Wellons v. PNS Stores, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 S. WELLONS, et al., Case No.: 18-CV-02913-RSH-DEB 12 Plaintiffs, ORDER GRANTING MOTION FOR 13 v. APPROVAL OF PAGA SETTLEMENT 14 PNS STORES, INC., et al., 15 Defendants. [ECF Nos. 296, 307, 321] 16 17 On February 16, 2023, Plaintiffs filed a motion for approval of the settlement of their 18 claims under the Private Attorneys General Act (“PAGA”), California Labor Code § 2698 19 et seq. ECF No. 307. Defendants join Plaintiffs’ motion, submitting that the proposed 20 PAGA settlement is fair, adequate, and reasonable. ECF No. 309. The Parties’ negotiated 21 settlement agreement and general release of Plaintiffs’ PAGA claims (hereinafter, the 22 “Settlement”) states that Defendant Big Lots Stores, LLC will pay $3,000 to resolve the 23 PAGA claims. ECF No. 307-5 at 1. Of this amount, $2,250 will be paid to the Labor and 24 Workforce Development Agency (the “LWDA”) and the remaining $750 will be allocated 25 in equal shares of $68.18 to Plaintiffs Samye Davis, William Duba, Garrick Kilgore, Saul 26 Mejia, Tina Seltzer, Satya Sharma, Jacqueline Smith, Michael Walters, Sean Wellons, 27 28 1 David Williams, and John Wright (collectively, the “PAGA Plaintiffs”). Id. at 2. As set 2 forth below, the Court grants the motion and approves the proposed Settlement. 3 I. ANALYSIS 4 In 2003, the California legislature enacted PAGA, reasoning that 5 adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for 6 labor law enforcement agencies had declined and were unlikely to keep 7 pace with the future growth of the labor market, and that it was therefore in the public interest to allow aggrieved employees, acting as 8 private attorneys general, to recover civil penalties for Labor Code 9 violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts. 10 11 Arias v. Super. Ct., 46 Cal. 4th 969, 980 (2009). A plaintiff bringing a PAGA claim thus 12 “does so as a proxy or agent of the state’s labor law enforcement agencies.” Id. at 986. 13 “Because the ‘plaintiff represents the same legal right and interest as state law enforcement 14 agencies’” in a PAGA action, a judgment “binds not only that employee but also the state 15 labor law enforcement agencies” and nonparty employees. O’Connor v. Uber Techs., Inc., 16 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016) (quoting Arias, 46 Cal. 4th at 986). 17 “When a PAGA claim settles, courts are tasked with approving the settlement 18 agreement but only after determining whether the relief provided is genuine and 19 meaningful, consistent with the underlying purpose of the statute to benefit the public.” 20 Aronson v. Gannett Co., No. CV 19-996 PSG (JEMX), 2023 WL 2025706, at *3 (C.D. 21 Cal. Feb. 15, 2023) (citing O’Connor, 201 F. Supp. 3d at 1133) (internal quotation marks 22 omitted). Approval therefore requires finding that the settlement agreement (1) meets the 23 statutory requirements of PAGA and (2) is fundamentally fair, reasonable, and adequate in 24 view of PAGA’s public policy goals. Id. (citing Chamberlain v. Baker Hughes, a GE Co., 25 LLC, No. 119CV00831DADJLT, 2020 WL 4350207, at *4 (E.D. Cal. July 29, 2020)). 26 First, the proposed settlement complies with the statutory requirements of PAGA. 27 Under PAGA, “75 percent of the civil penalties recovered by aggrieved employees must 28 be allocated to the LWDA and 25 percent allocated to aggrieved employees.” Cal. Lab. 1 Code § 2699(i). Here, the parties have agreed $2,250 will be paid to the LWDA and the 2 remaining $750 will be allocated to the PAGA Plaintiffs. ECF No. 307-5 at 2. These 3 amounts equal 75 percent and 25 percent, respectively, of the total $3,000 that Defendants 4 have agreed to pay. See ECF No. 307-1 at 3. 5 Second, the Court turns to the fairness of the proposed settlement. In making this 6 assessment, “[t]he court may consider factors such as the merits of the action, the maximum 7 recovery the plaintiff could obtain if the merits were decided in his favor, and ‘how and 8 why [the] parties arrived at the settlement amount.’” Aronson, 2023 WL 2025706, at *4 9 (quoting Hollis v. Weatherford US LP, No. 1:16-CV-00252 - JLT, 2017 WL 131994, at *2 10 (E.D. Cal. Jan. 12, 2017)). In this case, the Court’s November 10, 2022 Order on 11 Defendants’ motion for summary judgment significantly restricted the scope of the PAGA 12 claims, limiting the aggrieved employees to 11 of the 19 Plaintiffs who concluded their 13 employment with Defendants after January 22, 2017. ECF No. 293 at 57. Plaintiffs point 14 out that the given applicable statutory penalties under California Labor Code § 558(a), the 15 one-year statute of limitations, and the number of pay periods at issue, the award per 16 plaintiff—if successful at a jury trial—could not exceed $2,600. ECF No. 307-1 at 5–6. 17 Some of the plaintiffs were employed for less than the full one-year period within the 18 statute of limitations, and so would be able to recover even less. Id. This maximum possible 19 recovery, following a jury trial, favors the reasonableness the Settlement. 20 Additionally, the Parties here reached the Settlement over four years after this 21 lawsuit was filed, well after discovery was concluded, and shortly before the scheduled 22 trial. Each of the aggrieved employees is a signatory to the proposed Settlement, which 23 does not purport to bind nonparty employees. See ECF No. 307-5 at 3–15. These 24 circumstances indicate that all Parties were fully informed and had sufficient information 25 to assess the merits of their case and decide whether to proceed to trial. Additionally, the 26 case settled only with the intensive efforts of the assigned U.S. Magistrate Judge acting as 27 a mediator. See ECF No. 307-1 at 4; see also Satchell v. Fed. Express Corp., No. C03-2878 28 1 || SI, 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) (“The assistance of an experienced 2 || mediator in the settlement process confirms that the settlement is non-collusive.’’). 3 Finally, the Parties have submitted the proposed Settlement to the LWDA, providing 4 ||the LWDA with a date for submitting a notice of opposition to this Court. See ECF No. 5 307-1 at 4-5; ECF No. 307-7 (Notice to LWDA). The LWDA has not filed an opposition. 6 Considering the foregoing factors, the Court concludes that the proposed Settlement 7 fundamentally fair, reasonable, and adequate in view of PAGA’s public policy goals. 8 CONCLUSION 9 For the reasons stated above, the Court GRANTS the motion (ECF No. 307). The 10 || proposed PAGA Settlement is hereby APPROVED. Further, the Court DENIES as moot 11 || Plaintiffs’ ex parte motion for a status conference regarding approval of the Settlement 12 || (ECF No. 321) and Defendants’ motion to sever (ECF No. 296). 13 IT IS SO ORDERED. 14 Dated: May 26, 2023 hut ¢ Howe 15 Hon. Robert S. Huie United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28