70 Cal.App.5th 986
Cal. Ct. App.2021Background
- Uribe (Orange County) sued Crown for unreimbursed uniform-cleaning and slip-resistant shoe costs and sent a PAGA notice that only referenced those expense theories (no cell-phone claims).
- Garibay had earlier filed a separate Alameda County putative class/PAGA action alleging unreimbursed personal cell-phone use by Crown janitors.
- After private mediation, Uribe and Crown reached a $370,000 settlement conditioned on Uribe amending to add class and cell-phone claims and to release class and PAGA claims (the agreement allocated $10,000 to PAGA penalties).
- The settlement contained an express nullification clause forbidding severance: if any material approval failed, the entire agreement would be void and funds returned.
- Garibay intervened in the Orange County action, opposed settlement approval, opted out of the settlement distribution, and appealed after the trial court entered final approval and judgment.
- The Court of Appeal held Garibay has standing to challenge the PAGA component and reversed the judgment because Uribe’s LWDA PAGA notice did not include facts/theories about unreimbursed cell-phone use and the settlement could not be severed under its nullification clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to appeal after opting out | Garibay: as an intervenor she is a party of record and is aggrieved because the settlement would extinguish her PAGA claim and waste her litigation investment | Crown/Uribe: Garibay opted out of the class settlement and is not bound or aggrieved, so lacks appellate standing | Garibay has standing to challenge the PAGA component because her PAGA claim would be extinguished by res judicata and she has an immediate, pecuniary, substantial interest |
| Adequacy of Uribe’s PAGA notice to LWDA for unreimbursed cell-phone claims | Uribe: his notice referencing section 2802 and reimbursement for expenses generally is sufficient to support cell-phone reimbursement theory | Garibay: the notice never mentioned cell-phone reimbursement or any supporting facts/theories, so it failed section 2699.3’s ‘‘facts and theories’’ requirement | Notice inadequate: the plain meaning of Uribe’s notice did not include facts/theories about cell-phone expenses, so Uribe could not bring or settle a PAGA claim on that theory |
| Effect of settlement nullification/severability clause | Uribe/Crown: sought final approval of settlement as presented | Garibay: invalid PAGA component makes settlement unenforceable and it cannot be severed due to the nullification clause | Because the PAGA component was not viable and the agreement forbade severance, the entire settlement is null; judgment reversed and remanded |
Key Cases Cited
- Hernandez v. Restoration Hardware, 4 Cal.5th 260 (Cal. 2018) (unnamed class members must intervene or move to vacate to obtain party-of-record appellate rights)
- Williams v. Superior Court, 3 Cal.5th 531 (Cal. 2017) (PAGA notice must state nonfrivolous "facts and theories" to inform LWDA and employer)
- Arias v. Superior Court, 46 Cal.4th 969 (Cal. 2009) (PAGA judgments bind aggrieved employees and the state)
- Brown v. Ralphs Grocery Co., 28 Cal.App.5th 824 (Cal. Ct. App. 2018) (PAGA notice that parrots statutory language without supportive facts/theories is deficient)
- County of Alameda v. Carleson, 5 Cal.3d 730 (Cal. 1971) (appeal standing requires being a party "aggrieved"—rights must be immediate, pecuniary, and substantial)