Judge Upinder S. Kalra, Case 21STCV27188 2022-09-13 Tentative Ruling

Judge: Upinder S. Kalra, Case: 21STCV27188, Date: 2022-09-13 Tentative Ruling

Case Number: 21STCV27188 Hearing Date: September 13, 2022 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: September 13, 2022

CASE NAME: Maria Magdalena Gomez v. Bel Aire Bridal, Inc.

CASE NO.: 21STCV27188

PLAINTIFF’S MOTION FOR PRELIMINARY APPROVAL OF PAGA SETTLEMENT

MOVING PARTY: Plaintiff Maria Magdalena Gomez

RESPONDING PARTY(S): None as of September 8, 2022.

REQUESTED RELIEF:

1) Preliminary Approval of PAGA Settlement

2) Approval of Plaintiffs’ Attorneys’ Fees and Costs

3) An order appointing Phoenix Settlement Administrators as Settlement Administrator and approve fee

4) Disbursement of Settlement Sum to LWDA and Aggrieved Employees

TENTATIVE RULING:

1) Motion for Approval of PAGA Settlement is GRANTED.

2) Request for Plaintiffs’ Attorneys’ Fees Costs is GRANTED.

3) Request for Phoenix Settlement Administrators as Settlement Administrator and approve fee is GRANTED.

4) Request for Disbursement of Settlement Sum to LWDA and Aggrieved Employees is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On July 23, 2021, Plaintiff Maria Magdalena Gomez, on behalf of herself and all others aggrieved employees (“Plaintiff”) filed a complaint against Defendant Bel Aire Bridal, Inc. (“Defendant.”) The complaint was for civil penalties under the Private Attorneys General Act, and alleged seven violations, based on failure to provide rest and meal periods as well as failure to pay wages. Plaintiff alleges that while working for Defendant, she and other aggrieved employees were not full compensated for the time worked and were not provided meal and rest breaks.

On September 23, 2021, Defendant filed an Answer.

On August 19, 2022, Plaintiff filed the current Motion for Order of Preliminary Approval of PAGA Settlement. No opposition has been filed as of September 8, 2022.

LEGAL STANDARD

Under Labor Code section 2699(l)(2): “The superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” (Lab. Code. §2699(l)(2); see Williams v. Superior Court (2017) 3 Cal.5th 531, 549 [noting in passing that “PAGA settlements are subject to trial court review and approval, ensuring that any negotiated resolution is fair to those affected.”].)

“[N]either the California legislature, nor the California Supreme Court, nor the California Courts of Appeal, nor the [LWDA] has provided any definitive answer as to what the appropriate standard is for approval of a PAGA settlement.” (Haralson v. U.S. Aviation Services Corp. (N.D. Cal. 2019) 383 F.Supp.3d 959, 971].) “In commenting on a proposed PAGA settlement, the LWDA has offered only this guidance: It is thus important that when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the standards of being ‘fundamentally fair, reasonable, and adequate’ with reference to the public policies underlying the PAGA.” (Id.; see also Flores v. Starwood Hotels & Resorts Worldwide, Inc. (C.D. Cal. 2017) 253 F.Supp.3d 1074, 1077 [federal district court approved PAGA settlement where court was satisfied that the parties' settlement was “fair and adequate in view of the purposes and policies of the statute” and the parties “adequately divvied up the civil penalties under Section 2699(i) of the California Labor Code.”]; Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 589 [a court may exercise its discretion to approve a settlement of a suit that includes a PAGA claim even if no portion of the settlement is allocated toward payment to the LWDA].)

ANALYSIS:

Plaintiff Maria Magdalena Gomez moves the court to approve the proposed settlement claims pursuant to the Private Attorneys General Act.

Terms of the Settlement:

Total Settlement Amount: $55,000.00

Attorney’s Fees: $18,315.00

Litigation Costs and Expenses: $2,266.25

LWDA: $23,939.01

PAGA Payment: $7,979.68

Settlement Administration Costs: $2,500.00

1. Requirement to Send Agency a Copy of Proposed Settlement

“The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” (Lab. Code § 2699, subd. (l)(2).) Counsel for Plaintiff declares that on Friday, August 19, 2022, he submitted the Proposed Settlement via the online portal to the LWDA. Confirmation of this submission is attached to Justin Lo’s declaration as Exhibit C.

2. Fairness, Reasonableness, and Adequacy of PAGA Settlement

“PAGA settlements are subject to trial court review and approval, ensuring that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549, citing Lab. Code § 2699, subd. (l)(2).) The trial court must determine that the settlement is fair, reasonable, and adequate to all concerned. (Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th 332, 337.)

There is a presumption that the settlement agreement is fair where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the trial court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Reed, 208 Cal.App.4th at 337.) This standard applies in the context of class actions and qui tam actions alike. (See Gov. Code § 12652, subd. (e)(2) [in qui tam action, a state or political subdivision may settle the action with the defendant despite objections of the qui tam plaintiff if the court determines, after a hearing providing the qui tam plaintiff an opportunity to present evidence, that the proposed settlement is fair, adequate, and reasonable under all the circumstances]; see also Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348, 382 [a PAGA representative action is a type of qui tam action].)

Penalties recovered by aggrieved employees must be distributed as follows: 75% to the LWDA and 25% to the aggrieved employees. (Lab. Code § 2699, subd. (i).) However, civil penalties recovered under section 558, subdivision (a)(3) shall be paid to the affected employee. A prevailing employee is entitled to an award of reasonable attorney fees and costs incurred in the action. (Lab. Code § 2699, subd. (g)(1).)

Even once the presumption of fairness has been established, the court bears the responsibility to ensure the recovery under the settlement agreement represents a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.)

The various factors that courts use to determine if a settlement should be approved indicate that this settlement is fair. First, the Plaintiff indicates that the matter was settled through arms-lengths negotiations. (Dec. Lo ¶ 15.) Further, the strength of the claim favors approval of the settlement; Defendant maintained numerous defenses that could have eliminated any recovery. (Motion 10: 20-23.) Another factor to consider is the fact that the risks and expenses of continued litigation also weighs in favor of settlement approval; there was a potential “net-zero recovery” had this matter continued. (Motion 11: 25 – 12: 1.) Also, the benefits of the settlement, $7,979.68 to the employees, are reasonable; this settlement is significant as it allows the aggrieved employees to obtain recover when they otherwise would not receive. (Motion 13: 13-16.) Additionally, the scope of the release is narrowly tailored; it is limited to civil penalties in the Action under Labor Code § 2698. (Settlement Agreement, § 37.) The experience of counsel indicates the settlement is fair. Plaintiff’s counsel has experience in complex wage and hour litigation. (Dec. Lo ¶ 2-5, Ex. A.) As stated above, investigation and discovery is another factor used to determine if settlement is appropriate. Here, Plaintiff’s counsel completed discovery that was sufficient to evaluate these claims, obtaining documents that included wage statements, policy documents and data of the alleged violations. (Dec. Lo ¶ 12-14.)

The above factors indicate that the settlement agreement is fair and reasonable.

3. Attorney’s Fees and Litigation Costs

The award of attorney fees is made by the court at the fairness hearing using the lodestar method with a multiplier, if appropriate. (Ketchum III v. Moses (2000) 24 Cal.4th 1122, 1132-36.) Despite any agreement by the parties to the contrary, the court has an independent responsibility to review the attorney fee provision of the settlement agreement and award an amount that it determines to be reasonable. (Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 128.)

Here, Plaintiff seeks $18,315.00 in fees and $2,266.25 in litigation costs as stated in the Settlement Agreement. (Settlement Agreement § 15.) This amount is 33.3% of the Settlement Sum. The Court finds that this requested amount is reasonable. The percentage, 33.3%, is within the range found to be reasonable. (See Vasquez v. Coast Valley Roofing, Inc. (E.D. Cal. 2010) 266 F.R.D. 482, 491, “The typical range of acceptable attorneys' fees in the Ninth Circuit is 20% to 33 1/3% of the total settlement value, with 25% considered the benchmark.”) Further, the costs incurred, such as mediation fees, court conference fees, filing fees, and expert fees, total $2,266.25. The costs are attached to the Lo Declaration. As such, the Court finds these fees to be reasonable.

Conclusion:

For the foregoing reasons, the Court decides the pending motion as follows:

1) Motion for Approval of PAGA Settlement is GRANTED.

2) Request for Plaintiffs’ Attorneys’ Fees Costs is GRANTED.

3) Request for Phoenix Settlement Administrators as Settlement Administrator and approve fee is GRANTED.

4) Request for Disbursement of Settlement Sum to LWDA and Aggrieved Employees is GRANTED.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: September 13, 2022 __________________________________ Upinder S. Kalra

Judge of the Superior Court