1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ROBERT MISKA, Case No. 1:20-cv-01183-AWI-BAM 12 Plaintiff, FINDINGS AND RECOMMENDATIONS

REGARDING JOINT MOTION FOR

13 v. APPROVAL OF SETTLEMENT 14 ENGINEERING AUTOMATION & (Doc. 36) DESIGN, INC., et al., 15 Defendants. 16 17 Currently pending before the Court is the Joint Motion and Motion for Approval of 18 Settlement filed by Plaintiff Robert Miska and Defendants Smith Seckman Reid, Inc. (“SSR”) 19 and Conagra Brands, Inc. (“Conagra”) filed a. (Doc. 36.) The motion was referred to the 20 undersigned for findings and recommendations pursuant to 28 U.S.C. § 636 and Federal Rule of 21 Civil Procedure 72. (Doc. 37.) For the reasons set forth below, the Court will recommend the 22 joint motion for approval of settlement be granted. 23 Background 24 On July 14, 2020, Plaintiff initiated this action in Stanislaus Superior Court against 25 Defendants Engineering Automation & Design, Inc. dba EAD Management Services, Inc. 26 (“EAD”), SSR and Conagra. Plaintiff alleged violations of the California Labor Code and 27 Business & Professions Code, claiming that Defendants failed to pay overtime wages, failed to 28 provide mandatory meal and rest breaks, and failed to pay all earned wages at the time of 1 discharge. (See Docs. 1, 1-2.) 2 On August 17, 2020, Plaintiff filed a first amended complaint, adding an additional cause 3 of action for violations of the California Private Attorneys General Act (“PAGA”) against only 4 SSR and Conagra. Plaintiff alleged that SSR and Conagra engaged in a pattern of wage and hour 5 violations under the California Labor Code and the applicable IWC Wage Order. (See Docs. 1, 1- 6 5, 1-6, First Amended Complaint (“FAC”).) In addition to his individual claims, Plaintiff 7 asserted that he was bringing the action on behalf of all other current and former non-exempt 8 employees of SSR and Conagra in California who suffered at least one of the Labor Code 9 violations described in the complaint during the applicable time period. (FAC at ¶ 3.) 10 By this action, Plaintiff sought recovery of wages and compensation due and owing to 11 Plaintiff under California law as well as “penalties owed to Plaintiff and . . . the Aggrieved 12 Employees pursuant to PAGA.” (FAC at ¶ 51.) Plaintiff specified in his PAGA claim that he 13 sought to “recover civil penalties, but only those civil penalties that are required to be shared with 14 the LWDA and no individual relief or underpaid wages, on behalf of himself and other Aggrieved 15 Employees for SSR and CONAGRA’S violations of Labor Code §§ 201, 203, 204, 208, 210, 223, 16 226, 226.7, 227.3, 510, 512, 551, 552, 1174, 1194, and 1198.” (FAC at ¶ 129.) However, in 17 addition to civil penalties, Plaintiff also appeared to seek the following on behalf of the 18 Aggrieved Employees: (1) “restitution in the amount of ten minutes of pay time for each rest 19 period in addition to 30 minutes of pay time for each meal period that Defendants did not 20 authorize or permit,” (FAC at ¶ 71); (2) “actual damages pursuant to California Labor Code § 21 226, subdivisions (e) and (g),” (FAC at ¶ 99); and (3) “unpaid wages and civil penalties pursuant 22 to California Labor Code § 558,” (FAC at ¶ 105). 23 On August 5, 2021, the parties filed a Joint Stipulation and Request for Approval of 24 Settlement to allow for the dismissal of the operative first amended complaint with prejudice, 25 including Plaintiff’s PAGA claim against SSR and Conagra. (Doc. 34.) The parties explained 26 that on February 12, 2021, defendants filed a Notice of Related Cases notifying this Court that the 27 consolidated case Moises Negrete, et al., on behalf of themselves and other similarly situated v. 28 Conagra Brands, Inc. (f/k/a ConAgra Foods, Inc.), et al., Case No. 2:16-cv-631-FMO-AJW 1 (“Consolidated Negrete Action”) was currently pending in the United States District Court for the 2 Central District of California. The Consolidated Negrete Action reportedly covers employees that 3 worked at the Conagra facility in Oakdale, where Plaintiff worked. The court in the Consolidated 4 Negrete Action certified a class in Oakdale that included several Labor Code claims alleged in the 5 action pending before this Court. The parties in the Consolidated Negrete Action reached a 6 settlement of all claims. Based, in part, on SSR and Conagra’s position that the settlement in the 7 Consolidated Negrete Action effectively resolved the PAGA claim in this action, Plaintiff settled 8 his individual claims with Conagra and SSR and agreed to dismissal of all claims against Conagra 9 and SSR, including the PAGA claim. Plaintiff indicated that he has not been compensated, and 10 does not stand to be compensated, in any manner with respect to his representative allegations 11 against SSR and CONAGRA. Due to the inclusion of the PAGA claim in the FAC, Plaintiff, 12 SSR and Conagra sought approval of their settlement, including dismissal of Plaintiff’s complaint 13 in its entirety with prejudice. (Doc. 34.) 14 The district court denied the request and directed the parties to file a formal motion for 15 approval of the settlement, including “briefing on the requirements of dismissing a PAGA claim 16 with prejudice and the relation of this PAGA claim to related cases.” (Doc. 35.) 17 On November 18, 2021, the parties filed the instant joint motion for approval of 18 settlement. (Docs. 36, 36-3.) In the motion, the parties contend that dismissal of Plaintiff’s 19 PAGA claim is appropriate, and that the settlement is fair, due to the effect of the settlement 20 agreement reached in the Consolidated Negrete Action. (Doc. 36-1 at 8.) The parties explain that 21 Defendants asserted during settlement negotiations in this case that Plaintiff’s PAGA claim had 22 been resolved per the terms of the settlement reached in the Consolidated Negrete Action, and 23 that Plaintiff and the Aggrieved Employees in this action purportedly stand to be compensated by 24 way of a settlement payment made in connection with the Consolidated Negrete Action. As a 25 result, Defendants ascribed no value to Plaintiff’s PAGA claim for purposes of settlement in this 26 case. (Id.) The parties then settled Plaintiff’s individual claims, with the settlement payment 27 attributable only to Plaintiff’s individual claims in exchange for a dismissal with prejudice of the 28 1 entire action against SSR and Conagra.1 2 According to the parties, the Central District of California granted preliminary approval of 3 the settlement agreement in the Consolidated Negrete Action and set a final approval (fairness) 4 hearing for December 2, 2021. (Doc. 36-1 at 7-8.) Although referenced in their motion and 5 request for judicial notice, the parties failed to provide the Court with the preliminary approval 6 order in the Consolidated Negrete Action (“Order Re: Motion for Preliminary Approval of Class 7 and representative Action Settlement”). (Doc 36-3, RJN 4.) The parties also failed to provide the 8 Court with information concerning the status of settlement in the Consolidated Negrete Action, 9 including whether final approval had been granted. 10 Additionally, in the joint motion for approval, the parties indicated that pursuant to the 11 settlement agreement in the Consolidated Negrete Action, $360,000 of the settlement amount was 12 to be allocated as penalties under PAGA, with seventy-five percent of the civil penalties paid to 13 the California Labor and Workforce Development Agency and the remaining twenty-five percent 14 paid to the aggrieved employees. (See Doc. 36-1 at 7; Cal. Lab. Code § 2699(i).) In exchange for 15 this payment, the Negrete plaintiffs agreed to release claims under PAGA for themselves and all 16 aggrieved employees. (Doc. 36-1 at 7.) Although the parties addressed the applicable civil 17 penalties under PAGA, they failed to address Plaintiff’s apparent efforts to seek restitution, actual 18 damages, or unpaid wages on behalf of the Aggrieved Employees in this action, (FAC at ¶¶ 71, 19 99, 105), including whether such requests were subsumed by the settlement in the Consolidated 20 Negrete Action. 21 Following a preliminary review of the joint motion, the Court ordered the parties to 22 provide supplemental briefing that included (1) the preliminary approval order in the 23 Consolidated Negrete Action, (2) information regarding the status of final approval in that action, 24 and (3) the final approval order, if any. The Court also directed the parties to file supplemental 25 briefing addressing the relief sought in this action on behalf of the Aggrieved Employees and the 26 relation of the Consolidated Negrete Action to that relief. (Doc. 38.) 27 1 Plaintiff reached a separate settlement with Defendant EAD, which did not involve a PAGA claim. 28 Defendant EAD was dismissed from this action by stipulation. (See Docs. 39, 40.) 1 On April 26, 2022, the parties filed supplemental briefing in this action. According to the 2 briefing, final approval of the settlement in the Consolidated Negrete Action was granted on 3 February 7, 2022. Judgment was entered specifying that $270,000 (75% of the $360,000 ascribed 4 to the PAGA claim) shall be paid to the LWDA. (Doc. 41 at 3.) It is the settling defendants’ 5 position in this action that the payment and corresponding release in the Consolidated Negrete 6 Action subsumes any PAGA penalty that could have been obtained in this action. (Id.) Further, 7 despite the apparent discrepancies in the pleadings identified by the Court, Plaintiff reported that 8 he only sought to recover civil penalties for the Aggrieved Employees in this action and the 9 inconsistencies were “unfortunate and inartful pleading errors.” (Id. at 4.) Plaintiff 10 acknowledged that only civil penalties are recoverable pursuant to his PAGA claim, and that 11 Plaintiff cannot and does not seek to recover any other type of relief on behalf of the Aggrieved 12 Employees. (Id.) 13 II. Discussion 14 A. Requests for Judicial Notice 15 Plaintiff filed a request for judicial notice pursuant to Federal Rule of Evidence 201 of the 16 following documents: (1) Consolidated Third Amended Class Action Complaint filed on October 17 30, 2017, document 113, in the Consolidated Negrete Action; (2) “Amended Stipulation of Class 18 Action Settlement,” filed on February 8, 2021, document 259-2, in the Consolidated Negrete 19 Action; (3) Class Action Complaint, filed on January 28, 2016, document 4-1, in the Consolidated 20 Negrete Action; and (4) Order Re: Motion for Preliminary Approval of Class and representative 21 Action Settlement, filed on June 21, 2021, document 263, in the Consolidated Negrete Action. 22 (Doc. 36-3.) 23 Additionally, in conjunction with the supplemental briefing, Plaintiff filed a request for 24 judicial notice, which seeks judicial notice of the following documents in the Consolidated 25 Negrete Action: (1) Order Re: Motion for Preliminary Approval of Class and Representative 26 Action Settlement filed on June 21, 2021; (2) Plaintiffs’ Notice of Motion and Motion for Final 27 Approval of Class Action Settlement filed on December 16, 2021; (3) Order Re: Final Approval 28 of Class Action Settlement filed on February 7, 2022; (4) Judgment filed on February 7, 2022; 1 and (5) Consolidated Third Amended Class Action Complaint filed on October 30, 2017. (Doc. 2 41-2.) 3 The Court may take judicial notice of the records of proceedings in other federal or state 4 courts. U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th 5 Cir. 1992). Accordingly, Plaintiff’s requests for judicial notice are GRANTED. 6 B. Motion for Settlement Approval 7 Under PAGA, “court[s] shall review and approve any settlement of any civil action filed 8 pursuant to [PAGA].” Cal. Labor Code § 2699(l)(2). While courts are not required to approve 9 settlement provisions resolving a plaintiff’s individual claims, they are required to approve 10 settlement provisions related to a plaintiff’s PAGA claims. See Kuang Xuan Liu v. Win Woo 11 Trading, LLC, No. 4:14-cv-02639-KAW, 2017 WL 4283947, at *1 (N.D. Cal. Sept. 27, 2017). In 12 the instant matter, however, the parties are not seeking approval of any settlement provisions 13 related to Plaintiff’s PAGA claims. Rather, the parties appear to agree that Plaintiff’s PAGA 14 claims are subsumed by the settlement and release in the Consolidated Negrete Action and, as a 15 result, the PAGA claims can and should be dismissed from this action with prejudice. 16 An employee suing under PAGA “does so as the proxy or agent of the state’s labor law 17 enforcement agencies.” Arias v. Superior Ct., 46 Cal. 4th 969, 986, (2009). The “employee 18 plaintiff represents the same legal right and interest as state labor law enforcement agencies— 19 namely, recovery of civil penalties that otherwise would have been assessed and collected by the 20 Labor Workforce Development Agency.” Id. (citation omitted). “Because collateral estoppel 21 applies not only against a party to the prior action in which the issue was determined, but also 22 against those for whom the party acted as an agent or proxy, a judgment in an employee’s action 23 under [PAGA] binds not only that employee but also the state labor law enforcement agencies.” 24 Id. (internal citations omitted). Further, “[b]ecause an aggrieved employee’s action under 25 [PAGA] functions as a substitute for an action brought by the government itself, a judgment in 26 that action binds all those, including nonparty aggrieved employees, who would be bound by a 27 judgment in an action brought by the government.” Id.; see Robinson v. S. Ctys. Oil Co., 53 28 Cal.App.5th 476, 483 (2020) (finding, under the doctrine of claim preclusion, that a settlement 1 and resulting judgment finally resolving the LWDA’s claims bars relitigation of a claim for civil 2 penalties based on the resolved Labor Code violations; employee could not opt of settlement 3 resolving LWDA’s claims and thereafter pursue civil penalties for the same violations again on 4 behalf of the LWDA). Therefore, the Court must assess whether the final judgment in the 5 Consolidated Negrete Action resolved the same Labor Code violations asserted here under 6 PAGA. Robinson, 53 CalApp.5th at 482 (“Claim preclusion arises if a second suit involves (1) 7 the same cause of action (2) between the same parties (3) after a final judgment on the merits in 8 the first suit.”). 9 In this case, Plaintiff is a former employee at Conagra’s Oakdale facility and purports to 10 bring his PAGA representative action on behalf of all other current and former non-exempt 11 employees of SSR and Conagra. The representative action is brought against SSR and Conagra 12 for “engaging in a pattern of wage and hour violations under the California Labor Code and the 13 applicable Industrial Welfare Commission (“IWC”) Wage Order. (FAC at ¶ 3.) Plaintiff asserts 14 that these violations include: “failure to pay all overtime wages; failure to pay all minimum and 15 regular wages for all hours worked; failure to authorize and permit off-duty meal periods of at 16 least 30 minutes before the commencement of the sixth hour of work; failure to authorize and 17 permit off-duty paid rest periods, failure to provide accurate itemized wage statements; failure to 18 maintain accurate records; failure to provide one day’s rest in seven; and failure to timely pay all 19 earned wages due upon separation of employment.” (FAC at ¶ 5.) Plaintiff’s allegations are 20 based on common, uniform policies and practices. (See, e.g., FAC at ¶¶ 27 (overtime 21 compensation), 29 (failing to permit 30-minute duty-free meal period), 30 (failing to permit 10- 22 minute, off-duty rest period).) 23 In the Consolidated Negrete Action, Plaintiffs worked at seven of Conagra’s food 24 processing facilities, including the Oakdale facility. (Doc. 41-2, Consolidated Third Amended 25 Class Action Complaint at ¶ 5-17.) Plaintiffs brought the action on behalf of themselves and all 26 other non-exempt employees who worked at Conagra’s facilities. (Id. at ¶¶ 1, 18.) The action 27 focused on Conagra’s illegal policies and practices applied to all non-exempt employees, 28 including failing to provide full and timely, uninterrupted meal periods before commencement of 1 the sixth hour of work, failing to authorize and permit uninterrupted, off-duty 10-minute rest 2 periods, failure to pay all minimum wages for all hours worked, failure to pay all overtime wages, 3 failure to timely pay all earned wages due upon separation of employment failure to provide 4 accurate itemized wage statements; failure to maintain accurate records (Id. at ¶¶ 30.b, 32, 44, 47, 5 55, 65, 77, 82, 86.) 6 Pursuant to the terms of that settlement agreement, the Negrete plaintiffs agreed to release 7 their claims under PAGA based on the factual allegations in the operative complaint for that time 8 period on behalf of themselves and all “Aggrieved Employees,” including those who worked at 9 Conagra’s Oakdale facility from August 16, 2014 to January 15, 2021. (Doc. 36-3, Ex. 2, 10 Amended Stipulation of Class Action Settlement at ¶¶ 2, 33(e), 74(b).) In particular, upon the 11 effective date, the Aggrieved Employees were “deemed to have released the Released Parties of 12 any and all claims and/or causes of action under PAGA, which are based upon the factual 13 allegations set forth in the operative complaint and arising at any time during the respective 14 PAGA Period.” (Id. at ¶ 74(b).) The operative complaint included claims for (1) failure to 15 provide meal periods; (2) failure to authorize and permit rest periods; (3) failure to pay minimum 16 wages; (4) failure to pay overtime wages; (5) failure to pay all wages due to discharged and 17 quitting employees; (6) failure to furnish accurate itemized wage statements; and (7) failure to 18 maintain required records. (See id. at ¶ 74(a).) 19 On June 21, 2021, the Central District of California issued an order granting preliminary 20 approval of the class action settlement in the Consolidated Negrete Action. (Doc. 41-2, Ex. 1, 21 Order Re: Motion for Preliminary Approval of Class and Representative Action Settlement.”) 22 The court found the settlement promoted enforcement of wage and hour laws in that it provided 23 relief for the plaintiffs’ PAGA claim. (Id., Order at p. 13.) Additionally, the court noted that 24 although the LWDA received notice of the settlement, it did not object or respond, which the 25 court construed as consent to the proposed settlement. (Id., Order at p. 13, n. 9.) 26 On February 7, 2022, the Central District of California issued an order granting final 27 approval of the class action settlement in the Consolidated Negrete Action. (Doc. 41-2 at Ex. 3.) 28 Judgment was entered the same date. (Id. at Ex. 4.) 1 Having considered the request for settlement approval, the Court finds that the PAGA 2 claims in both actions are based on Defendants’ common, uniform policies and practices resulting 3 in Labor Code violations for (1) failure to provide meal periods; (2) failure to authorize and 4 permit rest periods; (3) failure to pay minimum wages; (4) failure to pay overtime wages; (5) 5 failure to pay all wages due to discharged and quitting employees; (6) failure to furnish accurate 6 itemized wage statements; (7) failure to maintain required records. Further, the release applied to 7 claims of the same Labor Code violations arising at any time during the respective PAGA Period. 8 Because the final judgment in the Consolidated Negrete Action resolved and released the Labor 9 Code violations asserted here for the time period asserted here, the PAGA claims for civil 10 penalties based on the resolved Labor Code violations may not be relitigated. Arias 46 Cal. 4th at 11 986; Robinson, 53 Cal.App.5th at 483. The Court therefore finds that the PAGA claims may be 12 dismissed with prejudice. 13 III. Conclusion and Recommendation 14 Based on the foregoing, IT IS HEREBY RECOMMENDED that the Joint Motion for 15 Settlement Approval be granted. 16 These Findings and Recommendations will be submitted to the United States District 17 Judge assigned to the case, as required by 28 U.S.C. § 636(b)(l). Within fourteen (14) days after 18 being served with these findings and recommendations, the parties may file written objections 19 with the Court. The document should be captioned “Objections to Magistrate Judge’s Findings 20 and Recommendations.” The parties are advised that the failure to file objections within the 21 specified time may result in the waiver of the “right to challenge the magistrate’s factual 22 findings” on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th Cir. 2014) (citing Baxter v. 23 Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)). 24

IT IS SO ORDERED.

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26 Dated: August 9, 2022 /s/ Barbara A. McAuliffe _

UNITED STATES MAGISTRATE JUDGE

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