Judge: Gregory Keosian, Case: 21STCV18512, Date: 2023-10-17 Tentative Ruling
Case Number: 21STCV18512 Hearing Date: October 17, 2023 Dept: 61
Plaintiffs Seneca Vaughn and
Rickey Vitiligo’s Motion for Approval of PAGA Settlement is GRANTED.
Plaintiff to give notice.
I.
MOTION TO
APPROVE SETTLEMENT
Under PAGA, “t[t]he superior
court shall review and approve any settlement of any civil
action filed pursuant to this part. The proposed settlement shall be
submitted to the agency at the same time that it is submitted to the court.” (Lab.
Code, § 2699, subd. (l)(2).)
“[A] trial court should
evaluate a PAGA settlement 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.” (Moniz
v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77.)
Federal courts have compared
and contrasted PAGA settlements to class action settlements:
In the class
action context, where PAGA claims often also appear, a district court must
independently determine that a proposed settlement agreement is “fundamentally
fair, adequate and reasonable” before granting approval. [Citations.] However,
as the parties rightly point out and as noted above, this is not a class action
lawsuit, and PAGA claims are intended to serve a decidedly different
purpose-namely to protect the public rather than for the benefit of private
parties. [Citation.] In one recent district court case, the LWDA provided some
guidance regarding court approval of PAGA settlements. [Citations.] In that
case, where both class action and PAGA claims were covered by a proposed
settlement, the LWDA stressed that “when a PAGA claim is settled, the relief
provided for under the PAGA be genuine and meaningful, consistent with the
underlying purpose of the statute to benefit the public and, in the context of
a class action, the court evaluate whether the settlement meets the standards
of being “fundamentally fair, reasonable, and adequate” with reference to the
public policies underlying the PAGA.”
(Salazar, supra, 2017 WL
1135801 at pp. 3–4.) A number of these factors, “including the strength of the
plaintiff's case, the risk, the stage of the proceeding, the complexity and
likely duration of further litigation, and the settlement amount,” have been
recognized as useful in the analysis of PAGA settlements. (Moniz, supra,
72 Cal.App.5th at p. 77.)
Plaintiffs Seneca Vaughn and
Rickey Vitiligo (Plaintiffs) present the terms of a proposed PAGA settlement
here as follows. Defendant Public Health Foundation Enterprises, Inc.
(Defendant) agrees to pay a gross settlement amount of $1,150,000.00. (Saunders
Decl. Exh. 1, ¶ 3.1.) Plaintiffs’ counsel is to be paid from this amount
$383,333.33, representing one third of the gross settlement, plus expenses not
exceeding $15,000.00. (Id. at ¶ 3.2.1.) Plaintiffs are each to receive
individual payments of $5,000.00. (Id. at ¶ 3.2.2.) Fees are to be paid
to the settlement administrator in an amount not exceeding $10,000.00. (Id.
at ¶ 3.2.3.)
These payments leave an
approximate net settlement award of $731,666.67. From this, 75% is to go to the
Labor Workforce Development Agency, while 25% is to go to the aggrieved
employees on a per pay period basis. (Id. at ¶ 3.2.4.) The parties
estimate that there are 3,651 aggrieved employees, who worked a total of
115,000 pay periods. (Id. at ¶ 4.1.)
As to the amount of fees
sought, Plaintiffs present a lodestar analysis of fees expended in this case of
$233,375, representing 293.8 hours of attorney work, at an average hourly rate
of $794.33. (Saunders Decl. Exh. 5.) Measured against the $383,333.33 fee award
sought here, the award sought would work a multiplier of roughly 1.64 on this
lodestar figure.
Plaintiffs present a maximum
potential exposure for Defendant of $28 million, based the following estimates
of violation rates applicable to Plaintiffs’ alleged violations:
·
10% violation rate for unpaid wages: $1.15
million
·
35.8% violation rate for meal period violations:
$4.117 million
·
100% violation rate for rest period violations:
$11.5 million
·
100% violation rate for wage statement
violations: $11.5 million
·
100% violation rate for waiting time penalties
for 2,500 former employees: $250,000
Plaintiffs present the defenses
that Defendant proposed as to each claim, such as the adoption of a legitimate
alternative work schedule, compliant meal and rest break written policies, and
potential unmanageability of the claims. (Saunders Decl. ¶¶ 21–26.)
In light of the above, the
overall settlement amount furthers the purposes of PAGA. The settlement is
reasonable in light of the strength and complexity of Plaintiffs’ claims, and
the risks posed by litigation. Plaintiffs’ request for fees, representing one
third of the gross settlement amount, is reasonable in light of the proposed
lodestar and multiplier presented by Plaintiffs’ counsel. The calculation of
attorney fees from a percentage of a common fund created by a settlement
agreement is a permissible mode of fee calculation. (See Laffitte v. Robert
Half Internat. Inc. (2016) 1 Cal.5th 480, 503.) Courts may evaluate the
reasonableness of any percentage-based attorney fee award through a
“cross-check” with a lodestar calculation, as Plaintiff presents here. (See Laffitte v. Robert Half Internat. Inc. (2016) 1
Cal.5th 480, 505.)
The
motion is therefore GRANTED.