Judge Peter A. Hernandez, Case Number: 22PSCV02263, Date: 2024-05-30 Tentative Ruling

Plaintiff Karina Villagrana’s Motion for Approval of PAGA Settlement is GRANTED.

Plaintiff Karina Villagrana (“Villagrana”) brings this Private Attorneys General Act (“PAGA”) action on behalf of herself and other aggrieved employees. Villagrana alleges she was employed by Zerep Management Corporation dba Valley Vista Services, Inc. (“VVS”) as a dispatcher from approximately June 1, 2021 to July 16, 2022. Villagrana alleges VVS violated various Labor Code provisions by failing to provide uninterrupted meal and rest periods, to pay overtime wages, to pay wages for all hours worked, to pay all wages due at separation of employment, to reimburse for all necessary business-related expenses, and to provide accurate wage statements.

On December 2, 2022, Villagrana filed a complaint, asserting a cause of action against VVS and Does 1-20 for:

1. Civil Penalties Under the Private Attorneys General Act (California Labor Code §§ 2698, et seq.)

On February 28, 2023, a “Joint Stipulation to Stay the Representative PAGA Action; Order” was entered.

On May 13, 2024, the court related Case Nos. 22PSCV02263 and 23STCV00276; Case No. 22PSCV02263 was designated as the lead case.

A Non-Appearance Case Review re: Stay/Result of Adolph v. Uber is set for June 4, 2024.

Plaintiff Mario Trigueros (“Trigueros”) brings this PAGA action on behalf of himself and other aggrieved employees. Trigueros alleges he was employed by VVS as a truck driver. Trigueros alleges VVS failed to reimburse for all necessary business-related expenses.

On January 6, 2023, Trigueros filed a complaint, asserting a cause of action against VVS and Does 1-50 for:

1. Penalties Pursuant to Labor Code § 2699, et seq. for Violations of Labor Code § 2802

On April 26, 2024, a “Stipulation and Order to Withdraw Plaintiff’s Pending Motion to Lift Stay Pending Appeal and Joint Request to Lift Stay of Trial Court Proceedings.”

On May 13, 2024, the court related Case Nos. 22PSCV02263 and 23STCV00276; Case No. 22PSCV02263 was designated as the lead case.

A Status Conference Re: Related Case and Case Management Conference are set for May 30, 2024.

Labor Code § 2699, subdivision (l)(2) states: “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 (“PAGA”)]. The proposed settlement shall be submitted to the [Labor and Workforce Development Agency (“LWDA”)] at the same time that it is submitted to the court.”

Any settlement of any civil action filed under PAGA must be “fair and adequate in view of the purposes and policies of the statute.” (O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135.)

Seventy-five percent of all PAGA penalties must be paid to the LWDA. (See Lab. Code § 2699(i) [“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.”].)

Labor Code § 2699(g)(1) provides, in relevant part: “Any employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs . . . .” (Lab. Code § 2699(g)(1).)

Villagrana requests entry of an order granting of the parties’ “Private Attorneys General Act Settlement Agreement” (“Agreement”).

The Agreement is attached as Exhibit A to the Declaration of Christopher Adams (“Adams”). Citations herein are to provisions of the Agreement unless otherwise noted. The essential terms of the Agreement are as follows:

• Definition of Aggrieved Employees: “Aggrieved Employees” means “all

• Definition of PAGA Period: “PAGA Period” means “the time period from

• Definition of PAGA Pay Period: “PAGA Pay Period” means “any Pay Period

• Definition of Gross Settlement Amount (“GSA”): The GSA is $275,000.00

counsel are not to exceed 1/3 of the GSA (i.e., $91,667.67. (Section I, ¶ 10). Costs are $13,137.41. (Id.)

$38,673.98) is the “amount to be distributed to Aggrieved Employees, on a pro rata basis,” consisting of 25% of the PAGA Penalties Amount (Id.; Section III, ¶ 3(d).)

º Calculation: Each Employee Payment (i.e., “the PAGA Penalty Payment that will be distributed to Aggrieved Employees as per Article IV.3) will

be calculated by Administrator (defined below) by dividing $38,673.98 by the total number of PAGA Period Pay Periods worked by all Aggrieved Employees during the PAGA Period and multiplying the result by each Aggrieved Employee’s PAGA Period Pay Periods. (Section III, ¶ 3(d)(i).)

enhancement award. (Section I, ¶ 22). The Service Award is in addition to any Individual PAGA Payment to which Villagrana is entitled. (Id.) Administrator (defined below) will issue Villagrana an IRS Form 1099 in connection with this payment. (Id.)[2]

º Settlement Administration Fee: Settlement administration fees are not to exceed $5,550.00 (Section I, ¶ 10).

º LWDA Payment: Seventy-five percent (75%) of the PAGA Penalties (i.e., $116,021.98) will be distributed to the LDWA. (Section I, ¶ 12; Section III, ¶ 3(d).

• Settlement Administrator: ILYM Group, Inc. (“ILYM”) is the third-party

settlement administrator. (Art. I, ¶ 25.) ILYM will be responsible for establishing a Qualified Settlement Fund for purposes of administering the Agreement (Section IV, ¶ 1) and for calculating and distributing all settlement checks. (Section III, ¶ 3.)

No later than 21 business days after the “Effective Date” (i.e., “the date by when

both of the following have occurred: (a) the Court enters a Judgment on its Order

final as of the day the Court enters Judgment”), VVS will provide ILYM with a list

the PAGA Period, and social security number, to the extent available from VVS’s records. (Section IV, ¶ 2).

into an account established by ILYM for administration and distribution. (Section

IV, ¶ 3). No later than 21 calendar days after receipt of the GSA from VVS, ILYM

days after it receives the returned undeliverable mail to search for a more current

address for the Aggrieved Employee (via a skip trace or other reasonable method) and re-mail the cover letter and Employee Payments to any alternative or updated

ILYM will also distribute the LWDA Payment, attorney’s fees and costs and administration costs within 21 calendar days after receipt of the GSA from VVS.

• Uncashed Funds: Each Aggrieved Employee will be issued one check for his

checks are issued by ILYM. After the 180 day-period, ILYM will cancel all checks that have not been cashed or deposited and remit funds associated with such canceled checks to the State Controller's Office, Unclaimed Property Division in the name associated with each Aggrieved Employee whose Employee Payment checks are canceled. (Id.)

• Notice to LWDA: Concurrently with this motion, Villagrana provided a copy

• Release: “PAGA Released Claims” means “any and all claims, rights, demands, liabilities and causes of action for civil penalties under the PAGA asserted, or that

could have been asserted in the Complaint, including, but not limited to, those under California Labor Code §§ 1197, 1197.1, 1198, 510, 558, 1194, 1197.1, 1198, 226.7, 512(a), 226, 201, 202, 203, 2802, 1198, 2698 et seq., the applicable IWC Wage Order and California Civil Code § 1542 release as to those sections, that arose during the PAGA Period.” (Section I, ¶ 21).

“Released Parties” means “Valley Vista Services, Inc., and each of its former,

present, and future parents, subsidiaries, affiliates, and related entities, and each of

their former, present, and future owners, directors, officers, employees, shareholders, members, attorneys, insurers, predecessors, successors, assigns or subsidiaries.” (Section I, ¶ 23).

• Escalator Clause: VVS estimates, based on a review of its records to date, that

increases by more than 10%, VVS has the option to either (1) increase the GSA on a pro-rata basis equal to the increase in the number of Pay Periods worked by

“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.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76 [internal quotations and citations omitted].) “[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. (Id. at 77.)

On March 29, 2024, the parties participated in a full-day mediation conducted by Michael D. Young, who is “well-respected and knowledgeable in wage-and-hour actions and has additional specific expertise in PAGA actions.” (Adams Decl., ¶ 16). The parties discussed the claims and defenses at-length, and each side provided the other with several settlement proposals before the agreement was reached, with Young’s assistance. (Id., ¶ 19). The parties only reached a settlement after months of negotiations and additional informal discovery. (Id.)

On September 14, 2022, Villagrana served a written PAGA Notice to both the LWDA and VVS. (Adams Decl., ¶ 12, Exh. E). The LWDA did not respond to the letter. (Id., ¶ 13.) The parties conducted “extensive formal discovery,” including initial disclosures, written discovery, and Villagrana’s deposition. (Id., ¶ 16). Prior to litigation, VVS produced Villagrana’s personnel file and wage statements. (Id., ¶ 17). In addition to formal discovery and in anticipation to mediation, Villagrana’s counsel informally requested that VVS produce its relevant policies, procedures, and practices and data demonstrating estimated representative size, hours worked, workweeks (pay periods), hourly-rates, and total compensation of non-exempt employees. (Id.) In response, VVS produced: (1) the written policies and practices related to meal periods, rest periods, overtime, wage statements, payment of final wages, and any other wage-and-hour issues; (2) sample time records and wage statements; and (3) data demonstrating the total number of aggrieved employees and total number of pay periods (i.e., approximately 330 employees and approximately 13,000 PAGA pay periods). (Id.)

Adams has satisfactorily attested as to his experience in employment representative and class actions involving wage-and-hour claims. (See Adams Decl.). Adams submits that the Settlement fulfills the purpose of the PAGA statute, is within the accepted range of recoveries for this types of litigation, is fair and reasonable under the circumstances, and in the best interests of Plaintiff, the State of California and other Allegedly Aggrieved Employees. (Id., ¶ 44-45.)

Adams has set forth the strengths and weaknesses of Villagrana’s case in Paragraphs 37-40 of his declaration. Adams opines that the total exposure in this case is $390,000.00 (i.e., 3,900 pay periods x $100 penalty per pay period). (Adams Decl., ¶ 40). Adams notes that, had the case not settled, there would be costs of further litigation and risks to recovery. (Id., ¶ 44).

Further, Adams represents that, from the inception of the litigation, VSS indicated that it would aggressively litigate this matter. (Id.). VSS “vehemently denied” Villagrana’s allegations. (Id., ¶ 41). VSS argued that that each employee received a full thirty-minute meal period and all of their rest period. And claimed that the timecards evidenced all employees who worked shifts longer than six hours clocked in and out for lunches of at least 30 minutes or longer. (Id.) VSS attempted to demonstrate its method to calculate the overtime pay complied with the method approved by the DLSE and also argued that its policies and procedures with regards to meal and rest breaks complied with California wage-and-hour law. (Id.) VSS also argued that it would be unmanageable to try the instant action as a representative action. (Id., ¶ 42). Villagrana also considered VVS’s position that PAGA penalties are discretionary in nature and that, even if she were successful at trial, the court has discretion to significantly decrease the amount of damages awarded in a PAGA action. (Id., ¶ 43).

The court finds that the settlement is “fair, reasonable, and adequate in view of PAGA’s purposes,” based on the foregoing. The distribution of PAGA penalties complies with Labor Code section 2699, subdivision (i).

“PAGA Released Claims” means “any and all claims, rights, demands, liabilities and causes of action for civil penalties under the PAGA asserted, or that could have been asserted in the Complaint, including, but not limited to, those under California Labor Code §§ 1197, 1197.1, 1198, 510, 558, 1194, 1197.1, 1198, 226.7, 512(a), 226, 201, 202, 203, 2802, 1198, 2698 et seq., the applicable IWC Wage Order and California Civil Code § 1542 release as to those sections, that arose during the PAGA Period.” (Adams Decl., ¶ 2, Exh. A, Section I, ¶ 21). “Released Parties” means “Valley Vista Services, Inc., and each of its former, present, and future parents, subsidiaries, affiliates, and related entities, and each of their former, present, and future owners, directors, officers, employees, shareholders, members, attorneys, insurers, predecessors, successors, assigns or subsidiaries.” (Id., ¶ 2, Exh. A, Section I, ¶ 23).

“Because an aggrieved employee’s action under the Labor Code Private Attorneys General Act of 2004 functions as a substitute for an action brought by the government itself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government. The act authorizes a representative action only for the purpose of seeking statutory penalties for Labor Code violations . . .” (Arias v. Superior Court (2009) 46 Cal.4th 969, 986.)

The court finds that the release is fair, reasonable and adequate under the statute.

“PAGA has no notice requirements for unnamed aggrieved employees, nor may such employees opt out of a PAGA action.” (Baumann v. Chase Inv. Services Corp. (9thCir. 2014) 747 F.3d 1117, 1122.)

Again, no later than 21 business days after the “Effective Date,” VVS will provide ILYM with a list of the Aggrieved Employees in a computer-readable format, which will include each Aggrieved Employee's full name, last known mailing address, start and end date(s) of employment or total pay periods worked for VVS in California during the PAGA Period, and social security number, to the extent available from VVS’s records. (Id., ¶ 2, Exh. A, Section IV, ¶ 2).

No later than 21 calendar days after receipt of the GSA from VVS, ILYM will mail the Employee Payments under cover letter to each of the identified Aggrieved Employees. The cover letter will be provided to the Aggrieved Employees in both English and Spanish. Prior to mailing the cover letter, ILYM will check the addresses provided in the Aggrieved Employees List using the United States Postal Service's National Change of Address database and update the addresses for known address changes. If any of the mailings to the Aggrieved Employees of their cover letter and Employee Payments are returned as undeliverable within 30 calendar days of mailing, ILYM will have 5 calendar days after it receives the returned undeliverable mail to search for a more current address for the Aggrieved Employee (via a skip trace or other reasonable method) and re-mail the cover letter and Employee Payments to any alternative or updated address obtained. (Id.). Each Aggrieved Employee will be issued one check for his or her Employee Payment which will expire 180 calendar days from the date the checks are issued by ILYM. After the 180 day-period, ILYM will cancel all checks that have not been cashed or deposited and remit funds associated with such canceled checks to the State Controller's Office, Unclaimed Property Division in the name associated with each Aggrieved Employee whose Employee Payment checks are canceled. (Id.) (Id., ¶ 2, Exh. A, Section IV, ¶ 3).

The Agreement provides that attorney’s fees to be paid to Villagrana’s counsel are not to exceed 1/3 (i.e., $91,666.67) of the GSA. (Adams Decl., ¶ 2, Exh. A, Section III, ¶ 3).

The court finds the requested attorney’s fees and costs to be reasonable pursuant to the “common fund” method. (Lafitte v. Robert Half Intern. Inc. (2016) 1 Cal.5^th 480, 486.).

Villagrana’s will receive $10,000.00 as an enhancement payment. (Adams Decl., ¶ 2, Exh. A, Section I, ¶ 22). The court finds this award to be reasonable and adequately supported by Villagrana’s declaration.

Settlement Administration Costs are $5,500.00. (Id., ¶ 2, Exh. A, Section I, ¶ 10). The court finds these costs to be reasonable.

[1] The motion was filed May 2, 2024 and set for hearing on May 30, 2024. The motion was not accompanied by a proof of service. Plaintiff has not filed a proof of service, to date (i.e., as of May 24, 2024, 4:01 p.m.) California Rules of Court rule 3.1300, subdivision (c) provides that proof of service of moving papers must be filed no later than 5 court days before the hearing. Article III, Paragraph 8 of the parties’ “Private Attorneys General Act Settlement Agreement” provides, in relevant part, that “Plaintiff’s Counsel shall be responsible for preparing a Joint Stipulation for Court Approval of PAGA Settlement, or if the Court requires, a Motion for Approval of the Settlement (‘Motion’) and providing Defense Counsel with an opportunity to propose revisions to the Motion prior to filing. . . Plaintiff’s Counsel will serve the Motion on Defendant’s Counsel. . .” (emphasis added). The court will inquire of Plaintiff on the day of the hearing whether service was made. To the extent the court is not satisfied that service has been made, it will continue the hearing.

[2] VVS has agreed to separately settle Villagrana’s individual claims alleged in arbitration, which is set forth in a separate individual settlement agreement. (Adams Decl., ¶ 46).