Judge Lynne M. Hobbs, Case Number: 23STCV17296, Date: 2024-05-17 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV17296, Date: 2024-05-17 Tentative Ruling

Case Number: 23STCV17296 Hearing Date: May 17, 2024 Dept: 61

SARTURO SALAS GARCIA vs STAY GREEN INC.

TENTATIVE

Plaintiff Arturo Salas Garcia’s Motion for PAGA Settlement Approval is GRANTED, with the amount of litigation expenses to be apportioned to Plaintiff’s counsel reduced from $10,614.23 to $8,000.00, with the difference to be added to the PAGA penalties.

Plaintiff to give notice.

DISCUSSION

Under PAGA, “t[t]he superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” (Lab. Code, § 2699, subd. (l)(2).)

“[A] trial court should evaluate a PAGA settlement to determine whether it 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.)

Federal courts have compared and contrasted PAGA settlements to class action settlements:

In the class action context, where PAGA claims often also appear, a district court must independently determine that a proposed settlement agreement is “fundamentally fair, adequate and reasonable” before granting approval. [Citations.] However, as the parties rightly point out and as noted above, this is not a class action lawsuit, and PAGA claims are intended to serve a decidedly different purpose-namely to protect the public rather than for the benefit of private parties. [Citation.] In one recent district court case, the LWDA provided some guidance regarding court approval of PAGA settlements. [Citations.] In that case, where both class action and PAGA claims were covered by a proposed settlement, the LWDA stressed that “when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the standards of being “fundamentally fair, reasonable, and adequate” with reference to the public policies underlying the PAGA.”

(Salazar, supra, 2017 WL 1135801 at pp. 3–4.) A number of these factors, “including the strength of the plaintiff's case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount,” have been recognized as useful in the analysis of PAGA settlements. (Moniz, supra, 72 Cal.App.5^th at p. 77.)

Plaintiff Arturo Salas Garcia (Plaintiff) presents the terms of a proposed PAGA settlement as follows. Defendant Stay Green, Inc. (Defendant) agrees to pay a gross settlement amount of $150,000.00. (Ardestani Decl. Exh. 1, ¶ 1.11.) Plaintiff’s counsel is to be paid from this amount $52,500.00, representing 35% of the total, plus expenses of up to $8,000.00. (Id. at ¶ 3.2.3.) Plaintiff is to receive an individual “enhancement” fee of $7,500.00. (Id. at ¶ 3.2.1.) Fees are to be paid to the settlement administrator in the amount not to exceed $3,500.00. (Ardestani Decl. ¶ 10.)

Plaintiff estimates that, of the amount available to pay PAGA penalties, $56,911.33 shall go to the LWDA, while $18,970.44 will go to aggrieved employees. (Ardestani Decl. ¶ 9.) With an estimated class of aggrieved employees amounting to 215 employees, with 3,579 pay periods, Plaintiff estimates the average employee payout is $88 per employee, (Ardestani Decl. ¶¶ 9, 14.)

Plaintiff’s counsel presents a fee lodestar of 96.1 hours worked, which given the fee award sought equals approximately $546.30 per hour. (Ardestani Decl. ¶ 40.) Plaintiff’s counsel states that application or their ordinary hourly rates would yield a fee lodestar of $71,090.00. (Ardestani Decl. ¶ 40.)

Plaintiff estimates the maximum total value of his claims to be $1,789,000.00, assuming a 100% violation rate across each pay period at issue, and a full award of $100 per violation. (Ardestani Decl. ¶ 15.) Plaintiff argues that Defendant presented defenses to its claims, such as the existence of a code-compliant time-keeping system, compliant written polices governing meal and rest breaks, employer-and provided work-clothing for which no reimbursement was required. (Motion at p. 6.) Plaintiff argues that the remaining claims are derivative of the same facts supporting other wage-violation claims — such as waiting time penalties — and are thus subject to defenses such as “good faith,” in addition to being dependent on predicate violations. (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1201.)

The settlement agreement presented to the court is reasonable in light of the purposes of PAGA, the Defendant’s estimated exposure, and the fee lodestar presented by Plaintiff’s counsel. The calculation of attorney fees from a percentage of a common fund created by a settlement agreement is a permissible mode of fee calculation. (See Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 503.) Courts may evaluate the reasonableness of any percentage-based attorney fee award through a “cross-check” with a lodestar calculation, as Plaintiff presents here. (See Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 505.)

However, the expenses sought by Plaintiff’s counsel must be reduced. The settlement agreement specifically provides for expenses not to exceed $8,000.00. (Ardestani Decl. Exh. 1, ¶ 3.2.3.) Plaintiff’s counsel nonetheless seeks expenses amounting to $10,614.23. (Motion at p. 13; Ardestani Decl. ¶ 45.) Although Plaintiff argues that the greater amount of expenses is reasonable, it has already specifically bargained for a lower amount.

Accordingly, the motion is GRANTED, with the amount of litigation expenses to be apportioned to Plaintiff’s counsel reduced from $10,614.23 to $8,000.00, with the difference to be added to the PAGA penalties.