Judge: Theresa M. Traber, Case: 23STCV16104, Date: 2025-04-22 Tentative Ruling

Case Number: 23STCV16104    Hearing Date: April 22, 2025    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     April 22, 2025                                    TRIAL DATE: NOT SET

CASE:                         Cree Oriana Pleasant, et al. v. Pacific Aviation Corporation

CASE NO.:                 23STCV161074           

MOTION FOR APPROVAL OF PAGA SETTLEMENT

MOVING PARTY:               Plaintiffs Cree Oriana Pleasant and Irene Salita

RESPONDING PARTY(S): No response on eCourt as of 04/17/25

CASE HISTORY:

·         07/10/23: Complaint filed.

·         10/11/23: First Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a PAGA action. Plaintiffs allege that Defendant has systematically underpaid its employees.

Plaintiffs move for approval of a proposed settlement agreement.

TENTATIVE RULING:

Plaintiffs’ motion for approval of settlement of her claims for civil penalties under PAGA is CONTINUED to June 18, 2025 at 9:00 AM.

DISCUSSION:

Plaintiff moves for approval of a proposed settlement agreement in which Defendant will pay $295,000 to settle all claims.

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.  (Declaration of Kane Moon ISO Mot Exh. 1.)  Further, the declaration of counsel in support of the motion reveals that the settlement agreement was simultaneously submitted to the LWDA as is required under the statute, with confirmation of service via online upload.  (Id. Exh. 3.) Plaintiffs have also provided a copy of the predicate letter sent to the LWDA before filing suit. (Id. Exh. 2.) Plaintiffs have therefore satisfied the procedural requirements of this motion.

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.)

            Plaintiffs have shown the parties engaged in an arms’-length negotiation by independently meeting and conferring and participating in mediation with Steven Rottman, Esq. on September 10, 2024, resulting in this settlement. (Moon Decl. ¶ 10.) Plaintiffs’ counsel has also provided evidence of their substantial experience in wage and hour litigation and in PAGA actions. (Id. ¶¶ 24-43.)

Further, Plaintiffs have provided sufficient evidence regarding the nature of the PAGA investigation to determine its adequacy. Plaintiffs state that Defendant produced a sampling of time and payroll records, as well as wage and hour policies and relevant policy documents in place during the relevant time period. (Moon Decl. ¶ 9.) Plaintiffs state that there were approximately 1,364 aggrieved employees, including Plaintiffs, during the relevant time period, for which there were 31,367 pay periods from July 10, 2022 through September 10, 2024. (Id. ¶¶ 4, 19.) 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 $42,578.42 (representing 25% of the net Settlement Fund of $170,313.66 after administration costs not to exceed $5,186, attorney’s fees in the amount of $98,333.33, and expenses in the amount of $21,176.01) among the 1,364 aggrieved parties for an average recovery of approximately $31.22 each. (See Moon Decl. Exh. 1 §§ 3-4.) Plaintiffs calculate, 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 $3,136,700. (Moon Decl. ¶ 19.) Applying the same fee structure as in the proposed settlement, this would result in a total net settlement amount to the aggrieved parties of $202,225 amounting to an average recovery of $574.91 among the 1364 aggrieved parties, not accounting for attorney’s fees or enhancements. The Court finds that Plaintiffs have offered sufficient evidence to determine the relative strength of the claims and the range of possible settlement values.

Plaintiffs’ counsel request $21,167.01 in costs and $98,333.33 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.) Plaintiffs’ counsel does not provide itemized billing records, but states the total costs incurred in a declaration under penalty of perjury. (Moon Decl.¶ 51.) Plaintiffs’ counsel also states under penalty of perjury that Attorney Moon billed $34,437.50 in attorney’s fees, accounting for 36.25 hours at $950 per hour, that Attorney Ter-Astvatsatryan billed $40,035. in fees (47.1 hours at $850 per hour), Attorney Ruan billed $3,584.75 (11.03 hours at $325 per hour) and Attorney Christopherson billed $12,250.00 (24.5 hours at $500 per hour.) (Id. ¶ 45.)  Thus, Plaintiffs’ counsel are requesting fees commensurate with the fees actually billed. In light of this showing, the Court finds that the requested fees are reasonable based on the evidence provided.

Plaintiffs’ counsel has not, however, accounted for the costs requested in this settlement beyond the bare statement that the costs sought were those actually advanced. This statement is not sufficient, as Plaintiffs must establish not only that the costs were incurred but that the costs were reasonably incurred. A bare statement in this regard does not suffice. Plaintiffs must furnish the Court with some evidence that would permit the Court to evaluate the reasonableness of the costs claimed.

Plaintiffs do not state why Simpluris was selected as the administrator but states that its requested administration expenses in the amount of $5,186 was the lowest bid received. (See Motion fn. 1.) Plaintiffs have also provided the Court with a sworn declaration from Simpluris’ Director of Client Services describing the corporation’s substantial record of claims administration and disclaiming any affiliation with litigation counsel. (Declaration of Denise Islas ISO Mot. ¶¶ 3-5, Exhs. A-B.) The Court therefore finds that Plaintiffs have 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 any claims:

for civil penalties under the Labor Code Private Attorneys General Act (“PAGA”), based upon all underlying wage and hour claims under state, federal, or local law, which arise out of the claims expressly pleaded in the action, and all other claims, such as those under the California Labor Code, Wage Orders, regulations, and/or other provisions of law, that could have been asserted based on the facts pleaded in the Action . . .

(Moon Decl. Exh. 1 §5.1.)

In the Court’s view, a release must focus solely on the extinguishment of claims for PAGA penalties for the Labor Code violations alleged in Plaintiffs’ LWDA letter against Defendant alone to be reasonable. Instead, the release, as drafted, appears to focus on the extinguishment of claims for PAGA penalties arising out of facts that could have been pled based on the Complaint. This language sweeps too broadly, as it goes beyond PAGA claims to encompass any Labor Code violations or other claims, not merely those claims under PAGA that could have been asserted based on the LWDA letter. The release provision must be modified to cover “all claims that were pled under the PAGA in the Action, but only to the extent that they were properly asserted in the LWDA predicate letter that dictates the scope of the PAGA claims that can be brought in this action.” Thus, the parties must revise their release to limit it to the PAGA claims that the Plaintiffs were authorized to assert and settle 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 to revise the settlement and furnish the Court with the information specified above.

CONCLUSION:

            Accordingly, Plaintiffs’ motion for approval of settlement of her claims for civil penalties under PAGA is CONTINUED to June 18, 2025 at 9:00 AM.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated:  April 22, 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.