Judge Stephanie M. Bowick, Case Number: 22STCV33354, Date: 2025-02-25 Tentative Ruling

Judge: Stephanie M. Bowick, Case: 22STCV33354, Date: 2025-02-25 Tentative Ruling

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CASE NAME: Ismael Arrieta Rodriguez v. Cacique LLC, et al.

CASE NUMBER: 22STCV33354

DATE FILED: 10/12/2022

CALENDAR NUMBER: 3

PROCEEDING: Motion for Approval of Private Attorneys General Act Settlement

MOVING PARTY: Plaintiff Ismael Arrieta Rodriguez

OPPOSITION: None

REPLY: N/A

After consideration of the briefing filed, Plaintiff Ismael Arrieta Rodriguez’s Motion for Approval of Private Attorneys General Act Settlement is GRANTED.

The Court signs the “[PROPOSED] ORDER GRANTING PLAINTIFF’S MOTION FOR APPROVAL OF PRIVATE ATTORNEYS GENERAL ACT SETTLEMENT AND JUDGMENT THEREON” filed on November 19, 2024 after indicating in the caption and footer that it is a judgment rather than an order.

This is a Private Attorneys General Act (“PAGA”) action. Plaintiff Ismael Arrieta Rodriguez (“Plaintiff”) brings suit against Defendants Cacique LLC and Cacique Foods LLC (collectively, “Defendants”) alleging the following cause of action:

1. Civil Penalties Pursuant To The Private Attorneys General Act Of 2004 (“PAGA”), Labor Code §2698, et seq.

Plaintiff filed the instant Motion for Approval of Private Attorneys General Act Settlement (the “Motion”).

Pursuant to Labor Code section 2699, Plaintiffs move for an order approving the proposed PAGA settlement between Plaintiff and Defendants and attached to the declaration of James Clark as Exhibit 1 (the “Settlement”).

Plaintiff’s memorandum is twenty (20) pages, which exceeds the fifteen (15) page limit set forth in California Rules of Court, rule 3.1113, subdivision (d), and Plaintiff did not apply ex parte “[w]ith written notice of the application to the other parties, at least 24 hours before the memorandum is due, for permission to file a longer memorandum” setting forth the “reasons why the argument cannot be made within the stated limit.” (Cal. R. Ct., 3.1113(e).)

Although the Court admonishes counsel for failing to follow the procedures for filing a longer memorandum, the Court nonetheless considers the full memorandum.

Pursuant to Labor Code section 2699, subdivision (s)(2), “[t]he proposed settlement shall be submitted to the agency [the Labor and Workforce Development Agency (the “LWDA”)] at the same time that it is submitted to the court.” (Labor Code, § 2699(s)(2).)

Counsel for Plaintiff provides evidence that the proposed settlement was submitted to the LWDA. (James Clark Decl., ¶ 68, Ex. 3.)

“The superior court shall review and approve any settlement of any civil action filed pursuant to [PAGA].” (Lab. Code, § 2699(s)(2).) When reviewing PAGA settlements, the trial court should “ensure[] that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549 (citing Lab. Code, § 2699(l)(2)).) However, there is no set standard a trial court must follow when approving such settlements and may exercise its discretion to approve a settlement that is fair, adequate, and reasonable. (See Lab. Code, § 2699(e); Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 589-590; Haralson v. U.S. Aviation Services Corp. (N.D. Cal. 2019) 383 F.Supp.3d 959, 971 [“[N]either the California legislature, nor the California Supreme Court, nor the California Courts of Appeal, nor the LWDA has provided any definitive answer as to what the appropriate standard is for approval of a PAGA settlement.”]; see also The Rutter Group, Cal. Prac. Guide Civ. Proc. Before Trial, Ch. 14-D, ¶14:250 [“The standards for review [for court approval of a representative PAGA action settlement] are unclear, however, because the trial court does not have a fiduciary responsibility to any absent class members as it does in reviewing class action settlements.”].)

Given the dearth of California case authority on the issue, the Court looks to federal district court cases for guidance on court approval of PAGA settlements. Federal district court cases have concluded that any settlement of any civil action filed under PAGA must be “‘fair and adequate in view of the purposes and policies of the statute.’” (Flores v. Starwood Hotels & Resorts Worldwide, Inc. (C.D. Cal. 2017) 253 F.Supp.3d 1074, 1077 (quoting O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135).) In Haralson, supra, the court noted that the rationale behind the statute’s court approval requirement is that settlement of PAGA claims compromises a claim that could otherwise be brought by the state. (See Haralson, supra, 383 F.Supp.3d at 971.) The court noted that the LWDA has provided the following guidance: “It is thus important that when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the standards of being ‘fundamentally fair, reasonable, and adequate’ with reference to the public policies underlying the PAGA.” (Haralson, supra, 383 F.Supp.3d at 971.) Federal courts have also considered payment of civil penalties as a factor in approval of PAGA settlements. (See Flores, supra, 253 F.Supp.3d at 1077 [federal district court approved PAGA settlement where court was satisfied that the parties' settlement was “fair and adequate in view of the purposes and policies of the statute” and the parties “adequately divvied up the civil penalties under Section 2699(i) of the California Labor Code.”].) However, payment of civil penalties is not dispositive. (See Nordstrom Com. Cases, supra, 186 Cal.App.4th at 589.)

Prior to the recent amendments to Labor Code section 2699 that became effective on July 1, 2024, Labor Code section 2699 provided that:

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.

However, the current, operative version of Labor Code section 2699 provides that

Except as provided in subdivision (n), civil penalties recovered by aggrieved employees shall be distributed as follows: 65 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 35 percent to the aggrieved employees.

(v)(1) Except as provided in paragraph (2), the amendments made to this section by the act adding this subdivision shall apply to a civil action brought on or after June 19, 2024.

(2) The amendments made to this section by the act adding this subdivision shall not apply to a civil action with respect to which the notice required by subparagraph (A) of paragraph (1) of subdivision (a), paragraph (1) of subdivision (b), or subparagraph (A) of paragraph (1) of subdivision (c) of Section 2699.3 was filed before June 19, 2024.

Thus, for actions brought before June 19, 2024, seventy-five percent of all PAGA penalties must be paid to the LWDA and twenty-five percent must be paid to the aggrieved employees.

The version of Labor Code section 2699 effective June 27, 2016 to June 30, 2024 as well as the current, operative version of the statute provides that:

Any employee who prevails in any action shall be entitled to an award of reasonable attorney's fees and costs, including any filing fee paid pursuant to subparagraph (B) of paragraph (1) of subdivision (a) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 2699.3.

(Lab. Code, § 2699(k)(1) [2024]; accord, Lab. Code, § 2699(g)(1) [effective June 27, 2016 to June 30, 2024].)

Here, the Settlement provides that Defendants will pay $335,000.00 (the “Gross Settlement Amount”) in exchange for a release of both Plaintiff’s and the aggrieved employees’ claims. (Settlement, §§ 1.12, 3, 5.) The Settlement provides that the following will be deducted from the Gross Settlement Amount: (1) up to $1,000.00 to Plaintiff as payment for initiating and litigating the action; (2) up to $111,666.67, or one-third, for attorney’s fees; (3) up to $20,000.00 for litigation costs and expenses; and (4) up to $7,200.00 for settlement administration costs. (Id. at §§ 1.25, 3.)

Since the instant action was filed before June 19, 2024, seventy-five percent (75%) of the PAGA penalties must be allocated for the LWDA and twenty-five percent (25%) must be allocated for the aggrieved employees. (Lab. Code, § 2699(i) [effective June 27, 2016 to June 30, 2024].)

The Settlement provides that seventy-five percent (75%) of the remaining amount ($195,133.33) will be allocated for the LWDA, and twenty-five percent (25%) will be allocated for the aggrieved employees. (Id. at § 3.2.4.)

Plaintiff provides evidence that, in reaching the Settlement, the parties engaged in both informal and formal discovery before attending a full-day mediation with an experienced labor and employment mediator. (Clark Decl. at ¶¶ 15-18.)

The Settlement states that there are an estimated ¿365 Aggrieved Employees who worked 10,000 PAGA Pay Periods during the PAGA Period. (Settlement at § 4.1; Clark Decl. at ¶ 11.)

Plaintiff indicates that Defendant denies all liability. (Clark Decl. at ¶ 14; see id. at ¶¶ 36-38.)

After consideration of the declaration of James Clark, the Court finds that the requested attorney’s fees and litigation costs/expenses are reasonable. (Id. at ¶¶ 3-8, 44, 53-66, Ex. 2.)

After consideration of the declaration of Plaintiff Ismael Arrieta Rodriguez, the Court approves the $1,000.00 payment to Plaintiff. (Ismael Arrieta Rodriguez Decl., ¶¶ 3-9.)

Given the number of aggrieved employees and pay periods, the Court finds the $7,200.00 requested for settlement administration costs reasonable and approves that amount.

Given the risks and expenses inherent in litigating the claims through trial, the Court finds that the Settlement is fair, reasonable, and adequate in view of the purposes and policies of the PAGA statute. (Clark Decl. art ¶¶ 19-43.)