Judge: Kerry Bensinger, Case: 23STCV06709, Date: 2024-07-30 Tentative Ruling

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Case Number: 23STCV06709    Hearing Date: July 30, 2024    Dept: 31

Tentative Ruling

Judge Kerry Bensinger, Department 31

HEARING DATE:     July 30, 2024                                      TRIAL DATE:  Vacated

CASE:                         Sabrina Carrion v. Clutter Inc., et al.

CASE NO.:                 23STCV06709

MOTION FOR APPROVAL OF REPRESENTATIVE ACTION SETTLEMENT

MOVING PARTY:               Plaintiff Sabrina Carrion, as an aggrieved employee, and on behalf of all other aggrieved employees

RESPONDING PARTY:     No opposition

I.          INTRODUCTION

            On March 27, 2023, Plaintiff Sabrina Carrion filed this action against Defendants Clutter, Inc. and Charles Robertson for penalties under the Private Attorney General Act (“PAGA”).

            The parties have agreed on the terms of a settlement.  Under the proposed settlement, Defendants will pay a Gross Settlement Amount of $570,000.  Of that amount, up to $199,500 will be paid as attorney fees, $20,350.85 will be paid for reimbursement of litigation expenses, up to $7,500 will be paid to Plaintiff as a PAGA Representative Service Payment, and up to $7,950.00 will be paid to a settlement administrator, leaving a PAGA Settlement Amount of $334,699.15.  (Chang Decl., Ex. 1, ¶ 3.1.)  From the PAGA Settlement Amount, 75 percent (or $251,024.36) will be paid to the Labor and Workforce Development Agency (“LWDA”) and 25 percent (approximately $64.17 [$83,674.79/1,304 aggrieved employees) will be paid to the aggrieved employees on a pro rata basis.   

II.        DISCUSSION

A court must review and approve any penalties sought as part of a proposed settlement agreement pursuant to Labor Code section 2699.  (Lab. Code § 2699, subd. (l).)  “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.”  (Lab. Code, § 2699, subd. (i).)  

A.        Plaintiff Has Provided Notice of the Settlement to LWDA. 

A proposed PAGA settlement must be submitted to LWDA at the same time that it is submitted to the court for review and approval.  (Lab. Code § 2699, subd. (l)(2).)  Plaintiff’s counsel attaches proof that the settlement was submitted to the LWDA on May 31, 2024—before the motion was filed.  (Chang Decl., Ex. 6.) 

Accordingly, the Court finds that this requirement is not satisfied. 

B.        The Settlement is Entitled to a Presumption of Fairness. 

A presumption of fairness¿for a settlement agreement exists where: (1) the settlement is reached through 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.  (Dunk v. Ford Motor Co.¿(1996) 48 Cal.App.4th 1794, 1802.)  The final factor does not apply to PAGA.  (See Arias v. Superior Court (2009) 46 Cal.4th 969, 984 [representative actions under PAGA do not violate the due process rights of “nonparty aggrieved employees who are not given notice of, and an opportunity to be heard”].) 

On February 7, 2024, the parties attended a full day mediation session with mediator Jeffrey A. Ross, esq., where they reached a settlement.  (Chang Decl. ¶¶ 15, 20.)  The settlement was therefore reached through arm’s-length bargaining. 

The parties engaged in discovery regarding Defendants’ policies, practices, time and payroll information of approximately 1,304 aggrieved employees, Plaintiff’s personnel file (including time and payroll data for Plaintiff).  (Chang Decl. ¶ 18.)  Accordingly, there was sufficient investigation to allow counsel and the Court to act intelligently. 

Plaintiff’s counsel “are experienced litigators who specialize in employment law, with a substantial PAGA and wage and hour class action practice.”  (Chang Decl., ¶ 62.)

The Court finds that the settlement is entitled to a presumption of fairness. 

C.        The Release is Permissible. 

If the Court approves the PAGA settlement, the aggrieved employees will release “all claims, rights, demands, liabilities and causes of action that arose during the PAGA Period for civil penalties under PAGA that were alleged, or reasonably could have been alleged, based on the facts stated in the Operative Complaint and the PAGA Notice for PAGA civil penalties.”  On only her own behalf, Plaintiff also waives the protections of Civil Code section 1542.  This release is limited to claims for civil penalties that arise from or relate to allegations in Plaintiff’s Complaint in this action, and it is permissible. 

D.        The Attorney Fees and Costs Are Reasonable. 

A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action.  (Lab. Code, § 2699, subd. (g)(1).)  Plaintiff’s counsel will receive up to 35% of the PAGA Settlement Amount for attorney fees (estimated at $199,500.00) and up to $5,000.00 in costs and expenses from the PAGA Settlement Amount.  (Chang Decl., Ex. 1, ¶ 3.2.2.) 

The Court finds that the attorney fees and costs are reasonable. 

III.       CONCLUSION

The motion for approval of PAGA settlement is GRANTED. 

Moving party to give notice. 

Dated:   July 30, 2024