Judge: David Sotelo, Case: 21STCV26647, Date: 2022-12-05 Tentative Ruling
Case Number: 21STCV26647 Hearing Date: December 5, 2022 Dept: 40
MOVING PARTY: Plaintiff Dumas, as a
representative on behalf of California and other aggrieved employees.
Plaintiff Donald Dumas, as a representative on behalf of other aggrieved employees and the State
of California, sues Defendants Allied Nationwide Security, Inc., Ajmal Nomair, pursuant
to a single Private Attorneys General Act (“PAGA”) based on allegations of
Failure to Provide Meal Periods, Failure to Provide Rest Periods, Failure to
Provide Accurate and Complete Wage Statements, Failure to Pay Overtime Wages,
Failure to Pay Minimum Wages, Failure to Pay Timely Wages During Employment,
and Failure to Pay All Wages Due to Discharged and Quitting Employees against
the Defendants.
Dumas now brings an
unopposed Motion for an Order Approving Settlement of PAGA Claims and Awarding
Attorney’s Fees, Costs, and General Release Payments, and Reimbursement of
Settlement Administration Expenses in this action.
Legal Standard: The PAGA is “a procedural statute
allowing an aggrieved employee to recover civil penalties or Labor Code violations—that otherwise would be
sought by state labor law enforcement agencies.” (Amalgamated Transit Union,
Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)
The statute provides a mechanism for private enforcement of Labor Code
violations for the public benefit. (See Arias v. Superior Court (2009) 46
Cal.4th 969, 986; Ochoa-Hernandez v. Cjaders Foods, Inc. (N.D.Cal. 2010)
2010 WL 1340777, at p. *4.)
To incentivize employees to bring PAGA actions, the statute
provides aggrieved employees 25 percent of the recovered civil penalties. (Lab.
Code § 2699, subd. (i).) The remaining 75 percent is distributed to the Labor
and Workforce Development Agency (“LWDA”) “for enforcement of labor laws and
education of employers and employees about their rights and responsibilities
under [the Labor Code].” (Lab. Code § 2699, subd. (i).)
In reviewing the terms of a settlement agreement, the court
determines whether the settlement is fair, reasonable, and adequate to all
concerned, and not the product of fraud, collusion, or overreaching. (Reed
v. United Teachers Los Angeles (2012) 208 Cal.App.4th 322, 337; Nordstrom
Commission Cases (2010) 186 Cal.App.4th 576, 581.) Although a PAGA
plaintiff need not satisfy class action requirements (see Arias v. Superior
Court (2009) 46 Cal.4th 969, 975), general principles applicable to class
action settlements apply equally in this context. In the context of a class
action settlement, the court considers various factors including whether (1)
the settlement is the result of arm’s length bargaining, (2) investigation and
discovery are sufficient to allow counsel and the court to act intelligently,
(3) counsel is experienced in similar litigation, and (4) the percentage of
objectors is small. (Nordstrom, supra, 186 Cal.App.4th at 581; Wershba
v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245.) In considering the
amount of settlement, the court is mindful that compromise is inherent and
necessary in the settlement process. (Wershba, supra, 91
Cal.App.4th at 250.)
I. Summary of
Settlement
On April 27, 2022, the Parties participated in mediation
with Steve Cerveris, Esq. With the assistance of Mr. Cerveris, the Parties
agreed to resolve this PAGA action fully and finally as to Plaintiff and the
Aggrieved Employees. The Settlement involves $420,000 as the non-reversionary
Maximum Settlement Amount. The total sum available for payment of PAGA
penalties deducts $139,998.60 for the payment of Plaintiff’s counsel’s fees and
$13,175.50 in costs, as well as costs of administration up to $10,000 from the
$420,00.00 Settlement Sum, yielding approximately $256,825.90 for the LDWA and
Aggrieved Employees. Seventy-five percent (75%) of this amount, or $192,619.42,
shall be allocated to LDWA, and the remaining twenty-five percent (25%) or
$64,206.48, shall be distributed to the Aggrieved Employees in pro rata shares.
The Settlement Administrator will, via regular First-Class U.S. Mail, mail
copies of an Explanatory Letter along with Individual PAGA Payments to all
Aggrieved Employees within thirty (30) calendar days after Defendants’ funding
and payment of the entirety of the Maximum Settlement Amount and after receipt
of a spreadsheet from the Defendants with sufficient information to allow
payments to be made. (Mot., 6:14-8:5; Mot., Lo Decl., ¶¶ 11-17, Ex. D
[Settlement].)
II. Fairness,
Reasonableness, and Adequacy & Fraud, Collusion, and Overreaching
The Court first finds that the obtaining of the Settlement here
through a mediation with Steve Cerveris, Esq.—who a quick Google search shows
to be a career mediator and professor of law in the subject of negotiations—shows
an arm’s length transaction where both parties acted independently and in their
own self-interest without one party influencing the other and with Allied
Nationwide “disput[ing] Plaintiff[]’[s] claims and … the existence … and extent
of liability as alleged by Plaintiff[].” (Mot., Lo Decl., ¶ 13.)
The Court next finds that the investigation and discovery in
this case show the Settlement Agreement is strong insofar as Plaintiff provides
a Declaration from counsel (1) detailing how through discovery Plaintiff’s
counsel “was able to (i) determine the total number of distinct individuals
falling within the definition of ‘Aggrieved Employee’ for the relevant
statutory period, and (ii) construct a damage model that calculated the maximum
realistic amount of PAGA penalties that could be levied against Defendant
within the Release Period” and (2) verified time records supporting a finding
that extensive discovery occurred in reaching this Settlement. (Mot., Lo Decl.,
¶¶ 11-13, Ex. E.)
The Court also finds that counsel’s experience in these matters
lend to a conclusion of fairness in the Settlement, where Exhibit A to the Lo
Declaration attached to this Motion provides a detailed list of 57 lawsuits to
which Plaintiff’s counsel was attached and which Plaintiff’s counsel represents
as similar to this PAGA action. (Mot., Lo Decl., ¶ 5, Ex. A.)
Based on Plaintiff’s filings, there do not appear to be
objectors to the Settlement Agreement.
The Court concludes that the circumstances surrounding the
negotiation and resulting Settlement Agreement demonstrate that the Agreement
represents a fair, reasonable, and adequate settlement secured through an arm’s
length transaction untainted by fraud, collusion, or self-dealing. (See Kullar
v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)
III. Proof of Service
on the LDWA
Service of the LWDA is reflected in an attachment to the
Motion’s Lo Declaration. (Mot., Lo Decl., Ex. C.)
IV. Administrator Appointment
and Costs
The Motion suggests the appointment of Phoenix Settlement
Administrators as the Settlement Administrator and approval of administration
fees up to $10,000 for payment out of the Settlement Sum (Mot., 21:5-6), which
the Court finds satisfactory based on the detailed invoice provided by Phoenix
Settlement Administrators, showing projected costs of $10,273.30 based on six
distinct general tasks that must be performed by the Administrator to properly
disburse the Settlement Agreement’s pro rata shares to the Aggrieved Employees.
(Mot., Lo Decl., Ex. G.)
V. Attorney’s Fees
and Costs
An aggrieved employee who prevails in a PAGA action may
recover reasonable attorney’s fees and costs. (Labor Code, § 2699, subd. (g)(1).)
Whether a plaintiff established entitlement to an award of fees under PAGA is a
question best decided by the trial court. (San Diego Municipal Employees
Association v. City of San Diego (2016) 244 Cal.App.4th 906.)
Here, the attorney’s fees sought are $139,998.60, or approximately
33 1/3% of the $420,000 Settlement Sum (Mot., 18:6-15), which the Court finds
reasonable based on the contingent nature of the case, the respectable recovery
obtained, and the number of similar matters handled by Plaintiff’s counsel.
(Mot., 18:6-19; Mot., Lo Decl., ¶¶ 5, 19, Ex. A; compare with Mot., Lo Decl.,
Ex. C, § 3, ¶ 4 [discussing manner by which reduced fees would affect
Settlement awards] & Ex. E [84.20 hours expended by Plaintiff’s counsel
prosecuting this action at $550 per hour for total fees incurred of $46,310].)
The Court also finds that the $13,175.50 in requested costs
are reasonable based on their nature and germane to the securing of the
$420,000 Settlement in this action. (Mot., 13:20-24; Mot., Lo Decl., Ex. F.)
Plaintiff’s Motion to Approve Settlement PAGA of Claims and Awarding
Attorney’s Fees, Costs, and General Release Payments, and Reimbursement of
Settlement Administration Expenses is GRANTED.
Phoenix Settlement Administrators are APPOINTED AS
SETTLEMENT ADMINISTRATOR entitled to administration fees up to $10,000.
Attorney’s fees of $139,998.60 and costs of $13,175.50 are
GRANTED as reasonable recovery for Plaintiff’s counsel’s work in prosecuting
this action and reaching a respectable Settlement therein.