Jacques v. Maxco Supply, Inc.

This concession is dispositive, and we will not read a requirement into a statute that does not appear therein.” (Id. at p. 79, internal citation omitted.)

2. Notice to LWDA

Labor Code section 2699, subdivision (s)(2), states: “The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” Plaintiffs’ counsel has shown that notice of the settlement was provided to the LWDA on February 5, 2025. (Lazar Decl., ¶ 41.)

3. Is the Settlement Fair, Adequate, and Reasonable? 14

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.)

“Given PAGA's purpose to protect the public interest, we also agree with the LWDA and federal district courts that have found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view of PAGA's purposes and policies. We therefore hold that a trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Ibid, internal citations and footnote omitted.)

a. Strength of the Case

The operative pleading, the Second Amended Complaint, alleges a sole cause of action for penalties pursuant to PAGA, based on various Labor Code violations. Plaintiffs argue the settlement is reasonable and will redress the alleged civil code violations experienced by the 787 PAGA members. (Lazar Supp. Decl., ¶ 5.) Defendant provided time and payroll data representing a 20% sample of the PAGA members which was in turn analyzed by plaintiff’s counsel who determined the potential exposure for defendant was $3,238,160. (Lazar Supp. Decl., ¶ 6.)

Regarding weaknesses of the claims, plaintiff notes the court’s discretion to reduce the civil penalties and defendant’s defenses. Plaintiff’s counsel details her assessment of the merits and risks of each violation alleged based upon her experience prosecuting such claims. (Lazar Supp. Decl., ¶¶ 8-16.)

The discussion of the strengths and weaknesses of the case is conclusory and insufficient to justify a settlement in any amount.

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 attended mediation. Plaintiffs’ counsel are highly experienced in representative litigation.

Plaintiffs attest to the settlement as a product of arm’s-length negotiations facilitated by mediator Monique Ngo-Bonnici. (Lazar Decl. ¶ 16.) The mediation on May 5, 2025 resulted in the settlement now before the court. (Ibid.) Regarding pre-settlement discovery, counsel states that defendant provided a 20% sample of time and payroll records for PAGA members and that these records were analyzed by counsel for use in settlement negotiations. (Lazar Supp. Decl., ¶ 5.)

This factor weighs in favor of approval.

c. Risks of Litigating Case through Trial

Counsel notes that the parties both recognized the cost, time, inconvenience, and delay in the continued litigation PAGA claim.

d. Amount of Settlement

The gross settlement is $800,000, and to assess the reasonableness of this amount, the court needs a good valuation of the total potential penalties. In the supplemental declaration, plaintiffs’ counsel provides analysis of the value of the respective violations supporting the PAGA penalties. (Lazar Supp. Decl., ¶¶ 8-16.) However, no foundation for the number of employees and pay periods has been provided.

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.

g. Scope of the release

... PAGA's statutory scheme and the principles of preclusion allow, or “authorize,” a PAGA plaintiff to bind the state to a judgment through litigation that could extinguish PAGA claims that were not specifically listed in the PAGA notice where those claims involve the same primary right litigated. Because a PAGA plaintiff is authorized to settle a PAGA representative action with court approval (§ 2699, (l)(2)), it logically follows that he or she is authorized to bind the state to a settlement releasing claims commensurate with those that would be barred by res judicata in a subsequent suit had the settling suit been litigated to judgment by the state. (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 83.)

Here, the settlement agreement provides that the following claims would be released:

All Aggrieved Employees are deemed to release, on behalf of themselves and their respective former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns, Released Parties from all claims, 16

rights, demands, liabilities and causes of action that arose during the PAGA Period for civil penalties under PAGA that were alleged, or reasonably could have been alleged, based on the facts stated in the Operative Complaint and the PAGA Notice for PAGA civil penalties, including, but not limited to, pursuant to Labor Code sections 210, 226.3, 558, 1174.5, 1197.1 and 2699, in connection with alleged violations of Labor Code sections 201,202,203,204,226,226.3, 226.7, 246, et seq., 432, 510, 512, 558, 1174, 1194, 1194.2, 1197, 1197.1, 1198.5, 2699 and 2810.5, among others. (Lazar Decl., Exh. 1.)

This is consistent with the Notices sent by each plaintiff. (Lazar Decl., Exh. 2.) The scope of the release appears to be appropriately limited to the PAGA claims of which the LWDA was given notice and those supported by the allegations of the complaint.

4. Attorney’s Fees and Costs

Plaintiffs’ attorneys seek an award of $266,666.67 in attorneys’ fees (1/3 of the gross settlement), and up to $40,000 in costs. Courts have approved awards of fees in class actions that are based on a percentage of the total common fund recovery. (Laffitte v. Robert Half Internat. (2016) 1 Cal.5th 480, 503.) It appears that the same reasoning would apply to PAGA settlements, which bear similarities to class actions. However, the court may also perform a lodestar calculation to double check the reasonableness of the fee request. (Id. at pp. 504-506.)

A court assessing attorney’s fees begins with a touchstone or lodestar figure, based on the ‘careful compilation of the time spent and reasonable hourly compensation of each attorney ... involved in the presentation of the case." (Serrano v. Priest (1977) 20 Cal.3d 25, 48.) As our Supreme Court has repeatedly made clear, the lodestar consists of "the number of hours reasonably expended multiplied by the reasonable hourly rate. ..." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095, italics added; Ketchum v.

Moses (2001) 24 Cal.4th 1122, 1134.) Here, the billing rates (reaching $1,200 per hour) are excessive and unrealistic in the local market. Counsel asserts that attorney rates surveyed included firms from all over the state, “including firms in San Francisco County, which should be equally representative of Fresno.” (Lazar Supp. Decl., ¶ 17.) San Francisco and Fresno Counties are not comparable. The court would be inclined to reduce counsels’ billing rates consistent with those of counsel in Fresno County.

5. Administration Costs

The settlement agreement provides that settlement administrator ILYM Group, Inc., will receive $8,450 to cover administration costs. While ILYM has provided a declaration from one of its representatives stating how much it will charge for administration costs, there is no indication that the parties received bids from other administrators. The court cannot determine that this is a reasonable fee to administer this settlement.

6. Incentive Award to Named Plaintiffs 17

The settlement also provides that the three named plaintiffs will receive incentive awards of $10,000 each. There is nothing in PAGA that specifically authorizes an additional incentive payment to the named plaintiffs. PAGA only authorizes awards of penalties to aggrieved employees based on actual violations of the Labor Code. (Labor Code § 2699(i).) Plaintiffs argue that the California Supreme Court has indicated approval of such awards in Turrieta v. Lyft, Inc., supra, 16 Cal.5th 664. However, there the Supreme Court noted it was considering a limited issue of whether a “plaintiff in a representative action filed under PAGA ha[s] the right to intervene, or object to, or move to vacate a judgment in a related action that purports to settle the claims that plaintiff has brought on behalf of the State.” (Id. at p. 632-633.)

The court is not inclined to award plaintiffs an incentive award. 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 07/01/26. (Judge’s initials) (Date)

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