Friday, October 16, 2015
Non-Party Gains Reversal of Stipulated Judgment in Labor Case
By a MetNews Staff Writer
The Court of Appeal for this district yesterday reversed a stipulated judgment, approved by the trial court, in response to an appeal by a non-party.
Justice John Segal of Div. Seven wrote the opinion, which was not certified for publication. It reverses a judgment by Los Angeles Superior Court Judge Elihu M. Berle.
The appellant, Eric P. Clarke, had been a bus driver for First Transit, Inc. When a class action was brought against the company for wage and hour violations, Clarke opted out.
In June of 2013, Berle preliminarily approved a settlement agreement. Under it, the complaint would be amended to add a claim for statutory penalties under Private Attorneys General Act (“PAGA”).
First Transit was to pay $2 million to settle claims of former and present employees, and $10,000 was to go to the California Labor and Workforce Development Agency to settle the PAGA claims.
Shortly before the scheduled Oct. 8, 2013 hearing on final approval, Clarke moved to intervene. Berle denied the motion as untimely, and approved the stipulated judgment.
On Jan. 21, 2014, Clarke filed a notice for appeal from the “Order Granting Final Approval of Class Action Settlement and Judgment Thereon,” citing Code of Civil Procedure §904.1.
In yesterday’s opinion, the court affirmed the denial of Clarke’s motion to intervene. Segal wrote:
“Because Clarke unreasonably delayed in seeking intervention, the trial court properly denied his application.”
As to Clarke’s standing to appeal the judgment, Segal reasoned:
“A nonparty may have standing to appeal…where ‘a judgment or order has a res judicata effect on the nonparty.’…Clarke has standing to appeal the judgment because under Arias v. Superior Court (2009) 46 Cal.4th 969…the settlement agreement will preclude him from pursuing his PAGA claims.”
There must be a reversal. Segal said, because the settlement does not allocate 25 percent of the civil penalties to the past and present employees, as required by Labor Code §2699(i), and because Berle didn’t consider whether $10,000 is a sufficient amount to be allocated to the PAGA claims, as called for in §2699(l).
In remanding the case to the trial court for “a new hearing for final approval of the settlement agreement in compliance with the requirements of section 2699, subdivisions (i) and (l),” Segal specified that Clarke must be allowed to participate.
The case is Alonzo v. First Transit, B253699.
Mark Yablonovich, Patrick J. Clifford, and Joseph Hoff of the Law Offices of Mark Yablonovich were attorneys for Clarke. Hunter Pyle and Mana Barari of Sundeen Salinas & Pyle represented the class and Theodore R. Scott and David J. Dow of Littler Mendelson acted for First Transit.
“We are gratified that the court of appeal denied Mr. Clarke’s attorneys’ attempt to intervene in our case. We are confident that our trial judge will reach the same conclusion on remand—namely that the PAGA allotment in this case was fair and just.”
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