Judge: Michael P. Linfield, Case: 22STCV22420, Date: 2023-12-08 Tentative Ruling
Case Number: 22STCV22420 Hearing Date: December 8, 2023 Dept: 34
SUBJECT: Motion for Approval of PAGA Settlement
Moving Party: Plaintiff
Stephanie Romero
Resp. Party: None
SUBJECT: Motion to Vacate the Notice of
Conditional Settlement
Moving Party: Plaintiff
Stephanie Romero
Resp. Party: None
The Second Motion
for Approval is GRANTED.
As the Motion to
Vacate is conditioned on denial of the Second Motion for Approval, the Motion
to Vacate is DENIED as moot.
BACKGROUND:
On July 12, 2022, Plaintiff filed her
Complaint against Defendant Alta Public Schools on causes of action arising
from Plaintiff’s employment with Defendant.
On September 21, 2022, Plaintiff filed
her First Amended Complaint.
On January 13, 2023, Plaintiff filed her
Second Amended Complaint (SAC).
On February 14, 2023, Plaintiff filed
her Notice of Errata regarding her SAC.
On March 2, 2023, Defendant filed its
Answer to Plaintiff’s SAC.
On June 9, 2023, Defendant filed its
First Amended Answer to Plaintiff’s SAC.
On November 7, 2023, the Court denied
without prejudice Plaintiff’s Motion for Approval of PAGA Settlement
(“Plaintiff’s First Motion for Approval”).
On November 9, 2023, Plaintiff filed her
Motion for Approval of PAGA Settlement (“Plaintiff’s Second Motion for
Approval”). In support of her Motion, Plaintiff concurrently filed: (1)
Declaration of Matthew Gutierrez; (2) Request for Judicial Notice; and (3)
Proposed Order.
On November 21, 2023, Plaintiff filed
her Motion to Vacate the Notice of Conditional Settlement (“Motion to Vacate”).
In support of her Motion to Vacate, Plaintiff concurrently filed: (1)
Declaration of Matthew Gutierrez; and (2) Proposed Order.
No opposition or other response has been
filed to either of the motions.
ANALYSIS:
I.
Request for Judicial Notice
Plaintiff requests
that the Court take judicial notice of:
(1) Legislative Counsel
Digest re Senate Bill 836.
The Court DENIES as irrelevant judicial notice to
this item. “Although a court may judicially notice a variety of matters (Evid.
Code, § 450 et seq.), only relevant material may be noticed.” (Am.
Cemwood Corp. v. Am. Home Assurance Co. (2001) 87 Cal.App.4th 431, 441, fn.
7, quotation omitted, italics in original.)
II. Legal Standard
“This part shall
be known and may be cited as the Labor Code Private Attorneys General Act of
2004.” (Lab. Code, § 2698.)
“Notwithstanding
any other provision of law, any provision of this code that provides for a
civil penalty to be assessed and collected by the Labor and Workforce
Development Agency or any of its departments, divisions, commissions, boards,
agencies, or employees, for a violation of this code, may, as an alternative,
be recovered through a civil action brought by an aggrieved employee on behalf
of himself or herself and other current or former employees pursuant to the
procedures specified in Section 2699.3.” (Lab. Code, § 2699, subd. (a).)
In bringing an action pursuant to the Labor
Code Private Attorneys General Act of (2004) (“PAGA”), “the aggrieved employee
acts as the proxy or agent of state labor law enforcement agencies,
representing the same legal right and interest of those agencies, in a
proceeding that is designed to protect the public, not to benefit private
parties.” (Amalgamated Transit Union, Local 1756, AFL-CIO v. Super. Ct. (2009)
46 Cal.4th 993, 1003, citations omitted.)
PAGA claims, as well as
settlements of PAGA claims, involve multiple statutory requirements. (Lab.
Code, § 2699, et seq.)
III.
Discussion
The Court considers below the various
statutory requirements of PAGA, as well as whether the settlement meets the
fair, reasonable, and adequate standard.
A.
Proof of Service on the Labor and Workforce
Development Agency Prior to Commencement of Action, at Commencement of Action,
and Prior to Settlement of Action
1.
Legal Standard
“A civil action by an aggrieved employee pursuant to subdivision
(a) or (f) of Section 2699 alleging a violation of any provision listed in
Section 2699.5 shall commence only after the following requirements have been
met:
“(1)
“(A) The aggrieved employee or representative shall
give written notice by online filing with the Labor and Workforce Development
Agency and by certified mail to the employer of the specific provisions of this
code alleged to have been violated, including the facts and theories to support
the alleged violation.
“(B) A notice filed with the Labor and Workforce
Development Agency pursuant to subparagraph (A) and any employer response to
that notice shall be accompanied by a filing fee of seventy-five dollars ($75).
The fees required by this subparagraph are subject to waiver in accordance with
the requirements of Sections 68632 and 68633 of the Government Code.”
(Lab. Code, §
2699.3, subd. (a)(1)(A)–(B).)
“The provisions
of subdivision (a) of Section 2699.3 apply to any alleged violation of the
following provisions: subdivision (k) of Section 96, Sections 98.6, 201, 201.3,
201.5, 201.7, 202, 203, 203.1, 203.5, 204, 204a, 204b, 204.1, 204.2, 205,
205.5, 206, 206.5, 208, 209, and 212, subdivision (d) of Section 213, Sections
221, 222, 222.5, 223, and 224, paragraphs (1) to (5), inclusive, (7), and (9)
of subdivision (a) of Section 226, Sections 226.7, 227, 227.3, 230, 230.1,
230.2, 230.3, 230.4, 230.7, 230.8, and 231, subdivision (c) of Section 232,
subdivision (c) of Section 232.5, Sections 233, 234, 351, 353, and 403,
subdivision (b) of Section 404, Sections 432.2, 432.5, 432.7, 435, 450, 510,
511, 512, 513, 551, 552, 601, 602, 603, 604, 750, 751.8, 800, 850, 851, 851.5,
852, 921, 922, 923, 970, 973, 976, 1021, 1021.5, 1025, 1026, 1101, 1102,
1102.5, and 1153, subdivisions (c) and (d) of Section 1174, Sections 1194,
1197, 1197.1, 1197.5, and 1198, subdivision (b) of Section 1198.3, Sections
1199, 1199.5, 1290, 1292, 1293, 1293.1, 1294, 1294.1, 1294.5, 1296, 1297, 1298,
1301, 1308, 1308.1, 1308.7, 1309, 1309.5, 1391, 1391.1, 1391.2, 1392, 1683, and
1695, subdivision (a) of Section 1695.5, Sections 1695.55, 1695.6, 1695.7,
1695.8, 1695.9, 1696, 1696.5, 1696.6, 1697.1, 1700.25, 1700.26, 1700.31,
1700.32, 1700.40, and 1700.47, Sections 1735, 1771, 1774, 1776, 1777.5, 1811,
1815, 2651, and 2673, subdivision (a) of Section 2673.1, Sections 2695.2, 2800,
2801, 2802, 2806, and 2810, subdivision (b) of Section 2929, and Sections
3073.6, 6310, 6311, and 6399.7.” (Lab. Code, § 2699.5.)
“For cases filed on
or after July 1, 2016, the aggrieved employee or representative shall, within
10 days following commencement of a civil action pursuant to this part, provide
the Labor and Workforce Development Agency with a file-stamped copy of the
complaint that includes the case number assigned by the court.” (Lab. Code, §
2699, subd. (l)(1).)
“The 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).)
2.
Discussion
Plaintiff filed causes of action for various
labor code violations, including violations of Labor Code sections 203, 226.7,
and 510. These sections are covered by Labor Code section 2699.5, and thus the
pre-complaint notice requirement to the Labor Workforce Development Agency
(LWDA) applies here. (Lab. Code, § 2699.3, subd. (a).)
Plaintiff provided the Court with evidence
that Plaintiff sent a notice letter to LWDA on July 14, 2022. (Decl. Gutierrez,
Exh. h.) The Court finds that this meets the notice requirement under Labor
Code section 2699.3, subdivision (a).
Plaintiff has provided the Court with
evidence that a file-stamped copy of the complaint with the case number
assigned by the Court was sent to the Labor Workforce Development Agency
(LWDA). (Decl. Guiterrez, Exhs. F–G.) The Court finds that this meets the
notice requirement under Labor Code section 2699, subdivision (l)(1).
Plaintiff provided email evidence of
submission of a copy of the proposed settlement to LWDA at the same time that
it submitted the proposed settlement to the Court. (Lab. Code, § 2699, subd.
(l)(2); Decl. Gutierrez Exh. D.) The Court finds that this meets the notice
requirement under Labor Code section 2699, subdivision (l)(2).
B.
The PAGA Settlement
1.
Legal Standard
“For all provisions of this code except those for which a civil
penalty is specifically provided, there is established a civil penalty for a
violation of these provisions, as follows: . . . (2) If, at the time of the
alleged violation, the person employs one or more employees, the civil penalty
is one hundred dollars ($100) for each aggrieved employee per pay period for
the initial violation and two hundred dollars ($200) for each aggrieved
employee per pay period for each subsequent violation.” (Lab. Code, § 2699,
subd. (f)(2).)
“For purposes of
this part, whenever the Labor and Workforce Development Agency, or any of its
departments, divisions, commissions, boards, agencies, or employees, has
discretion to assess a civil penalty, a court is authorized to exercise the
same discretion, subject to the same limitations and conditions, to assess a
civil penalty.” (Lab. Code, § 2699, subd. (e)(1).)
“In any action by
an aggrieved employee seeking recovery of a civil penalty available under
subdivision (a) or (f), a court may award a lesser amount than the maximum
civil penalty amount specified by this part if, based on the facts and
circumstances of the particular case, to do otherwise would result in an award
that is unjust, arbitrary and oppressive, or confiscatory.” (Lab. Code, § 2699,
subd. (e)(2).)
“Except as
provided in subdivision (j), civil penalties recovered by aggrieved employees
shall be distributed as follows: 75 percent to the Labor and Workforce
Development Agency for enforcement of labor laws, including the administration
of this part, and for education of employers and employees about their rights and
responsibilities under this code, to be continuously appropriated to supplement
and not supplant the funding to the agency for those purposes; and 25 percent
to the aggrieved employees.” (Lab. Code, § 2699, subd. (i).)
“Except as
provided in paragraph (2), an aggrieved employee may recover the civil penalty
described in subdivision (f) in a civil action pursuant to the procedures
specified in Section 2699.3 filed on behalf of himself or herself and other
current or former employees against whom one or more of the alleged violations
was committed. Any employee who prevails in any action shall be entitled to an
award of reasonable attorney’s fees and costs, including any filing fee paid
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) or subparagraph
(B) of paragraph (1) of subdivision (c) of Section 2699.3. Nothing in this part
shall operate to limit an employee’s right to pursue or recover other remedies
available under state or federal law, either separately or concurrently with an
action taken under this part.” (Lab. Code, § 2699, subd. (g)(1).)
2.
Highlights of the Proposed PAGA Settlement
The highlights of the proposed PAGA
settlement are listed below:
(1) Defendant will pay
a gross settlement amount of $40,000.00 (the “Gross Settlement Amount”).
(2) PAGA Counsel (who
are Plaintiff’s Counsel) will be paid up to 33.33% of the Gross Settlement
Amount (which would be $13,333.33, although the currently estimated amount is
expected to be $11,665.50, or approximately 29.16% of the Gross Settlement
Amount), plus up to $1,000.00 in costs (the “Costs”), which is an additional
2.5% of the Gross Settlement Amount.
(3) Phoenix Settlement
Administrators (the “PAGA Administrator”) will be paid up to $2,950.00, except
for a showing of good cause and as approved by the Court. This is 7.375% of the
Gross Settlement Amount.
(4) LWDA and the
Aggrieved Employees (including Plaintiff, who will be receiving her pro rata
share of the PAGA penalties) will receive 75% and 25%, respectively, of the
remaining $19,384.50.
(5) Plaintiff has a
separate agreement with Defendant for settlement of her non-PAGA claims.
(6) There are estimated
to be 99 Aggrieved Employees who worked a total of 2,956 of PAGA-relevant pay
periods. The Aggrieved Employees will receive payments from the PAGA
Administrator based on a division of the employee share of the PAGA penalties
that is multiplied by each employee’s number of PAGA-relevant pay periods.
(7) Aggrieved Employees
will have up to 180 days to cash their settlement checks, after which those
checks will be voided, and the funds represented by such checks will be sent to
the California Controller’s Unclaimed Property Fund in the name of the
Aggrieved Employee. The Settlement Administrator shall be responsible for the
administration of all unclaimed funds, including any and all reporting
requirements proscribed by California law.
(Decl. Gutierrez, Exhs. A–B.)
The proposed PAGA settlement
also includes other terms, such as for distribution of the settlement and
release from claims. (Ibid.)
3.
Attorneys’ Fees and Attorneys’ Costs
PAGA Counsel requests $11,665.50 in
attorneys’ fees, which is approximately 29.16% of the Gross Settlement Amount.
PAGA Counsel further requests $1,000.00 in costs, which is an additional 2.5%
of the Gross Settlement Amount.
The Court finds that these amounts of fees
and costs are reasonable.
4.
PAGA Administrator Costs
PAGA Counsel requests that the PAGA
Administrator be paid up to $2,950.00 (which is 7.375% of the Gross Settlement
Amount) for expenses incurred in administering the settlement.
PAGA Counsel has provided additional
documentation regarding the PAGA Administrator costs. Upon reviewing the
invoice and terms and conditions, the Court is satisfied that this amount of
costs is appropriate here.
5.
Remaining Civil Penalties for LWDA and Aggrieved
Employees
PAGA Counsel requests that LWDA and the
Aggrieved Employees receive 75% and 25%, respectively, of the “Net Settlement
Amount (i.e., the Gross Settlement Amount, less the Attorneys’ Fees, Attorneys’
Costs, and PAGA Administrator Costs).
This division of the civil penalties is
required pursuant to Labor Code section 2699, subdivision i.
The estimated amount Net Settlement Amount is
$22,718.00. The proposed division of 75% to LWDA and 25% to the Individual PAGA
Payments is appropriate, with any further savings from the PAGA Administrator’s
Costs being split similarly.
6.
Reversion of Funds
The settlement agreement gives Aggrieved
Employees up to 180 days to cash their settlement checks, after which those
checks will be voided, and the funds represented by such checks will be sent to
the California Controller’s Unclaimed Property Fund in the name of the
Aggrieved Employee. The Court finds that this provision is appropriate.
7.
Enhancement Award
Under this settlement agreement, Plaintiff
will not be awarded any “bonus” or enhancement award for work done in this
matter. The Court finds that this is acceptable given that Plaintiff apparently
has a separate agreement for settlement of her non-PAGA claims.
8.
Notice of Release of Claims
PAGA Counsel provide a revised proposed
notice to the Aggrieved Employees which contains the bolded language required
by the Court in its November 7, 2023 ruling. (Decl. Gutierrez, Exh. D.) The
Court is satisfied with the revised proposed notice.
C.
The Fair, Reasonable, and Adequate Standard
1.
Legal Standard
The Court of Appeal has held “that 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, citations omitted.)
“Despite the fact
that a representative action under PAGA is not a class action, and is instead a
type of qui tam action, a standard
requiring the trial court to determine independently whether a PAGA settlement
is fair and reasonable is appropriate. . . . Because many of the factors used
to evaluate class action settlements bear on a settlement’s fairness—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—these factors can be useful in evaluating the fairness of a PAGA
settlement.” (Moniz, supra, at pp. 76–77.)
2.
Discussion
Plaintiff’s Counsel provide a detailed
explanation of the Parties’ settlement negotiations, including: (1) the
investigation into the claims; (2) the negotiations between the Parties; and
(3) consideration of Defendant’s finances, based upon a review of sampled
records that indicate Defendant’s ability to pay. (Decl. Gutierrez, ¶¶ 10–12.)
In addition, Plaintiff’s Counsel provide an additional detailed explanation as
to why the civil penalty is fair, reasonable and adequate. (Second Motion for
Approval, pp. 5–7.) The Court is now satisfied that the fair, reasonable, and
adequate standard has been met here.
II.
Conclusion
The Second Motion for Approval is
GRANTED. Counsel to prepare the Order
for the Court.
As the Motion to Vacate is
conditioned on denial of the Second Motion for Approval, the Motion to Vacate
is DENIED as moot.