Ambrose v. U.S. Med-Equip, LLC

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TAYLOR AMBROSE, Plaintiff, v. US MED-EQUIP, LLC, Defendant.

No. 1:23-cv-00114-SAB

United States District Court, E.D. California

January 26, 2024

ORDER GRANTING PLAINTIFF'S MOTION FOR APPROVAL OF PAGA SETTLEMENT WITH REDUCTION IN ATTORNEYS' FEE AWARD AND DIRECTING CLERK OF COURT TO ENTER JUDGMENT AND CLOSE CASE

(ECF NO. 18)

I. INTRODUCTION

Plaintiff Taylor Ambrose (“Ambrose”), maintains this representative action against Defendant U.S. Med-Equip, LLC (“Med-Equip”) for penalties pursuant to the Private Attorneys General Act of 2004, California Labor Code §§ 2698 et seq. (“PAGA”) alleging violations of Labor Code §§ 201, 202, 203, 204, 210, 226, 226.3, 226.7, 227.3, 256, 510, 512, 1174, 1185, 1194, 1194.2, 1197, 1197.1, 1198, 1199, 2802, 2804, California Code of Regulations Title 8 Sections 11050 and 11150, and California Industrial Commission Wage Order 4. Currently before the Court is Plaintiff's motion to approve the settlement of this PAGA action. (Pl.'s Mot Appr. PAGA (“Mot”), ECF No. 18.) The settlement also encompasses the resolution and release of the individual underlying claims between the Plaintiff and Defendant relating to this action.

The Court held a hearing on the motion on January 24, 2024. For the reasons explained herein, the Court orders the motion be granted with a reduction in the attorneys' fees request, and associated increase in the penalties awarded to the State of California and the aggrieved employees.

II. BACKGROUND

On January 26, 2023, Plaintiff submitted a letter to the California Labor and Workforce Development Agency (“LWDA”) to notify the LWDA of Plaintiff's intent to seek civil penalties under PAGA for violations of Labor Code §§ 201, 202, 203, 204, 210, 226, 226.3, 226.7, 510, 512, 1185, 1194, 1194.2, 1197, 1197.1, 1198, 1199, 2802, 2804, California Code of Regulations Title 8 Sections 11050 and 11150, and California Industrial Commission Wage Order 4. (See Mot. 7; Decl. Jonathan Melmed Supp. Mot. (“Melmed Decl.”) ¶ 10, ECF No. 18-1, Ex. 2, ECF No. 18-3 at 1.) The LWDA did not respond to the notice. (Id.)

Also on January 26, 2023, Plaintiff filed a class action complaint alleging causes of action for (1) failure to pay minimum wages; (2) failure to pay overtime wages; (3) failure to provide rest periods and pay missed rest period premiums; (4) failure to provide meal periods and pay missed meal period premiums; (5) failure to maintain accurate employment records; (6) failure to pay wages timely during employment; (7) failure to pay all wages earned and unpaid at separation; (8) failure to indemnify all necessary business expenses; (9) failure to furnish accurate itemized wage statements; and (10) violations of California's unfair competition law. (ECF No. 1; Melmed Decl. ¶ 11.) The Parties stipulated to allow Plaintiff to file a first amended complaint adding a single cause of action for PAGA Penalties Pursuant to Labor Code § 2698 et seq. for violations of Labor Code §§ 201, 202, 203, 204, 210, 226, 226.3, 226.7, 510, 512, 1185, 1194, 1194.2, 1197, 1197.1, 1198, 1199, 2802, 2804, California Code of Regulations Title 8 Sections 11050 and 11150, and California Industrial Commission Wage Order 4 (the “Action”). (Mot. 7; Melmed Decl. ¶ 12.) On April 13, 2023, the Court approved the stipulation and deemed the first amended complaint filed. (ECF Nos. 6, 7.) On May 15, 2023, Defendant filed an answer. (ECF No. 8.)

On June 13, 2023, the Court issued a phased class scheduling order. (ECF No. 11.) On October 27, 2023, the parties filed a notice of settlement. (ECF No. 14.) On October 30, 2023, the Court vacated all dates and deadlines, and ordered the parties to file a motion for approval of class action settlement on or before December 29, 2023. (ECF No. 15.)

On November 6, 2023, the parties filed a notice of dismissal requesting Plaintiff's class claims only, be dismissed without prejudice. (ECF No. 16.) The stipulation proffered that the parties did not intend to dismiss Plaintiff's individual or PAGA representative claims by way of the joint request. (Id.) The stipulation further proffered that: no consideration was exchanged for the dismissal of Plaintiff's class claims; no notices were mailed to the similarly situated employees nor has there been any form of advertising disseminated; no class has been certified in this matter; no motions to certify a class have been filed; and no person not named in this lawsuit is bound by the dismissal. (Id.) On November 7, 2023, the Court issued an order construing and entering the stipulation of dismissal as a stipulation to amend the complaint, and the Court deemed the first amended complaint amended so that any class action claims asserted therein are no longer alleged against Defendant, and ordered the parties to file any motion for approval of the PAGA settlement, on or before December 29, 2023. (ECF No. 17.) Therefore, the operative complaint in this action, as amended, does not contain any class claims. (See ECF Nos. 6, 7, 16, 17.)

On December 19, 2023, Plaintiff filed the motion for approval of the PAGA settlement. (ECF No. 18.) Attached to the motion is a notice dated December 11, 2023, that indicates the proposed settlement materials were sent to the LWDA on such date by electronic submission. (Melmed Decl., Ex. 3, ECF No. 18-4 at 1.)^[1]

No opposition or objection has been filed. On January 24, 2024, the Court held a hearing on the motion to approve the PAGA settlement. Megan E. Ross appeared on behalf of Plaintiff. Annureet K. Grewal appeared on behalf of Defendant.

On January 24, 2024, the parties submitted forms giving consent to Magistrate Judge jurisdiction over this action for all purposes. (ECF Nos. 19, 20.) Accordingly, on the same date, this action was authorized to proceed before the assigned Magistrate Judge for all further proceedings including trial and entry of judgment. (ECF No. 22.)

III. LEGAL STANDARD

In 2003, the California Legislature enacted the Private Attorney General Act, California Labor Code §§ 2698 et seq., after declaring that “adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for labor law enforcement agencies had declined and were unlikely to keep pace with the future growth of the labor market, and that it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts.” Arias v. Superior Ct., 46 Cal.4th 969, 980 (2009).

Under PAGA, an “aggrieved employee” may bring an action for civil penalties for labor code violations on behalf of themselves and other current or former employees. Cal. Lab. Code § 2699(a). An “aggrieved employee” is defined as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” Cal. Lab. Code § 2699(c).

An employee plaintiff suing under PAGA “does so as the proxy or agent of the state's labor law enforcement agencies.” Arias, 46 Cal.4th at 986. In such action, “the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies- namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency.” Id. (citing Cal. Lab. Code § 2699(a), (f)).

Therefore, a judgment in such PAGA “action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.' Arias, 46 Cal.4th at 986; see also Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 381 (2014) (“When a government agency is authorized to bring an action on behalf of an individual or in the public interest, and a private person lacks an independent legal right to bring the action, a person who is not a party but who is represented by the agency is bound by the judgment as though the person were a party.”), abrogated on other grounds by Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906, 213 L.Ed.2d 179 (2022); Perez v. All Ag, Inc., No. 118CV00927DADEPG, 2021 WL 3129602, at *3 (E.D. Cal. July 23, 2021) (same).

“Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency, leaving the remaining 25 percent for the ‘aggrieved employees.' ” Arias, 46 Cal.4th at 980-81 (quoting Cal. Lab. Code § 2699(i)). “The civil penalties recovered on behalf of the state under the PAGA are distinct from the statutory damages to which employees may be entitled in their individual capacities.” Iskanian, 59 Cal.4th at 381. Therefore, “a request for statutory penalties provided by the Labor Code for employer wage-and-hour violations, which were recoverable directly by employees well before the [PAGA] became part of the Labor Code,” is distinct from “a demand for ‘civil penalties,' previously enforceable only by the state's labor law enforcement agencies.” Id. (quoting Caliber Bodyworks, Inc. v. Superior Ct., 134 Cal.App.4th 365, 377 (2005)).

To bring an action under PAGA, an aggrieved employee must first provide written notice to the LWDA as well as to the employer. Id. (citing Cal. Lab. Code § 2699.3(a)(1)(A)). Further, the trial court “shall review and approve any settlement” of a PAGA action, and “[t]he proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” Cal. Lab. Code § 2699(l)(2).

“There is no binding authority identifying the proper standard of review of PAGA settlements to be employed by the court.” Perez, 2021 WL 3129602, at *3. “In the class action context, where PAGA claims are also often brought, a district...