Judge: Thomas D. Long, Case: 23STCV09065, Date: 2024-06-27 Tentative Ruling

Case Number: 23STCV09065    Hearing Date: June 27, 2024    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On April 24, 2023, Plaintiff Elia Paxtor Lopez filed this action against Defendant KF Sunray 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 $150,000.00.  Of that amount, one-third will be paid as attorney fees ($50,000.00), up to $15,000.00 will be paid as costs/expenses, $5,000.00 with be paid to Plaintiff as an incentive payment, and up to $8,865.00 will be paid to a settlement administrator.  (See Young Decl., Ex. B [“Settlement”].)  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).)  Plaintiff’s counsel attaches proof that the settlement was submitted to the LWDA at the same time the motion was filed.  (Young Decl., Ex. C.)

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 settlement was reached after extensive arms’ length negotiations by experienced counsel on both sides after extensive formal discovery and informal discovery and recognition of the strengths and weaknesses of each parties’ positions.  (Mahoney Decl. ¶ 5.)

The parties had sufficient information, including Defendant’s policies and handbooks, payroll data, time records, and had conducted an adequate investigation to allow them to make an educated and informed analysis and conclusion.  (Mahoney Decl. ¶ 5.)  Accordingly, there was sufficient investigation to allow counsel and the Court to act intelligently.

Counsel is also very experienced in similar litigation.  (Mahoney Decl. ¶ 4; Young Decl. ¶¶ 25-27.)

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

C.        The Release is Permissible.

If the Court approves the PAGA settlement, the aggrieved employees will release “all claims for PAGA penalties that were alleged, or reasonably could have been alleged, based on the PAGA Period facts stated in the Operative Complaint and the PAGA Notice.”  (Settlement at pp. 7-8.)

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 $50,000.00 in fees and up to $15,000.00 in costs, with excess funds reverting to the Net Settlement Amount.  (Young Decl. ¶¶ 16, 23.)

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 27th day of June 2024