Sandoval v. Valley Plating Works, Inc.

[2] Although as of May 14, 2026, zero (0) Notices have been returned to Phoenix, there are seventy-one (71) Class Members in the Class List who do not have a mailing address or Social Security number, and Phoenix is not able to send the Notice to the seventy-one (71) Class Members without an address. (Mitzner Decl., P.P.4, 7.)

Tentative Ruling

Re: Motion to Approve Private Attorneys General Act ("PAGA") Settlement Date: 8/26/26 Time: 11:00 am Moving Party: Jorge Sandoval ("Plaintiff") Opposing Party: None Department: 11 Judge: Bruce Iwasaki ________________________________________________________________________

Plaintiff's motion to approve PAGA settlement is granted as to the gross settlement amount, attorney fees, attorney costs, administration costs, and net settlement amount. During oral arguments, the Court will ask Plaintiff's counsel to discuss the scope of the release. BACKGROUND This is a wage-and-hour representative action. Here, Plaintiff requests approval of the parties' PAGA-only settlement. LAW PAGA permits an "aggrieved employee" to recover Labor Code civil penalties on the LWDA's behalf, if the LWDA declines to collect the penalties itself. (Cal.

Lab. Code, Sec. 2699, subd. (a); see also Mejia v. Merchants Building Maintenance, LLC (2019) 38 Cal.App.5th 723, 732-733.) The California Supreme Court has distinguished between Labor Code "civil penalties" that are "intended to 'punish the employer' for wrongdoing, often 'without reference to the actual damage sustained'" and "statutory damages" that "primarily seek to compensate employees for actual losses incurred" - a PAGA action can recover only the former. (Z.B., N.A. v. Superior Court (2019) 8 Cal.5th 175, 182, 198 [holding that Labor Code section 558 "amount sufficient to recover unpaid wages" is not a "civil penalty" recoverable via PAGA].) "A PAGA action is 'fundamentally a law enforcement action designed to protect the public and not to benefit private parties.'" (Mejia, supra, 38 Cal.App.5 th at 732; see also Iskanian v.

CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 381.) PAGA requires a court to "review and

approve any settlement of any civil action filed" under PAGA, but it does not provide review and approval standards or guidelines. (Cal. Lab. Code, Sec. 2699, subd. (l)(2).) The California Supreme Court has interpreted PAGA as requiring courts to ensure that "any negotiated [PAGA] resolution is fair to those affected." (Williams v. Superior Court (2017) 3 Cal.5th 531, 549, emphasis added).) The parties affected by a PAGA settlement include: (1) the LWDA, who receives 65% of settlement funds and is "bound by the outcome of the proceeding to adjudicate the employee's PAGA claim" (Mejia, supra, 38 Cal.App.5th at 732); (2) the aggrieved employees, party and non-party, who receive 35% percent of settlement funds and are, like the LWDA, bound by a PAGA action judgment; (3) plaintiffs' counsel, who may be awarded reasonable attorney fees and costs; and (4) defendant, who pays the settlement. [1] Moniz v.

Adecco USA, Inc. (2021) 72 Cal.App.5 th 56 provides greater detail about the standard courts should apply when evaluating PAGA settlements. The opinion adopts the "fair, reasonable, and adequate" standard used in class settlements. DISCUSSION Settlement Terms Gross settlement amount = $110,000.00 Attorney fees = $36,666.66 Attorney costs = $22,918.19 Administration costs = $5,000.00 Incentive award = $0.00 Net settlement amount = $ 45,415.15.

Analysis

Plaintiff's counsel's declaration establishes that, in preparation for mediation, the parties took part in informal discovery. Plaintiff's counsel used the information to assess the value of the case and associated risks. Ultimately, Plaintiff's counsel came up with maximum and discounted exposure estimates. Plaintiff's counsel asserts that the gross settlement amount is within a reasonable range, especially considering the defenses Defendant raised, and that the settlement is fair, reasonable, and adequate. (See Moon Decl., P.P. 11-40.)

As PAGA necessitates, Plaintiff's counsel submitted a pre-suit notice letter and a copy of the settlement to the LWDA. (See id. at P.P. 7, 15, Exs. 2, 3.) The Court finds as follows. Gross Settlement Amount Plaintiff's counsel calculated Defendant's maximum PAGA exposure to be $341,500.00. (See id. at P. 31.) He calculated Defendant's discounted, reasonable PAGA exposure to be one-third of the maximum PAGA exposure - i.e., $113,833.33. (See ibid.) Both amounts were calculated without stacking. (See id. at P. 29.)

The Court agrees that stacking would be unlikely. "Until the employer has been notified that it is violating a Labor Code provision (whether or not the [Labor] Commissioner or court chooses to impose penalties), the employer cannot be presumed to be aware that its continuing underpayment of employees is a 'violation' subject to penalties." (Bernstein v. Virgin America, Inc. (9 th Cir. 2021) 3 F.4 th 1127, 1144.) There does not appear to be a prior citation by the Labor Commissioner in this case.

Notably, the calculations are based on a $100.00 penalty per pay period, even though Plaintiff claims the aggrieved employees suffered numerous violations (overtime violations, meal period violations, rest period violations, etc.). Plaintiff's counsel contends multiple factors make it more reasonable to assess a single penalty per pay period than to do a claim-by-claim assessment. The factors include an absence of records showing off-the-clock work, meal break violations, rest break violations, and reimbursement violations, the unwillingness of the aggrieved employees to participate in the litigation, the existence of counterevidence demonstrating lower violation rates than Plaintiff's counsel anticipated, the potential viability of Defendant's legal defenses, and the Court's discretion to award less-than-maximum penalties. (See Moon Decl., P.P. 25-29.)

On balance, the Court agrees and finds that the gross settlement amount ($110,000.00) and the escalator amount (see id. at P. 17) are fair, reasonable, and adequate. The parties agreed to these amounts via arm's-length mediation after investigation and discovery. The gross settlement amount is nearly 97% of Defendant's "no stacking" reasonable exposure amount, and it reasonably accounts for the factors highlighted by Plaintiff's counsel. Attorney Fees The amount for attorney fees ($36,666.66) is fair, reasonable, and adequate.

This is a contingency case. (See id. at P. 77(b).) In contingency cases in the complex courts, 33.3% of the gross recovery is normal. Attorney Costs The amount for attorney costs ($22,918.19) is fair, reasonable, and adequate. It is just over 2% of the gross settlement amount, and it is within the range that has been approved in other complex cases in Department 11. The settlement agreement caps attorney costs at $25,000.00. (See id. at Ex. 1, Sec. 3.2.1.) If the costs fail to reach the cap, the Court will award the incurred amount to ensure that additional settlement money goes to the LWDA and aggrieved employees.

Administration Costs The amount for administration costs ($5,000.00) is fair, reasonable, and adequate.

Like the attorney costs, it is within the range that is typically approved in Department 11. The Court will award the incurred amount if it turns out to be less than the cap. (See id. at Ex. 1, Sec. 3.2.2. [capping administration costs at $5,000.00].) Incentive Award Plaintiff does not request an incentive award. Net Settlement Amount The net settlement amount, as modified ($ 45,415.15), is fair, reasonable, and adequate. It is over 41% of the gross settlement amount. Release The release states: 5.

RELEASES OF CLAIMS. Effective on the date when Defendant fully funds the entire Gross Settlement Amount, Plaintiff, the State of California, and the Aggrieved Employees will release claims against all Released Parties as follows: 5.1. Release by Plaintiff, the State of California, and Aggrieved Employees: Upon approval by the Court of the Settlement and as of the Effective Date, Plaintiff, the State of California and all Aggrieved Employees are deemed to release, on behalf of themselves and their respective former and present representatives, agents, attorneys, administrators, successors, and assigns, the Released Parties from all claims, rights, demands, liabilities, causes of action, and theories of liability for PAGA penalties that were pled or could have been pled based on the factual allegations contained in the PAGA Notice and Operative Complaint during the PAGA Period. ("PAGA Released Claims"). (Id. at Ex. 1, Sec.Sec. 5-5.1, bolding and underlining in original.)

The Court is concerned about overbreadth. First, do Plaintiff and the aggrieved employees have standing to release claims on behalf of former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns? Second, is the definition of "Released Parties" overinclusive? [2] At the hearing, counsel needs to address the scope of the releases. [1] R ecently, the Legislature amended PAGA, changing the LWDA's recovery from 75% to 65% and the aggrieved employees' recovery from 25% to 35%. (See Chin, et al., Cal.

Practice Guide: Employment Litigation (The Rutter Group 2025) P. 17:830.) The parties must ensure that the settlement complies with these percentages.

"Released Parties" means: Valley Plating Works, Inc. and each of its past and present divisions, affiliates,

affiliated entities, related entities, parents, subsidiaries, predecessors, successors, joint ventures, joint employers, assigns, and their respective shareholders, owners, officers, directors, employees, agents, trustees, attorneys, managers, operators, insurers, representatives, administrators, fiduciaries, beneficiaries, subrogees, executors, partners, privies, and consultants. (Id. at Ex. 1, Sec. 1.28.) | Home -->)" -->