Judge: William A. Crowfoot, Case: 19BBCV00032, Date: 2023-02-10 Tentative Ruling

Case Number: 19BBCV00032    Hearing Date: February 10, 2023    Dept: 3

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - NORTHEAST DISTRICT

I.            INTRODUCTION

On January 10, 2019, plaintiffs James Zheng, John Zhang, Ray Zhang, on behalf of themselves and others similarly situated (“Plaintiffs”) filed this action.  On September 19, 2019, Plaintiffs filed a First Amended Complaint (“FAC”) against defendants CTOUR Express LLC; Charlie Lu aka Ying Qiang Lu; Maggie Lu aka Mei Lingying; CTOUR Charter LLC; CTOURHOLIDAY LLC; CTOUR Investment holding, Inc.; Sea Gull Holiday; Seagull Coach, Inc.; C & J Express; Skyline Group, Inc.; And Does 8through 20, (“Defendants”).  Trial is currently scheduled for March 20, 2023.  Plaintiffs seeks an order approving the settlement the parties have reached regarding their Private Attorneys General Act (“PAGA”) claim.  The motion is unopposed. 

II.          LEGAL STANDARD

A superior court must review and approve any penalties sought as part of proposed settlement agreement pursuant to Section 2699 (PAGA statute).  (Labor Code, § 2699, subd. (l)(2).)  The PAGA is “a procedural statute allowing an aggrieved employee to recover civil penalties—for Labor Code violations—that otherwise would be sought by state labor law enforcement agencies.”  (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)¿ The statute provides a mechanism for private enforcement of Labor Code violations for the public benefit.  (See Arias v. Superior Court (2009) 46 Cal.4th 969, 986; Ochoa-Hernandez v. Cjaders Foods, Inc. (N.D.Cal. 2010) 2010 WL 1340777, at p. *4.)  To incentivize employees to bring PAGA actions, the statute provides aggrieved employees 25 percent of the recovered civil penalties, with the remaining 75 percent is distributed to the Labor and Workforce Development Agency (“LWDA”) “for enforcement of labor laws and education of employers and employees about their rights and responsibilities under [the Labor Code].”  (Lab. Code § 2699, subd. (i).)  A prevailing employee is also entitled to an award of reasonable attorney fees and costs incurred in the action.  (Labor Code, § 2699, subds. (g)(1).) 

In reviewing the terms of a settlement agreement, the court determines whether the settlement is fair, reasonable, and adequate to all concerned, and not the product of fraud, collusion, or overreaching.  (Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th 322, 337; Nordstrom Commission Cases (2010) 186 Cal.App.4th 576, 581.)  Although a PAGA plaintiff need not satisfy class action requirements (see Arias v. Superior Court, supra, 46 Cal.4th at p. 975), general principles applicable to class action settlements apply equally in this context.  In the context of a class action settlement, the court considers various factors including whether (1) the settlement is the result of 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.  (Nordstrom, supra, 186 Cal.App.4th at 581; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245.)  In considering the amount of settlement, the court is mindful that compromise is inherent and necessary in the settlement process.  (Wershba, supra, 91 Cal.App.4th at 250.)¿ 

III.        DISCUSSION

The Court finds that Plaintiffs satisfy the procedural requirements for the proposed settlement, and that the Settlement Agreement is fair, reasonable, and adequate.

Labor Code § 2699, subdivision (l)(2) provides, in pertinent part: “[t]he 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).)  Here, Plaintiffs have not provided written confirmation of submission of the proposed settlement to the LWDA.  However, Plaintiffs’ proof of service shows that LWDA was a recipient of this instant motion and accompanying declarations, including a copy of the Settlement Agreement.  Thus, Plaintiffs have satisfied the requirements of Section 2699, subdivision (l)(2).¿

Here, the parties engaged in an 11 plus hour mediation session with JAMS Mediator Hiro N. Aragaki, Esq., on October 25, 2022.  (Fang Decl. ¶ 6.)  Mr. Aragaki worked extensively with both sides until the parties finally reached an agreement in the early morning on the following day.  (Id.)  Prior to mediation, the parties engaged in the substantial exchange of discovery in order to evaluate the strength of Plaintiff’s claims and Defendant’s defenses.  (Fang Decl. ¶ 5.) 

The Court finds that the risk, expense, and complexity of further litigation balances strongly in favor of approval of the Settlement.  Plaintiffs claim that the availability and cooperation of CTOUR employees (other than the Plaintiffs) as witnesses to prove the extensive nature of the Labor Code violation claims is less than certain since Plaintiffs’ counsel regularly experienced difficulty in obtaining cogent basic proof with the help of newly immigrated, Chinese-speaking employees with no experience of the American legal system.  Plaintiffs argue that the proof of many of their claims, such as lack of appropriate meal and rest periods, depend on testimony rather than documentation.  Plaintiffs also point out other barriers to proof and recovery at trial, which the Court finds to weigh in favor of settlement.  (See Mot. Sec V., pp. 19-22.) 

The Court further finds that the amount offered in Settlement is fair, adequate, and reasonable given the realistic value of Plaintiffs’ claim.  Plaintiffs calculated the settlement amount as reasonable based on the fact that it falls within the likely range of results should the matter have gone to trial.  Plaintiffs argue that the Court should find the Settlement to be reasonable since the proposed PAGA percentage is larger than normal, and courts have commonly found that PAGA settlements of amounts (or percentages of the total settlement) as reached herein properly satisfy the statute’s purpose.  Plaintiffs cite to cases in which courts approved of smaller PAGA allocations from the total settlement consideration.  Plaintiffs argue that the cases show that the proposed $275,000 PAGA allocation out of a total settlement of $625,000 is a higher than average allocation in favor of the PAGA claims and the LWDA.  Based upon the foregoing, the Court finds that the Settlement amount is fair, reasonable, and adequate. 

The Court additionally notes that the Settlement complies with Labor Code section 2699, subdivision (i), which requires 75 percent of the amount to be paid to the LWDA and 25 percent of the amount to be paid to the Aggrieved Employees.  (Fang Decl. ¶ 7.E.)   

Further, the Court further finds that Plaintiffs are represented by experienced counsel.  (Fang Decl. ¶ 12; Short Decl. ¶ 4) and that the requested attorney fee award is fair, adequate, and reasonable.  Plaintiffs’ Counsel requests attorney’s fees of 35% of the Gross PAGA Payment (which is 44% of the Gross Payment).  (Fang Decl. ¶ 7.D.)  The Court finds Plaintiffs’ Counsel’s request to be reasonable as it comports with the terms of the Settlement in that Plaintiff’ Counsel may not request attorney’s fees greater than one-third of the Gross Payment.  The Court similarly finds that the requested litigation costs of $6,968.37 are fair, reasonable, and adequate.  Plaintiffs’ Counsel has submitted records justifying the litigation costs sought. (See Fang Decl., Exh. 3; Short Decl. Exh. 3.) 

The Court finds that the Settlement Agreement is fair, reasonable, and adequate to all concerned, and not the product of fraud, collusion, or overreaching, thus, Plaintiffs’ Motion for Order Approving the Private Attorneys General Act Settlement between the parties is GRANTED.

IV.         CONCLUSION

Based on the foregoing, the motion to approve settlement of claims brought under the Private Attorneys General Act is GRANTED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at alhdept3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.