Judge: William D. Claster, Case: 20-01174058, Date: 2022-09-02 Tentative Ruling

Plaintiff Deja Henry's Notice of Motion and Motion for Approval of Representative Action  Settlement  ROA 69

Plaintiff’s motion for approval of PAGA settlement is CONTINUED to October 14, 2022 at 9:00 a.m. in Department CX104 to permit the parties to respond to the following items of concern.   Any supplemental briefing shall be filed on or before October 4, 2022.  If a revised settlement agreement and/or proposed notice is submitted, a redline version showing all changes, deletions, and additions must be submitted as well.  In addition, Plaintiff must provide proof of service of any revised settlement agreement and supplemental papers on the LWDA.

Plaintiff’s Request for Judicial Notice is GRANTED as to Exhibits A and B, under Evid. Code § 451(a), but is DENIED as to Exhibit C.  (See Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049, 1062 [“[T]he statements of an individual legislator, including the author of a bill, are generally not considered in construing a statute, as the court’s task is to ascertain the intent of the Legislature as a whole in adopting a piece of legislation.”].)

As to the Settlement:

1.            Are there any other matters, whether individual, class, or PAGA, pending or in the pre-filing LWDA stage, that could be affected by approval of this settlement?

2.            The complaint defines all employees, not just non-exempt employees, as the aggrieved employees.  (See Compl. ¶ 1.)  Does this settlement provide anything for exempt employees, who have always been aggrieved employees as currently pled?

3.            How many pay periods are actually at issue?  Is the escalator triggered?

4.     The PAGA period extends through the approval date.  Why is it proper to base the escalator solely on pay periods through mediation?  Given that Defendant’s apparent financial condition means more money is unlikely to be forthcoming, the Court would prefer a closed-ended PAGA period tied to the time the case settled.

5.            Please provide a bid from the settlement administrator.

6.            The PAGA release describes “Class Members” and a “Settlement Class.”  This case is not a class action.  Please make necessary revisions.

7.            Paragraph 19.b of the agreement purports to bar the aggrieved employees from bringing claims associated with errors in settlement administration.  The aggrieved employees are not, and never will be, parties to this action.  The Court will not approve a settlement that binds them in any way other than by operation of PAGA itself.

8.            Counsel states that Defendants produced documents responsive to a “wish list” in informal discovery.  What documents?  Please provide more detail.  In particular, did Defendants turn over time and pay records for the aggrieved employees?  If so, was it a sample of records?  How large a sample?

9.            Counsel retained an expert to value the claims.  Who?  Please provide a CV.

10.         Counsel’s valuation of the PAGA claim is inadequate for the Court to discharge its approval duties.  “[A] trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.”  (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77.) To that end, for each predicate Labor Code violation, please provide further information about the strengths and weaknesses of Plaintiff’s claims and Defendant’s expected defenses, including the evidence supporting both sides’ cases. (See ibid. [citing Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116 and Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794].)

11.         In particular, the Court notes that the only evidence discussed in counsel’s supporting declaration pertains to Labor Code violations personally suffered by Plaintiff.  Did counsel find evidence of Labor Code violations suffered by any other employees?  What foundation is there to value this case beyond the experience of one person?

12.         The Court requires more information about Defendants’ finances.  This must come in the form of a declaration from Defendants, not their counsel, who lacks foundation to testify about Defendants’ finances.  The declaration needs to contain sufficient information to justify both the settlement amount and the two-installment structure of the settlement, which is unusual for a settlement of this size.  Defendants may temporarily lodge the declaration under seal and follow the procedures of CRC 2.550 et seq. if they wish the declaration to remain permanently sealed.

13.         As currently calculated, the settlement devotes about $8,770 to PAGA penalties out of a $50,000 GSA.  The attorneys’ fees alone (not counting litigation costs) are nearly twice that amount.  Plaintiff’s proposed incentive payment is only $1,200 less than the total amount devoted to PAGA penalties.  How does such an allocation further the purposes of PAGA?

14.         All counsel who will be paid from an award of fees from the GSA must submit contemporaneously made billing records for attorney’s fees and costs for lodestar cross-check purposes.

As to the Notice:

1.            Please describe the alleged Labor Code violations in the notice.

2.            Please provide more detail about the scope of the release.  Simply informing aggrieved employees that they have released “PAGA claims as asserted” is insufficient.

3.            Are any languages other than English and Spanish necessary?

4.            If any changes are made to the settlement agreement, please make corresponding changes to the notice.

5.            The font size in the actual notice may not be smaller than the font size in the proposed notice provided to the Court.