Judge: Teresa A. Beaudet, Case: 22STCV16191, Date: 2024-09-04 Tentative Ruling

Case Number: 22STCV16191    Hearing Date: September 4, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On May 16, 2022, Plaintiffs Noel Van Wagner and Veronica Andrade (jointly, “Plaintiffs”) filed this action against Defendant Westlake Properties, Inc.

The Complaint alleges causes of action for (1) whistleblower retaliation, (2) failure to provide meal periods, (3) failure to provide rest periods, (4) failure to reimburse employment-related expenses, (5) failure to pay overtime wages, (6) failure to provide accurate wage statements, (7) failure to pay wages on time, (8) failure to provide employment records,

(9) unfair business practices, and (10) violations of the Labor Code under the Private Attorneys General Act.

Plaintiffs indicate that the parties have entered into a PAGA Settlement and Release Agreement in this action. (Lofton Decl., ¶ 7, Ex. B.)

Plaintiffs now move for an order approving the settlement. The motion is unopposed.

Discussion

A superior court must “review and approve any settlement of any civil action filed pursuant to this part.” (Lab. Code, § 2699, subd. (s)(2).)

The Court notes that though there is no statutory or common law standard for approval of a PAGA settlement, the standard used for approval of class action settlements is instructive. “[A] presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.” ((Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.) The last factor, small percentage of objectors, is inapplicable to PAGA claims. ((See Arias v. Superior Court (2009) 46 Cal.4th 969, 984-985 [rejecting the argument that representative actions under PAGA violate the due process rights of “nonparty aggrieved employees who are not given notice of, and an opportunity to be heard”].) Additional factors that are useful to consider include the strength of a plaintiff’s case, the risk, expense, complexity and likely duration of further litigation, the amount offered in settlement, the extent of discovery completed, and the experience and views of counsel. ((See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128.)

The Court notes a few defects with the motion for approval of PAGA settlement.

First, it appears that the “Covered Period” specified in the PAGA Settlement and Release Agreement (herein, the “Settlement Agreement”) exceeds the one-year statute of limitations by 38 days. The statute of limitations for PAGA claims is one year. ((Code Civ. Proc., § 340, subd. (a).) The Complaint in this action was filed on May 16, 2022. One year prior to this date is May 16, 2021. After the filing of the LWDA notice, the statute of limitations is tolled for a maximum of 65 days. (Lab. Code, § 2699.3, subd. (a)(2)(A).) Therefore, adding an additional 65 days to the limitations period results in a cut-off date of March 12, 2021. However, the Settlement Agreement defines the “Covered Period” here as “the period between February 2, 2021 and the Effective Date.” (Lofton Decl., ¶ 7, Ex. B, § I(4), emphasis added.)

Second, the “Covered Employees” are not defined in accordance with Labor Code section 2699, subdivision (c)(1), which provides in pertinent part that “[f]or purposes of this part, ‘aggrieved employee’ means any person who was employed by the alleged violator and personally suffered each of the violations alleged during the period prescribed under Section 340 of the Code of Civil Procedure…” The Settlement Agreement here defines “Covered Employees” as “all current and former non-exempt Spa Relais employees of Defendant in California at any time between February 2, 2021 and the Effective Date.” (Lofton Decl., ¶ 7, Ex. B, § I(2).)

Third, Sections I(18) and V(41) of the Settlement Agreement refer to “Aggrieved Persons.” However, “Aggrieved Persons” does not appear to be a defined term in the Settlement Agreement. In addition, Section I(18) refers to a “PAGA Period,” but this also does not appear to be a defined term in the Settlement Agreement.

Fourth, pursuant to Labor Code section 2699, subdivision (s)(3), “[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.” Plaintiffs’ proposed order does not appear to contain any provision concerning the submittal of the order to the LWDA.

Fifth, the proposed order provides, inter alia, that “[o]n July 29, 2024 Plaintiffs filed an unopposed Motion for Approval of Settlement of Labor Code Section 2698, et. seq., Private Attorneys General Act (‘PAGA’) Claims and supporting documentation.” (Proposed Order, p. 1:26-28, emphasis added.) However, the motion was filed on July 30, 2024.

Sixth, the proposed order provides that “California Labor Code section 2699(l)(2) requires that the ‘superior court shall review and approve any settlement of any civil action filed pursuant to’ the PAGA.” (Proposed Order, p. 2:5-6.) However, it appears that such provision is now contained in Labor Code section 2699, subdivision (s)(2).

Seventh, the proposed order provides that “[t]he Court further considered the range of settlement amounts and awards of penalties approved by other courts when considering the value of this settlement under the PAGA, as well as the defenses to the claims presented.” (Proposed Order, p. 2:20-22.) However, it does not appear that Plaintiffs provided any evidence on such points.

Eighth, paragraphs 4 and 5 of the proposed order reference Labor Code section 2699, subdivision (g)(1). It appears that these paragraphs of the order should refer to Labor Code section 2699, subdivision (k)(1), which provides in pertinent part that “[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs…”

Ninth, the proposed order provides that “[a]s of the Effective Date, the Plaintiffs and all Covered Employees are bound by the release of Private Attorneys General Act claims contained in the Settlement Agreement.” (Proposed Order at p. 3:15-16.) However, the Settlement Agreement does not appear to contain any provision specifying when the release will be effective.

            Conclusion

            Based on the foregoing, the Court denies Plaintiffs’ motion for approval of settlement of Private Attorneys General Act claims without prejudice.   

Plaintiff is ordered to provide notice of this ruling.

DATED:  September 4, 2024                         ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court