Judge: Glenda Sanders, Case: 2021-01212714, Date: 2022-11-17 Tentative Ruling
The hearing on the Motion for Approval of PAGA Settlement is CONTINUED to February 9, 2023 at 2:00 p.m. in department CX101 to permit the parties to respond to the following issues. A supplemental briefing shall be filed at least 9 days before the continued hearing and respond where necessary to each of the points raised below. If required, an amendment to the settlement agreement is directed, rather than ‘amended settlement agreement’, to avoid use of limited Court time and resources. The parties shall also provide redline copies of the revised notice and proposed order.
A judgment in a PAGA action “binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.” (Arias v. Superior Court (2009) 46 Cal.4th 969, 986.) Thus, “PAGA settlements are subject to trial court review and approval, “to determine whether it is fair, reasonable, and adequate in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws. (See Moniz v. Adecco USA, Inc. (2021) 72 Cal. App. 5th 56.)
As to the Settlement
1. The scope of the Release is overly broad. The phrase “and any right or claim for damages, unpaid wages, statutory penalties, civil penalties restitution, disgorgement, interest or attorneys’ fees as a result thereof” at the end of the definition of PAGA Released Claims and the Release should be deleted.
2. Plaintiff has not identified the specific strengths and weaknesses of the claims in this matter or how the potential exposure was calculated for his valuation of the claims. By way of example only, Plaintiff does not identify how the policies were not compliant, provide the violation rate used to determine the settlement value, or identify defendant’s defenses or issues with proof. Additionally, there is no mention of the claims for reimbursement of necessary business expenses and failure to pay all wages due on termination, including holiday pay wages owed. It is unclear if Plaintiff’s counsel took into account these claims when analyzing the total value of this action.
3. Paragraph 34 of the Settlement permits recovery of attorney fees to a “successful” party if an action to enforce the Settlement is brought. The use of the terms “successful” and “unsuccessful” parties is ambiguous and appears to mean something different from “prevailing party” since the Parties decided not to use that term. Additionally, “Parties” means Plaintiff “on behalf of herself and on behalf of others similarly situated”. As a result, it appears the Settlement permits the recovery of attorney fees against aggrieved employees who may seek to enforce the Settlement. The Court will not permit the recovery of attorney fees against unidentified aggrieved employees.
4. The Settlement appears to permit disputes regarding work weeks. Settlement, ¶V.15.a [“The Settlement Administrator shall also resole any disputes by PAGA Employee as to workweeks, after consulting with counsel for both Parties. Absent sufficient proof from a PAGA Employee, Defendant’s employment records will be presumed accurate.”]. If so, what is the deadline and procedures for disputes?
As to the Notice
1. The notice to the aggrieved employees is to be revised consistent with the issues addressed above.
2. The release in the Notice is not consistent with the release in the Settlement and should be revised to be limited to claims for civil penalties under PAGA.
3. In paragraph 4, the language stating that the Court approved the allocation should be removed since it implies the Court has approved the specific Individual Penalties Share, which is inaccurate. Additionally, this provision appears to conflict with the Settlement since the Notice provides that the Individual Penalties Share is "final and cannot change"; yet, as discussed above, the Settlement appears to permit workweek disputes.
4. The Notice should provide the net settlement amount and the allocation of the PAGA penalties between the LWDA and the aggrieved employees so that the aggrieved employees have an understanding of what their Individual Penalties Share is based on.
As to the Proposed Order
1. The proposed order is to be revised consistent with the issues addressed above.
2. Settlement and Notice should be attached to the proposed order as an exhibit.
3. In paragraph 1, p. 2, line 13, insert "here" between "meaning" and "as".
4. Replace "Representative Action Members" with "PAGA Employee throughout the proposed Order so that the defined terms are consistent with the Settlement.
5. The total amount of the PAGA penalties and the amounts of the disbursements to the LWDA, PAGA Employees, attorney fees, litigation costs, Settlement Administrator, and Plaintiff's enhancement, if any, should be set forth in the proposed Order.
6. The Court will not dismiss this Action upon entry of the proposed Order. The Court will dismiss the Action after the final accounting.
7. The proposed order should include a date for the final accounting. The final accounting should occur after the deadline to cash checks has expired. The Court holds final accounting hearings on Fridays at 9:00 AM. The proposed order shall also state that Plaintiff will submit to the Court a final report at least 5 court days prior to the final accounting, including the actual amounts paid to aggrieved employees and the other amounts distributed under the settlement, including uncashed checks.
As to the Disbursements
1. Plaintiff’s counsel must provide sufficient information on the education and qualification of all the attorneys who worked on this matter and provide sufficient information for the Court to conduct a lodestar cross-check. While billing invoices are not required, there must be some explanation of the hours worked and tasks performed.
2. Plaintiff seeks $10,000 in litigation costs but provides no information on the costs actually incurred.
3. The Settlement Administrator should provide an invoice identifying the tasks it will perform and showing its fees and costs.
4. Plaintiff must disclose her individual settlement to the Court. If appropriate, Plaintiff may submit her individual settlement for an in camera review.
5. Plaintiff has presented no information or evidence explaining why Plaintiff should receive any enhancement.
Plaintiff is ordered to give notice, including to the LWDA, and file a proof of service.