Duane Morris Private Attorneys General Act Review – 2024

Key Rulings In PAGA Actions In 2023 The significant decisions in 2023 can be grouped into several categories, discussed below. 1. Settlement Approval Issues In 2023, courts continued to show that they are apt to deny settlement approval where procedurally the settled claims do not align with the pleadings and the case theories stated in the operative complaint where PAGA claims are issue. Errors in briefing and mistakes made by counsel can also lead to the denial of a proposed class-wide settlement. In Kabasele, et al. v. Ulta Salon, Cosmetics & Fragrance, Inc., 2023 U.S. Dist. LEXIS 42655 (E.D. Cal. Mar. 14, 2023), the plaintiffs filed a class action alleging that the defendant violated various state wage & hour laws. The parties ultimately settled the matter and the plaintiffs filed a motion for preliminary settlement approval. During the preliminary approval hearing, it was revealed that there was an error in the initial briefing regarding the number of class members. Instead of the previously stated 118,000 class members, there were approximately 18,000 class members. The court initially reviewed the motion based on the incorrect number of class members and declined further oral arguments. The plaintiff's counsel estimated the maximum possible value of the class claims to be $26,379,927, with an additional $8,950,000 in PAGA penalties. However, the court found that these estimates lacked detailed explanations and relied on mostly conclusory figures. The court also stated that the gross settlement amount proposed was $1,500,000, which constituted only 4.2% of the estimated maximum recovery. Given the low percentages compared to typical settlements, the court expressed concerns that it needed more information to assess whether the proposed settlement was fair, reasonable, and adequate for preliminary approval purposes. For these reasons, the court denied the motion for preliminary settlement approval. The effect of a prior PAGA settlement also was at issue in LaCour, et al. v. Marshalls Of California, LLC , 2023 WL 5542622 (Cal. App. 2023). The plaintiff, a loss prevention specialist, filed a PAGA action against his former employer premised on the employer’s alleged failure to reimburse for uniforms. The employer sought to dismiss the PAGA claims on the grounds they were encompassed by a prior settlement in a PAGA action, and barred by res judicata . For res judicata to apply, the Court of Appeal asked two questions. First, had the prior plaintiff plead or could she have plead the same claims that LaCour now sought to pursue. Second, when the prior case was settled, was the plaintiff there acting in privity with LaCour. The Court of Appeal answered “no” to both questions. As to the first question, the prior case was a bag check case, and the prior plaintiff had only been deputized by the LWDA to pursue claims related to that issue. Thus, the prior plaintiff could not have plead the expense reimbursement claims that LaCour was pursuing. As to privity, the Court of Appeal held it would not be fair to bind LaCour to the result obtained in the prior case in which he had not participated. Any employer facing multiple PAGA actions likewise should be aware of the ruling in Accurso, et al. v. In- N-Out Burgers , 2023 WL 5543525 (Cal. App. 2023). The employer there was facing five PAGA actions. When the fifth filed case - the Accurso case - was headed to mediation, two plaintiffs from one of the earlier filed PAGA actions tried to coordinate global settlement discussions across all of the cases. Accurso refused and reached a settlement that excluded the other PAGA plaintiffs. Upon learning of the impending settlement, some of the other plaintiffs moved to intervene in Accurso’s action. They also asked that the trial court stay Accurso based on the doctrine of exclusive concurrent jurisdiction. The trial court denied the motions, but on appeal, the Court of Appeal reversed. Although it agreed the trial court properly denied mandatory intervention, the Court of Appeal found error in the denial of permissive intervention. As to mandatory intervention, the intervening plaintiffs had demonstrated they had a significantly protectable interest in Accurso because they, as deputized proxies of the LWDA had a public enforcement charge, and any settlement of a PAGA claim within the scope of their proxy authorization would impair that authority. However, they failed to establish that Accurso was not adequately protecting their interests, i.e ., that he was seeking to settle claims outside the scope of his LWDA notice. As to permissive intervention, the Court

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