Judge: Mark H. Epstein, Case: 21SMCV01441, Date: 2024-11-19 Tentative Ruling

If the parties wish to submit on the tentative ruling and avoid a court appearance on the matter, the moving party must contact the opposing party and all other parties who have appeared in the action and confirm that each will submit on the tentative ruling. Please call the court no later than 4:30 p.m. on the court day before the hearing, leave a message with the court clerk at (310) 260-3629 advising her that all parties will submit on the tentative ruling and waive hearing, and finally, serve notice of the Court's ruling on all parties entitled to receive service. If any party declines to submit on the tentative ruling, then no telephone call is necessary, and all parties should appear at the hearing.

Case Number: 21SMCV01441    Hearing Date: November 19, 2024    Dept: I

Plaintiff filed this wage and hour action pursuant to PAGA, a statute in which a named plaintiff can bring suit on behalf of the State of California as a private Attorney General.  Any settlement is divided 75% to the state and 25% to the group of employees adversely affected by the alleged misconduct.  Plaintiff’s counsel is entitled to recover reasonable attorney’s fees for bringing the action.  The action is not a class action, although there are similarities.  Further, the resulting award or settlement is not in the nature of damages, but rather is a remedy based on the penalty for violation of the pertinent statute.  Here, suit was brought and the parties, through mediation, settled for a total settlement amount of $210,000.  After a deduction for fees and costs, the employees’ share of the settlement is approximately $28,000.  Plaintiff is getting a separate PAGA Incentive Payment of $5000 in addition to a separate undisclosed amount for his separate suit.  The separate suit, unlike the PAGA action, is one where he is suing for violations pertaining directly to him.  However, the court is not sure whether those allegations, or any of them, are similar to the violations alleged in the PAGA cause of action.  Nor does the court know the amount of the individual settlement.  There are 615 aggrieved employees in the PAGA case, which (assuming an equal division of the pool) is about $34 per employee.

The court needs to know what plaintiff’s actual total recovery will be.  The court also needs justification as to why the named plaintiff is getting $5000 and everyone else is getting $34.  The court is not clear that an incentive payment, at least of this magnitude, is valid here.  The named plaintiff is acting as the state’s agent or proxy, but the suit is designed to benefit the state and the group of employees primarily; it is not designed as a money-maker for the named plaintiff.  Of course, the named plaintiff has a time expenditure that is different than the other employees, and logic suggests appropriate compensation for that.  Here, Richard estimates that he spent between 10 and 20 hours on the case.  Assuming 20 hours, that is $250/hour, which seems a bit high.

The fees requested here are $70,000, which is one third of the total recovery.  Plaintiff justifies the fee on the percentage of recovery theory.  The court is not persuaded that such is the better calculation as opposed to a lodestar calculation.  The fee is justified in the short Mahoney declaration.  Counsel sets forth his extensive PAGA experience—and the court has no doubt but that counsel is an experienced PAGA attorney.  But other than saying that he is experienced and setting forth a conclusory statement that $70,000 is reasonable, there is no justification.  Plaintiff states that an expert was retained, but the court has not seen that report nor does the court have any information as to the expert’s bill.  The court has no idea how much time counsel spent on the case.  In short, the fees are not justified.  (The papers suggest that there is a more detailed declaration filed by attorney Alemzadeh, but the court cannot find it.)

In short, until these questions are answered, the court cannot approve the settlement.  The motion is therefore DENIED WITHOUT PREJUDICE.  The parties may bring a second motion that addresses these issues.