Judge: Teresa A. Beaudet, Case: 23STCV11375, Date: 2025-05-02 Tentative Ruling

Case Number: 23STCV11375    Hearing Date: May 2, 2025    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

On May 19, 2023, Plaintiff Caroline Ruddy (“Plaintiff”) filed this action against Defendants RQ Media Group, Inc. (“RQM”) and Brian Salzman (“”Salzman) (collectively, “Defendants”).

On September 7, 2023, Plaintiff filed a Verified First Amended Complaint (“FAC”). The FAC alleged twelve causes of action, including causes of action for breach of contract and breach of implied covenant of good faith and fair dealing. Defendants demurred to the first cause of action of the FAC for breach of contract, and the second cause of action of the FAC for breach of implied covenant of good faith and fair dealing. On January 8, 2024, the Court issued an Order, inter alia, sustaining Defendants’ demurrer to first and second causes of action of the FAC, with leave to amend.

On January 10, 2024, Plaintiff filed a Verified Second Amended Complaint.

On January 12, 2024, Plaintiff filed the operative Verified Third Amended Complaint. (“TAC”). The TAC alleges thirteen causes of action, including a cause of action for “PAGA Civil Penalties.” Defendants demurred to the first cause of action of the TAC for breach of implied contract, and the second cause of action of the TAC for breach of implied covenant of good faith and fair dealing. On May 15, 2024, the Court issued an Order, inter alia, overruling Defendants’ demurrer to first and second causes of action of the TAC.

Plaintiff and Defendants have reached a settlement in this action. (Kamenstein Decl., ¶18, Ex. C.) Plaintiff requests approval of the settlement of the PAGA claim and dismissal of the entire action against Defendants with prejudice. (Req. at 1:22-2:6.)

Plaintiff previously requested approval of the Private Attorney General Act settlement as to the thirteenth cause of action, and on February 14, 2025, the Court issued an Order denying Plaintiff’s request and ordering a new request be filed to address the defects identified in the request.

On March 17, 2025, Plaintiff filed the supplemental request for approval of Private Attorney General Act settlement and dismissal. The supplemental request is unopposed.

Legal Standard

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.)

            Discussion

As a preliminary matter, the Court notes that in response to the February 14, 2025 Order, Plaintiff’s counsel indicates that the TAC does not contain any claims on behalf of a class and is not brought as a class action per Code of Civil Procedure Section 1750 et seq. or 382, therefore no consideration is being given for dismissal of a class action. (Kamenstein Supp. Decl., ¶¶4, 17.) Specifically, Plaintiff’s counsel avers that Plaintiff was the only other employee and co-founder of Defendant RQ Media Group, Inc. (“RQM”) with 20% ownership besides Defendant Salzaman. (Id. at ¶8.) Furthermore, Plaintiff is the only employee at RQM who is alleged to have not received payment for accrued vacation time at the time of termination, thus is the only aggrieved employee. (Id. at ¶¶13, 16.) As such, Plaintiff’s counsel states no claims are being released under the Settlement Agreement by any unidentified employees other than Plaintiff. (Id. at ¶14.)

Accordingly, California Rule of Court, rule 3.770 is inapplicable here.

Nevertheless, the Court finds that Plaintiff’s Supplemental Request for PAGA Settlement Approval and Dismissal still contains a defect. Plaintiff’s counsel states “To the extent that any civil penalties pursuant to California Labor Code section 2699 are imposed, they will be distributed as follows: 75% to the Labor and Workforce Development Agency and 25% to the aggrieved employee.” (Kamenstein Supp. Decl., ¶15.) As discussed in the Court’s prior order, effective July 1, 2024, “civil penalties recovered by aggrieved employees shall be distributed as follows: 65 percent to the Labor and Workforce Development Agency for enforcement of labor laws, including the administration of this part, and for education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 35 percent to the aggrieved employees.” (Lab. Code, § 2699, subd. (m).)

Conclusion

 Based on the foregoing, the Court denies Plaintiff’s supplemental request for approval of Private Attorney General Act settlement and dismissal without prejudice.  

Plaintiff is ordered to provide notice of this ruling.

DATED:  May 2, 2025                                  

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court