Judge: Mel Red Recana, Case: 23STCV00656, Date: 2024-09-09 Tentative Ruling
Case Number: 23STCV00656 Hearing Date: September 9, 2024 Dept: 45
Hearing
date: September 9, 2024
Moving
Party:
Responding
Party:
Motion
for Approval of Settlement Under PAGA
The Court
considered the moving papers.
The
motion is GRANTED.
Background
On
January 12, 2023, Plaintiff Cristian Montoya (“Plaintiff”) filed a Complaint against
Defendants Greco Entertainment Group, Inc. (“Greco”), 2454 Wilshire Restaurant,
LLC (“2454 Wilshire”), 2460 Wilshire Restaurant LLC (“2460 Wilshire”) (collectively,
“Defendants”), and DOES 1-100, inclusive for violations of Private Attorneys
General Act (“PAGA”), California Labor Code Sections 2698, et seq.
On
March 13, 2023, Defendants jointly filed their Answer.
On May 14, 2024,
Plaintiff filed the instant Motion for Approval of Settlement Under PAGA. The
motion is unopposed.
Legal
Standard
The
Private Attorneys General Act is “a procedural statute allowing an aggrieved
employee to recover civil penalties—for Labor Code violations—that otherwise
would be sought by state labor law enforcement agencies.” (Amalgamated Transit Union, Local 1756,
AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.) The statute provides a mechanism for private
enforcement of Labor Code violations for the public benefit. (See Arias v. Superior Court (2009) 46
Cal.4th 969, 986.) The statute incentivizes aggrieved employees by providing 25
percent of the recovered civil penalties, while the remaining 75 percent is
distributed to the Labor and Workforce Development Agency (LWDA) “for
enforcement of labor laws…and for education of employers and employees about
their rights and responsibilities under [the Labor Code].” (Lab. Code, § 2699, subd. (i).)
“The
superior court shall review and approve any settlement of any civil action
filed pursuant to this part [Labor Code Private Attorneys General Act of
2004].” (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.) A court should consider factors used in evaluating
class action settlements, such as 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. (Ibid.) Other factors
that may be useful in determining fairness include whether (1) the settlement
is the result of 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. (Nordstrom Com. Cases
(2010) 186 Cal.App.4th 576, 581; Wershba v. Apple Computer, Inc. (2001)
91 Cal.App.4th 224, 245.) In considering
the amount of settlement, the court is mindful that compromise is inherent and
necessary in the settlement process. (Wershba,
supra, 91 Cal.App.4th at p. 250.)
Discussion
Plaintiff moves for an order granting
approval of the proposed settlement under PAGA on the grounds that the
settlement is fair, reasonable, and adequate. The breakdown of the proposed
settlement is as follows:
Gross Settlement Amount (“GSA”): $175,000.00
Plaintiff’s Counsel’s Fees: $58,333,33
Plaintiff’s Counsel’s Litigation
Costs: $20,000.00
Plaintiff’s Service Award: $10,000.00
Settlement Administrator Costs: $4,500.00
Net Settlement Amount (PAGA
Penalties): $82,166.67
PAGA Penalties: $82,166.67
Labor Workforce Development Agency (75%): $61,625.25
Aggrieved Employees (25%): $20,541.67
Service on the Labor and Workforce
Development Agency
Plaintiff
filed proof of service that the proposed settlement, moving papers, and
supporting declarations were electronically served on the Labor and Workforce
Development Agency on May 14, 2024, in compliance with Labor Code Section 2699,
subdivision (l)(2). (POS, filed on 5/14/24.)
Fair, Reasonable & Adequate
The Court finds
that the overall proposed settlement is fair, reasonable, and adequate to all
concerned parties and is not the product of fraud, collusion, or overreaching.
Here, the
parties engaged in informal and formal discovery, held several meet and confer
sessions, exchanged documents and information prior to mediation. (Trenner
Decl., ¶8.) This information included the number of potential alleged aggrieved
employees, number of aggregate pay periods, sample pay stubs, time records for
over 45,00 employee shifts, employee handbooks and manuals, and relevant policy
documents on Defendants’ time keeping and reporting policies. (Id.)
Plaintiff had this information reviewed by Berger Consulting Group to help
evaluate potential violation rates, potential damages, etc. (Id.) Next,
the parties attended a full-day mediation before Steven Pearl, Esq., who has
extensive experience mediating wage and hour class and PAGA actions. (Id.
at ¶9.) This demonstrates that the settlement was a result of arms-length
negotiations.
Furthermore,
Plaintiff’s counsel avers based on the information and documents provided by
Defendants, Plaintiff assessed the maximum value of the PAGA claims to be
released by the settlement to be approximately $2,744,200.00 at the rate of
$100.00 penalty for approximately 6,550 pay periods at issue for approximately
307 Aggrieved Employees. (Trenner Decl., ¶¶17-18.) However, Plaintiff concedes
that Defendants raised various procedural and meritorious defenses, which could
have decimated Plaintiff’s case if they were successful. (Id. at
¶¶19-25.) For example, Plaintiff’s counsel asserts that Defendants argued PAGA
penalties should be substantially discounted for stacked violations, as it
would be unfair to penalize them multiple times for the same violation. (Id.
at ¶23; Labor Code § 2699, subd. (f)(2).)
Experience of Counsel
Nikki
Trenner attests to her experience in wage/hour class actions and PAGA lawsuits
for the past six (6) years. (Trenner Decl., ¶33.) Trenner also attests to the
experience of her firm colleagues. (Id. at ¶¶34-41.) Finally, Trenner
avers that she assisted in several cases that resulted in million dollar
settlements. (Id. at ¶33.)
Attorneys’ Fees and Litigation Costs
Plaintiff
requests $58,333.333 in attorney’s fees and $20,000.00 in costs. Labor Code section 2699, subdivision (g)(1) provides
“[a]ny employee who prevails in any action shall be entitled to an award of
reasonable attorney’s fees and costs . . . .” (Lab. Code, § 2699(g)(1).)
The Court finds that Plaintiff is represented by
experienced counsel. Further, the fee requested, $58,333.333, represents
33.333% of the gross settlement. As to costs, Counsel avers that the total cost
incurred were $25,750.42 for filing fees, service of process, mediation fees,
PAGA filing fee, expert witness fees, case anywhere, and postage. (Trenner
Decl., ¶49.) Moreover, the PAGA settlement agreement indicates the parties
agreed to cap the costs at $20,000.00. (Id., Ex. 1.) The Court awards
this amount.
Accordingly, the Court awards $58,333.333 in attorney’s
fees and $20,000.00 in costs.
Plaintiff’s Service Award
Plaintiff
requests $10,000.00 as a service award for the worked he performed in this case
in the amount of 20.0 hours related to communicating with attorneys, searching
for and providing documents, and reviewing filing and key documents. (Montoya
Decl., ¶7.) The Court finds the $10,000.00 service award for approximately 20.0
hours of work is reasonable given the original net settlement amount was
$20,541.67.
Settlement Administration Costs
The
parties have agreed to engage Phoenix Settlement Administrators (“Phoenix”) as
the third-party settlement administrator and requests court approval of
$4,500.00 for administration costs. (Trenner Decl., ¶¶2, 11, Ex. 1.) Phoenix
will mail a Notice and settlement check to all PAGA members via First-Class
U.S. Mail, using the most current known mailing addresses identified in
Defendants’ records. (Id.)
Release
The Court finds the release under the Settlement
Agreement is fair and reasonable. The release states: “All Aggrieved Employees
are deemed to release, on
behalf of
themselves and their respective former and present representatives, agents,
attorneys,
heirs, administrators, successors, and assigns, the Released Parties from all
claims for
PAGA penalties that were alleged, or reasonably could have been alleged, based on the PAGA
Period facts stated in the Operative Complaint the PAGA Notice
including PAGA
claims predicated on alleged violations of the California Labor Code
sections
201-203, 204, 216, 221-223, 226, 226.7, 245-248.5, 351-353, 432, 432.5,
432.7, 510,
512, 558, 558.1, 1024.5, 1174, 1194, 1197, 1197.1, 1198, 1198.5, 1199,
2802, 2810.5,
and the applicable California Industrial Welfare Commission Wage
Orders.”
(Trenner Decl., ¶2 Ex. 1.)
Explanatory Letter
Plaintiff
has attached the proposed Notice letter that will be sent to the Aggrieved
Employees regarding the proposed PAGA settlement. (Trenner Decl., ¶2, Ex. 4.)
Accordingly,
the Motion for Approval of Settlement Under PAGA is GRANTED.
It
is so ordered.
Dated: September 9, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court