Fraser et al v. Nationwide Mutual Insurance Company

Filing 55

ORDER Re 54 Joint Request for Approval of PAGA Settlement. Signed by Judge Edward M. Chen on 7/18/2018. (emcsec, COURT STAFF) (Filed on 7/18/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JULIAN FRASER, et al.,
Plaintiffs,

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Case No. 17-cv-03702-EMC
ORDER RE JOINT REQUEST FOR
APPROVAL OF PAGA SETTLEMENT

v.
NATIONWIDE MUTUAL INSURANCE
COMPANY, et al.,

Docket No. 54

United States District Court
Northern District of California

Defendants.
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Five individual plaintiffs and Defendants Nationwide Mutual Insurance Company and

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Scottsdale Insurance Company have reached settlement on plaintiffs’ individual wage-and-hour

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claims. The parties seek court approval of the $16,000 portion of the settlement allocated as civil

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penalties to settle Plaintiffs’ individual claims under California’s Private Attorneys General Act

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(“PAGA”). Of that amount, $12,000 will be paid to the California Labor and Workforce

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Development Agency (“LWDA”).

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The Court needs additional information to approve the proposed PAGA settlement. Court

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approval is required to protect the interests of the aggrieved workers on whose behalf the suit has

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been brought and also the interests of the State of California and the public at large in the recovery

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of civil penalties. See O’Connor v. Uber Techs., Inc., 201 F.Supp.3d 1110, 1134 (N.D. Cal.

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2016). Because the parties do not intend to preclude other employees from asserting a PAGA

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claim by their settlement, the Court need only confirm that the amount allocated to PAGA

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proportionally is reasonable in light of the State’s interest in recovering civil penalties. The parties

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represent that “the amount allocated to PAGA represents approximately the same proportion of

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Plaintiffs’ computed total PAGA penalties as the proportion of total computed damages allocated

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to Plaintiffs directly in settlement of their underlying claims, when adjusted for the extra weight

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Plaintiffs placed on the overtime claims, which they viewed to carry less litigation risk than the

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remaining claims.” Joint Stip. ¶ 5. This representation is not supported by specific details

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sufficient to permit the Court to understand how the PAGA allocation was calculated, or what

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proportion of the total settlement it represents. The parties shall provide additional details

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sufficient to allow the Court to conduct its assessment. The parties should also state whether the

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LWDA has responded to notification of the proposed settlement.

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In addition, because PAGA judgments may have preclusive effect against the state labor

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agency or other aggrieved employees, see Arias v. Sup. Ct., 46 Cal.4th 969, 986 (2009), the parties

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shall revise the stipulation to clearly state that Defendants affirmatively agree to waive any
collateral estoppel or res judicata defense to PAGA actions brought by the State of California or

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United States District Court
Northern District of California

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aggrieved employees (other than Plaintiffs) for the same claims. See Kern Oil & Refining Co. v.

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Tenneco Oil Co., 840 F.2d 730, 735 (9th Cir. 1988) (noting that res judicata is a waivable

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affirmative defense).

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The parties shall submit the supplemental information and revised stipulation within one
(1) week of this order.

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IT IS SO ORDERED.

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Dated: July 18, 2018

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______________________________________
EDWARD M. CHEN
United States District Judge

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