Judge: Peter Wilson, Case: 2016-00863936, Date: 2022-08-18 Tentative Ruling

The Application to File Under Seal is GRANTED. Plaintiff is permitted to file under seal and redact information regarding her confidential individual settlement (“the monetary terms of the Confidential Settlement Agreement between Plaintiff and Defendants” in the supporting papers to the Motion for PAGA Approval, specifically, (1) section III.D.b) at p. 4, line 8 of the Memorandum; and (2) paragraph 13 at page 3, line 24 of the Declaration of Jamie Gottschalk-Hall. The parties expressly bargained for confidentiality in their confidential settlement (see Monster Energy Co. v Schechter (2019) 7 Cal.5^th 781, 793), and the strong public policy in favor of settlements such as this overcomes the right of public access. A substantial probability exists that this interest will be prejudiced if this information is not sealed, and this sealing order is narrowly tailored, pertaining only to are the monetary terms of the Confidential Settlement Agreement between Plaintiff and Defendants. No less restrictive means exist to achieve this overriding interest.

The hearing on the Motion for Approval of PAGA Settlement is CONTINUED to September 15, 2022 at 2:00 p.m. in department CX102 to permit the parties to respond to the following issues. A supplemental briefing shall be filed at least 9 days before the continued hearing and respond where necessary to each of the points raised below.  If required, an amendment to the settlement agreement is directed, rather than ‘amended settlement agreement’, to avoid use of limited Court time and resources. The parties shall also provide redline copies of the revised notice and proposed order.

A judgment in a PAGA action “binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.”  (Arias v. Superior Court (2009) 46 Cal.4th 969, 986.)  Thus, “PAGA settlements are subject to trial court review and approval, “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. (See Moniz v. Adecco USA, Inc. (2021) 72 Cal. App. 5th 56.)

As to the Settlement

1.    The Settlement explains payment to each aggrieved employee is on an “equal pro rata basis” (Settlement, §2(d)), but as described in the Settlement and Notice, it appears the payment will be on a per capita basis, or equally distributed based on the number of aggrieved employees. Settlement, §6(b); Notice, §V. Please clarify. 

2.    The Settlement provides that checks will expire after 180 days. Settlement, §6(d). Is this from date of issue or date of mailing? 

3.    The definition of “Released Claims” in the Settlement should be revised so that it is tied to the facts and theories alleged in the PAGA Notice letters and facts alleged in the action. (See Uribe v. Crown Building Maintenance Co. (2021) 70 Cal.App.5th 986, 1002-1005.)

4.    Plaintiff should provide the calculation for her PAGA penalties. 

5.    Only disputes between the named parties in the litigation should result in “prevailing party” attorney fees. The Court is not inclined to approve such a provision if it applies to unnamed aggrieved employees. Settlement, §§ 12(h) and (l).

6.    The Settlement provides a Final Dismissal Order will be provided within 2 business days of the Court signing the approval order. However, the Court will not enter a dismissal until after the final accounting hearing, which will take place after the settlement amounts have been disbursed, including funds from uncashed checks.  

As to the Notice

1.    The notice to the aggrieved employees is to be revised consistent with the issues addressed above.

2.    Does notice need to be translated to any other languages?

3.    The Notice provides a definition of the Released Parties that is different from the Settlement. Compare Settlement, §1(h) and Notice, §VII.

4.    The Notice does not provide the total PAGA penalty amount, combines the total attorney’s fees and costs amount but identifies it as 33% of the gross amount, and does not provide the total amount due to aggrieved employees. Notice, §§V and VIII. Each of these amounts should be identified.

5.    The Notice does not advise that aggrieved employees cannot opt out of the settlement or release, regardless of whether they cash their checks or not.

6.    The Notice should advise that the settlement checks are valid for 180 days and will be sent to the Unpaid Wage Fund thereafter.

As to the Proposed Order

1.    The proposed order is to be revised consistent with the issues addressed above.

2.    The Settlement and notice should be attached to the proposed order as an exhibit.

3.    The proposed order should indicate the Court finds the PAGA settlement to be “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.” (See Moniz v. Adecco USA, Inc. (2021) 72 Cal. App. 5th 56.)

4.    The proposed order should include the disbursement amounts.

5.    The proposed order should order the Settlement Administrator to fulfill its duties to administer the settlement in accordance with the terms and schedule in the Settlement.

6.    The proposed order should include a date for the final accounting.  The final accounting should occur after the deadline to cash checks has expired.  The Court holds final accounting hearings on Fridays at 9:00 AM.  The proposed order shall also state that Plaintiff will submit to the Court a final report at least 5 court days prior to the final accounting, including the actual amounts paid to aggrieved employees and the other amounts distributed under the settlement, including uncashed checks.

Plaintiff is ordered to give notice, including to the LWDA, and file a proof of service. Counsel must also give notice to the LWDA of any amendments to the Settlement or supplemental briefing made pursuant to this order, and provide proof of service.