Judge: Gregory Keosian, Case: 23STCV17006, Date: 2024-03-11 Tentative Ruling

Case Number: 23STCV17006    Hearing Date: March 11, 2024    Dept: 61

Plaintiff Alexis Tristan’s Motion for Approval of PAGA Settlement is GRANTED.

Plaintiff to give notice.

MOTION TO APPROVE PAGA 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.5^th at p. 77.)

Plaintiff Alexis Tristan (Plaintiff) present the terms of a proposed PAGA settlement here as follows. Defendant American Homes 4 Rent, L.P. (Defendant) agrees to pay a gross settlement amount of $195,000.00, (Agnew Decl. Exh. 3, ¶ 17.) Plaintiff’s counsel is to be paid from this amount one third, amounting to $65,000.00, plus expenses of up to $15,000.00, though Plaintiff requests actual expenses in the amount of $12,328.45. (Id. ¶ 18.) Plaintiff is to receive an individual “enhancement” payment of $10,000.00. (Id. at ¶ 19.) Fees are to be paid to the settlement administrator in the anticipated amount of $2,850.00. (Id. at ¶ 20.)

These payments leave a net amount of $104,821.55 to be paid as penalties. (Agnew Decl. Exh. 3, ¶ 21.) 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 ¶¶ 21–22.) There are approximately 98 aggrieved employees, who each stand to receive on average $267.40 from the $26,205.39 that is apportioned to them. (Id. at ¶¶ 16, 21–23.)

As to the amount of fees sought, Plaintiff presents a lodestar of 97.8 hours of attorney work (Agnew Decl. ¶ 49; Rosenthal Decl. ¶ 6), which at the proposed hourly rates of $800 per hour, would yield a lodestar of $78,240.00. Dividing those hours into the proposed $65,000 fee award would yield an average hourly rate of approximately $664.60 per hour.

Plaintiff presents a maximum potential exposure for Defendant of $538,600. (Agnew Decl. ¶ 26.) This estimate is based on 2,693 potential pay periods, with each period apportioned violations for overtime and wage statements.  (Agnew Decl. ¶ 26.) Plaintiff discusses Defendant’s challenges to both claims, including arguments as to the fundamental accuracy of the wage statements provided and overtime pay correctly calculated. (Motion at pp. 16–17.) Plaintiff also notes that this court would possess discretion to reduce an overall penalty amount, even if violations were found. (Motion at pp. 17–18.)

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 Plaintiff’s claims, and the risks posed by litigation. Plaintiff’s request for fees, representing one third of the gross settlement amount, is reasonable in light of the lodestar analysis presented by Plaintiff’s 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.