Judge Holly J. Fujie, Case Number: 21STCV21933, Date: 2024-02-21 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

This is a class action arising from alleged wage and hour violations under the California Labor Code. Plaintiff Elizalde filed the operative First Amended Complaint (“FAC”) against Defendant BMS Healthcare, Inc. for civil penalties under California Labor Code Sections 2698 et seq, the Private Attorneys General Act of 2004 (“PAGA”).

The Court granted Defendant BMS Healthcare, Inc.’s motion to compel arbitration of Plaintiff Elizalde’s individual PAGA claims and stay the proceedings.

Plaintiff Elizalde filed the instant motion for approval of PAGA settlement, attorneys’ fees, enhancement award, and reimbursement of litigation costs. No opposition has been filed.

Under California Labor Code, Section 2699, subdivision (l)(2), “[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).)

In Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, the court held “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.)

Plaintiff Elizalde argues the proposed Settlement of $165,000.00 to be paid by Defendant BMS Healthcare, Inc. on behalf of the aggrieved employees is reasonably and fairly advances each of the PAGA purposes. (Setareh Decl., ¶ 26, Ex. 1.) As such, Plaintiff Elizalde contends this Court should approve the Settlement.

“The PAGA is limited to the recovery of civil penalties.” (Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 579.) “Under the PAGA, the civil penalty for an initial violation is $100 per employee per pay period, and the penalty for each subsequent violation is $200 per employee per pay period.” (Villacres, supra, 189 Cal.App.4th at 580.)

Plaintiff Elizalde contends there were approximately 276 aggrieved employees during the PAGA period and based on the data provided by Defendant BMS Healthcare, Inc., there were approximately 5,400 pay periods from June 10, 2020 through April 21, 2023. (Settlement, ¶¶ 4.1, 8; Setareh Decl., ¶ 23.) Plaintiff Elizalde further contends the estimated potential recovery she believed she could reasonably achieve for all aggrieved employees if she was to prevail on all her causes of action total $1,975,600.00. Thus, Plaintiff Elizalde argues a gross settlement amount (“GSA”) of $165,000.00 or 8.35 percent of the potential maximum penalties is more than fair and adequate. Plaintiff Elizalde also argues the Settlement confers substantial benefit on aggrieved employees because of the risk of continued litigation as it relates to liability, discretionary penalties, and all the defenses asserted by Defendant BMS Healthcare, Inc.

The Settlement Achieves Compliance With and Deters Violations of State Labor Laws

Plaintiff Elizalde contends that while the parties dispute whether Defendant BMS Healthcare, Inc.’s employment practices violate the Labor Code, this litigation has achieved compliance with Labor Code sections referenced in the Settlement due to the significant amount that Defendant BMS Healthcare, Inc. has agreed to pay for these alleged violations. Furthermore, Plaintiff Elizalde asserts the significant amount will serve as a deterrent to similar violations.

Plaintiff Elizalde argues the proposed Settlement acts to encourage private enforcement of PAGA. Specifically, Plaintiff Elizalde contends she may receive a modest incentive payment, her counsel will receive attorneys’ fees and costs as determined by the Court, and all aggrieved employees will receive a 25 percent share of the PAGA allocation, as well as notice of the claim.

Plaintiff Elizalde asserts this Settlement reasonably values the PAGA claims as to Defendant BMS Healthcare, Inc. Plaintiff Elizalde further asserts Defendant BMS Healthcare, Inc. is paying an average of $597.83 ($165,000.00 ÷ 276) per aggrieved employee. Additionally, Plaintiff Elizalde contends if the Court grants her application for fees, costs, and incentive payments, the State and the aggrieved employees will still share approximately $322.35 ($88,968.85 ÷ 276) per aggrieved employee for civil penalties. Moreover, Plaintiff Elizalde argues the proposed Settlement, even with deductions, provides a substantial sum to the States, i.e., $66,726.64 ($88,968.85 x 75%). Plaintiff Elizalde also argues it provides a sum to each employee averaging $80.59 on a pro rata basis ($88,968.85 x 25% = $22,242.21 ÷ 276 Aggrieved Employees). Similarly, Plaintiff Elizalde contends the notice of settlement to the aggrieved employees will educate them as to the requirements of the Labor Code, which is in the public interest and consistent with PAGA’s purpose. California Labor Code, Section 2699, subdivision (j). Likewise, Plaintiff Elizalde argues public policy strongly favors the settlement of litigation. Furthermore, Plaintiff Elizalde contends the proposed method of distribution is fair and reasonable because each aggrieved employee’s actual potential penalties varies proportionally based on his or her pay periods worked during the PAGA period. Lastly, Plaintiff Elizalde argues the Settlement was submitted to California Labor and Workforce Development Agency (“LDWA”) on February 6, 2024 and they have not objected to the Settlement or made any comment about it.

Plaintiff Elizalde argues the Settlement requires that attorneys’ fees, costs, and incentive payment be paid from the common fund. Plaintiff Elizalde contends her counsel request attorneys’ fees of $55,000.00 (1/3 of the GSA) and their actual costs are currently $6,781.15, which are well within the range of reasonableness. First, Plaintiff Elizalde asserts that she and the aggrieved employees, as prevailing party plaintiffs in settlement, are entitled to recover their attorneys’ fees and costs for their wage claims, and the associated interest and penalties. (Lab. Code, §§ 218.5, 226(e), 1194, 2699(g); Code Civ. Proc., § 1021.5(a); Earley v. Superior Court (2000) 79 Cal.App.4th 1420.) Second, Plaintiff Elizalde asserts that the proposed Settlement consists of a substantial recovery considering that some wage and hour class action settlement result in class members receiving coupons or vouchers in much smaller amounts instead of cash payments. Next, Plaintiff Elizalde argues that despite the extent of risk involved in this case, her counsel skillfully navigated through it and negotiated a favorable result for the aggrieved employees and the State of California. Moreover, Plaintiff Elizalde contends her counsel’s previous experience in litigating wage and hour class actions against Defendant BMS Healthcare, Inc.’s counsel with experience in labor and employment litigation supports the fairness and reasonableness of the requested fee award.

Plaintiff Elizalde argues that the requested attorneys’ fees are also justified by the Lodestar Method because (1) counsel have already logged a combined total of $139.6 hours in billable time at their current standard hourly rate, resulting in a lodestar of $77,582.50 and multiplier of approximately 0.71; (2) the hours billed represent time spent on tasks that were essential to litigation and settlement; and (3) the standard hourly rates for Plaintiff Elizalde’s counsel ranging from $375.00 to $925.00 are reasonable. (Setareh Decl., ¶ 33.) Also, Plaintiff Elizalde contends her counsel’s requested attorneys’ fees are much lower than the value of the actual work performed. Finally, Plaintiff Elizalde contends the request for her counsel’s actual litigation costs of $6,781.15 in filing fees, courier costs, process server costs, and mediation fees, is fair and reasonable because they were documented and reasonably incurred. (Id. at ¶ 28. )

Plaintiff Elizalde argues the proposed enhancement award to her is also fair, adequate, and reasonable. Plaintiff Elizalde further argues the Settlement provides that she may seek an enhancement award of up to $10,000.00, which is just over 6 percent of the GSA. (Settlement, ¶ 3.2.3; Setareh Decl., ¶ 37.) Moreover, Plaintiff Elizalde contends her efforts in retaining experienced counsel, providing her counsel with extensive information about her work history with Defendant BMS Healthcare, Inc. and Defendant’s policies and practices with respect to the wage and hour claims at issue, foregoing pursuit of her individual claims in favor of a fair resolution, participating in mediation sessions, and being actively involved in the settlement process justified the enhancement award. In addition, Plaintiff Elizalde asserts her fiduciary responsibility as the representative, risks she undertook , the fact her share of the GSA will likely be less than absent aggrieved employees, risks of impairment to her job prospects, low individual burden on each aggrieved employee, her counsel’s dependence on her, and public policy also justify the enhancement award.

Here, Defendant BMS Healthcare, Inc. agrees to pay the GSA of $165,000.00, which includes Individual PAGA payments, the LWDA PAGA payment, PAGA counsel fees payment, PAGA counsel litigation expenses payment, the Administrator’s expenses payment, and the Representative Enhancement payment. (Settlement, ¶ 1.10.) Furthermore, approximately $88,968.85 will be available for distribution to the aggrieved employees and LWDA. Specifically, the LWDA will receive about $66,726.64 (75 percent) and the aggrieved employee will receive around $22,242.21 (25 percent) of the GSA.

The Court finds that the proposed Settlement is fair, adequate, and reasonable in the view of PAGA’s overall purpose. The GSA is far less than the estimated potential recovery amount had this case proceeded to trial, which suggests it shall deter future labor violations. Furthermore, the GSA is enough to remediate the LWDA and aggrieved employees. Likewise, the GSA would encourage others to bring PAGA claims for similar Labor Code violations to further enforce such rights. Also, the requested attorneys’ fees and costs are reasonable in light of the amount of worked actually performed in this case, Plaintiff Elizalde counsel’s experience in these types of matters, and the favorable result rendered in this matter. Moreover, Plaintiff Elizalde is permitted under the proposed Settlement to receive an enhancement award that is a small percentage of the GSA and Plaintiff Elizalde has shown that she has expended substantial time and effort in bringing about this legal action, as well as getting a favorable result. Last, this motion is unopposed and the LWDA has not objected to its approval, despite having notice of the proposed Settlement.

The Court GRANTS Plaintiff Maria Elizalde’s motion for approval of PAGA settlement, attorneys’ fees, enhancement award, and reimbursement of litigation costs.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court