Judge: Salvatore Sirna, Case: 21PSCV00552, Date: 2024-11-20 Tentative Ruling
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Case Number: 21PSCV00552 Hearing Date: November 20, 2024 Dept: G
Plaintiff Malik Crawford’s Motion for Approval of Private
Attorneys General Act Settlement Agreement and Release, Award of Attorneys’
Fees and Costs, General Release Fee, and Settlement Administration Costs
Respondent: NO OPPOSITION
TENTATIVE RULING
Plaintiff Malik Crawford’s Motion for Approval of Private Attorneys General Act Settlement Agreement and Release, Award of Attorneys’ Fees and Costs, General Release Fee, and Settlement Administration Costs is CONTINUED to a date to be determined at the hearing set in Department G (Pomona).
Plaintiff Malik Crawford’s counsel is ordered to provide supplemental briefing on (1) Defendants’ estimated PAGA penalties exposure and (2) a comparison of that amount to the amount obtained in the present settlement.
BACKGROUND
This is a wage and hour action brought pursuant to the Private Attorneys General Act (PAGA). Defendants West Covina Nissan and West Covina Motor Group, LLC (West Covina Motor Group) employed Plaintiff Malik Crawford as an hourly non-exempt employee. On July 6, 2021, Crawford filed a complaint individually and on behalf of other aggrieved employees against West Covina Nissan, West Covina Motor Group, and Does 1 through 100, alleging violations of Labor Code section 2698 et seq. for (1) failure to pay overtime, (2) failure to provide meal periods, (3) failure to provide rest periods, (4) failure to pay minimum wage, (5) failure to timely pay wages upon termination, (6) failure to timely pay wages during employment, (7) failure to provide complete and accurate wage statements, (8) failure to keep complete and accurate payroll records, and (9) failure to reimburse necessary business-related expenses and costs.
On August 20, 2024, Crawford filed a First Amended Complaint (FAC) against West Covina Nissan; West Covina Motor Group; Trophy Automative Dealer Group, LLS (Trophy); and Does 100, alleging the same cause of action.
On October 14, 2024, Crawford filed the present motion. A hearing on the motion and an OSC Re: Dismissal are set for November 20, 2024.
ANALYSIS
Crawford moves for court approval of PAGA settlement pursuant to Labor Code section 2699, subdivision (l). For the following reasons, the court CONTINUES the hearing on Crawford’s motion.
Legal Standard
Labor Code section 2699, subdivision (l)(2) states:¿“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.” “A copy of the superior court’s judgment in any civil action filed pursuant to this part and any other order in that action that either provides for or denies an award of civil penalties under this code shall be submitted to the agency within 10 days after entry of the judgment or order.” (Lab. Code, §2699, subd. (l)(3).)
While PAGA requires court review and approval of settlements, it does not specify the standard or criteria for such review. (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 75 (Moniz).) Thus, courts have generally applied the same review standards used for class actions, which inquire “independently whether a PAGA settlement is fair and reasonable.” (Id., at p. 77.)
To determine if a PAGA settlement is fair and reasonable, courts consider factors “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.” (Ibid.) Lastly, courts will also consider if the settlement is “adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Ibid.)
Discussion
In this case, West Covina Nissan, West Covina Motor Group, and Trophy (collectively Defendants) have agreed to settle the present matter with Crawford for the gross amount of $145,000.00. (Mayer Decl., ¶ 8, Ex. 1, § 3(a).) From this, the following would be deducted: attorney fees ($58,000.00 or 40% of gross settlement amount), litigation costs ($16,547.96), a general release fee to Crawford ($5,000.00), and settlement administration costs (up to $3,400.00). (Mayer Decl., Ex. 1, § 3(a).) This leaves a net settlement amount of $62,052.04. Pursuant to Labor Code section 2699, subdivision (i), seventy-five percent is payable to the Labor and Workforce Development Agency (LWDA), and twenty-five percent is payable to the aggrieved employees. Thus, the sum of $46,539.03 is payable to the LWDA, and $15,513.01 will be divided among approximately 160 employees. (Mayer Decl., Ex. 1, § 3(b).)
In the FAC, Crawford seeks civil penalties for thirteen different violations of the Labor Code including (1) failure to pay overtime in violation of Labor Code sections 510 and 1198; (2) failure to provide meal periods in violation of Labor Code sections 226.7 and 512, subdivision (a); (3) failure to provide rest periods in violation of Labor Code section 226.7; (4) failure to pay legally required minimum wages in violation of Labor Code sections 1194, 1197, and 1197.1; (5) failure to pay wages upon termination in violation of Labor Code sections 201 and 202; (6) failure to timely pay wages during employment in violation of Labor Code section 204; (7) failure to provide complete and accurate wage statements in violation of Labor Code section 226, subdivision (a); (8) failure to keep complete and accurate payroll records in violation of Labor Code section 1174, subdivision (d); (9) failure to reimburse necessary business-related expenses and costs in violation of Labor Code sections 2800 and 2802; (10) failure to timely produce personnel records in violation of Labor Code sections 1198.5; (11) failure to provide sick leave in violation of Labor Code sections 227.3 and 245 et seq.; (12) failure to pay reporting time pay in violation of Labor Code section 1198; and (13) failure to provide a day of rest in violation of Labor Code sections 551, 552, and 1198.
In analyzing the strengths, risks, and complexity of this case, Crawford’s counsel believes there is sufficient evidence to support the allegations that Defendants violated the Labor Code. (Mayer Decl., ¶ 15.) Nonetheless, Crawford’s counsel also acknowledges there is a risk a court could find the current action unmanageable and require individual inquiries into these alleged violations. (Mayer Decl., ¶ 15.) In addition, Crawford’s counsel points to defenses or challenges that can be raised by the Defendants to reduce or eliminate recovery including that they did not engage in a uniform policy and systematic scheme of wage abuse, that they have legally compliant employment policies and practices, that the present action should be subject to arbitration, that standing is lacking, that discovery or trial should be limited or bifurcated, and that heightened or cumulative penalties are inappropriate. (Mayer Decl., ¶ 17-19.)
But while Crawford’s counsel states “the parties have conducted sufficient investigation and review of information to be sufficiently apprised of the nature and extent of the PAGA claim asserted in this lawsuit, and to enable both sides to fully evaluate the Settlement for its fairness, adequacy, and reasonableness,” Crawford’s counsel fails to provide any actual evaluation of the specific claims raised by Crawford. (Mayer Decl., ¶ 20.) Crawford’s counsel also fails to make any attempt to estimate Defendants’ potential PAGA exposure and compare that exposure to the results of this settlement. Thus, Crawford’s counsel has failed to provide the court with an adequate basis upon which to evaluate whether the amount of the proposed settlement is fair and reasonable.
Accordingly, the court CONTINUES the hearing on Crawford’s motion in order for Crawford’s counsel to provide additional briefing.
CONCLUSION