Judge Thomas D. Long, Case 20STCV17354 2022-09-16 Tentative Ruling

The parties have agreed on the terms of a settlement. Under the proposed settlement, Defendant will pay a total of $490,000.00. Of that amount, up to $215,000.00 will be paid as attorney fees, up to $19,000.00 will be paid as costs, and $10,000.00 will be paid to Plaintiff. Some portion will also be paid to a settlement administrator. Of the remaining amount, 75-percent will be paid to the Labor and Workforce Development Agency (“LWDA”) and 25-percent will paid to the aggrieved employees on a pro rata basis, based on the number of pay periods each employee worked for Defendant during the covered period.

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 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, and the motion would be concurrently served on it. (Jardini Decl. ¶ 6.)

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 conducted a day-long mediation with Hon. Joe Hilberman on February 9, 2022. (Jardini Decl. ¶ 28; Jehdian Decl. ¶ 10.) In subsequent months, they had several other informal settlement discussions, reaching a settlement on May 26, 2022. (Jardini Decl. ¶ 28; Jehdian Decl. ¶ 11.) The settlement was therefore reached through arm’s-length bargaining.

In connection with mediation, the parties engaged in informal exchange of information, including data sufficient to allow Plaintiff to calculate potential penalties. (Jardini Decl. ¶ 27.) Accordingly, there was sufficient investigation to allow counsel and the Court to act intelligently.

Plaintiff’s counsel has significant experience in class actions and has handled at least eight PAGA cases similar to this one. (Jardini Decl. ¶ 61-62; Jehdian Decl. ¶ 20.) The firm is currently handling 30 active class action or representative cases, predominantly wage and hour and consumer class actions. (Jardini Decl. ¶ 64.) Counsel is therefore experienced in similar litigation.

Through the settlement agreement, Plaintiff releases “any and all causes of action, claims, actions, rights, judgments, obligations, damages, penalties, demands, accountings or liabilities of whatever kind and character, which Plaintiff may have against the Company Releasees by reason of or arising out of, touching upon, or concerning any of the matters, acts or omissions described or referenced in the Action, any statutory claims, or any and all other matters of whatever kind, nature or description, whether known or unknown, occurring prior to the date of this Agreement.” (Jardini Decl., Ex. 1 at ¶ 31.) Plaintiff also expressly waives the benefits of Civil Code section 1542. (Id. at ¶ 33.)

Plaintiff also releases, on behalf of himself and all aggrieved employees, “all claims for penalties under the Private Attorneys General Act of 2004 that are alleged in and based on the factual allegations set forth in the operative Complaint.” (Jardini Decl., Ex. 1 at ¶ 29.) “The Released Claims include all claims for statutory penalties under the Private Attorneys General Act of 2004 that could have been sought by the Labor Commissioner that arise from, or relate to, suitable seating claims for Defendant's sales associates working in Defendant's stores in the state of California during the Covered Period.” (Ibid.)

This release is limited to claims for civil penalties that arise from or relate to allegations in Plaintiff’s PAGA letter or Complaint in this action, and it is permissible.

A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action. (Lab. Code, § 2699, subd. (g)(1).) Plaintiff’s counsel will receive up to $215,000.00 in attorney fees and $19,000.00 in costs from the Total Monetary Settlement Amount of $490,000.00. (Jardini Decl., Ex. 1 at ¶¶ 28(a), 28(d).)

Counsel declares they agreed to significantly discount their fees to a maximum of $215,000.00. (Jehdian Decl. ¶ 17; see Jardini Decl. ¶ 55.) Counsel declares they spent 528 hours on this case and incurred $246,467.82 in fees. (Jardini Decl. ¶¶ 33, 35; Jehdian Decl. ¶ 19.) Counsel states the total hours also include time spent on this motion and the anticipated time spent at the hearing. (Jardini Decl. ¶ 33, fn. 2.)

For the reasons stated in the Court’s July 22, 2022 order, the Court concludes $182,472.50 is a reasonable amount of attorney fees.

The motion for approval of PAGA settlement is GRANTED, with the modification of only $182,472.50 in attorney fees.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

Hon. Thomas D. Long

Judge of the Superior Court