Judge: Yolanda Orozco, Case: 21STCV12674, Date: 2023-01-13 Tentative Ruling
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Case Number: 21STCV12674 Hearing Date: January 13, 2023 Dept: 31
MOTION
FOR APPROVAL OF
REPRESENTATIVE ACTION SETTLEMENT
TENTATIVE RULING
The Motion for
Approval of Representative Action Settlement under the Private Attorneys
General Act is GRANTED.
Background
On April 02, 2021, Plaintiff Jose L. Bolanos, on behalf of himself, and other aggrieved employees, filed a Private Attorneys’ General Act (PAGA) action against Canoga Park Heating and Air Conditioning Co. Inc. and Does 1 to 100. The Complaint alleges violations of Labor Code sections 210, 226.3, 558, 1174.5, 1197.1, and 2699.
On December
20, 2022, Plaintiff filed this instant motion seeking approval of the
settlement of the PAGA action under California Labor Code section 2699(1)(2).
Legal Standard
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. (Lab. Code § 2699, subd. (i).) 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].” (Id.)
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 (2009) 46 Cal.4th 969, 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.)
Discussion
Plaintiff
seeks approval of Plaintiff’s PAGA action settlement. Plaintiff asserts that he
and Defendant have agreed to settle this action pursuant to a settlement
agreement attached as Exhibit 1 to the Declaration of Vendang J. Patel filed in
Support of this Motion.
Service on LWDA
Labor Code section 2699(l)(2) provides, in pertinent part: “The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.”
Plaintiff asserts that on December 20, 2022, a copy of the settlement was provided to LWDA. (Patel Decl. Ex. 5.) Plaintiff has complied with Labor Code section 2600(1)(2).
The Proposed Settlement
The proposed settlement covers approximately 36 aggrieved employees who are all current and former non-exempt, hourly-paid employees who worked for Defendant between January 26, 2020, through August 22, 2020 (“PAGA Period”). (Patel Decl. ¶ 5, Ex. 1.)
The Gross
Settlement Amount (“GSA”) is $120,000,00.00. From the GSA Plaintiff requests:
1)
$2,500.00
in administration costs;
2)
$42,000,00
in attorney’s fees;
3)
$8,138.24
in reimbursement of litigation costs; and
4) $5,000.00 as an Enhancement Payment to Plaintiff.
After the deductions above are made, the Net Settlement Amount is $62, 361.78. (Patel Decl. ¶ 24.)
The remaining seventy-five percent (75%) will be paid to the California Labor and Workforce Development Agency (“LWDA”), totaling $46,771.32, and twenty-five percent (25%), totaling $25,590.44, will be paid to the aggrieved employees, with the estimated average payment to be $433.07 to each aggrieved employee. (Patel Decl. ¶ 24, Ex. 1.)
a. Escalator Provision
The GSA is also subject to an Escalator Provision that states that in the event that the number of Pay periods worked by aggrieved employees during the PAGA period increased by more than 5% or 153 Pay Periods, the GSA will be increased proportionally to the Pay Periods in excess of 3,069 Pay Periods multiplied by the Pay Period Value. (Patel Decl. ¶¶ 7, 36.) “The Pay Period Value shall be calculated by dividing the originally agreed-upon Gross Settlement Amount ($120,000.00) by 3,069, which amounts to a Pay Period Value of $39.10. Thus, for example, should there be 3,300 Pay Periods in the PAGA Period, then the Gross Settlement Amount shall be increased by $9,032.10 ((3,300 Pay Periods – 3,069 Pay Periods) x $39.10 per Pay Period).” (Id.)
b. Disbursement of the
Settlement
Ten (10) calendar days from the date the Court signs an Order granting approval of the Settlement and Judgment, Defendant will deposit the GSA in a settlement fund established by Phoenix. (Patel Decl. ¶ 30, Ex. 1) Within seven (7) calendar days of the funding, Phoenix will issue payments to the aggrieved employees, LWDA, and Plaintiff’s counsel for attorneys’ fees and costs. (Id.)
c.
Settlement Administrator
The settlement administrator will be Phoenix Settlement Administrators (“Phoenix”). (Patel Decl. ¶ 27.) The costs of administrating the settlement, including, but not limited to, mailing the individual settlement payments to aggrieved employees will not exceed $2,500.00 and will be paid to Phoenix from the GSA. (Patel Decl. ¶ 26.) Phoenix will also be reasonable for filing any required federal and state tax forms and other administrative tasks. (Patel Decl. ¶ 66; Lawrence Decl.)
The Court finds the administration costs capped at $2,500.00 to be fair, reasonable, and adequate.
d. Release
In exchange for payment of the GSA, Plaintiff and all aggrieved employees for the duration of the PAGA period will release any known and unknown claims as alleged in or that could have been alleged based on the facts of the Complaint and the PAGA Notice for civil penalties under PAGA. (Patel Decl. Ex. 1) This includes:
“(a) all claims for failure to pay all overtime wages owed; (b) all claims for failure to pay minimum wages owed for all hours worked; (c) all claims for failure to provide compliant meal periods or compensation in lieu thereof; (d) all claims for failure to provide compliant rest periods or compensation in lieu thereof; (e) all claims for failure to maintain accurate time records; (f) all claims for failure to provide accurate wage statements; (g) all claims for failure to timely pay all compensation owed to terminated and/or resigned employees; and (h) all claims for failure to comply with the requirements of the Wage Theft Protection Act of 2011(‘PAGA Released Claims’).”
(Patel Decl. Ex. 1.)
The release also includes an “Exclusion to the PAGA Released Claims” clause that excludes all other claims from the release that arouse outside the PAGA period. (Patel Decl. Ex. 1.)
The Court finds that the general release is fair and reasonable because they pertain to the Labor Code violations Plaintiff alleged in his Complaint, sections 210, 226.3, 558, 1174.5, 1197.1, and 2699. (Patel Decl. ¶¶ 44-51, Ex. 1)
f.
Plaintiff’s Enhancement Payment
Plaintiff asserts that he is entitled to a
$5,000.00 enhancement for bringing this action and assisting counsel in
investigating, litigating and settling this case. (Patel Decl. ¶ 67, Ex. 1;
Bolanos Decl.)
The Court find the request fair, reasonable, and adequate.
g. Plaintiff’s Counsel and Attorneys’ Fee and Costs
The settlement provides an award of attorneys’ fees to Plaintiff’s counsel in an amount not to exceed 35% of the GSA, or $42,000.00. (Patel Decl. Ex. 1.) Plaintiff’s counsel asserts that the hourly rates of the Bibiyan Law Group, P.C. are $775, $625, $525, $425, $375, $350, and $325 with paralegal and legal assistant’s hourly rates are $150 and $75, respectively. (Patel Decl. ¶ 60.) Plaintiff’s counsel asserts that the total lodestar would be $221,100.00. (Id.)
Plaintiff’s Counsel asserts that 404.5 hours were spent litigating this case. (Bibiyan Decl. ¶ 21.)
“David D. Bibiyan billed 81.2 hours at his hourly rate of $775 per hour. Jeffrey D. Klein billed 142.3 hours at his hourly rate of $625. Diego Aviles billed 26.3 hours at his hourly rate of $525. Vedang J. Patel billed 42.1 hours at his hourly rate of $425 per hour. Joshua Shirian billed 41.7 hours at his hourly rate of $375. Anton Swain-Gil billed 37.9 hours at his hourly rate of $350. And Christopher Michael billed 22.4 hours at his rate of $325 per hour. Paralegals billed 6.5 hours at $150 per hour. Finally, legal assistants billed 5.0 hours at $75 per hour. Cumulatively, this amounts to a total lodestar of $221,100.00.”
(Id.)
It is unreasonable and inefficient to employ a large number of attorneys to handle a case that does not present complex or novel issues. (See Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24.) Nevertheless, the Court finds that an attorneys’ fee request of 42,000.00 or 35% of the GSA is fair, reasonable, and adequate.
Plaintiff also seeks reimbursement of $8,138.24 in litigation costs. The settlement agreement caps costs at $25,000.00 but Plaintiff is only seeking $8,138.24 in litigation costs. (Patel Decl. Ex. 1.) As evidence for the costs incurred, Plaintiff submits the Declaration of David D. Bibiyan attesting to the costs and providing an itemized list for the costs. (Bibiyan Decl. ¶ 36.)
Accordingly, the Court finds that the costs incurred are fair, reasonable, and adequate.
Plaintiff’s counsels sufficiently attested to their mediation effort in reaching a fair settlement and the risks they faced if litigation were to continue. The Court finds that the GSA and the terms of the settlement are fair, reasonable, and adequate and accomplish the objectives of the PAGA.
The Motion is GRANTED.
Conclusion
The Motion for Approval of Representative Action Settlement under the Private Attorneys General Act is GRANTED.
Moving party to give notice.