Alejandro Mazantini, et al. v. Mission Park Health Center, et al

Case Number

23CV02465

Case Type

Hearing Date / Time

Wed, 03/06/2024 - 10:00

Nature of Proceedings

Plaintiffs’ Motion for Approval of Settlement Under the Private Attorney’s General Act

Tentative Ruling

For Plaintiff Alejandro Mazantini, individually, and on behalf of all others similarly situated: Elliot Siegel and Julian Burns King

For Defendants Mission Park Health Center and Pacificare Health Management: Michael B. Eisenberg and Bryan W. Edgar                 

For Defendant Aaron Mayer: No appearance.

 

RULING

For the reasons set forth herein:

The motion for approval of settlement under the private attorney’s general act is denied without prejudice.

Background

Plaintiff Alejandro Mazantini, on behalf of himself and all similarly situated, filed his original representative action for PAGA penalties on June 8, 2023, against Defendants Mission Park Health Center, Pacificare Health Management, and Aaron Mayer.

On January 3, 2024, Plaintiff filed the operative first amended complaint (“FAC”).

As alleged in the FAC:

Plaintiff was an hourly, non-exempt employee of Mission Park Health Center from approximately 2004 to 2022 and was paid $21.00 per hour. Defendants failed to pay minimum wage for all hours worked, failed to pay overtime, failed to pay wages when due upon termination or regularly scheduled paydays, failed to provide rest and meal breaks, and failed to provide and maintain records.

On November 21, 2023, the parties attended mediation with mediator Kim Deck, Esq. The mediation resulted in settlement. (Siegel Dec., ¶¶ 14, 15.)

Plaintiff now seeks Court approval of the settlement agreement. The motion is unopposed.

Analysis

“Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.” (Lab. Code, § 2699, subd. (a).)

“The aggrieved employee or representative shall give written notice by online filing with the Labor and Workforce Development Agency and by certified mail to the employer of the specific provisions of this code alleged to have been violated, including the facts and theories to support the alleged violation.” (Lab. Code, § 2699.3, subd. (a)(1)(A).)

On June 6, 2023, Plaintiff, through counsel, gave written notice to the LWDA of Plaintiff’s intent to seek PAGA penalties against Defendants. (Siegel Dec., ¶ 8.) On August 23, 2023, Plaintiff provided an amended notice to the LWDA and Defendants regarding his asserted claims for PAGA penalties. (Siegel Dec., ¶ 9 & Exh. 2.) The Court has reviewed the letter sent to LWDA. The letter cites specific provisions of the Labor Code alleged to have been violated, including the facts and theories to support the alleged violations. As such, the notice given complies with the Labor Code and is sufficient.

“The agency shall notify the employer and the aggrieved employee or representative by certified mail that it does not intend to investigate the alleged violation within 60 calendar days of the postmark date of the notice received pursuant to paragraph (1). Upon receipt of that notice or if no notice is provided within 65 calendar days of the postmark date of the notice given pursuant to paragraph (1), the aggrieved employee may commence a civil action pursuant to Section 2699.” (Lab. Code, § 2699.3, subd. (a)(2)(A).

The LWDA did not provide notice of its intention to investigate Defendants’ alleged violations within the 65-day waiting period, following being given notice, or at any other time. (FAC, ¶ 49.) It was therefore proper for Plaintiff to commence this action by the filing of his complaint.

“An employee Plaintiff suing, as here, under the Labor Code Private Attorneys General Act of 2004, does so as the proxy or agent of the state’s labor law enforcement agencies. The act’s declared purpose is to supplement enforcement actions by public agencies, which lack adequate resources to bring all such actions themselves. [Citation.] In a lawsuit brought under the act, 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.” (Arias v. Superior Court (2009) 46 Cal.4th 969, 986 (Arias).)

“Every PAGA claim is ‘a dispute is between the employer and the state.’ [Citation.]” (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81 (Kim).) The purpose of PAGA is not to recover damages, restitution, or redress the employees’ injuries, but to recover civil penalties to remediate present violations and deter future ones. (Id. at p. 86.)

“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 agency at the same time that it is submitted to the Court.” (Lab. Code, § 2699, subd. (l)(2).) Although Plaintiff declares that notice of the settlement was submitted to the LWDA, and purports to support that with “Exhibit 2B,” there is not an Exhibit 2B attached to the declaration, nor any other proof that the proposed settlement was submitted to the LWDA. (Siegel Dec., ¶ 10.) Should Plaintiff again seek approval of a settlement, he must provide proof that the LWDA was provided with the proposed settlement.

“Despite the fact that ‘a representative action under PAGA is not a class action’ [citation], and is instead a type of ‘qui tam action’ [citation], a standard requiring the trial Court to determine independently whether a PAGA settlement is fair and reasonable is appropriate. Class actions and PAGA representative actions have many differences, with one salient difference being that certain due process protections afforded to unnamed class members are not part of PAGA litigation because aggrieved employees do not own personal claims for PAGA civil penalties. [Citations.] Nonetheless, the trial Court must ‘review and approve’ a PAGA settlement (§ 2699, subd. (l)(2)), and the Supreme Court has in dictum referred to this review as a ‘safeguard.’ [Citation.]” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76.) “PAGA settlements are subject to trial Court review and approval, ensuring that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.)

The proposed settlement defines “Aggrieved Employee” as “all current and former Non-exempt employees who worked for Defendants and worked at least one shift in the State of California during the PAGA Period, i.e., from June 8, 2022, through November 21, 2023.” (Settlement Agreement, ¶ 2 “Gross Settlement Amount” is $141,600.00 “and includes the Employee PAGA Portion payable to Aggrieved Employees, LWDA Payment payable to the LWDA, Court-awarded Attorneys’ Fees (not to exceed one-third of the Gross Settlement Amount, currently estimated to be Forty-Seven Thousand Two Hundred Dollars ($47,200)) to Plaintiff’s Counsel, Court-awarded Litigation Costs (not to exceed Fifteen Thousand Dollars ($15,000)) to Plaintiff’s Counsel, a service award payment to Plaintiff in an amount up to Nine Thousand Dollars ($9,000), and a Court-awarded payment to the Settlement Administrator for Settlement Administration Costs (not to exceed Fifteen Thousand Dollars ($15,000)).” (Id. at ¶ 8.)

Pursuant to the present motion, and the proposed order, Plaintiff is requesting that the Court approve the above stated terms of the settlement agreement.

The proposed settlement essentially follows the model for settlement of a class action and is inconsistent with Labor Code section 2699 et seq. As stated above, although having some similarities, a PAGA representative action is not a class action. (Arias, supra, 46 Cal.4th at page 975.) “The civil penalties a PAGA Plaintiff may recover on the state’s behalf are distinct from the statutory damages or penalties that may be available to employees suing for individual violations. [Citation.] Relief under PAGA is designed primarily to benefit the general public, not the party bringing the action.” (Kim, supra, 9 Cal.5th at page 81.)          

Unlike in a class action, there is no authority allowing for a representative enhancement payment in a PAGA action. “[T]he rationale for making enhancement or incentive awards to named Plaintiffs [in class action suits] is that he or she should be compensated for the expense or risk he has incurred in conferring a benefit on other members of the class.” (Clark v. American Residential Services, LLC (2009) 175 Cal.App.4th 785, 806, Italics Added.) Although here the “aggrieved employees” may receive a nominal amount of payment as a result of a PAGA settlement, A PAGA action is not meant to benefit the named Plaintiff or a class of persons. As noted above, PAGA actions are meant to benefit the public.  A PAGA civil penalties settlement is to be distributed “75 percent to the Labor and Workforce Development Agency for enforcement of labor laws, including the administration of this part, and for education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.” (Lab. Code, § 2699, subd. (i).) There is no authority for reducing this amount by making unauthorized deductions. 

Additionally, while “[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs” (Lab. Code, § 2699, subd. (g)(1)), that amount is not authorized by statute, or otherwise, to be deducted from the PAGA civil penalties payment.

All of the cases cited by Plaintiff in support of his request for a representative enhancement award and attorneys’ fees are class action cases rather than PAGA actions.

In order to comply with the Labor Code, and to allow the Court to assess the fairness of the proposed settlement, the total amount of the PAGA “civil penalties recovered” must be set forth separately, the amount of reasonable attorney’s fees and costs must be set forth separately, and Mazantini is not entitled to a representative payment.

While there may be a wide range of what might be considered a fair and reasonable PAGA civil penalties settlement, and what may constitute reasonable attorney’s fees and costs for pursuing the action, the Court will defer on any opinion regarding those amounts pending Mazantini addressing the deficiencies in the settlement agreement and proposed order.

Because the settlement agreement, and proposed order, are inconsistent with Labor Code section 2699 et seq., and other relevant authority, the motion to approve settlement will be denied without prejudice.