Judge: Laura A. Seigle, Case: 20STCV29734, Date: 2024-04-11 Tentative Ruling

Case Number: 20STCV29734    Hearing Date: April 11, 2024    Dept: 17

[TENTATIVE] ORDER GRANTING PLAINTIFF’S MOTION TO APPROVE PAGA SETTLEMENT

I.                   INTRODUCTION

            On August 4, 2020, Vahik Nazarpour filed a class and representative action against Gorgee Enterprises, Inc., Gabriel Transit, Inc., Access Services Incorporated, Timmy Mardirosian, and Petros Keshishian alleging drivers were improperly classified as independent contractors.  The complaint alleges 12 causes of action for: (1) misclassification as independent contractor (Lab. Code, §¿226.8);¹ (2) failure to pay all wages due (§¿1194); (3) failure to pay minimum wage (§¿1194); (4) failure to pay overtime compensation (§§¿510, 1194); (5) failure to provide meal periods (§§¿512, 226.7); (6) failure to provide rest periods (§§¿512, 226.7); (7) failure to provide accurate itemized wage statements (§¿226); (8) waiting time penalties (§§¿201-203); (9) illegal deductions (§¿221, 224); (10) failure to reimburse business expenses (§¿2802); (11) unfair business practices (Bus. & Prof. Code, §¿17200 et seq.); and (12) civil penalties under the Private Attorneys General Act (PAGA) (§¿2698 et seq.)

On February 25, 2022, Plaintiff moved to certify a class of taxi drivers allegedly misclassified as independent contractors by Defendants.  On November 17, 2022 the Court denied Plaintiff's motion for class certification.  On September 13, 2023, the parties mediated and reached a full settlement of Plaintiff’s individual claims, including his individual PAGA claim.  On October 17, 2023, Plaintiff filed a Notice of Settlement of Entire Case. 

On December 11, 2023 Plaintiff filed a Motion for Approval of PAGA Settlement.  On January 23, 2024 Plaintiff's motion was denied without prejudice for two reasons: (1) the proposed settlement had not been submitted to the court or the LWDA and (2) Plaintiff purported to settle only individual PAGA claims.  On March 19, 2024 Plaintiff filed this renewed Motion for Approval of PAGA Settlement.

Labor Code section 2699, subdivision (l)(2) states the “superior court shall review and approve any settlement of any civil action filed pursuant to this part [i.e., PAGA].  The proposed settlement shall be submitted to the agency [i.e., the LWDA] at the same time that it is submitted to the court.”  The court reviews “whether [the settlement] 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. )

II.               SETTLEMENT TERMS

Plaintiff attaches the written settlement agreement to the Declaration of Frank E. Marchetti.  Marchetti declares that the settlement agreement and Motion to Approve were submitted to the LWDA on March 18 and 19, 2024.  (Marchetti Dec. ¶ 18.)

The settlement agreement includes a release of “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 contained in the Complaint in the Action and the PAGA Notice,” but expressly not including any claims relating to the settlement, claims “based on occurrences outside the PAGA Period,” or claims pursuant to PAGA brought by any other person.  (Marchetti Decl., Ex. A at ¶ V.1.) 

Defendant agreed to pay $7,500 in exchange for this release.  From this sum the agreement provides for attorney's fees of "not more than 40% which is currently estimated to be $3,000" and distribution of 75% of the remaining $4,500 in funds to the LWDA ($3,375) and 25% to Plaintiff ($1,125).  (Id. at ¶ III.)  Defendant agreed to disburse the funds to Plaintiff’s counsel after entry of final judgment approving the Settlement.  (Id. at ¶ IV.1, ¶ I.5.)  At that time Plaintiff’s counsel “shall issue payments for the Individual PAGA Payment, the LWDA PAGA Payment, and the PAGA Counsel Expenses Payment,” provided that counsel’s expense payment “shall not precede disbursement of Individual PAGA Payments.”  (Id. at ¶ IV.2.)  The release is effective upon the funding of the settlement.  (Id. at ¶ V.)

III.            ANALYSIS

The release expressly does not extend to PAGA claims asserted by or on behalf of aggrieved employees other than Plaintiff.  (Marchetti Decl., Ex. A at ¶ V.1).  Moreover, with respect to his individual PAGA claim, Plaintiff complied with PAGA by allocating a portion of the penalty to the LWDA and providing it notice.  The LWDA made no objection to the settlement.

Plaintiff’s counsel seeks $3,000 in fees and litigation costs, which is 40% of the settlement fund.  Counsel declares his regular rate is $600 per hour and he spent at least 215 hours on the case..  (Marchetti Dec., ¶ 17.)  The $3,000 in fees and costs sought represent a tiny fraction of the costs advanced by counsel ($23,000) and value of the over 200 hours of work in this action ($129,000).  (Marchetti Dec. ¶ 17.)  The recovery is fair and reasonable. 

IV.            CONCLUSION AND ORDER

The Motion for Approval is GRANTED.

Plaintiff shall file a [Proposed] Judgment Approving the PAGA Settlement within 10 days of this Order. 

Plaintiff shall give the LWDA notice of this Order and of the Judgment once filed.