Case Number: BC626910 Hearing Date: August 22, 2018 Dept: 78

Superior Court Of California
County of Los Angeles
Department 78

RICARDO AMAYA.;

Plaintiff,

vs.

GLENDALE PLUMBING & FIRE SUPPLY, INC., et al.;

Defendants.

Case No.:

BC626910

Hearing Date:

August 22, 2018

[TENTATIVE] RULING RE:

plaintiff’s motion for approval of paga settlement.

Plaintiff Ricardo Amaya’s Motion to Approve PAGA Settlement is DENIED. Plaintiff’s motion for attorneys fees is also a also DENIED because the settlement has not been finalized.

The case of Moosheikh Mirzakhanian v. GPFS Franchise, Inc., et al, Case No. BC 709267, is declared to be a related case and is transferred from Department 14 to 78 for all purposes.

Factual Background

This is an action for wage and hour violations. The Complaint alleges as follows. Plaintiff Ricardo Amaya (“Amaya”) was hired by Defendant Glendale Plumbing & Fire Supply, Inc. (“GPFS”) in June 2013. (Complaint ¶ 14.) Amaya typically worked 60 hours per week. (Complaint ¶ 16.) Amaya was not provided with paystubs that accurately reflected hours worked. (Complaint ¶ 17.) Amaya was not paid overtime for more than eight hours worked in a day or 40 hours worked in a week. (Complaint ¶¶ 18–19.) Amaya was not permitted to take a ten-minute rest break per four hours worked, and was not permitted to take a 30-minute meal period. (Complaint ¶¶ 20–21.)

procedural history

Amaya filed his Complaint on July 12, 2016, alleging seven causes of action:

Failure to Pay Wages

Failure to Pay Overtime

Failure to Provide Itemized Wage Statements

Failure to Provide Meal and Rest Periods

Waiting Time Penalties

Unfair Competition

Private Attorney General Act

GPFS filed an Answer on August 12, 2016.

On March 15, 2018, Amaya filed a Notice of Settlement of Entire Case.

Amaya filed the present Motion for Attorneys’ Fees and Motion to Approve PAGA Settlement on June 25, 2018.

On July 16, 2018 counsel for plaintiff in Moosheikh Mirzakhanian v. GPFS Franchise, Inc., et al, Case No. BC 709267, filed a notice of related case in this Department identifying that case as a related case. On this 22,018 counsel in that case filed an objection to the pending motion for approval of PAGA settlement.

Discussion

MOTION TO APPROVE SETTLEMENT

Under PAGA, “t[t]he superior court shall review and approve any settlement of any civil action filed pursuant to this part. The 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).)

This court is not aware of any cases definitively establishing what criteria must be satisfied before a PAGA settlement is approved. Federal courts have recognized a lack of California cases regarding PAGA settlements. (Jesus Salazar and Matthew Valencia v. Sysco Central California, Inc. (“Salazar”) (E.D. Cal.) 2017 WL 1135801 [“This court is unable to find, and the parties have not identified, any published authority identifying the proper standard of review of PAGA settlements to be employed by the court.”].)

Federal courts faced with the issue have compared and contrasted PAGA settlements to class action settlements:

In the class action context, where PAGA claims often also appear, a district court must independently determine that a proposed settlement agreement is “fundamentally fair, adequate and reasonable” before granting approval. [Citations.] However, as the parties rightly point out and as noted above, this is not a class action lawsuit, and PAGA claims are intended to serve a decidedly different purpose-namely to protect the public rather than for the benefit of private parties. [Citation.] In one recent district court case, the LWDA provided some guidance regarding court approval of PAGA settlements. [Citations.] In that case, where both class action and PAGA claims were covered by a proposed settlement, the LWDA stressed that “when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the standards of being “fundamentally fair, reasonable, and adequate” with reference to the public policies underlying the PAGA.”

(Salazar, supra, 2017 WL 1135801 at pp. 3–4.)

This court therefore concludes that before it approves the settlement, it must find that the relief is “genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public,” and generally “fair, reasonable, and adequate” with respect to the public policies underlying PAGA.

The settlement here is as follows. GPFS on December 13, 2017, served Amaya with an Offer of Compromise under Code of Civil Procedure § 998 for $35,000, plus reasonable attorneys’ fees and costs. (Perez Decl. Exh. 1.) Amaya accepted that offer on December 14, 2017. (Perez Decl. Exh. 1.) $3,000 of the $35,000 is allocated to PAGA penalties, meaning that $2,250 is to be distributed to the California Labor and Workforce Development Agency, while $750 will go to Amaya. (Perez Decl. ¶ 9.) In his Complaint, Amaya sought $38,054.00 in damages for unpaid wages and non-PAGA penalties, plus $13,500 in PAGA penalties. (Perez Decl. ¶¶ 3–4; Complaint at p. 14.)

The Complaint sought $300,000 in PAGA penalties for other aggrieved employees. (Complaint ¶ 71, at p. 14.) The settlement contains no provision as to these other employees; Amaya represents that he did not receive any discovery regarding other aggrieved employees and did not notify other potentially aggrieved employees of this suit. (Perez Decl. ¶ 12.) Amaya asserts that no other aggrieved employees will be prejudiced by the settlement in this case, because other aggrieved employees have no private right of action as an alternative to PAGA. (Motion at p. 8; see Rope v. Auto-Chlor System of Washington, Inc. (2013) 220 Cal.App.4th 635, 650, [“In PAGA, the Legislature created an enforcement mechanism for aggrieved employees to file representative actions to recover penalties in cases in which there is no private cause of action as an alternative to enforcement by the Labor Commissioner.”], superseded by statute on other grounds.)

However, Amaya neglects that other aggrieved employees may be prevented from bringing their own PAGA claims against the same employer by the present settlement. (Arias v. Superior Court (2009) 46 Cal.4th 969, 986 [“Because an aggrieved employee’s action under the Labor Code Private Attorneys General Act of 2004 functions as a substitute for an action brought by the government itself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.”].) This includes the PAGA claim in Moosheikh Mirzakhanian v. GPFS Franchise, Inc., et al, Case No. BC 709267. Given that Amaya’s Complaint expressly seeks PAGA penalties for these other aggrieved employees (Complaint at p. 14), the court is not presently satisfied that the PAGA settlement before it is “genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public,” and generally “fair, reasonable, and adequate” with respect to the public policies underlying PAGA.

The objection of counsel for plaintiff in Moosheikh Mirzakhanian v. GPFS Franchise, Inc., et al, Case No. BC 709267, to the Motion to Approve PAGA Settlement is SUSTAINED and the Motion to Approve PAGA Settlement is DENIED. The motion for an award of attorneys fees is also DENIED because plaintiff is not yet a prevailing party.

The case of Moosheikh Mirzakhanian v. GPFS Franchise, Inc., et al, Case No. BC 709267, is declared to be a related case and is transferred from Department 14 to 78 for all purposes.

DATED: August 22, 2018 ________________________________

Hon. Robert S. Draper

Judge of the Superior Court