Field Notes: Be Careful Out There
I don’t usually do case updates. But for my PAGA litigators, read this one.
Taduran v. Glidewell, James R. Dental Ceramics, Inc.
https://www4.courts.ca.gov/opinions/documents/G064718.PDF
Based on the opinion, this is a PAGA case that went to trial on (1) overtime wage violations, (2) rest period violations, (3) separation earnings violations, (4) wage statements violations, and (5) recordkeeping violations. Liability was lightly contested. Applicable penalties were hotly contested. About $85,000 in unpaid wages underlying the Labor Code violations.
· Maximum Damages As Calculated by Plaintiff: $55,985,350.
· Total penalties after reduction proposed by Defendant: $334,545.94 (per pay period) or $359,214.06 (per aggrieved employee).
· Total awarded by Court: $516,965 (mixing per pay period and per employee methods).
· Award of less than 1% of total maximum PAGA damages upheld.
Lodestar Attorney Fee
· Lodestar of $1,047,772.50 plus $98,138.21 in costs.
· Plaintiff requests multiplier of 1.5 for $1,571,658.75.
· Defendant requests multiplier of 0.25 for $261,943.13.
· Trial Court applies a 0.7 multiplier and awards $733,440 in fees and $98,138.21 in costs.
· 0.7 multiplier upheld on appeal.
The California Court of Appeal, Fourth District, held that trial courts may reduce PAGA penalties “using any reasonable method to reduce that amount, including applying a reduction on a percentage, per pay period[,] or per employee basis.” (yes, I inserted the Oxford comma into the Court’s opinion).
Re the attorney fee award, the Court left open the question regarding the appropriate standard for evaluating an across-the-board reduction and instead held the trial court provided specific explanations for the 0.7 multiplier. The Court confined its review to the trial court’s reasoning, although in a footnote, the Court noted that it would not require the Trial Court to explain why it chose the 0.7 multiplier instead of 0.75.
Two holdings of note:
· Current hourly rates do not necessarily reflect the market value for prior work.
· In a representative action, the percentage of recovery can be used to support a negative multiplier.
In all, for this “win,” Defendant is on the hook for $1.34M ($516k in penalties, $733k in Plaintiff’s fees, and $98k in costs). If we conservatively assume Defendant spent at least $750k defending the case, Defendant’s “win” cost $2.1 million.
It’s a data point for what happens when a defendant essentially admits liability early, fixes violations during litigation, and tries the case almost solely on the penalty. It remains rare that PAGA cases go this far. For that reason alone, it's worth a read.
What I’m Listening To:
· Shinichi Atobe – Silent Way
· DJ-Kicks – Avalon Emerson
Apparently, the summer calls for electronic music.
Field Notes x Morello Mediation
None of this is legal advice. YMMV.