Judge: Thomas D. Long, Case: 20STCV06310, Date: 2023-05-23 Tentative Ruling

Case Number: 20STCV06310    Hearing Date: October 19, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On February 14, 2020, Plaintiff Nejat Setareh filed this action against Defendant American Cover Design 26, Inc. for penalties under the Private Attorney General Act (“PAGA”).

The parties have agreed on the terms of a settlement.  Under the proposed settlement, Defendant will pay $38,500.00 for Plaintiff’s individual, non-PAGA claims.  Defendant will also pay $1,000.00 in PAGA penalties, with 75-percent paid to the Labor and Workforce Development Agency (“LWDA”) and 25-percent paid to Plaintiff. 

A court must review and approve any penalties sought as part of a proposed settlement agreement pursuant to Labor Code section 2699.  (Lab. Code, § 2699, subd. (l).)  “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and 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 25 percent to the aggrieved employees.”  (Lab. Code, § 2699, subd. (i).)

A.        Plaintiff Has Provided Notice of the Settlement to LWDA.

A proposed PAGA settlement must be submitted to LWDA at the same time that it is submitted to the court for review and approval.  (Lab. Code, § 2699, subd. (l)(2).)  Counsel declares the settlement agreement has already been served on LWDA.  (Setareh Decl. ¶ 25 Ex. B.)

Accordingly, the Court finds that this requirement is satisfied.

B.        The Settlement is Entitled to a Presumption of Fairness.

A presumption of fairness¿for a settlement agreement 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 final factor does not apply to PAGA.  (See Arias v. Superior Court (2009) 46 Cal.4th 969, 984 [representative actions under PAGA do not violate the due process rights of “nonparty aggrieved employees who are not given notice of, and an opportunity to be heard”].)

The parties participated in a mandatory settlement conference on April 25, 2022, but the case did not settle.  (Setareh Decl. ¶ 20.)  Later, the parties did come to a settlement agreement.  (Setareh Decl. ¶ 21.)  The parties had participated in extensive written discovery and some depositions.  (Setareh Decl. ¶¶ 12-18.)  During discovery, information emerged leading Plaintiff to believe that the pursuit of the class action claims here against Defendant will not benefit the class and that the violations alleged were individual in nature only because Plaintiff had a unique job title and position in the company.  (Setareh Decl. ¶ 19.)  Accordingly, the PAGA and Labor Code violations alleged would have only related to Plaintiff's unique position and circumstance.  (Setareh Decl. ¶ 19.)  The settlement was therefore reached through arm’s-length bargaining with sufficient investigation to allow counsel and the Court to act intelligently.

Plaintiff’s counsel has significant experience in wage-and-hour litigation.  (Setareh Decl. ¶¶ 2-7.)  Counsel is therefore experienced in similar litigation.

The Court finds that the settlement is entitled to a presumption of fairness.

C.        The Release is Permissible.

Through the settlement agreement, Plaintiff releases all of his claims against Defendant, including the rights and benefits of Civil Code section 1542.  (Setareh Decl., Ex. 1 at pp. 3-4, ¶ 2.0.)  This release is limited to Plaintiff’s claims and not any claims on behalf of the public, and it is permissible.

D.        The Waiver of Attorney Fees and Costs is Reasonable.

A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action.  (Lab. Code, § 2699, subd. (g)(1).)  Here, each side will bear its own attorney fees and costs.  (Setareh Decl., Ex. 1 at p. 5, ¶ 3.0.)

The Court finds that the waiver of attorney fees and costs is reasonable.

E.        Conclusion

The motion for approval of PAGA settlement is GRANTED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 17th day of October 2023