SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

EVA SHARP, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

SAFEWAY INC. and DOES 1 through 50, inclusive,

Defendants.
Case No. 2011-1-CV-202901

TENTATIVE RULING RE: MOTION FOR APPROVAL OF PAGA SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on October 18, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a class action for recovery of penalties under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”). Plaintiff Eva Sharp (“Plaintiff”) worked as a cashier for defendant Safeway, Inc. (“Defendant”) in California. (Complaint, ¶¶ 3-4.) Plaintiff alleges Defendant failed to provide Plaintiff and the other putative class members with seats. (Complaint, ¶ 17.) The Complaint, filed on June 13, 2011, sets forth a single PAGA cause of action.

On July 16, 2018, the Court granted Plaintiff’s motion for class certification. The parties have now reached a PAGA settlement. Plaintiff moves for approval of the settlement, in addition to decertification of the class.

II. DISCUSSION

A. Decertification of Class

As stated previously, the Court certified a class on July 16, 2018. Plaintiff moves to decertify the class in light of the PAGA settlement. Upon further reflection, the Court takes note that there is only a single PAGA cause of action in the Complaint. In other words, there are no causes of action in the Complaint for which a class could be certified.

Under these circumstances, the Court exercises its inherent authority to reconsider interim orders and now finds the motion for class certification should have been denied. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108.) The July 16, 2018 order is amended to DENY the motion for certification. Consequently, there is no class to decertify. This is solely a PAGA action.

B. Legal Standard

A 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.)

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.)

C. Settlement Terms

Pursuant to the settlement, Defendant will pay a total amount of $12,000,000. (Declaration of Matthew Righetti in Support of Plaintiffs’ Motion for Approval of Settlement and Entry of Judgment, Ex. 1 (“Settlement Agreement”), ¶ 3.1.) This amount includes attorneys’ fees of $4,200,000, litigation costs of $185,443.28, an incentive award of $20,000, and settlement administration costs up to $77,500. (See Settlement Agreement, ¶¶ 3.2-3.3; Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Approval of Settlement and Entry of Judgment, pp. 3:10-14, 17:23-25.) PAGA requires that 75% of the net settlement fund be distributed to the LWDA. Consequently, $5,626,875 is required to be paid to the LWDA, while the remainder – $1,875,625 – can be distributed on a pro rata basis to aggrieved employees. Here, the distribution of amounts to aggrieved employees will based on weeks worked at a checkstand as a food clerk checker.

In addition to the monetary recovery, Defendant has agreed to establish and implement a two-year program to provide suitable seats to food clerk checkers working at front-end checkstands in Defendant’s California stores.

The claims administrator (Phoenix Settlement Administrators) will mail aggrieved employees a simple notice informing them of the terms of the approved settlement and their pro rata share of the monetary recovery.

D. Settlement Evaluation

Plaintiff asserts the total settlement amount constitutes about 5% of Defendant’s potential exposure in this action. Plaintiff states there were various factors weighing toward a discount of the penalties, including the risk that the Court could exercise its discretion to reduce the amount of penalties, and several arguments from Defendant such as its substantial disagreement regarding the interpretation of certain statutory language and Defendant’s “good faith” basis for determining the nature of the work did not reasonably permit the use of seats. Plaintiff concludes the case would likely boil down to a battle of the experts.

With regard to Plaintiff’s attorneys’ fees, Plaintiff provides a lodestar of $2,116,215.50, resulting in a multiplier of approximately 1.98. The fee amount is 35% of the gross settlement, which is higher than the standard 33% in common fund cases. Nevertheless, given the duration of this litigation, the large amount recovered, and that the multiplier failing within a reasonable range, the Court finds the fee request is fair. The Court also approves the requested costs.

Plaintiff Eva Sharp requests an incentive award of $20,000. She provides a declaration in support of her request in which she states she spent approximately 50 hours on the case, plus another 30-40 hours communicating with class counsel over the years. (Declaration of Eva Sharp in Support of Motion for Approval of Settlement, ¶ 7.) The requested amount of $20,000 is much higher than is generally awarded for incentive awards. As with the attorneys’ fee request, however, the Court finds the length of this litigation and the large amount recovered merit a somewhat higher incentive award than other PAGA cases. The Court approves an award of $14,000.

Ultimately, the Court finds the settlement is fair, reasonable, and adequate. The motion for approval of PAGA settlement is GRANTED, subject to the reduction in the incentive award.

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

NOTICE: The Court does not provide court reporters for proceedings in the complex civil litigation departments. Parties may arrange for a private court reporter to provide services, but those arrangements must be consistent with the local rules and policies posted on the Court’s website.