Judge: Stephen I. Goorvitch, Case: 19STCV28802, Date: 2023-05-08 Tentative Ruling

Case Number: 19STCV28802    Hearing Date: May 8, 2023    Dept: 39

Zaleka Turner, et al. v. Shipt, Inc., et al.

Case No. 19STCV28802

Defendants’ Motion to Enforce Settlement

The State’s Motion to Intervene

            Plaintiffs Zaleka Turner and Lauren Kiktavi (collectively, “Plaintiffs”) filed the instant case against Shipt, Inc. and Target Corporation (collectively, “Defendants”).  Plaintiffs asserted a claim under the Labor Code Private Attorney General Act of 2004 (“PAGA”), as well as class action claims for alleged wage and hour violations.  The parties reached a settlement.  However, the Labor and Workforce Development Agency, Department of Industrial Relations, Division of Labor Standards Enforcement (the “LWDA”) objects to the settlement of the PAGA claim, arguing that “[t]he proposed settlement that Defendants as this court to enforce is not fair or reasonable . . . [and] does not meet the standards for approval or enforcement.”  Accordingly, Plaintiffs’ counsel withdrew her motion for preliminary approval of this settlement. 

            The LWDA moves to intervene in this case.  The Court must permit a non-party to intervene if the non-party “claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person's ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties.”  (Code Civ. Proc., § 387, subd. (d)(1)(B).)  The LWDA has an interest in the subject of this case, as the State of California is the real party in interest in a PAGA suit.  (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 382.)  Therefore, the LWDA has a right to intervene, and the motion is granted. 

            Defendants moves to enforce the settlement agreement under Code of Civil Procedure section 664.6.  Code of Civil Procedure section 664.6 provides that “[i]f parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement.”  (Code Civ. Proc., § 664.6.) 

            As an initial matter, the LWDA argues that Defendants may not proceed under Code of Civil Procedure section 664.6.  The Court disagrees.  The parties entered into a written settlement agreement, and Plaintiffs’ counsel’s refusal to file a motion for preliminary approval of the settlement leaves Defendants no other means of seeking approval of the settlement agreement.  Nevertheless, unlike other civil cases, PAGA settlements are not final upon signing the settlement agreement.  Per Labor Code section 2699(1), the Court must approve the settlements following notice and opportunity to be heard by the LWDA.  Therefore, Defendants have the right to proceed under section 664.6, but the mere fact that there is a signed settlement agreement is not dispositive.  Defendants acknowledge this issue in their motion, as it is styled as a motion to enforce the settlement agreement and for preliminary approval.  Therefore, the Court reaches the merits of Defendants’ motion.    

The total settlement amount is $6,268,000.  The parties allocated one-third of the settlement, or $2,068,440, to attorneys’ fees.  (Class Action Settlement Agreement and Release, § 4.4.)  The parties allocated $158,000 for settlement administrator expenses, $10,000 in service awards for the named class payments, and $500,000 to settle the PAGA claims.  Thus, the amount remaining for members of the settlement class is $3,531,560.  The proposed settlement class consists of “all individuals who accepted or completed at least one order using the Shipt Marketplace Application in California from September 19, 2018 through June 30, 2022.”  (Plaintiffs’ Memorandum of Points and Authorities in Support of Preliminary Approval of Class Action Settlement, pp. 22-23.)  This settlement class is ascertainable, and its members have a community of interest that makes class treatment appropriate.  (See Sevidal v. Target Corp. (2010) 189 Cal.App.4th 905, see also Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.)  The class consists of appropriately 78,000 members, and there were 663,685 pay periods at issue.  (Declaration of Shannon Liss-Riordan, ¶¶ 10, 11, 43, 47.) 

The Court denies the motion and rejects the settlement for the reasons articulated by the LWDA.  A penalty of only $500,000 is unreasonable, given the potential penalties in the case.  Moreover, the Court has concerns that a settlement amount of $3,531,560 for a class of 78,000 employees over 663,685 is unreasonable.  The Court has considered Defendants’ arguments and is not persuaded to approve this settlement.   

Based upon the foregoing, the Court orders as follows:

1.         The LWDA’s motion to intervene is granted.

2.         The LWDA shall file its complaint-in-intervention within twenty (20) days.

3.         Defendants’ motion to enforce the settlement agreement and for preliminary approval of the settlement is denied.

4.         The Court orders the parties to meet-and-confer concerning potential trial dates and to file case management statements on or before May 22, 2023.  The Court shall hold a case management conference on May 26, 2023, at 8:30 a.m.

5.         Defendants’ counsel shall provide notice to all parties, including the LWDA.