Judge: Theresa M. Traber, Case: 23STCV11801, Date: 2025-04-24 Tentative Ruling
Case Number: 23STCV11801 Hearing Date: April 24, 2025 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: April 24, 2025 TRIAL
DATE: NOT SET
CASE: Andrea Campos v. Lucky Taro, Inc.
CASE NO.: 23STCV11801 
MOTION
FOR APPROVAL OF PROPOSED PAGA SETTLEMENT
MOVING PARTY: Plaintiff Andrea Campos
RESPONDING PARTY(S): No response on
eCourt as of 04/21/25
PROOF
OF SERVICE:
CASE
HISTORY:
·
05/24/23: Complaint filed.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is an action under the Private Attorneys General Act. Plaintiff
alleges that Defendant systematically denied its employees their full wages,
timely paid wages, overtime, meal and rest breaks, and accurate wage
statements.
Plaintiff moves for approval of a
proposed settlement agreement.
TENTATIVE RULING:
Plaintiff’s motion for approval
of settlement of claims for civil penalties under PAGA is CONTINUED to June 24,
2025 at 9:00 AM.
DISCUSSION:
Plaintiff moves for approval of a
proposed settlement agreement.
//
Procedural
Requirements
An application to approve a settlement under PAGA must include a copy
of the proposed settlement agreement, a copy of the predicate letter to the
LWDA seeking an investigation of the claims prior to filing the lawsuit, and a
declaration from counsel explaining the reasonable range of recovery in the
case and the reasons why the settlement is fair and reasonable. Further, “the proposed settlement” must be
given to the LWDA at the same time as the Court receives the request for
approval of the settlement. (Labor Code section 2699(l)(2).)
The motion submitted to the Court meets the procedural requirements
for this motion. A copy of the proposed
settlement agreement is included. (Amended Declaration
of Christian J. Petronelli ISO Mot Exh. A.) Plaintiff has also provided a copy
of the predicate letter sent to the LWDA before filing suit. (Id. Exh.
B.) The declaration of counsel in support of the motion states that notice
of the instant motion and hearing date was given to the LWDA on April 1, 2025
via online filing, but does not establish that the settlement agreement was
presented to the LWDA. (Amended Petronelli Decl. ¶ 23.) Before the Court can find that the motion is
procedurally compliant, Plaintiff must provide proof that the settlement
was presented to the LWDA, not merely that the LWDA had notice of the hearing.
Reasonableness
of Settlement
PAGA was enacted to aid public agencies, which lack adequate funding,
in enforcement of California’s labor laws. Private persons suing under the PAGA
do so as a proxy of the state. (ZB, N.A. v. Superior Court (2019) 8
Cal.5th 175, 185 (Lawson).) Aggrieved employees suing under the PAGA are
authorized to recover civil penalties, which advances a law enforcement
function, designed to protect the public. (Ibid., citing Arias v.
Superior Court (2009) 46 Cal.4th 969, 986 (Arias) and Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian)).)
Labor Code §2699(l)(2) requires courts to “review and approve any settlement of
any civil action filed pursuant to this part.” The California Supreme Court
explains that a PAGA claim is a form of a qui tam action. (Iskanian, supra,
59 Cal.4th 348, 382.)
As such, the Court looks to the standards for evaluating a qui tam
settlement in assessing this settlement, that is, whether the settlement is
“fair, adequate, and reasonable.” (Cf. Cal. Govt. Code § 12652 [In a qui
tam action a state or political subdivision may settle the action with the
defendant notwithstanding the objections of the qui tam plaintiff if the court
determines, after a hearing providing the qui tam plaintiff an opportunity to
present evidence, that the proposed settlement is fair, adequate, and
reasonable under all the circumstances].)
An application for approval of such a settlement must demonstrate that
the proposed settlement is adequate, reasonable, and fair to all those affected
by it. (Williams v. Superior Court (2017) 3 Cal.5th 531,
549.) Those affected by a PAGA settlement include: (1) the LWDA, who
receives 75% of settlement funds (Lab. Code § 2699(i)) and is “bound by the
outcome of the proceeding to adjudicate the employee’s PAGA claim” (Mejia v.
Merchants Building Maintenance, LLC, supra, 38 Cal.App.5th at p. 732); (2)
the aggrieved employees, both party and non-party, who receive 25% percent of
settlement funds and are, like the LWDA, bound by a PAGA action judgment (Lab.
Code § 2699(i); Arias v. Superior Court (2009) 46 Cal.4th 969, 985);
(3) plaintiffs’ counsel, who may be awarded “reasonable attorney’s fees and
costs” (Lab. Code § 2699(g)(1); and (4) the defendant who pays the settlement.
Assessing the fairness and adequacy of any settlement necessitates
decision-making based on unknowns. In determining whether a settlement falls
within the parameters of what may be considered reasonable, courts regularly
rely on estimates of potential maximum values weighed against weaknesses of the
claims. Other important indicia of fairness include arms’-length negotiations,
experienced counsel, and an adequate investigation of the claims. But the
potential value of the claims being settled is primary to any evaluation. (Dunk
v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802; Kullar v.
Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129-130.)
Plaintiff asserts that the agreement
was reached through “arm’s-length bargaining,” but offers no evidence which
would permit the Court to evaluate this fact. Greater detail must be
provided regarding the nature of the negotiations between the parties.
Plaintiff’s counsel has provided evidence of their substantial
experience in wage and hour litigation and in PAGA actions. (Amended Petronelli
Decl. ¶¶ 2-7.)
Further, Plaintiff has provided sufficient evidence regarding the
nature of the PAGA investigation to determine its adequacy. Plaintiff states
that Defendant produced all pay and time records for all aggrieved employees in
the same position as Plaintiff from March 14, 2022 to May 19, 2024, plus a
random sampling of 11 non-driver employees’ time and pay records. (Amended
Petronelli Decl. ¶ 11.) Plaintiff states in the moving papers that Defendant
believes there are a total of 161 aggrieved employees but does not cite to any
evidence establishing this fact. Plaintiff must provide evidence showing the
anticipated number of aggrieved employees so that the Court may evaluate
the reasonableness of the settlement. That said, the Court finds that based
on this evidence, the investigation of the PAGA claims was adequate to justify
a settlement.
Here, the settlement proposes to distribute $18,125 (representing 25%
of the net Settlement Fund of $72,500 after administration costs not to exceed
$5,000, attorney’s fees not to exceed $40,000, and expenses in the amount of $2,500)
among the (presumed) 161 aggrieved parties for an average recovery of
approximately $112.58 each. (See Amended Petronelli Decl. Exh. A.) As stated
above, Plaintiff must offer evidence tending to establish the putative
number of aggrieved parties. Applying this number Plaintiff calculates,
based on the number of workweeks and aggrieved parties, their hourly rates, and
the theories of how the Labor Code was violated, that the maximum value of the
claims would be $549,200. (Amended Petronelli Decl. ¶ 25.) Applying the same
fee structure as in the proposed settlement, this would result in a total net
settlement amount to the aggrieved parties of $125,425 amounting to an average
recovery of $779.03. The Court finds that Plaintiff has offered sufficient
evidence to determine the relative strength of the claims and the range of
possible settlement values, contingent on the presentation of evidence
establishing the number of aggrieved parties.
Plaintiff’s counsel requests that $2,500 in costs and $40,000 in
attorneys’ fees be paid out of the settlement funds. Plaintiffs justify this
amount as appropriate on the basis that Plaintiffs’ counsel achieved a
favorable result in a case that required thorough investigation and intensive
negotiations, and for which there were several potentially meritorious
defenses. This recovery matches other awards approved by courts in California
for wage and hour claims. (See, e.g., Martin v. Ameripride Servs. (S.D.
Cal. June 9, 2011) 2011 U.S. Dist. LEXIS 61796, 23 [“courts may award
attorney’s fees in the 30-40% range in wage and hour class actions that result
in recovery of a common fund under $10 million.) Plaintiff’s counsel does not
provide itemized billing records, but states the total fees incurred in
connection with this action are $52,265 for some 83.10 hours of work
distributed across counsel’s firm. (Amended Petronelli Decl. ¶¶ 31-35.) Thus,
Plaintiff’s counsel is requesting reduced fees relative to what has been
incurred in pursuit of this action. On that basis, the Court finds that the requested
fees are reasonable based on the evidence provided.
Plaintiff’s counsel has also provided an itemized cost bill showing
that costs have been incurred in the amount of $1,731.50, which is less than
the claimed $2,500. (Amended Petronelli Decl. Exh. D.) In the Court’s view, any
award of costs should be confined only to those costs which have actually been
incurred. The Court will therefore award reduced costs in the amount of
$1,731.50, with the balance to revert to the Net Settlement Amount, pursuant to
the terms of the Settlement Agreement. (Amended Petronelli Decl. Exh. A § III.)
Plaintiff has not identified the Settlement Administrator and
has failed entirely to address the reasonableness of the requested
administration expenses. Plaintiff must identify the Settlement
Administrator and provide some evidence or explanation justifying the allotment
of administration funds. Denise
Islas ISO Mot. ¶¶ 3-5, Exhs. A-B.) The Court therefore finds that Plaintiffs have
not yet justified the allotment.
The release of claims included in the Settlement states that all
aggrieved parties shall be deemed to have released Defendant or any related
entity from “all claims, demands, rights, liabilities and causes of action
available for civil penalties under PAGA stemming from all alleged violations
identified in the PAGA Notice during the PAGA period.” (Amended Petronelli
Decl. Exh. A. § III.B.) This release appropriately limits its scope to those
claims which were asserted in the LWDA predicate letter that dictates the scope
of claims that could be brought in this action.
In light of the issues identified above, the Court cannot grant
approval of the settlement at this time. Instead, the Court will order a
continuance of this matter to permit the parties furnish the Court with the
information specified above.
CONCLUSION:
Accordingly, Plaintiff’s motion
for approval of settlement of claims for civil penalties under PAGA is CONTINUED
to June 24, 2025 at 9:00 AM. A supplemental declaration with the missing
information identified above shall be filed at least five court days before the
hearing.
Moving
Party to give notice.
IT IS SO ORDERED.
Dated: April 24, 2025 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day
before the hearing. All interested parties must be copied on the email. It
should be noted that if you submit on a tentative ruling the court will still
conduct a hearing if any party appears. By submitting on the tentative you
have, in essence, waived your right to be present at the hearing, and you
should be aware that the court may not adopt the tentative, and may issue an
order which modifies the tentative ruling in whole or in part.