Judge Stephen I. Goorvitch, Case 21STCV00666 2023-02-03 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 21STCV00666, Date: 2023-02-03 Tentative Ruling

Case Number: 21STCV00666 Hearing Date: February 3, 2023 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 issued an order to show cause why this case should not be stayed pending the California Supreme Court’s decision in Turrieta v. Lyft, Inc. (2021) 69 Cal.App.5th 955. All parties opposed staying the case. Therefore, the Court discharged the OSC and indicated that it would rule on the motion to intervene, notwithstanding the California Supreme Court’s upcoming decision. The motion is denied. A plaintiff in a PAGA action does not have the right to intervene in a related case for the purposes of objecting to or vacating the settlement. (See Turrieta v. Lyft, Inc. (2021) 69 Cal.App.5th 955, 977.) As the Supreme Court of California granted review, the Court of Appeal’s decision does not controlling, but it is persuasive. “A PAGA claim is legally and conceptually different from an employee’s own suit for damages and stator penalties [because] [a]n employee suing under PAGA does so as the proxy or agent of the state’s labor law enforcement agencies.” (Ibid., citations and internal quotations omitted.)

The Court previously requested additional information concerning the PAGA settlement, which the parties have provided. “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.) The parties have agreed to settle this case for $66,960, which will be allocated as follows: (1) Attorney’s fees of $30,132; (2) PAGA administrator fees and costs of $4,000; and (3) a penalty of $32,828, of which the state will receive $24,621, and the employees will receive $8,207.

The Court approves this settlement for the following reasons. First, this settlement was the result of an arms-length negotiation with the assistance of a mediator, and this was a mediator’s proposal. Second, there was litigation risk for Plaintiffs’ counsel, as Defendant has legally-viable defenses. Third, COVID-19-related staffing reductions and PPP payroll subsidies are additional mitigating factors in favor of approving this settlement amount. Finally, the Court notes that PAGA actions are brought on behalf of the State of California, and the individual employees could have brought their own wage and hour cases if appropriate. Indeed, the PAGA settlement would not preclude the intervenors from bringing individual claims against Defendant.

Based upon the foregoing, the Court orders as follows:

1. The motion to intervene is denied.

2. The motion to approve the PAGA settlement is granted.

3. Per the parties’ stipulation in open court, the Court shall retain jurisdiction to enforce the settlement under Code of Civil Procedure section 664.6.

4. This case is dismissed with prejudice.

5. Plaintiff’s counsel shall provide notice.