SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

JOSE ORNELAS, on behalf of himself and all aggrieved employees and the State of California,

Plaintiff,

vs.

MAPLEBEAR, INC. (d/b/a/ INSTACART) and DOES 1-25,

Defendants.

Case No. 18CV323046

TENTATIVE RULING RE: MOTION TO APPROVE PAGA SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on February 14, 2020 at 9:00 a.m. in Department 3. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
This is a case for recovery of penalties under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”). The Complaint, filed on February 7, 2018, sets forth the following causes of action: (1) PAGA Penalties for Failure to Pay Wages Owed; (2) PAGA Penalties for Failure to Provide Meal Periods; (3) PAGA Penalties for Waiting Time Penalties; and (4) PAGA Penalties for Itemized Wage Statement and Recordkeeping Violations.

The parties have reached a PAGA settlement. Plaintiff Jose Ornelas (“Plaintiff”) previously moved for approval of the settlement, but the Court denied the motion. The parties have modified the settlement and Plaintiff seeks approval of the modified settlement.

III. LEGAL STANDARD
IV.
A superior court must review and approve any PAGA settlement. (Lab. Code, § 2699, subd. (l)(2).) The proposed settlement must be submitted to the Labor and Workforce Development Agency (“LWDA”) at the same time it is submitted to the court. (Ibid.)

As discussed by one court:

PAGA does not establish a clear standard for evaluating PAGA settlements.

…

Accordingly, certain courts have been willing to approve PAGA settlements only if (1) the statutory requirements set forth by PAGA have been satisfied, and (2) the settlement agreement is fair, reasonable, and adequate in view of PAGA’s public policy goals.

(Patel v. Nike Retail Services, Inc. (N.D. Cal. 2019) 2019 WL 2029061 at *2.)

As part of this analysis, these courts have evaluated proposed PAGA settlements under the relevant factors from Hanlon v. Chrysler Corp. (9th Cir. 1998) 150 F.3d 1011, 1026. (Patel v. Nike Retail Services, Inc., supra, 2019 WL 2029061 at *2.) “Of the Hanlon factors, the following are relevant to evaluating [a] PAGA settlement: (1) the strength of the plaintiff’s case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the amount offered in settlement; (4) the extent of discovery completed and the stage of the proceedings; (5) the presence of government participation; and (6) the expertise and views of counsel.” (Ibid.)

V. DISCUSSION
VI.
Under the previous version of the settlement, the net settlement amount was split so that 20% of the total was designated the “PAGA Civil Penalties Amount,” with 75% of that amount to be paid to the Labor and Workforce Development Agency (“LWDA”); and the remaining 80% of the total was designated the “PAGA Unpaid Wages Amount,” to be paid in its entirety to the settlement group for unpaid wages under Labor Code section 558. Of this proposed settlement, the Court found:

Distributing the entirety of the “PAGA Unpaid Wages Amount” to the settlement group is not permitted under the law. To the extent this amount is a penalty, 75% must be distributed to the LWDA; it cannot be paid in whole to the settlement group. (Lab. Code, § 2699, subd. (i).) To the extent this amount reflects unpaid wages, the Settlement Agreement runs afoul of a recent California Supreme Court case which states: “a PAGA claim does not include unpaid wages under section 558.” (ZB, NA. v. Superior Court of San Diego County (2019) 8 Ca1.5th 175, 245.) There are no non-PAGA causes of action in the Complaint, and “section 558 has no private right of action.” (Id. at p. 244.)

(Order re: Motion to Approve PAGA Settlement, p. 3:4-11.)

The parties have amended the settlement so that the entire settlement is now for civil penalties under PAGA. (See Declaration of Ryan L. Hicks Supporting Motion to Approve PAGA Private Attorney General Act Settlement (“Hicks Decl.”), Ex. 2 (“Addendum to Stipulation of Settlement and Release”).)

Pursuant to the amended settlement, defendant Maplebear, Inc. (“Defendant”) will pay a total amount of $350,000. (Hicks Decl., Ex. 1 (“Settlement Agreement”), ¶ 4.) This amount includes attorneys’ fees of $116,666.67, costs of $18,565.38, settlement administration fees of $15,000, and a service award of $5,000. The net settlement will be split with 75% to be paid to the LWDA and 25% to the aggrieved employees.

The aggrieved employees in this case are defined as “all current and former non-exempt In-Store Shoppers who worked in California during the period of December 4, 2016 through September 1, 2019.” (Settlement Agreement, ¶ 2.) There are 4,461 aggrieved employees. (Hicks Decl., ¶ 22.) This means that each aggrieved employee will get a little less than $11 of the net settlement fund ($48,691.99.)

Plaintiff asserts that although the recovery per employee is somewhat low, there were difficulties in proving the case, such as the fact that meal break violations occurred in only about 3% of all shifts and all the claims could be unmanageable due to required individualized analyses. Upon review, the Court finds the settlement is fair.

Plaintiff’s counsel provides a lodestar figure of $118,099.43, just above the amount of requested fees. (Hicks Decl., ¶ 28.) Plaintiff’s counsel also provides evidence of incurred costs of $18,565.38. (Id. at ¶ 25.) These amounts are approved.

With regard to the service award, Plaintiff submits a declaration detailing his participation in the case and stating he spent approximately 87 hours on the litigation. (Declaration of Jose Ornelas Supporting Motion to Approve Private Attorney General Act Settlement, ¶ 27.) The Court finds the service award is warranted and it is approved.

In sum, Plaintiff’s motion to approve PAGA settlement is GRANTED.

The Court will prepare the order if this tentative ruling is not contested.