Judge: Michael E. Whitaker, Case: 23SMCV04750, Date: 2024-07-17 Tentative Ruling

Case Number: 23SMCV04750    Hearing Date: July 17, 2024    Dept: 207

TENTATIVE RULING

MOTION

On October 5, 2023, Plaintiff Erin Naymark (“Plaintiff”) filed a complaint in this action against Defendant Tutored By Teachers, Inc., alleging nine causes of action for (1) misclassification of employment status; (2) failure to pay minimum wages; (3) failure to pay overtime wages; (4) failure to provide meal periods; (5) failure to provide rest periods; (6) failure to provide adequate paystubs; (7) failure to maintain accurate records; (8) failure to indemnify for all employment related losses/expenditures; and (9) unfair competition.

On November 27, 2023, after the Labor and Workforce Development Agency (“LWDA”) review period had expired, Plaintiff filed a First Amended Complaint (“FAC”) adding a cause of action for civil penalties under the Private Attorney General Act (“PAGA”).

Plaintiff now moves for approval of the PAGA settlement and judgment thereon.  Plaintiff’s motion is unopposed. 

ANALYSIS

“Under PAGA, an aggrieved employee may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency, leaving the remaining 25 percent for the ‘aggrieved employees.”  (Townley v. BJ's Restaurants, Inc. (2019) 37 Cal.App.5th 179, 181 [cleaned up.])  An individual employee is not entitled to recover the entire 25 percent amount of civil penalties allocated to aggrieved employees.  (Moorer v. Noble L.A. Events, Inc. (2019) 32 Cal.App.5th 736, 742.)

            “The superior court shall review and approve any settlement of any civil action filed pursuant to this part.”  (Lab. Code, § 2699, subd. (s)(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.)

            The parties seek to settle the matter for $550,000.00, of which $187,365.00 will be paid as attorneys’ fees to counsel, representing approximately 34% of the total settlement amount; $8,277.99 will be paid to reimburse costs; $5,135.00 will be allocated to prior counsel, as a lien holder, for attorneys’ fees; $795.90 will be allocated to prior counsel, as a lien holder, for costs; $3,750.00 will go to the administrator; $20,000 will be allocated to Plaintiff, as the PAGA representative; and the remaining $324,676.11 will be allocated as follows - 75% ($243,507.08) for the LWDA PAGA Payment and 25% ($81,169.03) for the 235 aggrieved individuals, as required by law.  (Ex. D to Wong Decl.)

            Concerning the $550,000 settlement amount, Plaintiff’s counsel performed an in-depth analysis of the likely recovery for each claim, taking into account the relative strengths, weaknesses, and risks of each claim, to determine a settlement amount that represented a reasonable compromise, pursuant to Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116 (hereafter Kullar.)  In Kullar, the appellate court analyzed whether a wage and hour class action settlement represented a reasonable compromise.  Although PAGA actions are not required to satisfy the requirements for class action settlements (see Arias v. Superior Court (2009) 46 Cal.4th 969, 975), the Court finds Plaintiff’s Kullar analysis instructive and compelling. 

            Specifically, Plaintiff provided an attorney declaration of Gregory P. Wong (“Wong”), outlining counsel’s calculations and indicating:

38. As detailed in the table below, the overall result of my Kullar risk analysis determined that the range of risk-adjusted recovery was $226,245.69 to $630,856.31. This places the proposed gross settlement amount of $550,000.00 squarely in the high range of potential outcomes.

Violation                    Max Exposure           Low Recovery           High Recovery

Misclassification        $2,350,000.00             $146,875.00                $440,625.00

Minimum Wage          $191,232.00                $23,904.00                  $35,856.00

Reimbursement           $99,600.00                  $6,225.00                    $18,675.00

Rest Break                  $59,234.11                  $3,702.13                    $7,404.26

Meal Period                $17,276.62                  $1,079.79                    $2,159.58

Wage Statement          $187,450.00                $11,715.63                  $35,146.88

Recordkeeping            $176,250.00                $11,015.63                  $33,046.88

Waiting Time              $347,656.32                $21,728.52                  $57,942.72

Total                           $3,428,699.05             $226,245.69                $630,856.31

(Wong Decl. ¶ 38.) 

In support of the requested $20,000 representative payment to Plaintiff, the Wong declaration provides as follows:

39. Plaintiff Naymark alleges individual claims that go beyond the scope of the representative PAGA claims at issue in this Action. To begin with, Plaintiff Naymark began work for Defendant in March of 2022. The PAGA Period for purposes of this action begins on September 14, 2022. Thus, Plaintiff has approximately six months of additional damages that have been pled on an individual basis beyond the PAGA penalties sought. Additionally, Plaintiff possesses “Individual PAGA” claims that are distinct from the representative PAGA claims. See Adolph v. Uber Technologies, Inc., 14 Cal.5th 1104 (2023). By agreeing to a general release and judgment as to all claims alleged in this Action, Plaintiff is compromising claims that go beyond the representative PAGA claims. Based on my experience as an employment litigator and my knowledge of Plaintiff’s individual claims, I estimate that a reasonable range of settlement for Plaintiff’s individual claims would have met or exceeded $20,000.00.

(Wong Decl. ¶ 39.)

The Wong Declaration also provides an accounting of the requested $183,152.50 in attorneys’ fees it is requesting.  (Wong Decl. ¶ 49.)

In support of the requested administrator fees, Plaintiff provides the curriculum vitae and an estimate from Phoenix, a class action administrator company, providing that the estimated costs to administer the PAGA settlement for 235 aggrieved members will not exceed $3,750.  (Wong Decl. ¶ 55, Ex. E.)

            Therefore, the Court finds that the proposed settlement amount is fair, reasonable, and adequate in all respects and has been submitted to the LWDA per Labor Code section 2699, subdivision (s)(2).  (Wong Decl.  ¶ 58, Ex. G.) 

            Plaintiff also seeks approval of the proposed notice of settlement and release of claims, which the parties propose sending with the settlement checks.  (Wong Decl.  ¶ 57, Ex. F.)  The Court finds the notice adequately instructs the aggrieved members of the settlement and their release of claims. 

CONCLUSION AND ORDER

For the reasons stated, the Court grants Plaintiff’s Motion for Approval of PAGA Settlement and Judgment in its entirety.  As such, the Court will enter the Order as proposed, except the Court will schedule a Status Conference regarding compliance with the distribution of the settlement proceeds on October 7, 2024 at 8:30 A.M. in Department 207.  A Status Report shall be filed with the Court no later than 5 court days before the conference.

Plaintiff shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith. 

DATED:  July 17, 2024                                                          ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court