Judge: Teresa A. Beaudet, Case: 22STCV21083, Date: 2024-11-19 Tentative Ruling

Case Number: 22STCV21083    Hearing Date: November 19, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On June 29, 2022, Plaintiff Melissa Perez filed this action against Defendant SPARC Group LLC dba Nautica.

On August 1, 2023, Plaintiff Melissa Perez, as an Individual, and On Behalf of Herself and Other Aggrieved Employees, and On Behalf of the General Public as Private Attorneys General (“Plaintiff”) filed the operative Second Amended Complaint (“SAC”). The SAC alleges twelve causes of action, including a ninth cause of action for violation of Labor Code sections 2698, et seq. (“PAGA”).

Plaintiff’s counsel states that “the Parties agreed to fully resolve the issues between them, including a PAGA Release as to Plaintiff and Aggrieved Employees.” (Zambrano Decl., ¶ 6.)

Plaintiff now moves for approval of the Private Attorney General Act 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 several defects with the motion for approval of PAGA settlement here.

First, it does not appear that Plaintiff filed any notice of motion. The Court notes that pursuant to California Rules of Court, rule 3.1112, subdivision (a), “[u]nless otherwise provided by the rules in this division, the papers filed in support of a motion must consist of at least the following: (1) A notice of hearing on the motion; (2) The motion itself; and (3) A memorandum in support of the motion or demurrer.” In addition, pursuant to California Rules of Court, rule 3.1110, subdivision (a), “[a] notice of motion must state in the opening paragraph the nature of the order being sought and the grounds for issuance of the order.”

Second, the subject Settlement Agreement and Release of PAGA Claims (herein, “Settlement Agreement”) attached to Plaintiff’s counsel’s declaration as Exhibit A does not appear to contain any signature from Defendant. (Zambrano Decl., ¶ 3, Ex. A.)  

Third, pursuant to Labor Code section 2699, subdivision (s)(2), “[t]he superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” Plaintiff does not appear to provide evidence showing that the proposed settlement was submitted to the LWDA.

Fourth, the Settlement Agreement provides that “[a]fter deducting the Plaintiff’s Counsel Payment and Settlement Administration Costs, the remainder of the Total Settlement Payment (the ‘PAGA Net Fund’) shall be allocated toward payment to the Labor & Workforce Development Agency and PAGA Settlement Members.” (Zambrano Decl., ¶ 3, Ex. A, ¶ 30.) However, “PAGA Net Fund” does not appear to be a defined term (rather, the Settlement Agreement defines “PAGA Fund”). (See Zambrano Decl., ¶ 3, Ex. A, ¶ 9.) In addition, the Settlement Agreement does not appear to specify the specific monetary amount of Plaintiff’s counsel’s payment or the remaining “PAGA Net Fund.”

Fifth, the Settlement Agreement contains the capitalized term “Total Settlement Payment,” but such term does not appear to be defined. In addition, the term “Individual Payment” is referenced in the Settlement Agreement but does not appear to be defined.

Sixth, Plaintiff’s counsel’s supporting declaration provides that “third-party administration expenses [are] up to $2,900.00.” (Zambrano Decl., ¶ 13.) However, this does not appear to be consistent with the Settlement Agreement, which provides that “[t]he Settlement Administrative Costs should not exceed more than $3,500.00 (Three Thousand Five Hundred Dollars and Zero Cents).” (Zambrano Decl., ¶ 3, Ex. A, ¶ 29.) 

Seventh, Paragraph 13 of the Settlement Agreement provides that “‘Released Claims’ shall mean any and all claims, whether known or unknown, to recover civil penalties pursuant to PAGA for any violations alleged in the Action, the LWDA Notice, or the Operative Complaint, or that could have been alleged in the Action, the LWDA Notice, or the Operative Complaint, that are based on the alleged meal and rest break, minimum wage, overtime compensation, wage statement, unreimbursed business expenses and final pay violations, and any resulting claim for penalties under PAGA alleged to have been violated in the Action during the PAGA Period. Released Claims include, but are not limited to, alleged violations by Defendant of the California Labor Code sections 98.6, 201, 202, 203, 204, 226(a), 510, 1102.5, 1194, 1197, 1198, 1770- 1773, 2441, et seq.” (Zambrano Decl., ¶ 3, Ex. A, ¶ 13, emphasis added.) However, it does not appear that the SAC in this action or the written notice to the LWDA mention any claim for unreimbursed business expenses. (Zambrano Decl., ¶ 4, Ex. B.)

Eighth, 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.” It does not appear that Plaintiff submitted any proposed order with the instant motion.

            Conclusion

            In light of the foregoing, the Court denies Plaintiff’s motion for approval of Private Attorney General Act settlement without prejudice.   

Plaintiff is ordered to provide notice of this ruling.

DATED:  November 19, 2024                       ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court