Sanchez v. Maddox Farms, LLC

2. Notice to LWDA

Labor Code section 2699, subdivision (l)(2), states that “[t]he proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” Here, plaintiff’s counsel states that notice of the settlement was provided to the LWDA on May 20, 2026. (Adams decl., ¶ 31.) However, according to the copy of the notice attached to his declaration, the notice was actually provided on January 29, 2026. (Exhibit E to Adams decl.) Nor could plaintiff’s counsel have given notice in May of 2026, since he executed and filed the declaration in January of 2026. In any event, the LWDA has been given notice of the settlement and it has not objected to the settlement, which satisfies the requirements of the statute. 11

3. Is the Settlement Fair, Adequate, and Reasonable?

As mentioned above, the Court of Appeal in Moniz v. Adecco USA, Inc., supra, 72 Cal.App.5th 56 stated that the trial court should review PAGA settlements to determine whether they are fair, adequate and reasonable. (Moniz, supra, at pp. 75-77.) “Because many of the factors used to evaluate class action settlements bear on a settlement's fairness—including the strength of the plaintiff's case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount—these factors can be useful in evaluating the fairness of a PAGA settlement.” (Id. at p. 77.) Here, plaintiff has adequately shown that the settlement is fair, adequate, and reasonable.

A. Strength of Case: Plaintiff calculated the potential exposure by multiplying the total number of pay periods in which a violation occurred by $100. There were an estimated 3,075 pay periods with a PAGA violation, so the total potential penalties were $307,500. However, plaintiff’s counsel had to discount the total potential recovery based on the strength of defendant’s defenses, the risk that the court would reduce the penalties even if plaintiff prevailed at trial, and the risks and costs of bringing the case to trial. Therefore, plaintiff has shown that the case was relatively strong, but entailed considerable risks as well, including the risk that he might not obtain anything at trial, or that, even if he did prevail, the award might be substantially reduced by the court. As a result, this factor weighs in favor of approving the settlement.

B. Stage of the Proceeding: A presumption of fairness exists where the settlement is reached through arm’s length mediation between adversarial parties, where there has been investigation and discovery sufficient to allow counsel and the court to act intelligently, and where counsel is experienced in similar litigation. (Dunk v. Ford Motor Company (1996) 48 Cal. App 4th 1794, 1802.) Here, the case settled after the parties exchanged informal discovery and attended mediation with a neutral mediator. It appears that counsel obtained sufficient information to make an informed decision about settling the case. Plaintiff’s counsel’s firm is also highly experienced in representative litigation. Therefore, this factor weighs in favor of approving the settlement.

C. Risks of Litigating Case through Trial: Plaintiff contends that, while the potential maximum recovery here was substantial, the defendant raised strong defenses and litigating the case through trial would have involved considerable risks for plaintiff. There would also have been substantial costs to both parties in trying the case. There was also the risk that the court would have reduced the amount of penalties substantially even if plaintiff prevailed at trial. Therefore, this factor weighs in favor of approving the settlement.

D. Amount of Settlement: As discussed above, the $275,000 gross settlement amount appears to be reasonable given defendant’s strong defenses and the likelihood that plaintiff would not be able to recover the full amount of penalties he sought. There is also a risk that the trial court would exercise its discretion to reduce the amount of penalties even if plaintiff prevailed at trial. Therefore, plaintiff’s decision to settle for a gross amount of $275,000 was reasonable under the circumstances. 12

E. Experience and Views of Counsel: Plaintiff’s counsel are highly experienced in class and representative litigation. They have stated that the settlement is fair, adequate and reasonable under the circumstances. Therefore, this factor weighs in favor of approval.

F. Government Participation: No government entity participated in the case, so this factor does not favor either approval or disapproval of the settlement.

4. Attorney’s Fees and Costs

Counsel has requested $96,250 in fees, which is 35% of the gross settlement. However, counsel has not provided any information about the hours he and the other attorneys of his firm worked on the case or what their rates are. Thus, he has not provided evidence to allow the court to perform a lodestar cross-check to determine whether the requested fees are reasonable. (Laffitte v. Robert Half International, Inc. (2016) 1 Cal.5th 480, 503 [holding that, while attorney’s fees may be awarded based on a percentage of the total class settlement, the trial court also has discretion to do a lodestar cross-check of the fees].)

As a result, the court finds that plaintiff’s counsel has not shown that the request for $96,250 in fees is reasonable here. On the other hand, counsel has adequately explained the request for $8,257.49 in costs. He attaches a copy of an invoice from a filing service to his declaration, which includes a breakdown of the costs incurred in the case. (Exhibit D to Adams decl.) Thus, he has shown that the request for an award of $8,257.49 in costs is reasonable.

5. Administration Costs

The settlement administrator, ILYM Group, Inc. will receive up to $4,250 to cover administration costs. However, ILYM has not provided a declaration from one of its representatives stating how much it will charge for administration costs. Therefore, plaintiffs have not shown that the requested administration costs are reasonable.

6. Incentive Award to Named Plaintiffs

The settlement also provides that the named plaintiff will receive an incentive award of $10,000. Plaintiff has provided a declaration describing the work he did on the case, so plaintiff has shown that an incentive award of $10,000 is reasonable to compensate him.

7.

Conclusion

The court intends to deny the order approving the PAGA settlement without prejudice and require plaintiffs’ counsel to provide additional evidence regarding the requested attorney’s fees and settlement administrator’s fees.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: KCK on 06/29/26. (Judge’s initials) (Date)

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