Antonia Ramirez v. ISL Employees Inc et al

The complaint seeks civil penalties, reasonable attorney fees and costs, and other relief. (Compl., p. 18, ll. 9-15.) On August 21, 2023, ADP filed an answer to the complaint generally denying the allegations therein and setting forth 27 affirmative defenses. On October 27, 2023, ISL filed an answer to the complaint generally denying the allegations therein and setting forth 30 affirmative defenses. On November 8, 2023, the court held a case management conference and ordered the parties to submit briefing regarding the impact of the Arbitration Ruling on this action.

Between December 6, 2023, and January 3, 2024, the parties submitted briefing on this issue. On January 10, 2024, the court issued a minute order assigning this action to department 4 of this court to determine if this action is related to the Ramirez Class Action. On February 9, 2024, the court ordered that this action is related to the Ramirez Class Action and reassigned this action to department 4. On January 7, 2025, after the parties engaged in informal discovery, the parties participated in a mediation that resulted in a settlement of the PAGA claims in this action. (Motion, p. 5, ll. 14-22.)

On December 8, 2025, Ramirez filed a motion for approval of the PAGA settlement in this action between Plaintiff and ISL (Settlement). There is no opposition to this motion. On April 24, 2026, the court initially reviewed the Settlement and requested that the parties provide additional information as to the scope of the release as it pertains to potential third parties and the requested attorney fees. On May 7, 2026, the court continued this matter to this hearing based on the parties stipulation.

On June 18, 2026, plaintiff's counsel filed a supplemental declaration addressing the issue of attorney fees. (Supp. Lazar Decl.) Also on June 18, 2026, defendant's counsel filed a declaration pertaining to the court's questions about the scope of the release as it pertains to any potential third parties. (Murphy Decl.) Analysis:

(1) Standards for Review of PAGA Settlement A PAGA action is a type of qui tam action, in which a private party is authorized to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. (Huff v. Securitas Sec. Servs. USA, Inc. (2018) 23 Cal.App.5th 745, 753.) "In bringing such an action, the aggrieved employee acts as the proxy or agent of state labor law enforcement agencies, representing the same legal right and interest as those agencies, in a proceeding that is designed to protect the public, not to benefit private parties." (Amalgamated Transit Union, Local 1756, AFL-CIO v.

Superior Court (2009) 46 Cal.4th 993, 1003.) The dispute is between the employer and the state. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) "Of the civil penalties recovered, 75 percent goes to the [LWDA], leaving the remaining 25 percent for the 'aggrieved employees.' " (Ibid.) Although this allocation has been changed by amendment in 2024, the 75/25 split still applies to this action because the LWDA notice at issue in this action was submitted in 2023. (See Lab. Code, Sec. 2699, subd. (v).) "The superior court shall review and approve any settlement of any civil action filed pursuant to this part.

The proposed settlement shall be submitted to the [LWDA] at the same time that it is submitted to the court." (Lab. Code, Sec. 2699, subd. (s)(2).) "A copy of the superior court's judgment in any civil action filed pursuant to this part and any other order in that action that either provides for or denies an award of civil penalties under this code shall be submitted to the agency within 10 days after entry of the judgment or order." (Id., subd. (s)(3).) "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. [P.]

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. [Citations.] 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." (Moniz v.

Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77 (Moniz), disapproved on other grounds in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664, 710.) "Taken together, 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 [citation], 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, supra, 72 Cal.App.5th at p. 83.) (2) The Settlement The Settlement is between Ramirez and ISL. (Lazar Decl., Ex. 1 at p. 3, ll. 1-4.)

The aggrieved employees covered by the Settlement are all current and former non-exempt, hourly-paid persons employed by ISL in California from May 6, 2022, through February 1, 2023. (Id. at P.P. 1.4, 1.19, 1.20.) ISL estimates there are 2,068 Aggrieved Employees who worked a total of 24,313 pay periods during this PAGA period. (Id. at P. 4.1.) Under the Settlement, ISL will pay the gross settlement amount of $505,000, subject to an increase if the actual number of pay periods exceeds the estimated number of pay periods by more than 10 percent. (Id. at P.P. 1.11, 8.1.)

The gross settlement amount shall be funded by ISL within 10 days of the effective date. (Id. at P. 4.3.) From this gross settlement amount, Ramirez seeks approval of an attorney fee award of $168,333.33, litigation costs of $19,905.26, and administration costs of $10,850. (Motion, p. 3, ll. 12-19.) Theses amounts are permitted in the Settlement. (Lazar Decl., Ex. 1 at P. 3.2.) Of the sum remaining after these approved deductions (Net Settlement Amount), seventy-five percent will be paid to the LWDA and twenty-five percent will be paid to aggrieved employees as PAGA penalties. (Lazar Decl., Ex. 1 at P.P. 1.23, 3.2.)

If the court approves cost and fee amounts less than those requested, the remainder is re-allocated to the Net Settlement Amount for distribution to the LWDA and aggrieved employees as additional PAGA penalties. (Ibid.) The PAGA penalties are $305,911.41, subject to the escalator clause in paragraph 8.1 of the Settlement.

(Motion, p. 8, ll. 8-12.) Pursuant to the Settlement and Labor Code section 2699, subdivision (i), 75 percent of the PAGA penalties, or $229,433.56 will be paid to the LWDA, and the remaining 25 percent, or $76,477.85 of the PAGA penalties will be paid to the aggrieved employees on a pro rata basis using their respective number of PAGA pay periods worked. (Ibid.) The estimated average payment to aggrieved employees is approximately $36.98. (Ibid.) In exchange for the payments under the Settlement, the aggrieved employees release for the duration of the PAGA period, on behalf of themselves and their respective former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns, the Released Parties from all claims for PAGA penalties that were alleged, or reasonably could have been alleged, based on the facts stated in the complaint and the PAGA notice. (Lazar Decl., Ex. 1 at P. 5.1.)

The Released Parties include ISL and each of its former and present directors, officers, shareholders, owners, financiers, investors, attorneys, insurers, predecessors, successors, assigns, subsidiaries, and affiliates, joint venturers, co-employers, and alleged affiliates, joint ventures, and co-employers, including non-employer The Oak Cottage of Santa Barbara and defendant ADP. (Id. at P. 1.27.) (3) Monetary Terms The total monetary amounts and structure of the Settlement appear 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. (See Moniz, supra, 72 Cal.App.5th at p. 83.)

The court has considered the gross settlement amount, the estimated Net Settlement Amount to be allocated as PAGA penalties, the total potential liability of the claims at issue, the risks and costs associated with further litigation, the potential benefits to the LWDA and aggrieved employees, and the public policy favoring settlement. (See Motion, p. 13, l. 18 - p. 17, l. 12; Lazar Decl., P.P. 24-34.) The court has also considered that the Settlement appears to have been reached through arm's length bargaining and is based on a sufficient investigation with the assistance of experienced counsel. (See Dunk v.

Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801-1802; see Lazar Decl., P.P. 19-20, 37-61; Bibiyan Decl., P.P. 29-36.) Moreover, the involvement of a mediator strongly weighs in favor of finding that the Settlement represents a non-collusive and arm's-length agreement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128-129 (Kullar); see Lazar Decl., P.P. 21-23.) "The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm's length transaction entered without self-dealing or other potential misconduct." (Kullar, supra, 168 Cal.App.4th 116 at p. 129.) (4) Notice The proposed notice and distribution methods appear reasonable and adequate for purposes of a PAGA-only settlement. (Lazar Decl., Ex. 1 at P. 4.1-4.4, Ex. 3.)

Notice of the Settlement appears to have been provided to the LWDA. (Lazar Decl., P. 62, Ex. 6.) (5) Scope of Release As to the scope of the release, Ramirez 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, supra, 72 Cal.App.5th at p. 83.) The court notes that the term Release Parties includes non-employer, The Oak Cottage of Santa Barbara (Oak Cottage).

Oak Cottage is not a party to this action, although the court notes that Oak Cottage or a similarly named entity was referenced in the PAGA notice. (Lazar Decl., Ex. 3.) Defendant's counsel explained in a declaration by counsel that "Oak Cottage does not have any of its own employees at the community, [but] they are all employed through Defendant [ISL]." (Murphy Decl., P. 2.) Thus, the release appears appropriately tethered to the complaint's factual allegations. ... Requiring a reasonable connection prevents the release from extending Amaro v.

Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 538; see LaCour v. Marshalls of California, LLC (2023) 94 Cal.App.5th 1172, 1192 [discussing the concept of privity in the context of claim preclusion and PAGA settlements].) (6) Attorney Fees Under PAGA, "[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney's fees and costs." (Lab. Code, Sec. 2699, subd. (k)(1).) Absent statutory authority or case law expressly permitting a percentage of the common fund to calculate attorney fees in a PAGA-only settlement, the court in its discretion

is inclined to utilize the traditional lodestar method. "Under the lodestar method, attorney's fees are calculated by first multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate of compensation." (Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 697.) "[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award." (Ketchum v.

Moses (2001) 24 Cal.4th 1122, 1132.) "The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services." (Ibid.) Plaintiff's counsel has submitted evidence of their lodestar. (Supp. Lazar Decl., Ex. 1.) There are seven timekeepers: Robert Wilson (39.7 hours at $1,200/hour), Paal Bakstad (77.8 hours at $600/hour), David Bibiyan (9.7 at $1,200/hour), Felipe Gomez (66.3 at $400/hour), Vedang Patel (34.9 hours at $900/hour), Megan Lazar (49.7 hours at $550/hour), Brooke Waldrop (16.7 hours at $750/hour).

The court has reviewed the time entries and finds the time spent on this matter was reasonable and necessary. (Lazar Supp. Decl., Ex. 1; Bibiyan Decl., P.P. 26-35.) Plaintiff has not submitted sufficient evidence of the qualifications of these attorney timekeepers to justify the requested rates. The court in its discretion will apply its own experience and judgment as to the appropriate rate for the lodestar check. The court finds that a blended rate of $600 per hour is typical for similar PAGA actions taken on contingence in the community, inclusive of senior partners and less experienced attorneys.

Applying the blended rate of $600 per hour for 294.8 total attorney hours, the lodestar is $176,760. The court declines to apply a positive or negative multiplier. The court will grant the requested attorney fee award of $168,333.33. The court finds the requested attorney fees is reasonable and fair. (7) Litigation Costs The court will further grant the requested cost reimbursement of $19,905.26. (Bibiyan Decl., P.P. 36-37, Ex.1.) These requested litigation costs appear reasonable and necessary. (Ibid.) (8) Settlement Administration Costs The qualifications of the settlement administrator, ILYM Group, Inc., appear adequate and the requested costs associated with the settlement administration in the amount of $10,850 appear reasonable. (See Rogers Decl., P.P. 2-6, Exs.

A-C; Lazar Decl., P. 61.)

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