Judge: Stephen I. Goorvitch, Case: 21STCV00666, Date: 2022-12-08 Tentative Ruling

Case Number: 21STCV00666    Hearing Date: December 8, 2022    Dept: 39

Claudia Castillo, et al. v. Westlake Properties, Inc., et al.

Case No. 21STCV00666

Motion for Leave to Intervene

Motion to Approve PAGA Settlement

            Plaintiffs filed the instant case on January 7, 2021, which included a cause of action under the Private Attorney General Act (“PAGA”), California Labor Code section 2699, et seq.  Plaintiffs seek approval of the settlement of the PAGA claim.  Noel Van Wagner and Veronica Andrade (the “Intervenors”) filed their own action against Defendants on May 15, 2022: Noel Van Wagner, et al. v. Westlake Properties, Inc., et al., Case No. 22STCV16191.  Previously, the Court found that the two cases are not related.  Now, the Intervenors seek leave to file a complaint-in-intervention in the instant case. 

              Plaintiffs filed the instant PAGA claim on behalf of themselves and other current or former employees based upon Defendants’ alleged wage and hour violations.  (Complaint, ¶ 226.)  Therefore, the settlement in the instant case would resolve the Intervenors’ PAGA claim.  (Declaration of John A. Lofton, ¶ 5.)  The Intervenors argue that the two cases are distinct.  Plaintiffs in the instant case are servers and cleaners at Defendants’ catering business who claim wage and hour violations related to their work.  By contrast, the Intervenors worked as massage therapists at the spa, and their claims relate to how the spa was managed.  Specifically, the Intervenors allege that “the Westlake spa scheduled massages back-to-back in a manner that prevented massage therapists from taking full and timely meal and rest breaks and required them to work off the clock to take care of massage clients.”  (Id., ¶ 2.) 

The Court has reviewed and considered the proposed settlement in this case.  “PAGA settlements are subject to trial court review and approval, ensuring that any negotiated resolution is fair to those affected.”  (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.)  Per Labor Code section 2699, subdivision (a), “civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency . . . and 25 percent to the aggrieved employees.”  (Lab. Code, § 2699, subd. (i).)  The settlement provides that Defendant will pay $66,960 to settle the PAGA claim, of which Plaintiffs’ counsel will receive 45% of this amount, or $30,132, and the settlement administrator will receive $4,000.  This leaves a penalty of $32,828, of which the State of California will receive $24,621, and the employees will receive $8,207.  Plaintiffs’ counsel represents that there are approximately 599 aggrieved employees, which are all non-exempt hourly workers of Defendant from October 30, 2019, to the present.  Accordingly, each employee would receive approximately $13.70.

The Court’s tentative order is to discharge the Order to Show Cause and deny the motion for leave to intervene based upon the discussion in Turrieta v. Lyft, Inc. (2021) 69 Cal.App.5th 955.  However, the Court does not have sufficient information to approve this settlement.  For example, the parties provide insufficient information concerning how the settlement amount was determined.  The parties do not discuss how many wage and hour violations were discovered and what Defendant’s maximum exposure would be if the case proceeded to trial.  Plaintiff’s counsel represents that “none of Defendant’s employees suffered any harm from or actual damage as a result of the conduct that forms the basis for Plaintiffs’ allegations.”  (Plaintiffs’ Motion, p. 8:14-16.)  The Court is unclear what this means, i.e., whether this means Plaintiffs’ counsel discovered no evidence of wage and hour violations.  Plaintiffs’ counsel does not discuss how they investigated the case in order to determine that this was a fair settlement for such a large number of employees.  Nor does Plaintiffs’ counsel discuss how they investigated the two distinct groups of employees—servers/cleaners versus spa workers—to ensure that the settlement is fair and appropriate. 

            The parties should be prepared to address these issues at the hearing.