Judge: Peter A. Hernandez, Case: 20STCV13849, Date: 2025-06-09 Tentative Ruling

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Case Number: 20STCV13849    Hearing Date: June 9, 2025    Dept: 34

Plaintiff Raul Maldonado’s Motion for Final Approval of Settlement is GRANTED in part.

Background

On April 9, 2020, Plaintiff Raul Maldonado (“Plaintiff”) filed a complaint against Defendant FS Hotels LA, Inc. (“Defendant”) arising from Plaintiff’s employment alleging causes of action for Violations of the Private Attorneys General Act of 2004 (“PAGA”).

On July 16, 2020, Plaintiff filed a First Amended Complaint (“FAC”).

On September 1, 2020, Defendant filed an answer.

On January 22, 2021, Plaintiff filed a Second Amended Complaint (“SAC”).

On May 27, 2022, the court denied Defendant’s Motion for Judgment on the Pleadings.

On July 29, 2022, the court denied Defendant’s Motion to Dismiss Plaintiff’s Representative Action.

On January 24, 2024, Plaintiff filed a Third Amended Complaint (“TAC”).

On February 27, 2024, Defendant filed an answer to Plaintiff’s TAC.

On August 7, 2024, the court granted Plaintiff’s Motion for Preliminary Approval of Settlement.

On May 13, 2025, Plaintiff filed this Motion for Final Approval of Settlement. No opposition or other responsive pleading has been filed.

Legal Standard

            A court must review and approve any penalties sought as part of a proposed settlement agreement pursuant to Labor Code section 2699.  (Lab. Code § 2699, subd. (l).)  “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and 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).)   

Discussion

            Plaintiff seeks final approval of the settlement between the parties. Under the proposed settlement, Defendant will pay a total sum of $1,300,000.00 with amounts of the settlement allocated to cover $455,000.00 in attorneys’ fees, $24,217.26.00 in litigation costs, $10,000.00 in a service payment to Plaintiff, and $15,000.00 in costs of the settlement administrator. (Motion, at p. 6.) The settlement allocates $50,000.00 for a PAGA payment with 75% to be paid to the Labor and Workforce Development Agency (“LWDA”) and 25% to be paid to the PAGA representative group composed of 855 members defined as “[a]ll non-exempt employees of FS Hotels LA, Inc., in California at any time from April 9, 2016, through June 16, 2019.” (Id., at pp. 6-7.)

The Settlement is Entitled to a Presumption of Fairness 

A presumption of fairness¿for a settlement agreement exists where: (1) the settlement is reached through 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.  (Dunk v. Ford Motor Co.¿(1996) 48 Cal.App.4th 1794, 1802.)  The final factor does not apply to PAGA.  (Arias v. Superior Court (2009) 46 Cal.4th 969, 984 [representative actions under PAGA do not violate the due process rights of “nonparty aggrieved employees who are not given notice of, and an opportunity to be heard”].)  

            The court finds that the settlement was reached through arm’s-length bargaining following an exchange of discovery between the parties and mediation with the Hon. Richard Stone. (Perlman Decl., ¶ 12.)

            In advance of mediation, the parties propounded written discovery, reviewed numerous documents produced, and took depositions. (Id., ¶ 13.) Accordingly, there was sufficient investigation to allow counsel and the court to act intelligently.  

            Additionally, Plaintiff’s Counsel Douglas W. Perlman and the Rastegar Law Group, APC has extensive experience litigating wage and hour class actions. (Id., ¶¶ 27-37.)

The settlement agreement meets all of the fairness factors. The court finds that the settlement is entitled to a presumption of fairness.  

The Release is Permissible 

If the court approves the settlement, the aggrieved employees agree to release “[a]ny and all claims, demands, rights, liabilities and causes of action that were asserted in the Complaint in the Action or that could have been asserted based on the factual allegations in the Complaint in the Action, i.e., that Defendants failed to pay all wages due, failed to pay overtime wages due, failed to provide accurate wage statements, failed to provide compliant meal periods, failed to provide compliant rest periods, failed to reimburse for necessary expenditures, engaged in unfair and unlawful business practices, and for violations and penalties under PAGA for any violations enumerated above, together with any other civil penalties, waiting time penalties, or other fines, penalties, interest, or charges of any kind that were asserted in the Complaint in the Action or that could have been asserted based on the factual allegations in the Complaint in the Action at any time during the Class Period (“Released Claims”). The release shall run for the duration of the Class Period. “Released Parties” means Defendant, its past or present officers, owners, directors, shareholders, clients, joint employers, employees, agents, principals, heirs, representatives, attorneys, accountants, auditors, consultants, insurers and reinsurers, and their respective successors and predecessors in interest, subsidiaries, affiliates, parents and attorneys, but only as to the claims described in the Settlement Agreement Section 10.1. Notwithstanding the foregoing, Fair Labor Standards Act claims will be released only as to those Class Members who negotiate their settlement checks and will therefore be deemed to have opted-in to the Settlement.” (Burns Decl., ¶ 5, Exh. A, at p. 3.)

This release is limited to claims for civil penalties that arise from or relate to the allegations in Plaintiff’s complaint in this action, and it is permissible.  

The Attorneys’ Fees and Costs Are Reasonable 

A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action.  (Lab. Code, § 2699, subd. (g)(1).)  “Courts recognize two methods for calculating attorney fees in civil class actions: the lodestar/multiplier method and the percentage of recovery method.”  (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 254.)  

Here, Plaintiff’s counsel will receive $455,000.00 of the $1,300,000.00 settlement amount in fees, and litigation costs estimated to be $24,217.26. (Motion, at p. 16.) Plaintiff’s counsel declares to have spent 419.50 hours in this matter, making the lodestar amount $396,768.75. (Id., at p. 18.) The court finds that the fees requested are reasonable and supported. The costs are also reasonable.  

The Enhancement Award is Reasonable 

The settlement provides a $10,000.00 enhancement award to Plaintiff. (Perlman Decl., ¶ 16.) Plaintiff’s contributions to this case included over 100 hours meeting with his counsel, searching for documents, preparing for and attending his deposition, assisting counsel in preparing for mediation, and regularly checking in with counsel regarding the status of the case. (Ibid.)

Based on the above, the court finds that a $10,000 enhancement award to Plaintiff is reasonable. 

The Estimated Settlement Administration Costs are Reasonable 

The settlement also provides for an estimated $15,000.00 in settlement administration costs to the settlement administrator Phoenix Settlement Administrators (“Phoenix”). (Motion, at p. 8.) The motion provides that Phoenix provided notice to the class of 855 members. (Id., at p. 7.)  Based on the work performed by Phoenix, an estimated $15,000.00 in settlement administration costs is reasonable.  

Plaintiff Has Provided Notice of the Settlement to LWDA 

A proposed PAGA settlement must be submitted to LWDA at the same time that it is submitted to the court for review and approval.  (Lab. Code § 2699, subd. (l)(2).) Plaintiff has not provided any evidence or declaration showing that LWDA received the proposed settlement concurrently with the filing of this motion.

Accordingly, the court finds that this requirement was not satisfied. The court grants Plaintiff’s motion, pursuant to the court receiving proof that the LWDA received notice of the proposed settlement.

Conclusion

Plaintiff Raul Maldonado’s Motion for Final Approval of Settlement is GRANTED in part.