SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

YI ZHENG, LEI LIU, DI WANG, and RAN XIONG,

Plaintiffs,

vs.

S.J. DISTRIBUTORS, INC., DOES 1 through 100,

Defendants.

Case No. 2016-1-CV-295717

TENTATIVE RULING RE: MOTION FOR LEAVE TO FILE A COMPLAINT IN INTERVENTION

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on March 29, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

On May 27, 2016, plaintiffs Yi Zheng, Lei Liu, Di Wang, and Ran Xiong (collectively, “Plaintiffs”) filed a putative class action arising out of various alleged wage and hour violations. Their Class Action Complaint (“Complaint”) sets forth the following causes of action: (1) Failure to Pay Overtime Wages; (2) Failure to Provide Meal Periods; (3) Failure to Provide Rest Periods; (4) Failure to Furnish Accurate Wage Statements; (5) Failure to Pay Earned Wages Upon Termination or Discharge; (6) Failure to Maintain Required Records; and (7) Unfair Competition.

On February 1, 2019, the Court denied a motion by Guadalupe Flores Elizarraraz to consolidate her putative class action with this case.

Non-party class member Manuel Gallardo now seeks leave to file a Complaint in Intervention.

II. DISCUSSION

Mr. Gallardo filed a class action complaint against defendant S.J. Distributors (“Defendant”) on July 13, 2018, in Los Angeles County Superior Court. His First Amended Complaint, filed on August 14, 2018, sets forth the following causes of action: (1) Underpayment of Minimum and Overtime Wages; (2) Failure to Provide Meal Periods; (3) Failure to Provide Rest Periods; (4) Failure to Provide Accurate Itemized Wage Statements; (5) Failure to Pay Timely Wages Upon Cessation of Employment; (6) Violation of Unfair Competition Law; and (7) Penalties Pursuant to Private Attorney General Act.

Mr. Gallardo asserts he is a member of the existing class and the proposed claims he wishes to state duplicate existing classwide cause of action alleged in Plaintiffs’ Complaint and seek additional penalties under the Private Attorney General Act, Labor Code section 2698, et seq. (“PAGA”) for the same underlying violations.

There are two methods of obtaining a right to intervene – intervention by right and permissive intervention. Code of Civil Procedure section 387 provides, in relevant part:

(d)(1) The court shall, upon timely application, permit a nonparty to intervene in the action or proceeding if either of the following conditions is satisfied:

(A) A provision of law confers an unconditional right to intervene.

(B) The person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties.

(2) The court may, upon timely application, permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.

(Code Civ. Proc., § 387, subd. (d).)

Mr. Gallardo contends he is entitled to both intervention by right and permissive intervention. He argues he has a right to intervene because Plaintiffs do not have a PAGA claim and therefore cannot adequately represent his interests. Mr. Gallardo contends any settlement or disposition in this case will preclude him from proceeding with his PAGA claim because he will no longer be an “aggrieved employee.”

In opposition, Defendant argues this case is similar to the case of Edwards v. Heartland Payment Systems, Inc. (2018) 29 Cal.App.5th 725, and intervention should be denied for the reasons discussed in that case. The Edwards case involved three lawsuits – Edwards, Wilson, and Torres. (Id. at p. 728.) Edwards and Wilson were both filed on January 5, 2016. (Ibid.) Torres was filed on March 4, 2016. (Id. at p. 729.) The cases all involved violations of the Labor Code.

On April 27, 2017, the Torres plaintiffs moved to intervene in Edwards. (Edwards v. Heartland Payment Systems, Inc., supra, 29 Cal.App.5th at p. 730.) Several days later, plaintiff’s counsel in Edwards moved for preliminary approval of a settlement. (Ibid.) The trial court denied permissive intervention, stating:

At this stage of the proceeding, the settlement has not been approved by the Court and thus [the Torres plaintiffs’] rights have not been detracted. Furthermore, if the settlement is approved, they will have the opportunity to challenge the release in the Edwards settlement by objecting to the settlement or may opt out of the settlement completely, such that their legal rights in the action are not hindered.

(Edwards v. Heartland Payment Systems, Inc., supra, 29 Cal.App.5th at p. 731.)

The appellate court agreed, concluding the Torres plaintiffs did not have a right to mandatory intervention, and the trial court did not abuse its discretion in denying permissive intervention. (Edwards v. Heartland Payment Systems, Inc., supra, 29 Cal.App.5th at pp. 733, 736-737.) The court found the Torres plaintiffs would be protected against the settlement in Edwards because they could object or opt out, and would also “receive additional protection from the trial court itself, which must approve any settlement in order to prevent fraud, collusion or unfairness to the class.” (Id. at p. 733.)

Mr. Gallardo correctly points out that all of the cases involved in Edwards had PAGA claims, so the court did not evaluate the question of whether a party asserting a PAGA claim can intervene in a class action that does not contain a PAGA claim. Rather, the court only analyzed whether the Torres plaintiffs’ interest in the class action would be protected. “A case is not authority for a proposition not considered.” (People v. Hatt (2018) 20 Cal.App.5th 321, 326.) Therefore, the Edwards case is inapposite.

Defendant argues that, although the state is a beneficiary of a PAGA claim, the state is not required to participate in or allowed to control any aspect of a PAGA case, so Mr. Gallardo does not have a fiduciary duty to protect the state’s interest in this action. While it is true that Mr. Gallardo does not have a fiduciary duty to the state, he does represent the interest of the state and of aggrieved employees.

Defendant also asserts allowing intervention at this stage of the proceedings would result in substantial duplication of effort and waste of resources. Defendant states there has been extensive discovery in this action and the parties have already sent a Belaire-West notice.

Mr. Gallardo responds that the claims in the Gallardo Complaint are the same as those in Zheng and the Gallardo class is fully encompassed in the Zheng class, so there will be little need for additional discovery and no need for a new Belaire-West notice. For the most part, this appears to be correct. The claims overlap, so the intervention of Mr. Gallardo in this case will not meaningfully expand the issues or necessitate a significant amount of additional discovery.

However, the class definitions in Gallardo include “[a]ll current and former hourly paid employees.” (Complaint in Intervention, ¶ 30.) The class definition in this action only includes current and former warehouse employees and drivers. (Complaint, ¶ 22.) The parties are ordered to appear at the hearing so Mr. Gallardo can explain whether the class definition in his case includes any additional current or former employees who are not included in the Zheng case.

Ultimately, a PAGA claim has different procedural standards than a class claim and provides for penalties instead of damages. This case does not include a PAGA cause of action, so the interest of Mr. Gallardo and other aggrieved employees cannot be adequately protected in this case and the disposition of this action may impair or impede that Mr. Gallardo’s ability to protect that interest. Accordingly, subject to an explanation of the differences in the class definition, the Court finds Mr. Gallardo has a right to intervene. The motion for leave to file a Complaint in Intervention is GRANTED.

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