Judge: Joseph Lipner, Case: 23STCV14521, Date: 2024-10-01 Tentative Ruling

Case Number: 23STCV14521    Hearing Date: October 1, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

            Plaintiff Daniel Rodriguez, individually and on behalf of others aggrieved, moves for approval of the settlement of his PAGA action against Defendants.

            The Court GRANTS Plaintiff’s motion.

Background

Plaintiff Daniel Rodriguez, individually and on behalf of aggrieved employees, filed this action against defendant Republique, LLC on June 22, 2023, under California’s Private Attorneys-General Act. Defendant answered on August 8, 2023.

On April 19, 2024, Plaintiff filed a Notice of Settlement.

On August 23, 2024, Plaintiff filed a Motion for Final Approval of the parties’ settlement, as required by Labor Code section 2699.

Defendant filed no opposition.

Legal Standard

“The superior court shall review and approve any settlement of any civil action filed pursuant to [the PAGA].” (Lab. Code, § 2699(s)(2).) “In review and approval of a proposed settlement under section 2699, subd. (l)(2) [new subd. (s)(2)], a trial court must scrutinize whether, in resolving the action, a PAGA plaintiff has adequately represented the state’s interests, and hence the public interest.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 89 .) The court may refuse to approve a settlement that is unfair or inadequate. (See O’Connor v. Uber Technologies, Inc. (N.D.Cal. 2016) 201 F.Supp.3d 1110, 1133-1134.)

Terms of Proposed Settlement

Analysis of Settlement Agreement

            Presumption of Fairness

Counsel Genish attests “the extent of informal discovery conducted was sufficient ... to evaluate the strength and value of the PAGA claims”, “the settlement negotiations were conducted by highly capable and experienced counsel”, and “Counsel are respected members of the bar with strong records of vigorous and effective advocacy.” (Gensh Decl., ¶ 51.) The matter was resolved with the assistance of a mediator. (Settlement, II(5).)

The settlement is entitled to a presumption of fairness.

            Fair, Adequate, and Reasonable

“The most important factor [for the court’s review] is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)

                        i. Basis of Claims

Plaintiff’s counsel explains the basis for the claims asserted in the complaint. (Genish Decl., ¶¶ 34-47.) Plaintiff claims, in brief, that Defendant required him and his colleagues “to perform work off-the-clock by requiring them to attend pre-shift meetings”, that Defendant “required [them] to perform pre-shift work activities off-the-clock”, and that Defendant failed to pay overtime as required. (Id., ¶ 34; see also ¶¶ 37, 40 [meal and rest periods], ¶¶ 45, 47 [derivative claims and penalties].)

                        ii. Amount Offered

Defendant’s estimated maximum exposure for all Plaintiff’s claims is $3,733,000.00. (Id., ¶¶ 46-47.) Plaintiff concedes that this outcome is unlikely given Defendant’s vehement denial of any liability in this matter; expected costs of vigorous litigation, including appeals; the likelihood that Plaintiff will not prevail on some or all of his claims at trial; ambiguities in the law regarding PAGA penalties; and the court’s discretion to reduce penalties.

To account for the risks associated with proving the underlying violations and the cost and delay in recovering alleged potential penalties, Plaintiff reduced his expected recovery by 75% to $933,250.00. (Genish Decl., ¶ 47.)

To account for the risks associated with succeeding on the merits and establishing liability, Plaintiff discounted by 75% a second time, bringing the value of his claims to $233,312.50. (Ibid.)

According to these calculations, the gross settlement of $225,000 is a fair, reasonable recovery, adjusting for costs and risks.

Assuming all deductions are taken in full, a net $35,132.46 will remain to compensate 275 estimated aggrieved employees. Each aggrieved employee will recover an average of approximately $127.75.

iii. Discovery Conducted, Experience of Counsel

            As discussed above, Counsel attests to sufficient informal discovery and to his and his associates’ long experience with PAGA claims.

                        iv. Conclusion

            Plaintiff has shown the settlement is fair, adequate, and reasonable.

            Scope of Release

            The Settlement states: “Upon the Effective Date and payment of all funds

under this Settlement, Aggrieved Employees (including Plaintiff) and the State of California, (Including the LWDA,) will be forever barred from pursuing any and all PAGA Released Claims defined in Section 1.16 herein. This release of claims expressly excludes any non-PAGA claims held individually by Aggrieved Employees other than Plaintiff.” (Settlement, ¶ III(5).) It also provides for Plaintiff to submit a proposed judgment that, in relevant part, “enjoins the prosecution of any of the PAGA Released Claims against Defendant. The judgment will not release or bar any claims other than the PAGA Released Claims as to Plaintiff, the State of California, and Aggrieved Employees.” (Settlement, ¶ III(11).)

            “ ‘PAGA Released Claims’ means any and all claims for civil penalties that were alleged or reasonably could have been assessed upon and collected from the Defendant and the Released Parties under PAGA, based on the factual allegations in the Action and the PAGA Notice, including but not limited to purported violations of California Labor Code sections 201, 202, 203, 204, 226(a), 226.7, 510, 512(a), 1174(d), 1194, 1197, 1197.1, 1198, 2800, and 2802 and Industrial Welfare Commission Wage Orders, including inter alia. Wage Order 5-2001, arising under the PAGA Period from the alleged claims against Defendant for Republique’s alleged failure to provide meal and rest periods and premiums; failure to pay minimum wages; failure to pay overtime; failure to pay wages during employment; failure to pay all wages upon termination, failure to provide accurate wage statements; failure to maintain complete and accurate payroll records of hours worked and meal periods; and failure to reimburse business expenses.” (Settlement, ¶ I(16).)

            “ ‘Released Parties’ means Republique, LLC and each of its former and present directors, officers, shareholders, owners, attorneys, insurers, predecessors, successors, assigns, subsidiaries, and affiliates.” (Settlement, ¶ I(20).)

            Notice

PAGA has no notice requirements for unnamed class members, nor may such employees opt out of a PAGA action. (See Hernandez v. DMSI Staffing, LLC. (N.D. Cal. 2015) 79 F.Supp.3d 1054, 1063, aff’d sub nom. Hernandez v. DMSI Staffing, LLC (9th Cir. 2017) 677 Fed.Appx. 359.)

The Settlement Administrator will mail an “Explanatory Letter” to each Aggrieved Employee, which is attached to the Settlement as Exhibit A. (Settlement, ¶ IV(3) and Exh. A.)

/ / /

Attorneys’ Fees and Costs 

An aggrieved employee who prevails in a PAGA action may recover reasonable attorney’s fees and costs. (Labor Code, § 2699(g)(1).) Whether a plaintiff established entitlement to an award of fees under PAGA is a question best decided by the trial court. (San Diego Municipal Employees Association v. City of San Diego (2016) 244 Cal.App.4th 906.)

Plaintiff’s Counsel requests attorneys’ fees of $67,500.00 and reasonable litigation costs of $12,520.16. (Genish Decl., ¶ 19.) The Settlement provides for fees up to $67,500 and costs up to $16,000. (Settlement, ¶ I(12).)

“Courts recognize two methods for calculating attorney fees in civil class actions: the lodestar/multiplier method and the percentage of recovery method.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 254.) Here, Plaintiff’s counsel requests attorney fees using the percentage method.

In common fund cases, the Court may employ a percentage of the benefit method, as cross-checked against the lodestar. (Laffitte v. Robert Half Int’l, Inc. (2016) 1 Cal.5th 480, 503. Here, the fee request of $67,500 represents 33% of the maximum settlement amount, which is equal to slightly less than the 33% average generally awarded in class actions. (See In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 558, fn.13 [“Empirical studies show that, regardless whether the percentage method or the lodestar method is used, fee awards in class actions average around one-third of the recovery.”].)

Regarding lodestar, Plaintiff’s counsel has provided the following information for the attorneys at Blackstone Law, APC: 

Plaintiff’s counsel’s percentage-based request discounts the lodestar by 50%. The percentage-based request is reasonable.

Plaintiff’s counsel also attests to reasonable costs via invoice and the declaration of the Settlement Administrator. (Genish Decl., ¶ 61 and Exh. 4 [cost invoice]; Lawrence Decl., ¶¶ 3, 6-16, and Exh. B [Administrator costs].)

Conclusion 

For the foregoing reasons, the Motion for Approval of PAGA Settlement is GRANTED.