Judge Holly J. Fujie, Case Number: 22STCV34558, Date: 2024-11-21 Tentative Ruling

This is a representative action arising from alleged wage and hour violations under the California Labor Code. Plaintiff commenced this action against Defendants Visual Data Media Services, LLC (“VDM”) and DOES 1 to 100, inclusive, for civil penalties under California Labor Code Sections 2698 et seq, the Private Attorneys General Act of 2004 (“PAGA”) on October 18, 2022.

The Complaint alleges Plaintiff was employed by Defendant VDM from September 2021 to December 17, 2021. (Comp., ¶1.) The Complaint further alleges Defendant VDM failed to pay Plaintiff all wages at the applicable minimum wage for all hours worked and overtime wages for all overtime hours worked. (Id. at ¶¶9-10, 12, 14, 16.)

On February 10, 2023, the Court issued an order on joint stipulation to stay case pending the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc. (Stipulation 02/10/2023.) On July 17, 2023, the Supreme Court of California issued its decision in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104.

On November 2, 2023, the Court granted Defendant VDM’s motion for stay of proceedings pending arbitration of Plaintiff’s individual PAGA claims.

On August 23, 2024, Plaintiff filed the instant motion for approval of PAGA settlement. The motion is unopposed.

The Private Attorneys General Act is “a procedural statute allowing an aggrieved employee to recover civil penalties—for 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.) The statute incentivizes aggrieved employees by providing 25 percent of the recovered civil penalties, while the remaining 75 percent is distributed to the Labor and Workforce Development Agency (LWDA) “for enforcement of labor laws…and for education of employers and employees about their rights and responsibilities under [the Labor Code].” (Lab. Code, § 2699, subd. (m) formerly cited as Lab. Code, § 2699, subd. (i).)

“The superior court shall review and approve any settlement of any civil action filed pursuant to this part [Labor Code Private Attorneys General Act of 2004].” (Lab. Code, § 2699, subd. (s)(2) formerly cited as 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.) A court should consider factors used in evaluating class action settlements, such as 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. (Ibid.) Other factors that may be useful in determining fairness include 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 Com. Cases (2010) 186 Cal.App.4th 576, 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 p. 250.)

Plaintiff moves for an order approving the proposed settlement on the terms and conditions set forth in the PAGA Settlement Agreement (“Settlement Agreement”) between Plaintiff and Defendant VDM. (Tran Decl., 19, Ex. 1.) The “settlement class” consists of 93 aggrieved employees. (Id. at ¶29.) The breakdown of the proposed Settlement agreement is as follows:

First, Plaintiff has attached the email response from the LWDA confirming receipt of the proposed Settlement Agreement on July 31, 2024, in compliance with Labor Code Section 2699, subdivision (s)(2). (Tran Decl., ¶¶72, 75, Ex. 3.)

Next, the parties engaged in an arms’ length settlement negotiations and mediation on March 28, 2024 before ultimately reaching the Settlement Agreement at issue. (Tran Decl., ¶¶16, 20-21.) Prior to mediation, the parties exchanged informal discovery, which revealed Defendant VDM employed approximately 93 aggrieved employees during 3,385 pay periods (“PAGA Period”). (Id. at ¶29.) This information allowed Plaintiff to assess the maximum value of the PAGA claims to be approximately $1,350,900.00. (Mot. at 8:13-15.) However, Plaintiff and her counsel concede given the state of the case law in this area and Defendant VDM’s purported compliance with Labor Code, the valuation used in Carrington v. Starbucks (2018) 30 Cal.App.5th 504 could make Defendant VDM’s maximum exposure only $338,500.00. (Tran Decl., ¶43.) Also, Plaintiff contends the prospect of a potential summary adjudication ruling, defenses to the case, potential appeal, and potential costs could be forced upon her if not successful in litigating this matter. (Id. at ¶45.)

As such, Plaintiff has demonstrated the overall proposed Settlement Agreement is fair, reasonable and adequate to all concerned parties and is not the product of fraud collusion or overreaching.

Moreover, William Tran attests to his and his firm’s experience in wage/hour class actions on both the state and federal level since 2022. (Tran Decl.,¶5.) Specifically, Counsel Tran avers to having been involved in numerous cases from pre-filing to settlement including PAGA representative actions like the instant case. (Id.) Likewise, Counsel Tran attests to the experience of the partner assigned to this case, Joseph Lavi having been involved in several class actions since 2000 with large settlements such as $6,510,000.00 in a case against Kaiser Permanente. (Id. at ¶¶6-8.)

Thus, Plaintiff has shown her counsel was experienced in the matters of this case including settlement.

Furthermore, Counsel Tran seeks $44,745.53 in fees and litigation costs not to exceed $10,000.00. Labor Code Section 2699, subdivision (k)(1) provides “[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs . . . .” (Lab. Code, § 2699, subd. (k)(1) formerly cited as Lab. Code, § 2699, subd. (g)(1).) As discussed above, Plaintiff is represented by experienced counsel and the fees requested make up only 33.333% of the gross settlement. As to the costs, Counsel Tran avers to incurring $8,953.67 in costs so far related to filing motions, responses to pleadings, court appearances, expert witnesses, depositions, and mediation, which is less than the agreed upon amount of $10,000.00.

Therefore, the Court awards the requested attorney’s fees and costs in the amount of $8,953.67.

Similarly, Plaintiff requests $1,000.00 as a service award for her time and effort exerted on behalf of the aggrieved employees. (Tran Decl., ¶71.) Specifically, Plaintiff searched for and provided information related to her employment and employment conditions to counsel; spent time in meeting with counsel discussing her work environment and requirements; made herself available for mediation; and reviewing and approving the proposed settlement. (Id.)

Given the original net settlement amount for the entire class is $18,913.62, the Court finds that a $1,000.00 service award for time and effort expended by Plaintiff in this action is reasonable under the circumstances.

Likewise, the parties agreed to engage ILYM Group, Inc. (“ILYM”) as the third-party settlement administrator and requests court approval of $2,850.00 for administrator costs. (Tran Decl., ¶70, Ex. 8 – Lisa Mullins Declaration.) ILYM will provide a mailing address and toll-free telephone number to receive correspondence and inquiries from aggrieved employees. (Mullins Decl., ¶4.) ILYM will upload the data file, which contains the aggrieved employees’ names, last known addresses, and social security numbers to check for duplicates and other discrepancies. (Id.) ILYM will also process this information against the National Change of Address database and update accordingly before preparing, administrating, and distributing the settlement checks. (Id. at ¶¶5-6.) ILYM further attaches the initial quote for its services (Id., Ex. C.) The estimated quote reflects the amount requested, thus the Court approves the settlement administrator costs in the amount of $2,850.00.

Finally, the release under the Settlement Agreement is fair and reasonable. Plaintiff’s release states: “Plaintiff and his or her respective former and present spouses, representatives, agents, attorneys (including PAGA Counsel), heirs, administrators, trustees, executors, successors, and assigns generally release and discharge Released Parties, and each of them, from any and all claims, transactions, or occurrences that occurred during the PAGA Period, including, but not limited to: (a) all claims that were, or reasonably could have been, alleged, based on the facts and allegations contained in the Operative Complaint and the PAGA Notice (Plaintiff’s Release). Plaintiff’s Release does not extend to any claims or actions to enforce this Agreement, or to any claims for vested benefits, unemployment benefits, disability benefits, social security benefits, workers’ compensation benefits that arose at any time, or based on occurrences outside the PAGA Period. Plaintiff acknowledges that Plaintiff may discover facts or law different from, or in addition to, the facts or law that Plaintiff now knows or believes to be true but agrees, nonetheless, that Plaintiff’s Release shall be and remain effective in all respects, notwithstanding such different or additional facts or Plaintiff’s discovery of them.” (Tran Decl., ¶19, Ex. 1 – Settlement Agreement ¶5.1.)

Therefore, the Court GRANTS Plaintiff Teresa R. Fleming’s motion for approval of PAGA settlement.

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