SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

LINGYU LU, an individual and on behalf of herself and all others similarly situated,

Plaintiff,

vs.

SURGICAL CARE AFFILIATES, LLC, a Delaware limited liability company; and DOES 1 through 100, inclusive,

Defendants.
Case No. 2016-1-CV-292982

TENTATIVE RULING RE: JOINT MOTION FOR APPROVAL OF PAGA SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on June 29, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative class action arising out of various alleged Labor Code violations. Plaintiff Lingyu Lu (“Plaintiff”) worked as a charge nurse for defendant Surgical Care Affiliates, LLC (“Defendant”) from April 6, 2015 through October 12, 2015. (Complaint, ¶ 16.) Plaintiff alleges that throughout her employment Defendant engaged in the following violations of the laws of the State of California: (1) the failure to pay minimum wage and overtime to Plaintiff; (2) the failure to provide uninterrupted meal and rest periods to Plaintiff; (3) the failure to maintain and provide Plaintiff with timely and accurate wage and hour statements; (4) the wrongful withholding of wages and compensation due to Plaintiff; (5) unfair competition; and (6) misclassification of Plaintiff as an exempt employee. (Complaint, ¶ 20.) Plaintiff also alleges Defendant frequently required her to work more than eight hours per day and more than 40 hours per week without proper compensation. (Complaint, ¶ 21.)

The putative class is defined as “all employees of any of the Defendants who are, have been, or will be employed at California locations of the Defendant in any non-exempt job positions including, but is [sic] not limited to, nurse, attendee, nurse-practitioner, patient intake, and [c]harge nurse, and were so employed during the period of time covered by the statute of limitations application to the particular cause of action in which the terms “Class Members” or “Class” appear, including [the] period of time during which the statute of limitations was or may have been tolled or suspended.” (Complaint, ¶ 3.)

The Complaint, filed on March 21, 2016, sets forth the following causes of action: (1) Failure to Pay Overtime Compensation; (2) Failure to Pay Minimum Wages; (3) Failure to Provide Meal Periods; (4) Failure to Provide Rest Periods; (5) Failure to Furnish Wage and Hour Statements; (6) Failure to Pay Wages and Waiting Time Penalty; and (7) Unfair Competition.

The parties have reached a settlement. They jointly move for approval of the settlement with regard to penalty claims under the California Private Attorneys General Act (California Labor Code section 2698, et seq.) (“PAGA”).

II. MOTION FOR APPROVAL OF PAGA SETTLEMENT

The parties have settled for a total amount of $75,000, 10% of which ($7,500) is allocated to PAGA. Out of the PAGA payment, 75% ($5,625) will be paid to the LWDA and 25% ($1,875) will be paid to Plaintiff.

There are several problems with the settlement that prevent the Court from granting approval. First, this case is a putative class action. (See, e.g., Complaint, ¶¶ 1, 3, 31-52.) The settlement does not include any class claims, in effect dismissing those claims. The dismissal of class claims, however, requires court approval. (Cal. Rules of Court, rule 3.770(a).) The parties have never sought court approval to dismiss the class claims in this case. This reason by itself necessitates the denial of the motion for approval of the settlement.

Additionally, the Court notes that, although the Complaint refers to the PAGA statute (Complaint, ¶ 50(j)), there is no PAGA cause of action and the prayer does not request any penalties pursuant to PAGA. Even if there were a PAGA claim in this action, the parties have not provided any justification for the amount allocated to PAGA and have not provided the maximum potential PAGA recovery for comparison purposes.

Lastly, it is not apparent why the $1,875 portion of the PAGA payment will be paid to Plaintiff instead of to all of the aggrieved employees. (Labor Code § 2699, subd. (i).)
For all of these reasons, the motion for approval of the PAGA settlement is DENIED WITHOUT PREJUDICE.

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