Ronald Beardsley v. Alisal Properties, et al

Case Number

24CV03864

Case Type

Hearing Date / Time

Wed, 08/27/2025 - 10:00

Nature of Proceedings

Plaintiff’s Unopposed Renewed Motion For Approval Of Settlement Pursuant To The Private Attorneys General Act of 2004 (“PAGA”)

Tentative Ruling

For Plaintiff Ronald Beardsley: Elliot J. Siegel, Julian Burns King, Lawrence W. Beall, King & Siegel LLP

For Defendants Alisal Properties dba Alisal Ranch and James Hiland Jackson: Leslie Joyner, Gordon Rees Scully Mansukhani, LLP

RULING

For all reasons discussed herein, the renewed motion of Plaintiff for approval of settlement pursuant to the Private Attorneys General Act of 2004 or “PAGA” is granted.

Background

The first amended complaint (FAC) filed on September 18, 2024, by Plaintiff Ronald Beardsley against Defendants Alisal Properties doing business as Alisal Ranch (the Ranch) and James Hiland Jackson (Jackson) (collectively, Defendants) is the operative pleading. In the FAC, Plaintiff asserts a single cause of action for civil penalties under Labor Code section 2698 et seq. (the Labor Code Private Attorneys General Act or PAGA). As alleged in the operative FAC:

The Ranch is in the hotel and resort business, with its principal place of business located at 1054 Alisal Road in Solvang, California (the premises). (FAC, ¶ 7.) Jackson is the Chief Financial Officer of the Ranch. (FAC, ¶ 8.) Plaintiff worked for Defendants as an hourly, non-exempt employee from November 2003 to June 24, 2024. (FAC, ¶ 6.)

During Plaintiff’s employment with Defendants, Defendants required employees to monitor radios and cellphones during the employees’ meal and rest periods, interrupted meal and rest periods to discuss work-related matters, prohibited or prevented employees from taking breaks when the workload was high or locations were understaffed, and prohibited employees from leaving the premises during breaks. (FAC, ¶¶ 14-17.) Defendants also required employees to respond to and assist guests and remain on-call for emergencies while off the clock, and failed to pay to employees gratuities which Defendants collected from their customers. (Id. at ¶¶ 19, 21 & 23-25.)

On January 22, 2025, Plaintiff filed an unopposed motion (the first approval motion) for an order approving the terms of a Joint Stipulation of Settlement of PAGA Representative Action (the Settlement Agreement) between Plaintiff and Defendants.

On February 19, 2025, the Court entered an order adopting its tentative ruling denying the first approval motion on procedural and substantive grounds further discussed in that order. The Court’s denial of the first approval motion was without prejudice to the future filing of an appropriate noticed motion for approval of the Settlement Agreement in accordance with the Court’s ruling.

On February 19, 2025, Plaintiff filed a second unopposed motion (the second approval motion) for approval of the Settlement Agreement.

On April 30, 2025, the Court entered an order adopting its tentative ruling denying the second approval motion on the grounds that, among other things, the terms of the Settlement Agreement did not provide for a distribution of civil penalties which complied with PAGA.

On June 26, 2025, Plaintiff filed an unopposed renewed motion for approval of a settlement pursuant to PAGA.

The present motion is supported by a declaration of Plaintiff’s counsel, Elliot J. Siegel (Siegel), who states that, after the Court denied approval of the Settlement Agreement, the parties entered into an amended Joint Stipulation of Settlement of PAGA Representative Action (the Amended Agreement) on June 2, 2025, a copy of which is attached to Siegel’s declaration (Siegel Decl., ¶ 3 & Exh. 1.) Plaintiff and Defendants also, and ostensibly separately, entered into a settlement of Plaintiff’s potential individual claims. (Siegel Decl., ¶ 3.)

Siegel further states that on June 5, 2025, Plaintiff gave notice of the Amended Agreement to the Labor & Workforce Development Agency (the LWDA), who did not respond to that notice. (Siegel Decl., ¶ 5 & Exh. 2C.) In addition, the present motion was submitted to the LWDA concurrently with its filing. (Siegel Decl., ¶ 4.)

Siegel asserts that Plaintiff worked for the Ranch as an hourly, non-exempt employee from November 2003 to June 24, 2024, and that Plaintiff and other non-exempt employees of the Ranch were subject to the same policies, practices, and procedures governing the payment of wages earned and hours worked. (Siegel Decl., ¶ 20.)

Siegel explains that this lawsuit challenges distinct and purportedly unlawful wage and hour practices which give rise to Plaintiff’s claim for penalties under PAGA. (Siegel Decl., ¶ 35.) The policies and practices which Plaintiff contends are unlawful include: the collection by the Ranch of a mandatory 22 percent charge or “Ranch Fee” as a gratuity on room reservations which the Ranch failed to pay to employees, and instructing employees to decline tips offered by guests; requiring employees to remain on-duty during meal and rest breaks to monitor and respond to calls and guests, with 56.4 percent of pay periods having at least one facially non-compliant meal period; failing to permit or authorize employees to leave the premises during rest breaks; and failing to pay earned and overtime wages, including at the time of an employee’s discharge. (Id. at ¶¶ 36-52.) Based on PAGA provisions which require proof of willful or intentional conduct by the Ranch, Plaintiff has abandoned certain derivative claims for PAGA penalties. (Id. at ¶ 53.)

According to Siegel, the Ranch has, among other things, denied that this action is appropriate for representative treatment for any purpose apart from settlement, asserted its compliance with the requirements of the Labor Code and applicable wage orders, and asserted various defenses including as to whether Plaintiff’s claims are subject to arbitration, whether an arbitral award could strip Plaintiff of standing to maintain non-individual PAGA claims, whether trial of the representative claims would be manageable, whether the Ranch Fee constitutes a gratuity, whether employees were relieved of employment duties during breaks or reimbursed for business expenses, whether penalties could or would be reduced, “capped”, or adjusted under new PAGA legislation, and whether Defendants’ conduct was willful. (Siegel Decl., ¶¶ 54-77.)

The risks described above were incorporated into Plaintiff’s counsel’s risk assessment to determine the appropriateness of the Amended Agreement. (See, e.g., Siegel Decl., ¶¶ 54, 73, & 77.) Siegel believes that there exists a significant risk based on the defenses asserted by the Ranch, including respect to whether the Ranch acted willfully or knowingly. (Siegel Decl., ¶¶ 54 & 73-77.)

Siegel further explains that, after Plaintiff filed the FAC, the parties engaged in discussions regarding the potential for settlement of Plaintiff’s claims. (Siegel Decl., ¶ 27.) As part of these discussions, the Ranch informally produced to Plaintiff policy-related documents, and what Siegel describes as a “statistically significant sampling” of the time and payroll records of 25 percent of the “aggrieved employees” (which the Court understands to refer to all employees who suffered each of the violations alleged in the FAC), records pertaining to the Ranch Fee including the percentage that was distributed to aggrieved employees, information relevant to potential damages with respect to shifts worked and total pay periods for the class, and other data and information related to the Ranch’s defenses. (Id. at ¶ 28.)

The parties participated in an all-day mediation on December 17, 2024, with Abe Melamed, who Siegel describes as “a well-respected mediator in the field of employment law and wage-and-hour class actions.” (Siegel Decl., ¶ 29.) Based on the Ranch’s representations and documents produced during mediation, there exist an estimated 475 aggrieved employees (the Aggrieved Employees) who, from July 11, 2023, through the date of the parties’ mediation, worked a total of 13,000 pay periods. (Id. at ¶¶ 23 & 84; see also Exh. 1, ¶ 19 [defining “PAGA Release Period”].) Siegel declares that this information was material to Plaintiff’s decision to enter into the Amended Agreement, which includes an “escalator provision”. (Id. at ¶ 23.)

For purposes of evaluating settlement of this matter, Plaintiff assumed a 100 percent violation rate across the relevant time period under PAGA with respect to the number of Aggrieved Employees noted above. (Siegel Decl., ¶ 85.) Plaintiff’s expert determined that, based on an “unstacked” penalty of $100 per pay period, the Ranch’s maximum exposure to or liability for penalties under PAGA during the relevant time period was $1.3 million. (Id. at ¶ 86) Considering the risks described above, and to determine the Ranch’s realistic exposure based on the Aggrieved Employees’ chance of prevailing at trial, Siegel applied “risk discounts” to Plaintiff’s damages model to arrive at a total “realistic” maximum exposure of the Ranch to penalties under PAGA, which totals $394,875. (Id. at ¶¶ 87-93.)  

When analyzing the Ranch’s exposure to civil penalties under PAGA, Plaintiff also considered limits on recovery including whether the penalties under PAGA may be appropriately “stacked”, the rate at which penalties would be calculated, and whether the Court might exercise its discretion to reduce these penalties. (Siegel Decl., ¶¶ 78-83.)

Siegel also considered the possibility of unfavorable decisions on summary judgment and at trial, including with respect to the penalties awarded, the possibility of an appeal, the risk that Plaintiff would not prevail on one or more of the underlying claims due to the Ranch’s ability to distinguish this case from existing cases, the risk that civil penalties available under PAGA might be reduced based on any lack of bad faith, and the costs and time of continued litigation versus an immediate and guaranteed settlement. (Siegel Decl., ¶¶ 95-96.)

 

The parties’ mediation resulted in a “Mediator’s Proposal” to resolve the matter subject to the successful negotiation of certain non-monetary terms. (Siegel Decl., ¶ 30.) After accounting for the sharply disputed factual and legal issues present in this litigation, the risks associated with further prosecution, and the benefits to be received pursuant to the compromise and settlement of the PAGA representative claims, the parties determined that there were benefits associated with settling the matter and accepted the Mediator’s Proposal. (Id. at ¶¶ 30-31.)

Siegel states the Amended Agreement provides that Defendants will pay the amount of $250,000 as a “PAGA Penalties Amount”, which will be distributed to the LWDA and a group of approximately 475 non-exempt employees of the Ranch (the PAGA Settlement Members) who worked at least one shift in California from July 11, 2023, through the date the Court enters an order approving the Amended Agreement. (Siegel Decl., ¶ 31; see also Exh. 1, ¶ 28.) Under the terms of the Amended Agreement, the PAGA Settlement Members will preserve their rights to separately file individual claims. (Id. at ¶ 32.)

The PAGA Penalties Amount described above is non-reversionary, and will be distributed as follows: (1) 65 percent to the LWDA, and (2) 35 percent to the PAGA Settlement Members. (Siegel Decl., ¶ 32 & Exh. 1, ¶ 28.) If the actual number of pay periods worked by the Aggrieved Employees from July 11, 2023, through the date of Court approval of the Amended Agreement increases by more than 10 percent, the PAGA Penalties Amount will increase by 1 percent for every 1 percent over the 10 percent threshold, with Defendants retaining discretion to adjust the length of the applicable PAGA period to the date of the parties’ mediation. (Id. at Exh. 1, ¶ 29.)

Pursuant to the Amended Agreement, Defendants have also agreed to separately pay the amount of $89,000 for attorney’s fees, an amount not to exceed $18,000 for litigation costs, and the amount of $3,000 to settlement administrator Simpluris for settlement administration costs.  (Siegel Decl., ¶ 33 & Exh. 1, ¶¶ 30-31.) Plaintiff will also separately receive a payment of $15,000 in exchange for a general release of all claims. (Id. at ¶¶ 3 & 33.)

Siegel notes that the PAGA Penalties Amount represents 63.3 percent of Defendants’ realistic maximum exposure in this matter, and provides for a per-pay period value of $28.90 out of a maximum of $100. (Siegel Decl., ¶ 94.) Siegel states that the Amended Agreement was negotiated in light of all known facts and circumstances, including the difficulty of proving some of Plaintiff’s and the PAGA Settlement Members’ claims, the potential defenses asserted by Defendants, the discovery and information reviewed by counsel, and the risks inherent in PAGA litigation. (Id. at ¶ 34.) Siegel states his belief that, in light of the risks and discount factors described above and in the Siegel declaration, the Amended Agreement represents a fair, adequate, reasonable, and positive result because it provides substantial monetary benefits to the PAGA Settlement Members and the State of California. (Id. at ¶¶ 34 & 94.)  

Siegel further notes that the claims released under the Amended Agreement are confined to civil penalties under PAGA, and do not include any non-PAGA claims for any alleged violations of the Labor Code, which the Aggrieved Employees may pursue in a separate proceeding. (Siegel Decl., ¶ 1-3.) Further, the Amended Agreement requires that each Aggrieved Employee receive an explanatory letter with their check describing this litigation and the settlement amounts, which will educate Aggrieved Employees as to the requirements of the Labor Code. (Id. at ¶ 103.) For these and all further reasons described above, Siegel asserts that the Amended Agreement is fair, reasonable, and in the best interests of the Aggrieved Employees and the State of California. (Id. at ¶ 104.)

As to the attorney’s fees and litigation costs which Defendants have agreed to pay separately, Siegel describes his background and experience, and that of other attorneys at Siegel’s firm who expended time in this matter. (Siegel Decl., ¶¶ 7-19, 110, & 112.) Siegel asserts that though his firm took this case on a contingency basis, the firm maintained contemporaneous records of hours expended in this litigation, which were entered into an electronic timekeeping system and copies of which are attached to the Siegel declaration. (Id. at ¶¶ 111, 113, & Exh. 4.) Siegel also describes and categorizes the efforts and hours expended by Siegel’s firm in this litigation. (Id. at ¶¶ 116-118.)

According to Siegel, the number of hours expended by Siegel’s firm total 149.3, and the hourly rates charged by Siegel’s firm range from $475 for associate Lawrence Beall’s time, to $825 for Siegel’s time. (Siegel Decl., ¶ 115.) The lodestar based on the number of hours expended multiplied by the hourly rates set forth in the Siegel declaration is $89,759.50. (Ibid.)

Siegel also provides a description of the litigation costs incurred by Plaintiff in this litigation. (Siegel Decl., ¶ 122; see also Appendix A & Exh. 7.) Though the Amended Agreement authorizes Plaintiff’s to recover litigation costs not to exceed $18,000, the actual costs incurred in this litigation total $16,008.30 with the excess reverting to the PAGA Penalties Amount. (Id. at ¶ 122.)

Siegel further states that the parties have agreed to use Simpluris as the settlement administrator, who provided a capped quote of $3,000 which Siegel characterizes as “competitive”. (Siegel Decl., ¶ 107 & Exh. 3.)  

Analysis

PAGA “empowers employees to sue on behalf of themselves and other aggrieved employees to recover civil penalties previously recoverable only by the Labor Commissioner…. [Citations] The PAGA also creates new civil penalties, equally enforceable by aggrieved employees, for most other Labor Code violations that previously did not carry such penalties. [Citation.] [¶] All PAGA claims are ‘representative’ actions in the sense that they are brought on the state’s behalf. The employee acts as ‘the proxy or agent of the state’s labor law enforcement agencies’ and ‘represents the same legal right and interest as’ those agencies — ‘namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency.’ [Citations.] The employee may therefore seek any civil penalties the state can, including penalties for violations involving employees other than the PAGA litigant herself.” (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 184-185; see also Lab. Code, § 2699, subd. (a).)

“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 [citation], and the Supreme Court has in dictum referred to this review as a ‘safeguard[ ].’ [Citation.] The Supreme Court has also observed that trial Court approval ‘ensur[es] that any negotiated resolution is fair to those affected.’ [Citations.] When trial Court approval is required for certain settlements in other qui tam actions in this state, the statutory standard is whether the settlement is ‘fair, adequate, and reasonable under all the circumstances.’ [Citations.] Thus, while PAGA does not require the trial Court to act as a fiduciary for aggrieved employees, adoption of a standard of review for settlements that prevents ‘ “ ‘ “fraud, collusion or unfairness” ’ ” ’ [citation], and protects the interests of the public and the LWDA in the enforcement of state labor laws is warranted. 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.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76-77, disapproved on another ground in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664, 709-710, fn. omitted.)

“The proposed settlement shall be submitted to the agency at the same time that it is submitted to the Court.” (Lab. Code, § 2699, subd. (s)(2).) Information appearing in the exhibits to the Siegel declaration shows Plaintiff submitted a copy of the Amended Agreement to the LWDA before filing the present motion with the Court. (Siegel Decl., Exh. 2C.)

The present record reflects that the Amended Agreement is the product of a mediation and the parties’ negotiations regarding the PAGA claims alleged in this action, and the defenses asserted as to those claims. Plaintiff has presented evidence of the risks associated with litigating these claims and defenses, including in regard to the potential for reductions in civil penalties that may be awarded under PAGA, among other things. The risks described in the motion appear to be substantial.

Plaintiff has also presented evidence showing that 65 percent of the PAGA Penalties Amount that Defendants have agreed to pay will be distributed to the LWDA, and that the remaining 35 percent will be distributed to the Aggrieved Employees. The distribution of the PAGA Penalties Amount provided in the Amended Agreement complies with subdivision (m) of Labor Code section 2699.

In addition, considering that the PAGA Penalties Amount represents more than one-half of Defendant’s realistic maximum exposure, as calculated by Plaintiff’s expert after accounting for the risks and defenses further discussed above, this amount appears fair, reasonable, and adequate as to those affected. There is also no evidence or information to suggest that the Amended Agreement is the product of collusion. Plaintiff’s counsel also believes that the PAGA Penalties Amount represents a fair, adequate, and reasonable settlement.

The available information and evidence further discussed above also suggests that separate payment of attorney’s fees agreed to by Defendants as provided for in the Amended Agreement is reasonable considering the lodestar further described above. As the remainder of the maximum litigation costs Defendant has agreed to pay will revert to the PAGA Penalties Amount, the Amended Agreement appears fair and reasonable with respect to Defendants’ payment of litigation costs. There is also no evidence or information to suggest that the agreed upon separate payment of $3,000 to Simpluris for settlement administration costs is unfair or unreasonable.

For all reasons discussed above, under the totality of the circumstances present here, it appears to the Court that the Amended Agreement is in all respects fair, adequate, and reasonable in view of PAGA’s purposes, and appears sufficient to remediate the labor law violations alleged in this action, to deter future violations by Defendants, and to maximize the enforcement of state labor laws. For these reasons, the Court will grant Plaintiff’s motion.