Gilmore v. McMillan-Hendryx

CourtDistrict Court, E.D. California
DecidedJanuary 20, 2022
Docket1:20-cv-00483
StatusUnknown

This text of Gilmore v. McMillan-Hendryx (Gilmore v. McMillan-Hendryx) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gilmore v. McMillan-Hendryx, (E.D. Cal. 2022).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 EDMOND TRENT GILMORE AND Case No. 1:20-cv-00483-HBK DANIEL GOWANS, on behalf of 12 themselves, all others similarly situated, ORDER GRANTING MOTION FOR 13 and the State of California APPROVAL OF PAGA SETTLEMENT1 14 Plaintiffs, (Doc. No. 20) 15 v. 16 McMILLAN-HENDRYX INCORPORATED, dba AMERICAN 17 SEALS WEST, INC., GARY HENDRYX, 18 JUSTIN HENDRYX, DEB C. HALL, 19 Defendants. 20 21 22 Pending before the Court is the Motion for Approval of PAGA Settlement submitted by 23 Plaintiffs Edmond Trent Gilmore and Daniel Gowans (“Plaintiffs”) on December 22, 2021. (Doc. 24 No. 20, “Motion”). Pursuant to the Court’s Order (Doc. No. 21), Plaintiff filed a supplemental 25 brief and evidence on January 5, 2022 (Doc. No. 22). No opposition was filed. 26 /// 27 ///

28 1 Pursuant to 28 U.S.C. § 636(c)(1), the parties consented to magistrate judge jurisdiction. (Doc. No. 16). 1 BACKGROUND 2 A. Summary of the Complaint 3 The initial complaint was filed on April 3, 2020. (Doc. No. 1). On June 25, 2020, 4 Plaintiffs filed a first amended complaint asserting thirteen causes of action, including one under 5 the Private Attorney General’s Act (“PAGA”), California Labor Code § 2699, et seq. (Doc. No. 6 6 at 1). In their PAGA claim, Plaintiffs assert they were aggrieved by certain of Defendants’ labor 7 and payroll practices. (Doc. No. 6 at 32:13-18). 8 B. Settlement Terms 9 The proposed settlement includes a total payment of $44,500 by Defendants on the 10 following terms: (a) $23,001.33 to Plaintiff Edmond Trent Gilmore for settlement of his 11 individual claim; (b) $2,091.03 to Plaintiff Daniel Gowans for settlement of his individual claim; 12 (c) $18,362.12 to Mallison & Martinez as attorneys’ fees and costs; and (d) $1,045.52 in PAGA 13 penalties ($784.14 to the state of California, $261.38 to the aggrieved employees). (Doc. No. 20 14 at 2, 20-3 at 2). The total settlement amount will be paid in three equal installments over ninety 15 days and will accrue 10% interest for non-payment. (Id. at 20-3 at 2-3). 16 Plaintiffs’ counsel will distribute the PAGA penalties to the government and to the 17 employees. Counsel represents that “[i]n the event funds remain undistributed or uncashed, after 18 reasonably diligent efforts, any funds from uncashed checks will be distributed to the California 19 Unclaimed Property/Wage Fund.” (Doc. No. 20-2 at 4:2-4). 20 Under the settlement, the named Plaintiffs release any claims they have against 21 Defendants, including the PAGA claims. (Doc. No. 20-2 at 3 ¶ 4). No other claims are released. 22 (See id.). Plaintiffs’ counsel represents that the settlement “clearly leaves individuals 23 unhampered to pursue their own individual wage claims under Arias.[2] Any monies received by 24 employees is an additional amount to these claims and these payments may encourage individual 25 employees to pursue such claims.” (Doc. No. 20-1 at 4:17-20). 26 No injunctive relief or other non-monetary relief is included in the settlement. (See id.). 27

28 2 This is an apparent reference to Arias v. Sup. Ct., 46 Cal. 5th 969 (2009). 1 APPLICABLE LAW 2 A. Standard of Review of PAGA Settlements 3 “‘A PAGA representative action is . . . a type of qui tam action’ in which a private 4 plaintiff pursues ‘a dispute between an employer and the state Labor and Workforce Development 5 Agency’ (‘LWDA’) on behalf of the state.” Haralson v. U.S. Aviation Servs. Corp., 383 F. Supp. 6 3d 959, 971 (N.D. Cal. 2019) (quoting Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 382, 7 384 (2014)). Although such actions do not require class certification, the Court must review and 8 approve the settlement of an action filed pursuant to the PAGA. Id.; Cal. Lab. Code § 2699(l)(2). 9 Courts consider: (1) whether the statutory requirements of notice to the LDWA have been 10 satisfied, and (2) whether the settlement agreement is fair, reasonable, and adequate, as well as 11 meaningful and consistent with PAGA’s public policy goals, which include “augmenting the 12 state’s enforcement capabilities, encouraging compliance with Labor Code provisions, and 13 deterring noncompliance.” Kang v. Wells Fargo Bank, N.A., 2021 WL 5826230, *15 (N.D. Cal. 14 Dec. 8, 2021); Perez v. All Ag, Inc., 2021 WL 3129602, *4 (E.D. Cal. July 23, 2021); see Moniz, 15 72 Cal. App. 5th at 64, 77 (“we also agree with the LWDA and federal district courts that have 16 found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view 17 of PAGA’s purposes and policies”) (citing cases). Accordingly, many of the same considerations 18 relevant to review of class action settlements are relevant here: 19 Thus, while PAGA does not require the trial court to act as a fiduciary for aggrieved employees, adoption of a standard of review for 20 settlements that prevents ‘fraud, collusion or unfairness,’ and 21 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 22 evaluate class action settlements bear on a settlement’s fairness— including the strength of the plaintiff's case, the risk, the stage of the 23 proceeding, the complexity and likely duration of further litigation, and the settlement amount—these factors can be useful in evaluating 24 the fairness of a PAGA settlement. 25 26 Moniz v Adecco USA, Inc., 72 Cal. App. 5th 56, 77 (2021) (internal quotation marks and citation 27 omitted). 28 1 B. Evaluation of PAGA Penalty Settlement 2 When evaluating the fairness, adequacy, and reasonableness of a PAGA penalty, courts 3 compare the potential penalty amount (its verdict value, as some courts refer to it) with the actual 4 recovery under the settlement. See Haralson, 383 F. Supp. 3d at 972-74; see also Moniz, 72 Cal. 5 App. 5th at 87 (“In estimating the potential recovery in the case to evaluate the fairness of the 6 settlement, the trial court assumed one violation [] per employee”). There is no express or even 7 baseline percentage of recovery required. Under the express terms of the PAGA, a verdict value 8 is not guaranteed even if the plaintiff prevails, as courts have discretion to lower the amount of 9 penalties based on the circumstances of a particular case. Cal. Lab. Code § 2699(e)(2); see also 10 Haralson, 383 F. Supp. 3d at 973-74 (courts evaluating settlements may consider likelihood of 11 exercising discretion to discount claims). 12 As such, courts have approved settlements across of range of verdict value percentages. 13 See Perez v. All Ag, Inc., 2021 WL 3129602, *4 (49% of verdict value of PAGA penalty); Decker 14 v. AllStates Consulting Services, LLC, 2020 WL 7769842, *3 (E.D. Cal. Dec. 30, 2020) (42% of 15 verdict value of PAGA penalty, resulting in average payment per employee of $188); Hartley v. 16 On My Own, Inc., 2020 WL 5017608, * 4 (E.D. Cal. Aug. 25, 2020) (approving settlement at 17 3.47% of verdict value of PAGA penalty, resulting in average payment per employee of $61); see 18 Haralson, 383 F. Supp. 3d at 972-74 (citing cases reflecting approval of settlements at 0.2% to 19 1.1% of verdict value of PAGA penalty). And courts have rejected settlements where the PAGA 20 penalty discount was too great. O’Connor v. Uber Technologies, Inc., 201 F. Supp. 3d 21 1110,1133-1134 (N.D. Cal. 2016) (declining to approve proposed settlement of penalties at 0.1% 22 of verdict value); see also Haralson, 383 F. Supp. 3d at 972-74 (requesting more information 23 regarding proposed settlement of penalties at less than 1% of verdict value).

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Bluebook (online)
Gilmore v. McMillan-Hendryx, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gilmore-v-mcmillan-hendryx-caed-2022.