Judge: Thomas D. Long, Case: 21STCV43225, Date: 2023-05-08 Tentative Ruling

Case Number: 21STCV43225    Hearing Date: May 8, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On November 23, 2021, Plaintiff Miguel Figueroa filed this action against Defendants Emcod Inc. and Scott Drucker.  The Complaint alleged multiple individual claims and a representative claim for penalties under the Private Attorney General Act (“PAGA”).

The parties have agreed on the terms of a settlement.  Under the proposed settlement, Defendants will pay no PAGA penalties in exchange for a dismissal of the PAGA claims with prejudice.

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).)  Plaintiff’s counsel attaches proof that the settlement was submitted to the LWDA at the same time the motion was filed.  (Messrelian Decl., Ex. 1.)

Accordingly, the Court find 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”].)

On June 6, 2022, the parties attended a Resolve Law LA conference, where they tentatively agreed to settle the matter on an individual basis with a dismissal of the representative PAGA claim.  (Motion at p. 3.)  The settlement was therefore reached through arm’s-length bargaining.

The parties engaged in discovery regarding Defendants’ policies, practices, operations, time and payroll information, Plaintiff’s personnel file (including time and payroll data for Plaintiff), and the time records and payroll records for a group of six employees who were within the PAGA period.  (Motion at p. 4.)  Plaintiff’s counsel engaged a data analyst to determine the Labor Code violation rate.  (Messrelian Decl. ¶¶ 5-6.)  Accordingly, there was sufficient investigation to allow counsel and the Court to act intelligently.

There is no information about counsel’s experience in similar litigation.  However, the Court takes judicial notice of the fact that Plaintiff’s counsel was also counsel of record in at least one other PAGA case, Case No. 21STCV41387, in this Department.

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

C.        The Release is Permissible.

Plaintiff entered into a confidential individual settlement agreement with Defendants to settle his individual claims.  (Motion at p. 4.)

If the Court approves the PAGA settlement, the aggrieved employees will release all claims that arose during the Release Period for PAGA violations based on the Labor Code sections and Industrial Welfare Commission Orders alleged in the Complaint.  Plaintiff will dismiss the PAGA claim with prejudice.

Although the settlement results in no PAGA penalties, the parties thoroughly analyzed the evidence for the six aggrieved employees.  There was a 0.1% violation rate when an employee did not clock out for a meal period, a 0.2% violation rate for late meal periods, and a 1.3% violation rate for short meal periods.  Overtime payments appeared to be correct.  According to Plaintiff’s data expert analyst, there were essentially no violations, so the derivative Labor Code claims would not be of any value.  Based on this conclusion, it does not appear that the other five aggrieved employees would succeed in bringing their own PAGA claims for a different result.  Accordingly, the Court will approve the release and dismissal with prejudice.

D.        Conclusion

The motion for approval of PAGA settlement and release 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.  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.

       Dated this 8th day of May 2023