Tentative Ruling: Antonia Ramirez vs ISL Employees Inc et al
Case Number
23CV02949
Case Type
Hearing Date / Time
Fri, 04/24/2026 - 10:00
Nature of Proceedings
Motion: Approval
Tentative Ruling
For all reasons stated herein, the motion of plaintiff Antonia Ramirez for approval of representative action settlement is continued to June 5, 2026. On or before May 22, 2026, plaintiff shall submit additional supporting information as required in this ruling.
Background:
On February 15, 2023, Plaintiff Antonia Ramirez (Ramirez) filed a class action complaint in the related action entitled Antonia Ramirez v. ISL Employees, Inc., et al., case No. 23CV00634 (the Ramirez Class Action). On August 18, 2023, Ramirez’s individual claims in the Ramirez Class Action were ordered to arbitration, the class claims in the Ramirez Class Action were dismissed, and the Ramirez Class Action was stayed pending completion of arbitration (the Arbitration Ruling). The Ramirez Class Action is still pending. The stay has not been lifted.
On July 10, 2023, Ramirez initiated this action by filing a complaint against Defendants ISL Employees, Inc. (ISL), and ADP Totalsource I, Inc. (ADP), setting forth five causes of action for (1) civil penalties under Labor Code section 210, (2) civil penalties under Labor Code section 226.3, (3) violation of Labor Code section 558, (4) violation of Labor Code section 1174.5, (5) violation of Labor Code section 1197.1, and (6) civil penalties under Labor Code section 2699. The complaint seeks to recover civil penalties on behalf of aggrieved employees under the Private Attorneys General Act of 2004 (PAGA). The PAGA claims are based on alleged violations of the Labor Code, including defendants’ failure to accurately track employee work time, compensate employees for overtime, compensate employees for off-the-clock work, provide uninterrupted meal and rest periods, provide accurate wage statements, and provide mandatory sick leave. (Compl., ¶¶ 11-26.)
The complaint alleges that Ramirez was employed with defendants from January 2014 through at least May 2022 as a nonexempt employee. (Compl., ¶ 27.) According to her memorandum in support of this motion, Ramirez worked as a caregiver at ISL’s Oak Cottage of Santa Barbara Memory Care facility with duties that included bathing and feeding residents. (Motion, p. 4, ll. 5-8.) Plaintiff alleges she gave notice of these violations to the California Labor and Workforce Development Agency (LWDA) pursuant to Labor Code section 2699.3 on February 15, 2023. (Compl., ¶ 8.) The LWDA did not provide notice of its intention to investigate the alleged violations within 65 calendar days of the February 15 notice. (Compl., ¶ 10.) 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).
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, § 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, § 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. [¶] 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 ¶¶ 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 ¶ 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 ¶¶ 1.11, 8.1.) The gross settlement amount shall be funded by ISL within 10 days of the effective date. (Id. at ¶ 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 $10,850.00. (Motion, p. 3, ll. 12-19.) These amounts are permitted in the Settlement. (Lazar Decl., Ex. 1 at ¶ 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 ¶¶ 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.)
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 ¶ 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 ¶ 1.27.)
(3) The Court’s Initial Evaluation
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.) 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., ¶¶ 19-20, 37-61; Bibiyan Decl., ¶¶ 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., ¶¶ 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.)
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), and other entities that may be related to ISL. 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.) The court also notes that Ramirez worked at a facility named “Oak Cottage of Santa Barbara Memory Care.” (Ramirez, Decl,, ¶ 3.) However, there is insufficient information to determine the entity Oak College’s relationship to the PAGA claims in this action. The court will require additional information on the issue of what claims are being released against Oak Cottage and any other non-parties, including support for why such claims were adequately addressed by the Settlement such that they should be released. (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].) “Releases must be appropriately tethered to the complaint’s factual allegations. … Requiring a reasonable connection prevents the release from extending to claims that are only remotely related to the allegations in the complaint.” (Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 538.) The court will require an adequate factual record to support the scope of the release.
Additionally, the court is not inclined to calculate attorney fees by applying a percentage to the common fund. The court is aware that this approach has been approved in the class action context with a lodestar cross-check. (See Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 503-506.) However, the court is not aware of any binding appellate case law that expressly permits this approach in the context of a PAGA-only settlement. Ramirez does not cite the court to any such authority. 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, § 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. (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) The court will require additional evidence on the issue of attorney fees, including evidence of the tasks performed and the time spent by the attorneys. Contemporary time records are preferred, but counsel may also submit time summaries as to each attorney with as much detail as possible. The time entries should relate to counsel’s efforts in this PAGA action and not to related actions. The court will require an adequate factual record to support the requested attorney fee award.
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., ¶¶ 2-6, Exs. A-C; Lazar Decl., ¶ 61.) The proposed notice and distribution methods appear reasonable and adequate for purposes of a PAGA-only settlement. (Lazar Decl., Ex. 1 at ¶ 4.1-4.4, Ex. 3.) Notice of the Settlement appears to have been provided to the LWDA. (Lazar Decl., ¶ 62, Ex. 6.) The requested litigation costs in the amount of $19,905.26 appear reasonable and necessary. (Bibiyan Decl., ¶ 37, Ex. 1.)