Judge: Thomas D. Long, Case: 21STCV20228, Date: 2023-08-15 Tentative Ruling

Case Number: 21STCV20228    Hearing Date: August 15, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On May 28, 2021, Plaintiff Danielle Terry filed this action against Defendant SBF Foods, LLC 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 a Gross Settlement Amount of $300,000.00.  Of that amount, up to $105,000.00 (35%) will be paid as attorney fees, up to $20,000.00 will be paid as costs, and up to $20,00.00 will be paid to a settlement administrator.  (Moon Decl., Ex. 1 at p. 5, ¶ 3.2.)  Of the remaining amount, 75-percent will be paid to the Labor and Workforce Development Agency (“LWDA”) and 25-percent will be paid to the aggrieved employees on a pro rata basis. 

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.  (Moon Decl. ¶ 8 Ex. 3.)

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 conducted mediation with Mark Rudy, Esq. on June 8, 2023, resulting in the settlement.  (Moon Decl. ¶ 13.)  Prior to mediation, the parties engaged in informal discovery, including an exchange of sample data and demographic information, Plaintiff’s personnel file, and sample time records for Aggrieved Employees.  (Moon Decl. ¶ 11.)  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, almost entirely in class and representative actions.  (Moon Decl. ¶¶ 38-54.)  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 her claims against Defendant through the effective date, including the rights and benefits of Civil Code section 1542.  (Moon Decl., Ex. 1 at pp. 8-9, ¶ 5.1.)

Plaintiff also releases, on behalf of herself and all aggrieved employees, “any and all claims, wage and hour claims, rights, demands, liabilities and causes of action of any nature or description for civil penalties under PAGA alleged/asserted in the Actions, as amended, arising from and/or related to the facts and claims alleged/asse1ied in the Actions, as amended, that could have been alleged/asserted in the Actions based on the facts and claims alleged in the Actions, as amended, and the facts and claims asse1ied in, arising from or related to, or could have been alleged in the PAGA Notice dated May 28, 2021.”  (Moon Decl., Ex. 1 at p. 10, ¶ 5.3.)

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

D.        The Attorney Fees and Costs Are 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).)  Plaintiff’s counsel will receive up to 35% of the Gross Settlement Amount for attorney fees ($105,000.00) and up to $20,000.00 in costs and expenses from the Gross Settlement Amount.  (Moon Decl., Ex. 1 at p. 5, ¶ 3.2.1.)

Counsel declares they have spent 194.8 hours on this case, totaling $114,947.50 at their respective hourly rates.  (Moon Decl. ¶ 58.)  Counsel also incurred $17,190.13 in expenses.  (Moon Decl. ¶ 65.)  If the actual costs remain less than $20,000.00, the difference will revert to the Aggrieved Employees.  (Moon Decl. ¶ 65.)

The Court finds that the attorney fees and costs are 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 15th day of August 2023