Department 78, Stanley Mosk Courthouse

Alicia Hernandez v. Awesome Doughnut, LLC

22STCV02415

January 31, 2024

PAGA Settlement

DECISION

The settlement is denied without prejudice for the reasons listed below.

The parties are ordered to appear to set a new date.

Moving party to provide notice.

There is no settlement agreement provided. Exhibit 1 is the settlement for plaintiff's individual claims.

There is no letter to the LWDA asking for investigation provided.

Plaintiff’s counsel miscalculates the distribution of settlement. Lab. Code, Section 2699(i) provides that 75% the civil penalties recovered by aggrieved employees shall go to the LWDA for enforcement of labor laws and 25% of the penalties shall go to the aggrieved employees. There is no provision providing that attorney’s fees should come out of the 75% earmarked for the LWDA. Plaintiff and her counsel have no right to the amount to be paid to the LWDA. 

Additionally, the fees requested appear excessive compared to the amount billed. Counsel seeks 35% of gross settlement, which is higher than fees typically awarded in PAGA settlements. Additionally, Counsel provides the following billing entries:

Task Time (hours)

Investigation, client interview, legal research. 2.25

Review of Plaintiff’s records .75

Calls with Plaintiff .5

Prepare PAGA letter 1.25

Prepare PAGA complaint and related documents 3.5

Data demand 3.25

Phone calls with opposing counsel 3.75

Preparation of settlement agreement, this motion, communication with settlement administrator 9.5

Anticipated work related to settlement. 1.5

Total 26.25

35% of gross settlement for 26.25 hours of work appears to be excessive compared to the gross settlement amount and the difficulty of this case. Counsel argues the fees requested are lower than the reasonable market rate of $875 per hour, which would have produced a result of $22,968.75. However, this rate is excessive, and Counsel did not provide his normal rate. This appears to be a straightforward case which settled relatively quickly. The billing entries also include entries for communications, interviews, and investigatory work that do not warrant billing at a higher rate. Given Counsel’s experience and the complexity of this case, the Court finds $500 is a reasonable hourly rate. (Moss Decl., ¶31.) Additionally, a lodestar modifier is not warranted here because this was not a difficult case. The Court finds that a reasonable award of $14,000 in attorney’s fees, or just over 23% is reasonable under the circumstances. 

The Court will grant the request for $805.71 in costs because the costs appear reasonable. Although Counsel’s declaration states that he requests up to $1,000 in costs, he does not explain what the additional costs are for. Additionally, the proposed order states costs are $805.71

Therefore, the correct distribution of costs is as follows:

$14,805.71 for attorney’s fees and costs. 

$2,775 in administrator’s costs

The net settlement after fees and costs is $42,419.29

$31,814.47 to go to the LWDA, which represents 75% of the net settlement.

$10,604.82 to go to the aggrieved employees, which represents 25% of the net settlement.