JULIE GUNTHER, Plaintiff and Respondent, v. ALASKA AIRLINES, INC., Defendant and Appellant.
D076762, D077313
COURT OF APPEAL, FOURTH APPELLATE DISTRICT, DIVISION ONE, STATE OF CALIFORNIA
Filed 12/1/21
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JULIE GUNTHER,
Plaintiff and Respondent,
v.
ALASKA AIRLINES, INC.,
Defendant and Appellant.
D076762, D077313
(Super. Ct. No. 37-2017-00037849-CU-OE-NC)
CONSOLIDATED APPEALS from a judgment and postjudgment order of the Superior Court of San Diego County, Timothy M. Casserly, Judge. Affirmed in part, reversed in part and remanded.
Jones Day, Matthew J. Silveira, Shay Dvoretzky, Anthony J. Dick and Elizabeth G. Bentley for Defendant and Appellant.
Law Offices of Alexander M. Schack, Alexander M. Schack, Natasha N. Serino and Shannon F. Nocon for Plaintiff and Respondent.
DLA Piper, Mary Dollarhide, Julie Dunne, Stanley J. Panikowski and Matthew Riley as Amicus Curiae on behalf of California Employment Law Council.
* Pursuant to California Rules of Court, rule 8.1110, this opinion is certified for publication with the exception of parts B and C of the discussion.
California law requires employers to provide wage statements containing certain information, including the applicable hourly wage rates, and the number of hours worked by the employee, and says workers must be able to “promptly and easily determine” that information. (Lab. Code, § 226, subds. (a) & (b).)1 In Ward v. United Airlines, Inc. (2020) 9 Cal.5th 732 (Ward I), a group of airline pilots and flight attendants who perform duties across the country, sued their employer alleging that it failed to provide wage statements compliant with subdivision (a) of section 226 (hereafter, § 226(a)). (Ward I, at p. 741.) The California Supreme Court explained that these employees are entitled to section 226(a)-compliant wage statements if California qualifies as the employee’s principal place of work. “For pilots, flight attendants, and other interstate transportation workers who do not perform a majority of their work in any one state, this test is satisfied when California serves as their base of work operations, regardless of their place of residence or whether a collective bargaining agreement governs their pay.” (Ward I, at p. 740.)
The plaintiffs in this case are flight attendants who alleged that their employer, Alaska Airlines, Inc. (Alaska), failed to provide section 226(a)-compliant wage statements. They sought penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (
Notwithstanding the implications of Ward I, in this appeal Alaska contends that section 226(a) cannot be applied to the flight attendants because it is preempted by federal law. Alaska also raises multiple challenges to PAGA penalties, including that the trial court erred in awarding heightened penalties under section 226.3 of PAGA.
In the published portion of this opinion, we reject Alaska’s argument that application of section 226 is preempted by federal law and affirm the trial court’s determination that the flight attendants in this case are entitled to section 226(a)-compliant wage statements. We conclude, however, that the trial court erred in awarding heightened penalties under section 226.3 because the plain language of the statute provides that heightened penalties apply only where the employer fails to provide wage statements or fails to keep required records, which is not the situation here. Accordingly, we reverse the penalties awarded under section 226.3 and remand the matter to the trial court to determine the penalty amount under section 2699, subdivision (f)(2) of PAGA. We also conclude that, on this record, reversal of the penalty award does not require vacation of the attorney’s fees award. In the unpublished portion of this opinion, parts B and C, we reject Alaska’s defenses to the application of section 226(a).
FACTUAL AND PROCEDURAL BACKGROUND
Flight attendant employment is governed by a collective bargaining agreement between Alaska and the Association of Flight Attendants-CWA (AFA), negotiated under the Railway Labor Act (RLA) (
Plaintiff Julie Gunther is a flight attendant who works for Alaska. Gunter lives in San Diego, California and her employment with Alaska is
Gunther testified at trial that in reviewing her wage statements she is unable to determine (1) the number of TFP earned per pay period, (2) the rate of pay she received per TFP, (3) the number of hours she worked each month, (4) the number of hours worked per pay period, or (5) the rate of pay received per hour worked. Although a wage statement she received listed the total number of hours she worked in a particular month as 568, this translated to about 18 hours per day. Gunther stated she could not work that number of hours each month and she knew no flight attendants who worked this number of hours per month.
After a bench trial, the trial court found that Alaska’s wage statements failed to state basic information required by section 226 including (1) total hours worked by the employee, (2) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, and (3) the corresponding rate of pay for each. (§ 226(a)(2), (3) and (9).) The court awarded $4,000 in statutory penalties to Gunther (§ 226, subd. (e)) and $25,010,158 in PAGA penalties under section 226.3. The trial court rejected Alaska’s argument that it is impossible for it to comply with section 226 and
DISCUSSION
A. Section 226 Applies to the Aggrieved Employees
The trial court concluded that because all the flight attendants who were the subject of Gunther’s PAGA claim were based in California, these individuals were protected by section 226. In so holding, the trial court rejected Alaska’s “attempt to graft a more rigid mathematical bright-line onto the flexibility provided” in two earlier California Supreme Court decisions, stating that “the precise details of where each flight attendant spends his or
On appeal, Alaska does not contest the trial court’s finding that its wage statements do not contain the basic information required by section 226(a)(2), (3) and (9). It initially argued that California’s wage statement rules do not apply to flight attendants who, like Gunther, spend the vast majority of their time working in federal airspace and in other states for an out-of-state employer, regardless of whether they happen to begin and end their flight pairings in California. Alaska’s reply brief, filed after our high court decided Ward I modified its position to contend that California law does not apply automatically to every wage statement issued to every California-based flight attendant. It now maintains that Gunther must analyze each pay period for each flight attendant to determine if the flight attendant (1) worked the majority of the time in another state, or (2) whether the law of another jurisdiction might instead control if that jurisdiction has a greater interest in applying its own laws. Based on these contentions, Alaska argues that the judgment must be vacated and Gunther’s individual claims remanded for retrial because the trial court did not properly consider and apply either of these two principles. It contends that on remand, the parties must conduct additional discovery examining where flight attendants worked during different pay periods, and Gunther bears the burden of presenting
Gunther disagrees with Alaska’s reading of Ward I, supra, 9 Cal.5th 732. According to Gunther, the trial court correctly applied section 226 to the aggrieved employees because the evidence established that they are based in California, do not work primarily in any single state, and perform work during every trip sequence in California. We agree with Gunther.
In Ward I, supra, 9 Cal.5th 732, the Supreme Court addressed whether California wage laws apply to employees, such as pilots and flight attendants, who perform most of their work outside California’s territorial jurisdiction. (Id. at p. 740.) Specifically, the court addressed section 226, which requires an employer to supply each employee “semimonthly or at the time of each payment” a written wage statement disclosing the pay period and itemizing the hours worked, applicable hourly rates, gross and net wages earned, any deductions taken, and other relevant information. (§ 226(a).) It reasoned that “the Legislature intended for section 226 to apply to workers whose work is not performed predominantly in any one state, provided that California is the state that has the most significant relationship to the work. For
Here, Gunther and all aggrieved employees are based in California. Additionally, Alaska’s own evidence showed that these employees did not work primarily in any one state. For example, Alaska tracked two flight attendants for one month in 2018. One flight attendant spent 29 percent of her time flying in or over Alaska, and 17 percent over California. The other spent 34 percent of her time in and over Alaska and 19 percent over California. Alaska also tracked three other flight attendants for an entire year. One flight attendant spent 38 percent of her time that year flying over the ocean and 24 percent in or over California. Two other flight attendants tracked for an entire year had a single month where they spent the greatest amount of time in or over California and all other months “they spent more time flying over the ocean or over Latin America.”
Alaska offered no contrary evidence. Since Gunther started working for Alaska in August 2015, she has spent 27.9 percent of her time working in
Under Ward I, the relevant inquiry is a flight attendant’s connection to a particular state so as to trigger application of that state’s laws. (Ward I, supra, 9 Cal.5th at p. 752 [“The better question is what kinds of California connections will suffice to trigger the relevant provisions of California law.”].) Alaska did not argue that flight attendants have any meaningful connection to states they fly over, or that a state has any interest in transportation workers flying over its state. Accordingly, Gunther and the aggrieved employees anticipated and satisfied the Ward I test because substantial
To avoid this result, Alaska and amici curiae argue that California-based flight attendants are not covered for any “pay period” in which they work the majority of their time in another state. They contend that to determine whether California wage law applies, a remand and additional discovery is required because the trial court must analyze the location of flight attendant work on a pay-period-by-pay-period basis. This impractical argument is based on a misreading of Ward I.
Ward I stated that the “core purpose of section 226 is ‘to ensure an employer “document[s] the basis of the employee compensation payments” to assist the employee in determining whether he or she has been compensated properly.’ ” (Ward I, supra, 9 Cal.5th at p. 752.) Thus, “[a]pplication of section 226 logically depends on whether the employee’s principal place of work is in California. (Id. at p. 753.) As a remedial statute, section 226 “must be liberally construed in favor of affording workers protection.” (Id. at p. 754.) After examining the background of section 226, the Ward I court concluded that the Legislature intended to extend section 226’s protections to interstate transportation workers, and others who do not work the majority
The increment of work covered by section 226—the pay period—is relevant to this inquiry in the sense that the statute “does not operate at an hourly, daily, or even weekly level.” (Id. at p. 753.) The court stated that section 226 “does not appear to contemplate, for example, that an employee who works in 10 different jurisdictions over the course of a single pay period should receive 10 different wage statements, each prepared according to the laws of a different state. Any work-location-based test for section 226 must reconcile the possibility that some employees may perform their work in more than one jurisdiction with the legislative desire for a single statement documenting employee pay.” (Ward I, at p. 753, fn. omitted.) Accordingly, the court rejected the argument that section 226 should only apply to workers who perform all or most of their work in a particular jurisdiction. Ward I noted that “if every state were to adopt the same rule, then many transportation-sector employees—from interstate truck drivers to train conductors to the airline employees here—would not be entitled to the protections of any state’s law: Effectively, because these employees work in many jurisdictions, they would receive the protections of none.” (Ward I, at p. 754.)
But in focusing on the pay period as the “relevant time frame” for purposes of section 226 (Ward I, supra, 9 Cal.5th at p. 954, fn. 8), Ward I did not mean that aggrieved employees are obligated to perform a pay period-by-pay period analysis to eliminate the hypothetical possibility that in one aberrant pay period some flight attendant might spend the majority of his or her time in a state other than California. Arguing the necessity for such an inquiry on remand, Alaska seeks to deprive its employees of any wage
In deciding Gunther demonstrated that section 226 applied to the aggrieved employees, the trial court appropriately adopted a broader perspective. Alaska offered considerable evidence as to where its California-based flight attendants performed their work, yet never attempted to suggest that any such employee worked a majority of any pay period in a state other than California despite having every incentive to do so.
Alaska’s own evidence demonstrated that the aggrieved employees’ job activities in the aggregate meet the Ward I test, a proposition Alaska does not contest. This did not require individual analysis on a pay-period-by-pay-period basis, and nothing in Ward I suggests otherwise. Accordingly, a remand to mandate a pay-period-by-pay-period examination is not required.11
B. Wage Order No. 9 Does Not Preclude Gunther’s Wage-Statement Claims
Alaska argues that Industrial Welfare Commission wage order No. 9-2001 (IWC Wage Order No. 9), covering the transportation industry, spells out the wage-statement rules that such employers must follow and exempts workers who entered into a collective bargaining agreement (CBA) under the RLA. (
“[P]arties are not permitted to ‘ “adopt a new and different theory on appeal. To permit [them] to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant.” [Citations.]’ [Citations.] Only when the issue presented involves purely a legal question, on an uncontroverted record and requires no factual determinations, is it appropriate to address new theories.” (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847, italics omitted.) We are not, however, required to apply this exception and whether to do so is within our discretion. (Greenwich S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 767; see also Farrar v. Direct Commerce, Inc. (2017) 9 Cal.App.5th 1257, 1275–1276, fn. 3 [“Merely because an issue is one of law, does not give a party license to raise it for the first time on appeal . . . . Whether an appellate court will entertain a belatedly raised legal issue always rests within the court’s discretion.”].)
Here, Alaska did not raise this issue in its pretrial or posttrial briefing. Nor did it explain in its reply brief why it may properly raise this argument for the first time on appeal. Accordingly, we deem the argument forfeited. (See Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 798 [party forfeited claims “by failing to demonstrate either that it preserved these arguments in the trial court, or that it may properly raise such arguments for the first time on appeal”].)
In any event, our high court examined the legislative history of section 226 and rejected the argument that the Legislature intended the IWC Wage Order No. 9 exemption to foreclose claims made under section 226. (Ward I,
C. Alaska Has Not Shown that Federal Law Preempts Application of Section 226 to the Aggrieved Employees
The trial court rejected Alaska’s affirmative defenses that the dormant Commerce Clause, RLA, or Deregulation Act preempted the aggrieved employees’ claims. On appeal, Alaska reasserts that section 226 is preempted by the RLA and Deregulation Act. It also contends that the dormant Commerce Clause prohibits states from regulating wage statements for interstate flight crews. We first address the principle of federal preemption and then address each of Alaska’s arguments in turn.
1. Federal Preemption
“Federal preemption is the principle that a federal law can supersede or supplant any inconsistent state law or regulation. The principle stems from the supremacy clause of the United States Constitution, which establishes that federal law ‘shall be the supreme Law of the Land[,] . . . Laws of any State to the Contrary notwithstanding.’ [Citation.] Therefore, Congress has the power to enact federal laws that trump or ‘preempt’ conflicting state laws and may exercise that power by enacting an express preemption provision, . . . or courts may infer preemption.” (Valencia v. SCIS Air Security Corp. (2015) 241 Cal.App.4th 377, 383.)
“In all pre-emption cases, and particularly in those in which Congress has ‘legislated . . . in a field which the States have traditionally occupied,’ [citation], [the court must] ‘start with the assumption that the historic police
2. The Deregulation Act Does Not Preempt Gunther’s Claims
“Congress enacted the [Deregulation Act] in 1978 as an amendment to the [Federal Aviation Act]. The . . . purpose [of the Deregulation Act] was to encourage airlines to compete in the marketplace by deregulating the aviation industry.” (Montalvo v. Spirit Airlines (9th Cir. 2007) 508 F.3d 464, 474.) “Congress feared, however, that states would attempt to undo federal deregulation with regulation of their own. [Citations.] To prevent states from doing indirectly what Congress proscribed directly, Congress included an express preemption provision in the [Deregulation Act].” (Ibid.) The Deregulation Act preemption clause provides that “a State . . . may not enact or enforce a law, regulation, or other provision having the force and effect of
The ordinary meaning of the phrase “related to” is a broad one—“ ‘to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection 43 with,’ [citation]—and the words thus express a broad pre-emptive purpose.” (Morales v. TWA (1992) 504 U.S. 374, 383 [analyzing the preemption provision of 49 U.S.C. § 1305(a)(1)].) A state law may be preempted even if its effect on rates, routes, or services is only indirect. (Morales, at p. 386.) Despite this broad preemptive purpose, “federal law does not pre-empt state laws that affect rates, routes, or services in ‘too tenuous, remote, or peripheral a manner.’ [Citation.] [S]tate laws whose ‘effect’ is ‘forbidden’ under federal law are those with a ‘significant impact’ on carrier rates, routes, or services.” (Rowe v. N.H. Motor Transp. Ass’n (2008) 552 U.S. 364, 375 (Rowe).)
Alaska argues that requiring it to comply with the wage-statement rules contained in section 226 would significantly impact its prices, routes, and services. It claims that bringing its system into compliance with section 226 in a manner that requires it to track precisely when flight attendants clock in and clock out would take years and cost it “ ‘multiple millions of dollars.’ ” It contends this cost would dramatically affect its prices, routes, and services by reducing profitability, making it less competitive in the market and making it more “ ‘more susceptible . . . to economic shocks.’ ” To retain profitability, Alaska asserts it would have no choice but to pass these costs on to the consumer, reduce flights, or both.13
Knowing the amount of time a flight attendant spends flying above a given jurisdiction is not relevant to the issue before us—whether issuing wage statements compliant with section 226 would be so costly that it would “ ‘significant[ly] impact’ . . . carrier rates, routes, or services.” (Rowe, supra, U.S. at p. 375.) On this subject, Alaska failed to produce any evidence. Because we have no factual basis on which to judge the effect of compliance that Alaska would need to generate statements on an individual-by-individual basis to account for where flight attendants are based during that period, where they reside, and where they may work in any given pay period. Alaska would also need to overhaul its flight attendant tracking systems so as to determine where flight attendants spend the majority of their time working. Overhauling flight attendant tracking systems would be incredibly costly and to avoid this expense, Alaska and other airlines would be more likely to restrict flight attendant schedules to avoid triggering conflicting requirements. Even if Alaska and other airlines incurred the expense to overhaul their payroll systems, Airlines claim this case shows how inadvertent noncompliance would still threaten serious financial risk.
3. The RLA Does Not Preempt Gunther’s Claims
“ ‘Congress’ purpose in passing the RLA was to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes. [Citations.]’ [Citation.] Congress wanted to avoid having the states apply their own state-law principles to interpret a federal labor-law collective bargaining agreement, leading to inconsistent results.” (Soldinger v. Northwest Airlines, Inc. (1996) 51 Cal.App.4th 345, 358 (Soldinger).) To realize this goal, “[t]he RLA establishes a mandatory dispute-resolution mechanism for resolving certain classes of labor disputes that arise in the rail and airline industries, including what are known as ‘major’ and ‘minor’ disputes. [Citation.] Minor disputes, the sort potentially implicated here, ‘involve controversies over the meaning of an existing collective bargaining agreement in a particular fact situation.’ [Citations.] If such a dispute is covered by the RLA, it must be resolved through the procedures established under the [RLA]; it may not be resolved by pursuing state-law claims in court.” (Ward II, supra, 986 F.3d at p. 1244.)
We apply “a two-step test to determine whether the RLA preempts a state-law claim. First, we determine whether the claim is ‘grounded in’ a CBA by asking whether the claim ‘seeks purely to vindicate a right or duty created by the CBA itself.’ [Citation.] The RLA preempts state-law claims under this first step if the CBA is the only source of the right the plaintiff asserts; claims that merely refer to a CBA-defined right or that rely only in part on a CBA’s terms are not preempted. [Citation.] Second, if a claim is
We review de novo the trial court’s conclusion that RLA preemption does not apply. (Alaska Airlines Inc. v. Schurke (9th Cir. 2018) 898 F.3d 904, 916 (Schurke).) “ ‘Whether federal law pre-empts a state law establishing a cause of action is a question of congressional intent. [Citation.] Pre-emption of employment standards “within the traditional police power of the State” “should not be lightly inferred.” ’ ” (Soldinger, supra, 51 Cal.App.4th at p. 359.)
Alaska asserts that the RLA exempts its flight attendants from California’s wage-statement law because application of California law would involve an impermissible interpretation of the CBA. It notes that section 226 requires an accurate listing of the “hours worked” as well as the “piece rate” or “hourly rate” for each employee, but complains that flight attendants are not paid that way.15
Not surprisingly, Alaska does not assert that Gunther’s claim is “ ‘grounded in’ ” the CBA for purposes of the first step of the RLA preemption analysis. (Ward II, supra, 986 F.3d at p. 1244.) Review of the operative complaint shows that Gunther’s claim arises solely from section 226 and is not based on the CBA. Additionally, Gunther testified she is not challenging any provisions of the CBA. Moreover, the CBA does not address the content of wage statements and section 226 is a law that applies to all employers, whether or not covered by a CBA.
Under the second step of the analysis, the question is whether adjudicating Gunther’s section 226 claim would require interpretation of the CBA. (Ward II, supra, 986 F.3d at p. 1244.) “ ‘A state law claim is preempted if a court must interpret a disputed provision of the [CBA] to determine whether the plaintiff’s state law claim has merit.’ ” (Melendez, supra, 7 Cal.5th at p. 10, italics added.) Alaska argues that application of the wage statement requirements in section 226 would entail an impermissible interpretation of the CBA. It tenders this argument, however, without identifying any provisions in the CBA that are uncertain or disputed such that a court would need to interpret the terms rather than merely applying words with an accepted definition. (McCray v. Marriott Hotel Servs. (9th Cir. 2018) 902 F.3d 1005, 1012 [“[R]eading and applying relevant, unambiguous
Stated differently, Alaska fails to explain how accurately complying with the mandates of section 226 is impossible without interpreting the CBA. Although the complex pay structure of flight attendants may render compliance with the mandates of section 226 difficult and subject to additional litigation, Alaska cites no authority that such issues provide a basis for RLA preemption.
4. Application of Section 226 Does Not Violate the Dormant Commerce Clause
The Commerce Clause endows Congress with the power to regulate commerce among the several states. (
We review challenges to local regulations under the dormant Commerce Clause using a two-tiered approach. (Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth. (1986) 476 U.S. 573, 579 (Brown-Forman).) First, “[w]hen a state statute directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests
“ ‘Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. . . . If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.’ ” (City of Philadelphia v. New Jersey (1978) 437 U.S. 617, 624 (City of Philadelphia).) “The crucial inquiry, therefore, must be directed to determining whether [the statute at issue] is basically a protectionist measure, or whether it can fairly be viewed as a law directed to legitimate local concerns, with effects upon interstate commerce that are only incidental.” (Ibid.) “Occasionally the Court has candidly undertaken a balancing approach in resolving these issues, [citation], but more frequently it has spoken in terms of ‘direct’ and ‘indirect’ effects and burdens.” (Pike v. Bruce Church, Inc. (1970) 397 U.S. 137, 142 (Pike).)
Under the first tier of the analysis, we must examine whether section 226 discriminates against interstate commerce or favors in-state economic interests over out-of-state interests. (Brown-Forman, supra, 476 U.S. at p. 579.) Alaska does not argue that applying section 226 to the aggrieved employees results in discrimination against interstate commerce or that it favors in-state economic interests. Accordingly, we proceed to determine
California’s “employment laws apply to ‘all individuals’ employed in this state.” (Sullivan v. Oracle Corp. (2011) 51 Cal. 4th 1191, 1197.) As this court has stated, “[t]he Legislature enacted section 226 to ensure an employer ‘document[s] the basis of the employee compensation payments’ to assist the employee in determining whether he or she has been compensated properly. [Citations.] Section 226 ‘play[s] an important role in vindicating [the] fundamental public policy’ favoring ‘ “ ‘full and prompt payment of an employee’s earned wages.’ ” ’ ” (Soto v. Motel 6 Operating, L.P. (2016) 4 Cal.App.5th 385, 390.)
Gunther asserts that California has a legitimate state interest in ensuring that individuals working in California receive accurate wage statements, a point that Alaska does not challenge. Because section 226 regulates evenhandedly to effectuate a legitimate local public interest and only incidentally effects interstate commerce, we proceed to the second step of the analysis. There we must determine whether the incidental impact of section 226 on interstate commerce is excessive in relation to the putative local benefits. (City of Philadelphia, supra, 437 U.S. at p. 624.)
Alaska contends that applying California’s wage statement law to flight attendants would excessively burden interstate commerce because their work, frequently traveling through many states in a single day, implicates many different regulatory regimes. It asserts that many states have wage-statement requirements that may apply to California-based flight attendants, singling out the states of Washington, Illinois, and Massachusetts. Alaska complains that applying California wage-statement law to it would also violate the prohibition against state laws that directly control commerce
The Ninth Circuit recently rejected this argument in Ward II, supra, 986 F.3d 1234. In Ward II, United Airlines argued that applying section 226 to pilots and flight attendants would “require it to track every employee’s hours on a pay-period-by-pay-period basis to determine whether each employee spent more than 50 [percent] of his or her time working in another State and thus was exempt from [section] 226’s coverage.” (Ward II, at p. 1241.) It complained that the increased costs it would incur to develop this kind of tracking system “constitutes the sort of substantial burden on interstate commerce that the dormant Commerce Clause forbids.” (Ibid.)
We have already explained why a pay-period-by-pay-period analysis is neither required nor appropriate in deciding whether California wage statement rules apply. Moreover, the court in Ward II accepted that United would incur “additional costs if forced to track employee time in the way that it describes,” but noted that the employer “offered no evidence of what the magnitude of those costs might be” and that the additional cost of compliance with section 226 did not establish a burden on interstate commerce. (Ward II, supra, 986 F.3d at pp. 1241‒1242.) The Ninth Circuit further observed that United could “easily comply with California law by issuing [section] 226-compliant wage statements to all pilots and flight attendants whose home base airport is located in California. Adopting that policy would obviate any need to track the hours each employee spends working in different States, and would (at worst) result in rare instances in which United over-complies with California law by issuing a [section] 226-compliant wage statement to a
In Ward II the Ninth Circuit also addressed the argument tendered by Alaska and amicus curiae Airlines here that subjecting airlines to potentially inconsistent wage-statement regulations of multiple states would severely impact interstate commerce: “To prevail on this contention, [the airline] must show that [section] 226, as applied under the [Ward I] test, regulates in an area that requires national uniformity. [Citation.] It has not done so. Even if there are aspects of the interstate transportation industry that require national uniformity, employee wage statements are not among them.” (Ward II, supra, 986 F.3d at p. 1242.) The court explained that while state-by-state regulation of employee wage statements might increase operating costs, United “has not demonstrated that such regulation will impair the free flow of commerce across state borders or impede operation of the national airline industry.” (Ibid.) In particular, the airline “presented no evidence to support the conclusion that requiring it to comply with California law that differs from the wage-statement laws of other States will prove so cost-prohibitive as to disrupt the interstate service of its flights.” (Ibid.)
The Ninth Circuit again addressed this issue in Bernstein, supra, 3 F.4th 1127, where another group of California-based flight attendants alleged that the defendant airline failed to provide accurate wage statements as required by section 226. (Bernstein, at p. 1133.) The Bernstein panel upheld the district court’s decision that application of the California Labor Code did not violate the dormant Commerce Clause. (Bernstein, at pp. 1134, 1135‒1136.) It concluded that the employer “has not identified any other state labor laws with which it might be required to comply. Indeed, because California labor law’s application is based upon the parties’ various contacts
Alaska cites United Air Lines, Inc. v. Industrial Welfare Commission (1963) 211 Cal.App.2d 729 (Industrial Welfare Commission),16 as establishing the need for national uniformity regarding flight attendant wage statements. (See Industrial Welfare Commission, at pp. 748‒749.) We disagree. This case addressed a regulation providing that “[n]o employee shall be required to contribute directly or indirectly toward the purchase or maintenance of uniforms.” (Id. at pp. 733‒734.) The appellate court relied on the dormant Commerce Clause to invalidate the regulation, agreeing that application of the regulation to an airline imposed an undue burden on interstate commerce. (Id. at pp. 747‒749.) It found that while the “burden [on interstate commerce] may not be very great,” “[s]uch discrimination is bound to cause personnel troubles and to that extent, at least, a burden on interstate commerce.” (Id. at pp. 747, 748‒749.)
This 1963 case does not stand the test of time because it predates Pike, supra, 397 U.S. 137, and as such did not analyze whether the effect on interstate commerce was “clearly excessive” in relation to a legitimate local public interest. (Id. at p. 142 [“Where the statute regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate
D. PAGA Penalties
Alaska contends that the award of over $25 million in PAGA penalties under section 226.3 must be vacated because (1) Gunther’s initial PAGA letter failed to provide adequate notice of her claims, and she thus failed to exhaust her administrative remedies, divesting the trial court of jurisdiction to consider her PAGA claim, (2) the trial court wrongly allowed PAGA penalties based on “estimated” violations instead of actual violations,17 (3) the trial court wrongly imposed heightened penalties under section 226.3 because this statute does not apply, and (4) the trial court erred by penalizing it for every deficient wage statement it sent out after Gunther merely alleged violations and before any court adjudicated her claims.
We conclude that Gunther exhausted her administrative remedies because her initial PAGA letter provided adequate notice of her claims. Even assuming Gunther provided defective notice of her claims, Alaska forfeited its
1. Basic Legal Principles Regarding PAGA Penalties
PAGA authorizes aggrieved employees to act as private attorneys general and collect “civil penalt[ies]” for Labor Code violations where the LWDA has been notified and does not itself take action. (
A PAGA suit is representative in nature such that the plaintiff is “suing on behalf of all affected employees,” but “ ‘a representative action under PAGA is not a class action.’ ” (Kim, supra, 9 Cal.5th at p. 87.) Rather, a PAGA claim is technically “an enforcement action between the LWDA and
“The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to recover civil penalties that previously could be collected only by LWDA. [Citation.] In addition, to address violations for which no such penalty had been established, subdivision (f) of the statute created ‘a default penalty and a private right of action’ for aggrieved employees.” (Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 216.) The Labor Code also allows for heightened penalties for a violation of section 226(a) of $250 “per employee per violation in an initial citation” and $1,000 “per employee for each violation in a subsequent citation, for which the employer fails to provide the employee a wage deduction statement or fails to keep the records required in” section 226(a). (§ 226.3.)
2. Gunther Provided Sufficient PAGA Notice
Gunther’s September 29, 2017 section 2699.3 notice of Labor Code violations (the PAGA letter) generally alleged that Alaska violated several Labor Code provisions by failing “to pay wages earned” and “maintain[ing] adequate or accurate employment records.” Regarding Alaska’s purported violation of section 226, the letter stated:
“Alaska Airlines has violated California Labor Code § 226 by willfully failing to furnish Flight Attendant employees accurate, itemized wage statements showing the actual
wages earned, among other things. As set forth herein, Alaska Airlines failed to pay wages owed and frequently altered employee wage statements to pay flight attendant employees less than they actually earned. In addition, employers are required to afford employees the right to inspect their employment records. (Cal. Labor Code, § 226(b).) Alaska Airlines has violated California Labor Code § 226(b) in that it does not maintain proper employment records that would accurately reflect the wages earned of its flight attendants. Furthermore, it does not and has refused to provide access to such records to its flight attendants. As a result of Alaska Airlines’ violations of California Labor Code § 226(a) and (b), Alaska Airlines is liable for civil penalties pursuant to California Labor Code § 226.3 and 2698, et seq. Pursuant to Section 226.3, Alaska Airlines is subject to a $250 per employee per violation civil penalty for its failure to keep accurate and sufficient employment records as required under subdivision (a) of Section 226.” (Italics added.)
Without additional discussion, the trial court concluded that Gunther’s PAGA letter “identified Alaska’s [section] 226 violations and the facts and theories in support of such claims.”
Alaska contends that Gunther’s PAGA claim should have been dismissed because the PAGA letter did not properly notify it or the Labor Commissioner of the facts and theories supporting the wage statement claims that Gunther pursued at trial. At most, it claims, the letter advised of potential violations of section 226(a)(1) (requirement to display gross wages earned) and section 226(a)(5) (requirement to display net wages earned) but did not provide notice of the alleged violations that ultimately formed the basis of the trial court’s decision—that the wage statements failed to comply with section 226(a)(2), (3) and (9) regarding total hours worked, the number of piece-rate units earned and any applicable piece rate, or all applicable hourly rates in effect and number of hours worked at each rate. We conclude
“The Legislature enacted PAGA to remedy systemic underenforcement of many worker protections. This underenforcement was a product of two related problems. First, many Labor Code provisions contained only criminal sanctions, and district attorneys often had higher priorities. Second, even when civil sanctions were attached, the government agencies with existing authority to ensure compliance often lacked adequate staffing and resources to police labor practices throughout an economy the size of California’s.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 545 (Williams).) To resolve these problems, the Legislature “adopt[ed] a schedule of civil penalties ‘ “significant enough to deter violations” ’ for those provisions that lacked existing noncriminal sanctions,” and to “deputiz[e] employees harmed by labor violations to sue on behalf of the state and collect penalties, to be shared with the state and other affected employees.” (Ibid.)
Accordingly, before filing a PAGA suit, “[t]he aggrieved employee or representative shall give written notice by online filing with the [LWDA] and by certified mail to the employer of the specific provisions of this code alleged to have been violated, including the facts and theories to support the alleged violation. (Former § 2699.3, subd. (a)(1)(A), italics added.) “The evident purpose of the notice requirement is to afford the relevant state agency, the [LWDA], the opportunity to decide whether to allocate scarce resources to an investigation, a decision better made with knowledge of the allegations an aggrieved employee is making and any basis for those allegations.” (Williams, supra, 3 Cal.5th at pp. 545‒546.) “If the agency does not
As one federal district court explained, “ ‘PAGA notice must be specific enough such that the LWDA and the defendant can glean the underlying factual basis for the alleged violations.’ [Citation.] Conversely, ‘a string of legal conclusions with no factual allegations or theories of liability to support them . . . is insufficient to allow the [LWDA] to intelligently assess the seriousness of the alleged violations.’ [Citations.] Plaintiff, however, need not set forth ‘every potential fact or every future theory.’ [Citations.] ‘Under California’s Labor Code, a written notice is sufficient so long as it contains some basic facts about the violations, such as which provision was allegedly violated and who was allegedly harmed.’ ” (Stevens v. Datascan Field Services LLC (E.D.Cal., Feb. 17, 2016, No. 2:15-cv-00839-TLN-AC) 2016 U.S.Dist. Lexis 19289 at p. *11; Alcantar v. Hobart Serv. (9th Cir. 2015) 800 F.3d 1047, 1057 [“Plaintiff’s letter—a string of legal conclusions with no factual allegations or theories of liability to support them—is insufficient to allow the [LWDA] to intelligently assess the seriousness of the alleged violations. Neither does it provide sufficient information to permit the employer to determine what policies or practices are being complained of so as to know whether to fold or fight.”].)
In Williams, supra, 3 Cal.5th 531, the Supreme Court addressed whether “an aggrieved employee seeking to pursue civil penalties on behalf of other current or former employees [under PAGA] must have some modicum of substantial proof before proceeding with discovery” on the allegations made in the PAGA letter. (Williams, at p. 545.) In this context the court stated that “California public policy favors the effective vindication of
Applying this standard in light of the plain language of the statute, we conclude that Gunther’s letter satisfied PAGA’s minimal notice requirements. Gunther identified the specific provisions of the Labor Code that Alaska allegedly violated, section 226, subdivisions (a) and (b). Regarding her theory of liability, Gunther stated that Alaska “willfully fail[ed] to furnish Flight Attendant employees accurate, itemized wage statements.” Facts supporting this theory of liability included that the wage statements failed to show “the actual wages earned, among other things” and “failed to pay wages owed and frequently altered employee wage statements to pay flight attendant employees less than they actually earned.” Gunther’s letter contained sufficient information to put Alaska and the LWDA on notice for potential investigation, which satisfies the policy goal of subdivision (a) of former section 2699.3 to effectively vindicate consumer protections. (Williams, supra, 3 Cal.5th at p. 548.)
Even were we to assume that Gunther provided defective notice, Alaska forfeited the exhaustion argument by not raising it at trial because this is an affirmative defense subject to waiver.20 (Mokler v. City of Orange
Although no California court has addressed whether forfeiture applies to a PAGA claim, federal district courts have held that the failure to exhaust administrative remedies under PAGA is an affirmative defense subject to waiver. (Batson v. United Parcel Service, Inc. (S.D.Cal. Sept. 27, 2012, No. 12cv0839 BTM(JMA)) 2012 U.S.Dist. Lexis 139567, p. *6 [“failure to exhaust administrative remedies under the PAGA is an affirmative defense subject to her factual allegations and/or theories of liability to (i) allow the [LWDA] to assess the alleged violations, or (ii) allow Defendants to determine what policies or practices were being complained of.” In its summary judgment filings, however, Alaska did not argue that the alleged defective notice in Gunther’s PAGA letter amounted to a failure to exhaust administrative remedies which barred her PAGA claim. Accordingly, in denying Alaska’s summary judgment motion, the trial court did not address this affirmative defense. Rather, it rejected Alaska’s argument that Gunther’s pleadings failed to provide Alaska notice of this claim.
Alaska has not cited us to anywhere in the record showing that it asked the trial court to rule on the merits of its failure to exhaust affirmative remedies defense.
Here, Alaska’s answer raised the affirmative defense that Gunther’s failure to exhaust administrative remedies barred her PAGA claim. (Ante, fn. 19.) But Alaska never pursued this argument. In its summary judgment filings Alaska mentioned the PAGA letter, but it did not argue that the letter amounted to defective PAGA notice and thus a failure to exhaust administrative remedies. Accordingly, the court’s denial of Alaska’s summary judgment motion did not address this affirmative defense. Rather, it rejected Alaska’s argument that Gunther’s pleadings failed to provide
3. Heightened Penalties Under Section 226.3 Apply Only Where the Employer Fails to Provide a Wage Statement or Fails to Keep Adequate Records
The trial court noted that PAGA provided a “default” civil penalty under subdivision (f)(2) of section 2699. But relying on Raines v. Coastal Pacific Food Distributors (2018) 23 Cal.App.5th 667 (Raines), the court concluded that this lesser penalty did not apply because section 226.3 provided a specific (and higher) penalty for failure to comply with section 226(a). Section 226.3 provides in part:
“Any employer who violates subdivision (a) of Section 226 shall be subject to a civil penalty in the amount of two hundred fifty dollars ($250) per employee per violation in an initial citation and one thousand dollars ($1,000) per employee for each violation in a subsequent citation, for which the employer fails to provide the employee a wage deduction statement or fails to keep the records required in subdivision (a) of Section 226. The civil penalties provided for in this section are in addition to any other penalty provided by law.” (Italics added.)
Assuming the propriety of PAGA penalties in some amount, Alaska contends that the bolded language means what it says—that heightened penalties under section 226.3 apply only where the employer fails to provide wage statements or keep required records. Because it provided wage statements and kept the required records, Alaska argues that the $25 million in heightened penalties awarded by the trial court should be vacated and the matter remanded with an instruction to apply the default penalty amounts set forth in subdivision (f)(2) of section 2699. Relying on Raines, supra, 23 Cal.App.5th 667, Gunther asserts that section 226.3 provides a civil penalty
“Questions of statutory interpretation are subject to de novo review. [Citation.] ‘[O]ur primary task is to determine the lawmakers’ intent.’ [Citation.] Statutory interpretation to determine legislative intent may involve up to three steps. [Citation.] ‘The first step in the interpretive process looks to the words of the statute themselves.’ [Citation.] ‘It is only when the meaning of the words is not clear that courts are required to take a second step and refer to the legislative history.’ [Citation.] If an ambiguity remains after reviewing secondary rules of construction, we then ‘ “ ‘apply reason, practicality, and common sense.’ ” ’ ” (Curtis Engineering Corp. v. Superior Court (2017) 16 Cal.App.5th 542, 546.) Additionally, “[w]e interpret the language of the statute ‘in context, examining other legislation on the same subject, to determine the Legislature’s probable intent.’ [Citation.] The statutory language is construed in light of the entire statute and the overall statutory scheme, and we give ‘significance to every word, phrase, sentence, and part of an act in pursuance of the legislative purpose. [Citation.]’ [Citations.] We avoid an interpretation that renders any portion of the statute superfluous, unnecessary, or a nullity; this is so because we presume that the Legislature does not engage in idle acts.” (Teachers’ Retirement Bd. v. Genest (2007) 154 Cal.App.4th 1012, 1027‒1028.)
In accordance with these principles, we begin our consideration of section 226.3 by examining the words of the statute. That language provides that an employer who violates section 226(a) is subject to a civil penalty in differing amounts for an initial citation and any subsequent citations “for which the employer fails to provide the employee a wage deduction statement or fails to keep the records required in” section 226(a). Under the plain
Gunther does not argue that section 226.3 is unclear or ambiguous. Rather, to avoid the words of the statute and the absurdity of ignoring their plain meaning, Gunther argues that Raines, supra, 23 Cal.App.5th 667 expressly held that section 226.3 applies to “all violations of section 226.” (Raines, at p. 675.) Raines addressed the remedy for a technical violation of section 226(a)(9) by a defendant who failed to provide a wage statement that included the overtime hourly rate. (Raines, at p. 673.) The court concluded that three possible remedies existed for this violation: (1) statutory penalties to employees who suffered an injury under subdivision (e)(1) of section 226; (2) injunctive relief under subdivision (h) of section 226; and (3) civil penalties under section 226.3 for a violation of section 226(a). (Raines, at p. 673.) The plaintiff, however, sought recovery under the default provision of section 2699, subdivision (f), applicable where there is no existing civil penalty. (Raines, at p. 674.) In this context, the Raines court stated:
“Federal courts disagree whether subdivision (a) or subdivision (f) of section 2699 applies where the allegation is the failure to provide adequate wage statements. Some courts have read section 226.3 to limit civil penalties to only those instances where the employer failed to provide any wage statement or to keep records. (York v. Starbucks Corp. (C.D.Cal., Nov. 1, 2012, No. CV 08-07919 GAF) 2012 U.S.Dist. Lexis 190239, pp. *11–*12; Fleming v. Covidien, Inc. (C.D.Cal., Aug. 12, 2011, No. ED CV-10-01487 RGK) 2011 U.S.Dist. Lexis 154590, at p. *7.)[ ] We find more persuasive a decision that found section 226.3 sets out a civil penalty for all violations of section 226. (Culley v. Lincare, Inc. (E.D.Cal. 2017) 236 F.Supp.3d 1184, 1194.)” (Raines, at pp. 674‒675, fn. omitted.)
The Raines court then concluded that “[s]ection 226.3 provides the civil penalty for failure to comply. In our view, LWDA would not be prohibited from seeking civil penalties for a grossly inadequate wage statement simply because the employer did provide a statement. Otherwise, the purpose of the statute would be thwarted.” (Raines, supra, 23 Cal.App.5th at p. 675.) Of course the choice is not, as Raines suggests, between a penalty under section 226.3 and no penalty for an inadequate wage statement. Instead, the question is which penalty provision applies—the default penalty in section 2699, subdivision (f) or the heightened penalty under section 226.3? Thus, under either result the statute is not “thwarted.” Moreover, Raines and the federal district court decision on which it relied (Culley v. Lincare, Inc. (E.D.Cal. 2017) 236 F.Supp.3d 1184), provided no analysis of the statutory language to support a conclusion that section 226.3 applies to any violation of section 226(a). Accordingly, we decline to follow Raines on this point.22
decision under Hanna v. Plumer (1965) 380 U.S. 460, 465. (See Clayborne v. Lithia Motors, Inc. (E.D.Cal., Jan. 5, 2021, No. 1:17-cv-00588-AWI-BAM) 2021 U.S.Dist. Lexis 1323, at pp. *13-*14; Garcia v. Commonwealth Fin. Network (S.D.Cal., Nov. 24, 2020, No. 20-cv-1483-BAS-LL) 2020 U.S.Dist. Lexis 22053, at pp. *10-*11; Biag v. King George - J&J Worldwide Services LLC (S.D.Cal., July 22, 2020, No. 20-cv-307-BAS-DEB) 2020 U.S.Dist. Lexis 129528, at pp. *26-*28 [bound by Raines]; Raziano v. Albertsons LLC (C.D.Cal., Dec. 13, 2019, No. LA CV19-04373 JAK(ASx) 2019 U.S.Dist. Lexis 232455, at pp. *18-*20 [same]; Magadia v. Wal-Mart Associates, Inc. (N.D.Cal. 2019) 384 F.Supp.3d 1058, 1109 [same], rev’d in part, vacated in part by Magadia v. Wal-Mart Associates, Inc. (9th Cir. 2021) 999 F.3d 668.)
1. Additional Procedural Background
Gunther’s complaint alleged three causes of action for (1) failure to pay for hours worked under
After the trial court entered its judgment, Gunther moved for an award of attorney’s fees and costs under
In calculating the lodestar, the trial court rejected Alaska’s argument that the time spent on the dismissed causes of action should be omitted. The
The trial court also rejected Alaska’s argument that a lack of efficiency resulted in the lodestar being too high:
“While Alaska argues that this was a short case (i.e. only a 3-day trial), that economy was the result of [Gunther] jettisoning certain claims in order to maintain a tight focus in this case and avoid being bogged down by certain complexities that risked compounding and multiplying a number of confusing issues, which, in turn, would gobble up additional time. Given that history, while [Gunther’s] approach did include some claims that were initially broader than necessary, this Court ultimately finds that [Gunther’s] overall approach in this litigation has erred on the side of efficiency and economy.”
The trial court calculated the lodestar amount to be $755,888. It then applied a multiplier of 1.25 to account for the contingent nature of the fee award and awarded Gunther $944,860 in attorney’s fees.
2. The Trial Court Did Not Abuse Its Discretion in Making the Attorney’s Fees Award
PAGA provides that a successful employee “shall be entitled to an award of attorney’s fees and costs. . . .” (
“ ‘It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court. . . . [Citations.] The value of legal services performed in a case is a matter in which the trial court has its own expertise. [Citation.] The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. [Citations.] The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.’ ” (PLCM Group, supra, Cal.4th at p. 1096.) A “plaintiff’s joinder of causes of action should not dilute its right to attorney’s fees. Attorney’s fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed.” (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130.)
Alaska does not contest Gunther’s right to an attorney’s fees award, the 1.25 multiplier, or the reasonableness of the rates claimed, but it nonetheless asserts two independent bases for reversal of the fee award. First, assuming
The record supports a conclusion that a recalculation of PAGA penalties will not affect Gunther’s “ ‘degree of success’ ” as it relates to the attorney’s fees award. Thus, the attorney’s fees order is unaffected by the trial court’s error in calculating PAGA penalties. We also reject Alaska’s contention that the court was required to reduce the attorney’s fees award based on Gunther’s limited success in the litigation.
a. The error in calculating penalties under
An order awarding attorney fees “ ‘falls with a reversal of the judgment on which it is based.’ ” (California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 220.) But where, as here, there is a limited reversal, we remand for the trial court to consider anew the propriety of attorney’s fees unless we can say with certainty the court would have exercised its discretion the same way had the successful party not prevailed on the issue on which we
Here, our reversal is limited to the civil penalties awarded under
In awarding attorney’s fees, the trial court rejected Alaska’s argument regarding inflated billing and refused to decrease the lodestar calculation. In setting the multiplier, the court stated that it considered “the quality of the representation” in the lodestar amount. It concluded that a multiplier was warranted based on the “contingency fee risk” that Gunter’s counsel assumed when agreeing to take the case. The trial court, however, rejected Gunther’s suggested 4.3 multiplier as “very high.” It found that the case involved “novel and difficult issues” and concluded “that a multiplier of 1.25 is appropriate as it compensates counsel entirely for the time actually spent, but also provides
The trial court did not place significant reliance on the extent of Gunther’s monetary success in this litigation. Critically, it never attempted to justify or cross-check the lodestar attorney’s fees award by reference to a percentage of a monetary fund created by the litigation, and Alaska makes no challenge in that regard. (See, e.g., Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 49.) On this record, we see no likelihood the trial court would have exercised its discretion differently in the absence of the error regarding the civil penalties.
b. The trial court properly declined to reduce the lodestar based on alleged “limited success.”
“California law, like federal law, considers the extent of a plaintiff’s success a crucial factor in determining the amount of a prevailing party’s attorney fees. [Citation.] ‘Although fees are not reduced when a plaintiff prevails on only one of several factually related and closely intertwined claims [citation], “under state law as well as federal law, a reduced fee award is appropriate when a claimant achieves only limited success” . . . . ’ [Citation.] The trial court may reduce the amount of the fee award ‘where a prevailing party plaintiff is actually unsuccessful with regard to certain objectives of its lawsuit.’ ” (Environmental Protection Information Center v. California Dept. of Forestry and Fire Protection (2010) 190 Cal.App.4th 217, 238 (Environmental Protection).)
In evaluating the impact “limited success” has on an award of attorney’s fees, we apply the two-step test outlined in Hensley v. Eckerhart
Here, Alaska asserts that Gunther’s successful wage-statement claim—and the associated PAGA penalties—were not related to her claims regarding a failure to pay wages for all hours worked under
We conclude that the trial court did not abuse its discretion in finding that Gunther’s dismissed claims under
Review of Gunther’s operative complaint shows that her dismissed claims under
The second step of the inquiry requires that the trial court evaluate the significance of the overall relief obtained by plaintiff in relation to the hours reasonably expended on the litigation and reduce the lodestar calculation if the relief is limited in comparison to the scope of the litigation as a whole. (Espejo, supra, 13 Cal.App.5th at p. 382.) On this point, Alaska argues that the trial court “did not meaningfully consider Gunther’s limited success.”
As a preliminary matter, “there is no general rule requiring trial courts to explain their decisions on motions seeking attorney fees.” (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 101.) Accordingly, we draw no negative inference from an explanation Alaska considers to be “inadequate.” In any event, the trial court expressly considered and then rejected Alaska’s argument that time spent on Gunther’s dismissed claims should not be included in the lodestar calculation.
Alaska has failed to convince us that the trial court’s decision constituted an abuse of discretion. As stated by the United States Supreme Court, “the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit.” (Hensley, supra, 461 U.S. at p. 435.) Here, due to Gunther’s efforts, she defeated Alaska’s numerous affirmative defenses and obtained an injunctive order mandating that Alaska comply with
DISPOSITION
The penalties awarded under Labor Code
DATO, J.
WE CONCUR:
HALLER, Acting P. J.
GUERRERO, J.