Judge: Lon F. Hurwitz, Case: 20-01175109, Date: 2023-08-25 Tentative Ruling

1. Motion to Approve PAGA Settlement

2. Status Conference

Motion to Approve PAGA Settlement

This Motion was originally heard on 1/27/23 and, at that time, the Court set forth 13 separate areas that needed to be addressed by Counsel with respect to the Settlement Agreement including, inter alia, Item #4-the Agreement missing the signature of Defense Counsel. [ROA 93]

The Motion was continued to 4/28/23 to allow Counsel to revise the Motion to include the Court’s areas of concern.

On 4/28/23, the Court noted that “several significant issues remain.” The Court gave Counsel “one additional opportunity to resolve the following concerns…” [ROA 99]. Attached to Counsel’s Declaration is Exhibit “D”-the Settlement Agreement that is still not executed by Defendants or Defendants’ Counsel. The matter was continued to 7/07/23 and subsequently continued by the Court to 8/25/23 to allow Counsel to further correct/amend the Motion.

Counsel submitted a Second Supplemental Declaration in Support of the Motion on 6/23/23 [ROA 106] in which Counsel attached the “Amended Private Attorneys General Act Settlement Agreement And Release” as Exhibit “H” (redlined) and Exhibit “I” (final version). Once again, the Settlement Agreement is not executed by Defendants or Defendants’ Counsel.

The Court’s 04-28-23 Order identified the following issues:

PRIOR ISSUE 3: Please provide the estimated maximum value of the claims being settled, as well as how much the claims were discounted for settlement purposes and the bases therefore. Also, please explain in detail why the settlement value is less than the maximum value. A generic statement that counsel weighed the value of the case against a potential defense, potential appeal, and other considerations that are readily apparent in every civil action is not enough.

There are several significant problems here.

As to the COA No. 1, Plaintiff states no maximum recovery analysis is possible because this claim is based on missed meal and rest breaks. However, this cause of action concerns wages. The PAGA notice letter states it is based on the failure to pay minimum wages and the SAC alleges it is based on underpayment of minimum and overtime wages, which are subject to penalties. The supplemental declaration is non-responsive to this inquiry. Alternatively, to the extent no value has been provided, the release should not contain LABOR CODE §§ 201, 1182.12, 1194, and 1194.2.

As to COA Nos. 2–4 and 6–7, the analysis provided concerns only Plaintiff, yet the release purports to include all aggrieved employees. Each of the labor code violations in the SAC are alleged to serve as PAGA predicates for COA No. 5. (ROA 36 ¶¶ 52–59.)

The problem with using the violations only Plaintiff suffered is, most significantly, that he was employed from 07-01-19 through 02-24-20. That is a total of 17 pay periods (34 weeks), as counsel observes. (Supp. Ortiz Decl ¶ 4(h).) However, the PAGA Period as contemplated by the Settlement runs from 07-01-19 through the date of Court approval of the settlement. (Settlement § II(9).) In other words, assuming an end date of this hearing, the release covers approximately 100 pay periods (200 weeks). No analysis has been provided as to the scope of the release/valuation as to other aggrieved employees. Plaintiff’s individual valuation of $26,880, and $16,880 discount based on his individual settlement, is even more personal to him and therefore unhelpful. Based on this “analysis” it appears counsel did not examine payroll records and data for anyone other than Plaintiff.

Furthermore, while Plaintiff cites (but fails to quantify any resulting discount) Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal. App. 5th 746 to make the point PAGA claims are vulnerable to a motion to strike based on manageability, that fear ignores the fact this Court’s own Court of Appeal, the Fourth District, Division Three, has taken the precise opposite view. (Estrada v. Royalty Carpet Mills, Inc. (2022) 76 Cal.App.5th 685, 712 [“requiring that PAGA claims be manageable would graft a crucial element of class certification onto PAGA claims, undercutting our Supreme Court's prior holdings”].) Additionally, the California Supreme Court has indicated any manageability issues with, for example, meal period claims, can be addressed by narrowing the pool of alleged aggrieved employees, using representative testimony, surveys, statistical analysis or other evidence. (Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, 77-78.) And here again, counsel relies only on Plaintiff’s facts and assumes none of the other aggrieved employees experienced any additional violations. This assumption is completely without factual basis and cannot be accepted.

ISSUE. This is non-responsive. The purported release of claims is far-reaching and Plaintiff’s individual claims aside, there is no discussion of an investigation into Labor Code violations against other employees. (ROA 106.) Furthermore, the evaluation of Defendants’ “procedures and regulations” says nothing about the extent of Defendants’ violations thereof. (Id. ¶ 6.) Counsel also relies upon a prior declaration, which the Court expressly found insufficient. (Id. ¶ 7.)

PRIOR ISSUE 5: Please disclose any interest the attorneys for any party have in the proposed cy pres recipient – Orange County Trial Lawyers’ Charities.

Counsel reports only as to Plaintiff’s counsel, but the Court requires disclosure from Plaintiff, Defendant and its affiliates, and Defendant’s attorneys.

RESOLVED.  The settlement has been amended and the cy pres replaced by the California State Controller Unclaimed Property Fund. (Settlement § II(C)(9).) It should also explicitly state funds shall be sent in the aggrieved employee’s name, but that can be assumed.

PRIOR ISSUE 8: The Settlement Agreement provides that it may be modified by writing signed by the Parties (ROA 84, Ortiz Decl. Ex. A § II(D)(6).) Court approval is required for any modifications.

While the redline (Ex. F) reflects this change, Exhibit D is the executed Settlement and it does not.

RESOLVED. While there was no need to delete the part regarding a written agreement between the parties, the Court’s required approval makes this acceptable. (Settlement § II(D)(6).)

PRIOR ISSUE 9(a): The Settlement Agreement needs to be referenced in the Judgment by the ROA number of the declaration to which it is attached.

ROA 84 is not the operative settlement.

ISSUES: Counsel has submitted a Proposed Order, but it is not styled as an Order and Judgement, as it should be. (ROA 111.) Second, the order refers to the as-yet unexecuted settlement as the operative (¶ 1.) Third, the Proposed Order states, of the $95,000 settlement, “$10,000.00 of the Parties’ settlement allocation to the resolution of Plaintiff’s individual claims presented in the Complaint.” (Id.) The $10,000 individual settlement has nothing to do with the Court’s approval and any resulting order.

PRIOR ISSUE 9(c): A proposed date for the final accounting hearing must be included in the Proposed Judgment based on the new hearing date below.

This incorrectly identifies Dept. CX102.

RESOLVED: The Department number has been corrected but:

ISSUE: Now that the Unclaimed Property Fund has been selected, the proposed date of 03-29-24 is unrealistic. It should be at least one year later.

PRIOR ISSUE 9(d): The Judgment needs to instruct the Plaintiff to submit a copy of the Judgment to the LWDA within ten calendar days after entry of the Judgment.

Paragraph 10 of the Proposed Order fails to identify the recipient, stating only “Plaintiff is ordered to submit a copy of this Order within ten calendar days of the entry.”

ISSUE. Despite the Court’s explicit order, this has not been revised or corrected. (¶ 10.)

Finally, while not addressed in the prior order, even assuming the settlement can be approved, the Administrator’s estimate is for $3,850. The Court will only award actual, documented costs.

ISSUE: The unexecuted settlement reflects a change to $3,850 (§ II(B)(2)(b)), but the Proposed Order impermissibly states $5,000.

Plaintiff to give notice, including to the LWDA, and file proof of service.

RESOLVED. The Notice of Ruling (ROA 104) reflects service on the LWDA.

RULING

This is the third hearing on this motion. As identified in the Court’s prior orders, counsel failed to address several significant issues. (ROA 93, 99.) At the last hearing, the Court provided Plaintiff one more opportunity to address the issues. (ROA 99.) For the reasons set forth below, Plaintiff has failed to do so.

Counsel, on a serial basis, has failed to comply with a basic rule of court and this Department’s admonition it requires “strict compliance” with CRC 3.1110(f)(4). (See, e.g., ROA 48, 96, 106.)

Separate and apart from the continuing issues with Counsel’s Motion, as set forth hereinabove, Counsel is apparently unable to submit the most basic of requirements-a fully executed Settlement Agreement, even though Counsel has now had 3 chances to do so.

The Motion to Approve the PAGA Settlement is DENIED.

To the extent that Counsel chooses to refile this Motion, the Court sets an OSC re Sanctions for the same date pursuant to CCP Section 177.5 for Counsel’s failure to comply with Court Orders re compliance with CRC Section 3.1110 and this Court’s Procedural Guidelines For PAGA Settlements as set forth hereinbelow at C.2.

Given the Court’s 3 exhaustive analyses of the problems needing correction, there should be no reason for Counsel to be unable to present a Code and Rule Compliant Motion, without shortcomings, should Counsel choose to refile this Motion.

The Status Conference is continued to September 27, 2023, at 1:30 p.m. in Dept. CX 103.

Clerk to give Notice.