Judge: Robert S. Draper, Case: 19STCV32496, Date: 2022-10-11 Tentative Ruling

Case Number: 19STCV32496    Hearing Date: October 11, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

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

FACTUAL BACKGROUND   

This is an action brought pursuant to the Private Attorneys General Act (“PAGA”). The Complaint alleges as follows.

Plaintiff William Joseph Hodges (“Hodges”) was hired as an Account Executive by Defendant BRH International, Inc. d/b/a Hemper (“Hemper”) in January 2019. (Compl. ¶ 13.) Hemper treated Hodges as an employee but paid him as an independent contractor. (Compl. ¶ 14.) Hemper failed to withhold taxes from Hodges’s wages and did not provide him paystubs. (Ibid.) Defendants also violated the labor code by failing to compensate Hodges for his overtime work, failing to pay Hodges his due commission, failing to provide Hodges with statutory rest breaks, and failing to provide Hodges with reimbursement for travel as promised. (Compl. ¶¶ 15-19.)

PROCEDURAL HISTORY 

On September 12, 2019, Hodges filed the Complaint asserting twelve causes of action:

1.    Failure to Pay Wages;

2.    Failure to Pay Minimum Wages;

3.    Failure to Pay Overtime Compensation;

4.    Failure to Provide Meal and Rest Periods;

5.    Failure to Furnish Accurate Wage and Hour Statements;

6.    Misclassification of Employee as Independent Contractor;

7.    Retaliation;

8.    Waiting Time Penalties;

9.    Failure to Indemnify for Necessary Business Expenses;

10.                   Private Attorneys General Act;

11.                   Failure to Permit Inspection of Personnel and Payroll Records; and

12.                   Unfair Competition

On November 15, 2019, Defendants filed an Answer.

On September 16, 2022, Hodges filed the instant Motion for an Order Approving PAGA Settlement.

DISCUSSION

I.               MOTION FOR APPROVAL OF PAGA SETTLEMENT

Hodges moves the Court for an order approving settlement claim for civil penalties under the Private Attorneys General Act (“PAGA”).

The PAGA is “a procedural statute allowing an aggrieved employee to recover civil penalties—for Labor Code violations—that otherwise would be sought by state labor law enforcement agencies.” (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)  The statute provides a mechanism for private enforcement of Labor Code violations for the public benefit. (See Arias v. Superior Court (2009) 46 Cal.4th 969, 986; Ochoa-Hernandez v. Cjaders Foods, Inc. (N.D.Cal. 2010) 2010 WL 1340777, at p. *4.)   

To incentivize employees to bring PAGA actions, the statute provides aggrieved employees 25 percent of the recovered civil penalties. (Lab. Code § 2699, subd. (i).) The remaining 75 percent is distributed to the Labor and Workforce Development Agency (“LWDA”) “for enforcement of labor laws and education of employers and employees about their rights and responsibilities under [the Labor Code].” (Id.) 

In reviewing the terms of a settlement agreement, the court determines whether the settlement is fair, reasonable, and adequate to all concerned, and not the product of fraud, collusion, or overreaching. (Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th 322, 337; Nordstrom Commission Cases (2010) 186 Cal.App.4th 576, 581.) Although a PAGA plaintiff need not satisfy class action requirements (see Arias v. Superior Court (2009) 46 Cal.4th 969, 975), general principles applicable to class action settlements apply equally in this context. In the context of a class action settlement, the court considers various factors including whether (1) the settlement is the result of 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. (Nordstrom, supra, 186 Cal.App.4th at 581; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245.) In considering the amount of settlement, the court is mindful that compromise is inherent and necessary in the settlement process. (Wershba, supra, 91 Cal.App.4th at 250.) 

A.   The Proposed Settlement

A copy of the Settlement Agreement (the “Agreement”) is attached as Exhibit 2 to the Declaration of Ely Grinvald.

Under the terms of the Agreement, Hemper agrees to pay $60,000.00 in total. (Grinvald Decl., Ex. 2 at p. 2.) Plaintiff’s attorney fees will be deducted from this total, subject to Court approval, in an amount not to exceed 33.33% of the total settlement agreement, or $19,800.00. (Ibid.) Additionally, Hemper agrees to pay Attorney’s Costs in an amount not to exceed $1,000.00. (Id. at p. 3.) Hodges will be awarded an enhancement award of $2,500.00 for his effort in bringing the litigation. (Id. at p. 2.) Finally, Hodges will release his individual claims against Hemper for $17,500.00. (Ibid.)

The parties ask the Court to appoint Phoenix Settlement Administrators (“Phoenix”) as their settlement claims administrator. (Id. at p. 2.) The parties have agreed to allocate $550.00 for settlement administration. (Grinvald Decl. ¶ 14.) The remaining net settlement amount will be split between LWDA and the PAGA members pursuant to Labor Code section 2699(i).

The settlement will release Hemper from all future PAGA claims, but not from any individual claims aggrieved employees may wish to bring. (Grinvald Decl., Ex. 2 at p. 6.) Additionally, Plaintiff will release Hemper from all his individual claims. (Ibid.)

Plaintiff notes that the parties settled the case after two rounds of discovery, one informal discovery conference, and several conference calls in which the parties debated the legal merits of the case and negotiated the proposed settlement. (Grinvald Decl., ¶ 10.)

After considering all relevant factors of fairness, the Court finds that the PAGA Settlement set forth in the parties’ Settlement Agreement is fair and reasonable.

Accordingly, Plaintiff’s Motion for Approval of the PAGA settlement set forth in the Settlement Agreement is GRANTED.

DATED: October 11, 2022         ________________________________ 

Hon. Robert S. Draper 

Judge of the Superior Court