Vargas v. Central Freight Lines, Inc. et al, No. 3:2016cv00507 - Document 53 (S.D. Cal. 2017)
Court Description: ORDER Granting 50 Third Revised Joint Motion to Dismiss Claims. Signed by Magistrate Judge Jill L. Burkhardt on 12/5/2017. (dsn)
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Vargas v. Central Freight Lines, Inc. et al Doc. 53 1 2 3 4 5 UNITED STATES DISTRICT COURT 6 SOUTHERN DISTRICT OF CALIFORNIA 7 8 David Vargas, Case No.: 16-cv-00507-JLB Plaintiff, 9 10 v. 11 ORDER GRANTING THIRD REVISED JOINT MOTION TO DISMISS CLAIMS UNDER THE PRIVATE ATTORNEYS GENERAL ACT OF 2004 (“PAGA”) Central Freight Lines, Inc., Defendant. 12 13 [ECF No. 50] 14 15 16 The parties’ Third Revised Joint Motion to Dismiss Claims Under the Private 17 Attorneys General Act of 2004 (“PAGA”) (ECF No. 50) and the Declaration of Todd 18 Militzer Re: Third Revised Joint Motion to Dismiss Claims Under PAGA (ECF No. 52) 19 are presently before the Court. Based on the record, the Court GRANTS the parties’ Third 20 Revised Joint Motion to Dismiss Claims Under PAGA (ECF No. 50) as the parties have 21 made a sufficient showing that the proposed “PAGA settlement is fair and adequate in view 22 of the purposes and policies of the statute.” O’Connor v. Uber Techs., Inc., 201 F. Supp. 23 3d 1110, 1135 (N.D. Cal. 2016). 24 FOLLOWS: 25 1. Accordingly, IT IS HEREBY ORDERED AS With the exception of the duration of the Court’s retained jurisdiction, the 26 Court approves and incorporates by reference the terms and conditions of the Settlement 27 Agreement attached to the Third Revised Joint Motion (ECF No. 50-1, Ex. 1) and directs 28 the implementation of all remaining terms, conditions, and provisions of the Settlement 1 16-cv-00507-JLB Dockets.Justia.com 1 Agreement. The Settlement Agreement is attached hereto as Exhibit 1. The Court’s 2 retained jurisdiction outlined in Section H of the Settlement Agreement shall expire on 3 July 20, 2018. 4 2. 5 PREJUDICE; 6 3. 7 8 Plaintiff’s Sixth Cause of Action for PAGA penalties is DISMISSED WITH The Clerk of Court shall enter judgment on the terms set forth above and close this case. IT IS SO ORDERED. 9 10 Dated: December 5, 2017 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 16-cv-00507-JLB Exhibit 1 1 2 3 4 5 6 7 8 9 10 11 12 Christopher A. Olsen CA Bar No. 236928 caolsen@caolsenlawoffices.com OLSEN LAW OFFICES, APC 1010 Second Ave., Ste. 1835 San Diego, CA 92101 Telephone: 858.550.9352 Facsimile: 858.923.2747 caolsen@caolsenlawoffices.com Attorneys for Plaintiff David Vargas Spencer C. Skeen CA Bar No. 182216 spencer.skeen@ogletreedeakins.com Tim L. Johnson CA Bar No. 265794 tim.johnson@ogletreedeakins.com OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 4370 La Jolla Village Drive, Suite 990 San Diego, CA 92122 Telephone: 858.652.3100 Facsimile: 858.652.3101 Attorneys for Defendant Central Freight Lines, Inc. 13 UNITED STATES DISTRICT COURT 14 SOUTHERN DISTRICT OF CALIFORNIA 15 16 17 DAVID VARGAS, on behalf of himself and all others similarly situated, 18 19 20 21 22 Plaintiff, Case No. 3:16-cv-00507-L-JLB SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS v. CENTRAL FREIGHT LINES, INC., and DOES 1 through 100, inclusive, Defendants. 23 24 25 26 27 28 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff David Vargas, individually and in his capacity as a representative of the State of California on behalf of other aggrieved employees, and Defendant Central Freight Lines, Inc. hereby enter into this Settlement Agreement and Release of Private Attorneys General Act of 2004 Claims (“Settlement”) as follows: I. DEFINITIONS As used in this Settlement, the following terms shall have the following meanings: A. “Action” means the civil action entitled “David Vargas v. Central Freight Lines, Inc., et al., filed in the United States District Court, Southern District of California, Case No. 16-cv-00507-L-JLB. B. “Defendant” means Central Freight Lines, Inc. C. “Defense Counsel” means Spencer C. Skeen and Tim L. Johnson of Ogletree Deakins, Nash, Smoak, & Stewart P.C. D. “Effective Date” of the Settlement means the date upon which both of the following have occurred: (i) approval of the Settlement is granted by the United States District Court, or other court assuming jurisdiction of this matter, and (ii) the Court’s Judgment approving the Settlement becomes Final. Final shall mean the latest of: (i) if there is an appeal of the Court’s Judgment, the date the Judgment is affirmed on appeal, the date of dismissal of such appeal, or the expiration of the time to file a petition for writ of certiorari to the Supreme Court; or (ii) if a petition for writ of certiorari is filed, the date of denial of the petition for writ of certiorari, or the date the Judgment is affirmed pursuant to such petition; or (iii) if no appeal is filed, the expiration date of the time for filing or noticing any appeal of the Judgment. E. “LWDA” means the California Labor & Workforce Development Agency. F. “PAGA” means the Labor Code Private Attorneys General Act of 2004, California Labor Code §§ 2698 et seq. G. “PAGA Period” means February 26, 2015 through the date of entry of an order by the Court in this Action approving this Agreement. 1 36459439v.2 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 H. Central Freight Lines, Inc. as Pick Up and Delivery Drivers during the PAGA Period. I. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 “Plaintiff” means David Vargas individually and in his capacity as a representative of the State of California on behalf of other aggrieved employees. J. “Plaintiff’s Counsel” means Christopher A. Olsen of Olsen Law Offices, K. “Parties” means Plaintiff and Defendant. L. “Released Claims” means any and all claims for the recovery for civil APC. 8 9 “PAGA Settlement Members” means all persons employed in California by penalties under PAGA, whether known or unknown, to recover wages, damages, penalties, attorney fees, litigation costs, restitution, or equitable relief, which Plaintiff and/or the PAGA Settlement Members had, or may claim to have, against Released Parties, arising out of the violations alleged in Plaintiff's Sixth Cause of Action. "Released Claims" does not include the underlying substantive claims for failure to provide meal periods, failure to provide rest breaks, failure to pay wages of terminated or resigned employees, knowing and intentional failure to comply with itemized wage statement provisions, or violations of the unfair competition law. M. “Released Parties” means Defendant and all of its past and present owners, officers, directors, shareholders, employees, agents, assigns, attorneys, insurers, parent companies, subsidiaries, and affiliates, and their respective predecessors, successors, and assigns. II. RECITALS A. On February 23, 2016, Plaintiff’s Counsel sent a letter to the LWDA on behalf of Plaintiff under California Labor Code § 2699.3. Plaintiff sought to represent himself and all PAGA Settlement Members. More than 33 days passed after the letter was sent to the LWDA, and the LWDA did not indicate that it intended to investigate the alleged violations referenced in the letter. 28 2 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. On February 26, 2015, Plaintiff filed a complaint in the United States District Court, Southern District of California. On April 5, 2016, Plaintiff filed a First Amended Complaint, which contained a cause of action under PAGA. C. The Parties agreed to engage in a mediation, which took place on January 12, 2017, before the Hon. Herbert Hoffman. The Parties engaged in formal and informal discovery prior to the mediation. The Parties also engaged in extensive settlement negotiations at the mediation, which involved substantive offers and counteroffers between the Parties. The Parties also participated in numerous telephonic conferences and exchanged information about the financial condition of Defendant. Ultimately, negotiations resulted in this Settlement. D. Counsel for all Parties have thoroughly investigated the facts relating to the claims alleged in the operative complaint and made a thorough study of the legal principles applicable to the claims asserted against Defendant. Plaintiff’s Counsel has concluded that the Settlement is fair, reasonable, and adequate in light of all known facts and circumstances, including the defenses asserted by Defendant, potential adverse findings regarding liability, and numerous potential appellate issues. Plaintiff and Plaintiff’s Counsel also acknowledge they may have difficulty recovering a large PAGA penalty from Defendant given its financial situation. E. Defendant denies, and continues to deny, each and every claim and contention alleged in the Action, and has always maintained that it never engaged in any unlawful acts regarding any of the matters alleged in the Action. NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions set forth, the Parties agree as follows: III. NON-ADMISSION OF LIABILITY A. Based on the factual and legal issues involved, the expense and time necessary to prosecute the Action through trial, the risks, uncertainty and costs of further prosecution, the financial status of Defendant, the financial status of Defendant, the 3 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 difficulty of proof necessary to establish a class for purposes of liability, and the relative benefits to the PAGA Settlement Members of an expeditious resolution to the Action, the Parties have concluded that the terms set forth in this Settlement are fair, reasonable, adequate and in the best interests of the PAGA Settlement Members. B. By entering into this Settlement, Defendant denies any liability for any of the claims in the Action, as well as any other potential or unknown claims based on wage and hour violations under California or federal law. Neither this Settlement, nor any document referred to or contemplated herein, nor any action taken to carry out this Settlement, may be construed as, or may be used as, an admission, concession, or indication by or against Defendant of any unlawful conduct, fault, wrongdoing or liability whatsoever. Defendant specifically denies that it has engaged in any unlawful or wrongful conduct against Plaintiff or the PAGA Settlement Members. IV. TERMS OF THE PAGA SETTLEMENT A. The Total Settlement Payment Defendant shall pay a settlement payment in a total amount not to exceed $7,500 (“Total Settlement Payment”). The Total Settlement Payment is the maximum amount Defendant can be required to pay under this Settlement. B. Settlement Administration Fees and Costs Settlement administration shall be done by Defendant. Accordingly, the Parties did not allocate any funds for settlement administration. C. PAGA Fund The Total Settlement Payment shall be allocated toward payment to the LWDA and PAGA Settlement Members (“PAGA Fund”). 75% of the PAGA Fund will be sent to the LWDA and 25% of the PAGA Fund will be allocated among the PAGA Settlement Members based on his or her proportionate share of the weeks worked during the PAGA Period. 28 4 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 V. COMPUTATION/DISTRIBUTION OF TOTAL SETTLEMENT FUND 2 A. 3 Within 30 days after the Effective Date, Defendant shall distribute the Settlement 4 5 6 7 Funds to the LWDA and the PAGA Settlement Members. B. 10 Formula for Calculating Share of PAGA Fund The portion of the PAGA Fund that is paid to each PAGA Settlement Member shall be determined based on the following formula: 8 9 Payment of Total Settlement Payment 1. The payment to PAGA Settlement Members will be based on the number of weeks worked by each PAGA Settlement Member during the PAGA Period. Partial weeks will be counted as full work weeks. 11 2. The amount to be paid per week worked by a PAGA Settlement 12 Member will be calculated by dividing the value of the portion of the PAGA Fund that 13 will be paid to PAGA Settlement Members by the total number of weeks worked by all 14 PAGA Settlement Members during the PAGA Period. 15 3. Defendant’s records shall be determinative for purposes of 16 calculating the number of weeks worked and any payments to PAGA Settlement 17 Members. 18 19 20 21 22 23 24 25 26 27 28 C. Distribution of PAGA Fund 1. Defendant shall pay to the LWDA an amount equivalent to 75% of the PAGA Fund, or as otherwise directed by the Court. 2. Defendant shall distribute to PAGA Settlement Members their individual portion of the PAGA Fund (“Individual Payment”), or as otherwise directed by the Court. 3. Defendant will send the Individual Payment to the PAGA Settlement Members by postmarked First Class U.S. Mail. 4. Defendant shall maintain a list of the postmark date for the original mailing of the Individual Payment to the PAGA Settlement Members and a list of PAGA 5 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Settlement Members who did not receive the Individual Payment due to the inability to locate a valid address. 5. All settlement checks will remain valid and negotiable for 180 days from the date of their mailing by Defendant. After 180 days from the date of their mailing by Defendant, any uncashed checks will be void and escheat to the State of California Department of Industrial Relations, Unclaimed Wages Fund in the names of the PAGA Settlement Members. 6. No later than January 31, 2018, Defendant will prepare and issue IRS Form 1099 to PAGA Settlement Members who received a payment. VI. INJUNCTIVE RELIEF Defendant disputes injunctive relief may be obtained under PAGA. Defendant further denies it has engaged in any unlawful conduct under California law. Nevertheless, in consideration for the releases and other consideration set forth herein, Defendant agrees to the following injunctive relief within 30 days of the Effective Date: (1) distribute written meal and rest break policies that inform employees of their ability to take off-duty meal and rest breaks in compliance with California law; (2) provide training to all California hourly employees regarding their ability to take off-duty meal and rest breaks in compliance with California law; (3) implement a reporting procedure through which employees report when they have not been provided a duty-free meal or rest break; and (4) implement a policy to pay meal and rest break premiums whenever the foregoing does not fully accomplish the objective of ensuring off-duty meal and rest breaks in compliance with California law. VII. CLAIMS RELEASED BY PAGA SETTLEMENT MEMBERS A. Claims Released By the LWDA and the PAGA Settlement Members Upon the Effective Date, the LWDA and PAGA Settlement Members, including Plaintiff, fully release and forever discharge the Released Parties from any and all Released Claims during the PAGA Period. As a result of this release, the PAGA 6 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Settlement Members will be unable to bring a claim under, or recover in any other claim brought under, the California Private Attorneys General Act, California Labor Code §§ 2698 et seq., for any violations of the Released Claims that took place during the PAGA Period. B. Tax Treatment and Tax Indemnification PAGA Settlement Members will assume any tax obligations or consequences which may arise from this Settlement. PAGA Settlement Members release any and all claims that they have or may have against Defendant or Released Parties for any claims, demands, deficiencies, levies, assessments, executions, judgments, penalties, taxes, indemnification, and any other recoveries related to any payments made under this Settlement or any compensation provided at any time by Defendant or any of the Released Parties. The PAGA Settlement Members shall not contact Defendant, any of the Released Parties, or Defense Counsel. VIII. MISCELLANEOUS PROVISIONS A. Voiding the Settlement A failure of the Court to approve any material condition of this Settlement shall render the entire Settlement voidable and unenforceable as to Plaintiff and Defendant, at the option of Plaintiff or Defendant. B. Mutual Full Cooperation Plaintiff, Defendant, Plaintiff’s Counsel, and Defense Counsel agree to fully cooperate with each other to accomplish the terms of this Settlement, including, but not limited to, execution of such documents and to take such other action as may reasonably be necessary to implement the terms herein. Defendant will cooperate with Plaintiff to provide support to substantiate its financial condition. The Parties agree to use their best efforts and any other efforts that may become necessary by Order of the Court, or otherwise, to effectuate this Settlement. 28 7 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 C. 2 The signatories hereto represent that they are fully authorized to enter into this 3 4 Parties’ Authority Settlement. D. 5 Binding Nature of the Settlement 1. This Settlement shall be binding upon, and inure to the benefit of, the 6 successors or assigns of the Released Parties. Plaintiff represents, covenants, and 7 warrants that he has not directly or indirectly, assigned, transferred, encumbered, any 8 claim, demand, action, cause of action or rights released in the Released Claims in this 9 Settlement. This Settlement shall be binding upon Plaintiff and the PAGA Settlement 10 11 Members. 2. This Settlement may be amended or modified only by a written 12 instrument signed by Plaintiff’s Counsel and Plaintiff, as well as Defense Counsel and 13 Defendant. No rights under this Settlement may be waived except in writing. 14 3. This Settlement and any attached exhibits constitute the entire 15 agreement between Plaintiff and Defendant relating to the terms contained herein. All 16 prior or contemporaneous agreements, understandings and statements, whether oral or 17 written, whether express or implied, and whether by a party or its counsel, concerning 18 this Settlement are merged herein. No oral or written representations, warranties or 19 inducements have been made to any party concerning this Settlement or its exhibits 20 other than the representations, warranties and covenants contained and memorialized in 21 such documents. 22 4. Paragraph titles or captions contained herein are inserted as a matter 23 of convenience and for reference, and in no way define, limit, extend, or describe the 24 scope of this Settlement or any of its provisions. Each term of this Settlement is intended 25 to be contractual and not merely a recital. 26 27 28 8 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 E. Joint Drafting of Settlement Documents 1. 2 Plaintiff’s Counsel and Defense Counsel have arrived at this 3 Settlement as a result of a series of arm’s-length negotiations, taking into account all 4 relevant factors, present and potential. 2. 5 This Settlement has been drafted jointly by Plaintiff’s Counsel and 6 Defense Counsel and, therefore, in any construction or interpretation of this Settlement, 7 the same shall not be construed against any of the Parties. 3. 8 Plaintiff and Plaintiff’s Counsel agree that none of the documents 9 provided to them by Defendant shall be used for any purpose other than the settlement of 10 this Action. Specifically, none of the documents provided shall be used to pursue any 11 subsequent claims or litigation against Defendant or the Released Parties. 12 F. 13 This agreement may be executed in one or more counterparts and by facsimile. All 14 executed copies of this Settlement and photocopies thereof shall have the same force and 15 effect and shall be as legally binding and enforceable as the original. 16 17 G. Execution of the Settlement No Press Release or Publicity Regarding the Terms of Settlement Plaintiff and Plaintiff’s Counsel, as well as Defendant and Defense Counsel agree 18 that they will not issue any media or press release, initiate any contact with the media or 19 the press, respond to any media or press inquiry or have any communications with the 20 media or the press about the fact, amount or terms of this Settlement. Plaintiff and 21 Plaintiff’s Counsel shall not publicize or refer to the fact or amount of the Settlement, on 22 their websites, social media, any other marketing materials, or legal publication. Plaintiff 23 and Plaintiff’s Counsel will not state on their websites, social media, any other 24 marketing materials, or legal publications, that Defendant engaged in any act contrary to 25 California law, or denied payment owed to individuals classified as independent 26 contractors or employees, or otherwise disparage Defendant, or otherwise identify 27 Defendant. Defendant shall be allowed to report the Settlement or results of this lawsuit 28 9 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 5 6 7 8 9 if required to do so by public disclosure regulatory requirements or with respect to any financial or other disclosures which in their judgment are necessary. H. Continuing Jurisdiction of the Court The Parties agree that the Court shall retain jurisdiction over the Parties, and over this Settlement, in order to: (i) monitor and enforce compliance of Settlement, and/or (ii) resolve any disputes over this Settlement or the administration of the benefits of this Settlement. [Signatures on next page] 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS 1 2 3 4 DEFENDANT AND DEFENDANT’S COUNSEL DATED: November 2, 2017 By: DATED: November 2, 2017 Ogletree, Deakins, Nash, Smoak & Stewart, P.C. 5 6 7 8 9 10 11 Todd Militzer V.P. and Chief Financial Officer Authorized to sign on behalf of Defendant Central Freight Lines, Inc. By: /s/ Spencer C. Skeen Spencer C. Skeen Tim L. Johnson Attorneys for Defendant Central Freight Lines, Inc. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 SETTLEMENT AGREEMENT AND RELEASE OF PAGA CLAIMS
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