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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
Case No. JCCP 4980 (Coordinated);
n Re:
ARRIAGA AND ASSOCIATES PROPOSED] STATEMENT OF
WAGE AND HOUR CASES DECISION
JUDICIAL COUNCIL COORDINATION
PROCEEDING NO. 4980 orable Julia Alloggiamen
Department 9
The matter was part of a consolidated and bifurcated/trifurcated case. After the jury
verdict the wage and hour class action claims, both sides w ved jury a d requested a co
trial on the defamation claim The defamation ourt trial was heard before the Honorable Julia
Alloggiamento on April 10, 11, and 12th Based on a prior court order dated December 15, 2022
re: M tions Bifurcate Trifurcate Court receive evidence as it may relate t
PAGA and indemnification claims at the same time it is presented to the jury for the wage
hour claims. After the jury verdict, if additional evidence is required for the benc al, the
court will receive it at that time. The Court has received further evidence and argument from
Plaintiff and t class an Defendant through submitted briefs, evidence and declarations.
These claims were argued before the Court on June 21,
Proposed Statement of Decisi
1 At the hearing, Nathan Reese and Vilmarie Cordero represented Plaintiff George Jordan
2 and the class, Ron Bidgoli represented Plaintiffs Eddie Giron and Jesus Alarcon and the class,
3 Jean Paul LeClerq represented Plaintiffs Jason Lara, Jose Segura, Doug Martin, Russ Oleyer,
4 Martin Verducci and the class, and Steven Berki and Sumble Manzoor represented Plaintiff
5 Francisco Ibarra and the class (collectively “Plaintiffs”).
6 Mr. Stephen Ilg and Ms. Dania Baker represented Defendants Arriaga & Associates and
7 Mr. Christopher Arriaga (collectively “Defendants”).
8 BACKGROUND
9 The jury reached verdicts in this matter on April 6, 2023 in favor of the Plaintiffs and the
10 Class, completing Verdict Forms 2700, 2702, 2703, 2706, 2707, and special verdict forms under
11 Labor Code section 558.1 as stipulated by the parties.
12 LABOR CODE SECTION 203 PENALTIES
13 Labor Code § 203 provides:
14 If an employer willfully fails to pay, without abatement or reduction, in accordance with
15 Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, and 205.5, any wages of an employee who is
16 discharged or who quits, the wages of the employee shall continue as a penalty form the due date
17 thereof at the same rate until paid or until an action therefor is commenced. “Waiting time”
18 penalties may be collected only after an employee is discharged or quit until a lawsuit is filed.
19 Id.; see also Triad Data Servs. Inc. v. Jackson, 153 Cal.App.3d Supp 1, 12 (1984) (overruled in
20 part on other grounds).
21 For each named plaintiff, the jury found that the plaintiff performed work for Arriaga &
22 Associates, that their employment ended, that Arriaga & Associates willfully failed to pay the
23 full amount of wages earned by the plaintiff on the last day of employment, and that the Arriaga
24 & Associates willfully failed to pay the full amount of wages for 30+ calendar days after the
25 plaintiffs’ last day of employment. Verdict Forms (“VF”) 2703 for plaintiffs Doug Martin, Eddie
26 Giron, Francisco Ibarra, Jesus Alarcon, Jose Segura, Martin Verducci, Timothy Russ Oleyer,
27 George Jordan. In addition, the jury found that the Waiting Time Penalties Class performed
28 work for Arriaga & Associates, that the Waiting Time Penalties Class’s employment ended, and
2
Proposed Statement of Decision
1 that Arriaga & Associates willfully failed to pay the full amount of wages earned by the Waiting
2 Time Penalties Class on their last day of employment. VF 2703. Finally, the jury found that
3 Christopher Arriaga was an owner, director, officer, or managing agent of Arriaga & Associates
4 and that he engaged in some affirmative action beyond his states as an owner, officer, or director
5 of Arriaga & Associates and/or had some oversight of Arriaga & Associates’ operations and/or
6 some influence on Arriaga & Associates policies that resulted in the willful failure to pay the full
7 amount of wages earned on the last day of employment. Special Verdict Form LC 558.1 Waiting
8 Time Penalties.
9 WAITING TIME PENALTIES FOR NAMED PLAINTIFFS
10 The jury further found the daily rate for each named plaintiff. Therefore, the Waiting
11 Time Penalties for the Named Plaintiffs are as follows:
12
13 Daily Rate found by jury 30 days plus penalty
14 Doug Martin $306.25 $9,187.50
15 Eddie Giron $280.00 $8,400.00
16 Francisco Ibarra $385.00 $11,550.00
17 Jesus Alacron $210.00 $6,300.00
18 Jose Segura $280.00 $8,400.00
19 Martin Verducci $262.50 $7,875.00
20 Russ Oleyer $280.00 $8,400.00
21 George Jordan $308.00 $9,240.00
22
23 WAITING TIME PENALTIES FOR WAITING TIME PENALTIES CLASS
24 The Waiting Time Penalties Class is defined as “All members of the Overtime Class,
25 Apple Off-the-Clock Class, Apple Overtime Class and Double Time Class whose employment
26 with Defendants ended on or after July 7, 2014 and up to July 31, 2021.
27 Defendants argue that any final pay penalties awarded in this action should be limited to
28 the final pay penalties under Labor Code section 203 allegedly earned prior to the date the first
3
Proposed Statement of Decision
1 class action claim commenced on July 7, 2017. See Defendant’s RJN 3, Exh. B. This argument
2 was raised in Defendant’s Motion in Limine 23 which was denied by the Court. See Declaration
3 of Nathan Reese in Support of Plaintiff’s Trial Brief-Rebuttal, Exh. A. There is no authority to
4 support Defendants’ argument that this initial action commenced on July 7, 2017 should preclude
5 class members prior to the certification of the class. Class members are entitled to receive notice
6 of a pending class action, along with an opportunity to opt out. See People v. Pacific Land
7 Research Co, 20 Cal.3d 10, 17 (1977). In this case, the Waiting Time Penalty Class was
8 certified on April 3, 2022. The class composition became final on December 22, 2022 since the
9 opt out deadline was December 21, 2022. However, Plaintiffs have requested the period only
10 continue to July 31, 2021, which was when they received the last batch of records produced by
11 the Defendants. This period falls clearly before the time in which the “action was commenced”
12 for class members.
13 Plaintiffs’ expert, Dr. William Roberts, PhD., calculated the Waiting Time Penalties. Dr.
14 Roberts is an economist/statistician with the firm of Phillips, Fractor & Company, LLC which
15 offers consulting services to firms, governmental agencies, and other organizations as well as
16 expert witness and consulting services in support of litigation, primarily in the areas of statistics,
17 economics, finance and survey related research. Declaration of William Roberts, Ph.D.,
18 hereinafter “Roberts Decl.”¶ 1. Dr. Roberts testified at trial on March 13, 2023, and this Court
19 qualified him as an expert witness regarding econometrics and damage modeling for wage and
20 hour class actions. Id. at ¶ 3
21 Dr. Roberts first considered the time and pay data to determine who separated
22 employment during the class period. Dr. Roberts and his team constructed a list of 817 names
23 based on the records provided by Defendant, but made calculations for only 798, excluding those
24 who worked four or fewer days and for whom they were not able to match time and pay records.
25 Id. at ¶¶ 10, 11 and fn.1. Then Dr. Roberts determined the average daily rate for Waiting Time
26 Penalties Class Members by looking at the pay data for the class member’s last year of
27 employment. Dr. Roberts calculated the average daily rate of pay for the 798 class members as
28 $208.88325 per day. Id. at ¶ 12. Finally, he assumed that each class member would be owed
4
Proposed Statement of Decision
1 their daily rate for 30 days. The amount of each member of the Waiting Time Penalty Class was
2 added together to total $5,000,665.00. Id. at ¶¶ 10-11.
3 Defendants argue that Dr. Roberts’ testimony lacked credibility and that the Court should
4 completely disregard his analysis. However, the jury and this Court found him to be credible.
5 Defendants argue that Plaintiffs have not proven that all 798 no longer work for the Defendants.
6 However, Defendant offer no evidence other than conjecture to support that Dr. Roberts
7 calculations were inaccurate.
8 Mr. Arriaga contends that it is not uncommon for employees to leave and then come back
9 and that therefore departure does not necessarily mean their position was terminated
10 permanently. Arriaga Decl. ¶ 6. However, Arriaga has also stated that in 2017 and 2018,
11 Arriaga & Associates “lost its primary client Dave & Busters” and “shrunk down to a shell of its
12 former self” and that the “Apple-related projects ended soon after that.” Defendants’ Trial Brief,
13 p. 10. This is consistent with the evidence that Arriaga no longer employed a substantial number
14 of its guards. Arriaga provides no evidence to support an argument that every person he ever
15 employed simply remains on “inactive but not terminated” status simply because he did not
16 officially provide a notice of termination. Such an analysis would permit Arriaga to avoid his
17 obligations under the law based on semantics but not reality. Moreover, the jury specifically
18 found that the “Waiting Time Penalties Class’s employment with Arriaga” ended. VF-2303.
19
20 UNFAIR COMPETITION LAW (UCL) CLAIM (Restitution)
21
22 Plaintiffs seek an award of restitution under the Cal. Bus. & Prof. Code sec. 17200
23 (“UCL”) in the amount of unpaid wages. The statute of limitations for bringing an action under
24 UCL is four years, while damages for unpaid wages are recoverable for a three-year statutory
25 period. See Cal. Bus. & Prof. §17208; Cortez v. Purolator Air Filtration Products Co. (2000) 23
26 Cal.4th 163, 168, 178. During the hearing, both sides acknowledged that the jury’s findings as to
27 overtime, double time, meal period and rest period breaks were calculated (by stipulation of both
28 sides) from July 7, 2013 for the class and July 7, 2014 for the individual plaintiffs. See Reporters
5
Proposed Statement of Decision
1 Transcript (“RT”) attached as Exh. B to the Supplemental Declaration of Nathan Reese, p.3670.
2 While the Plaintiffs initial papers seemed to request the Court award additional damages (above
3 what the jury awarded) for 2013-2014, the Plaintiffs acknowledged both in their rebuttal papers
4 and at the hearing that the jury analyzed the claims from 2013 and therefor the request is simply
5 that the Court confirm the jury’s award of damages. Plaintiffs have been clear in their intention
6 that they are not seeking double recovery, nor does the Court intend to award it.
7 Defendants additionally argue that Plaintiffs should not be allowed to recover both for the
8 individual plaintiffs and the class as the individual plaintiffs’ awards would necessarily be
9 subsumed in the class. However, Plaintiffs argue (and evidence supports this in the record) that
10 damages awarded to individualized plaintiffs were based on their specific claims, some of which
11 fell outside the class due to timing or location. Defendants seems to be requesting an offset for
12 individual damages but have presented no evidence to the Court on where the damages overlap.
13 Defendants have not presented the jury nor this court with any alternative damages nor
14 information or evidence to support an alternative calculation. Defendants challenge Plaintiffs’
15 expert but simultaneously made a strategic decision to not hire an expert of their own, neither for
16 the jury trial nor for the court trial. Similarly, Plaintiffs have not provided any updated or
17 different damage calculation for the individual Plaintiffs for the period of 2013-2014.
18 Defendants conclude that “if any individual recovery occurs, it should be limited to the amounts
19 tabulated by the jury already.” Defendants’ Trial Brief – Phase 3, p. 5. Plaintiffs conclude that
20 they “do not seek duplicative recovery … [and] the Court should confirm the jury’s award of
21 damages.” Plaintiffs Rebuttal, p.4. The Court has no additional evidence from either side to
22 calculate any award different than what was awarded by the jury and confirms the jury awards
23 for damages.
24
25 LABOR CODE SECTION 226 STATUTORY PENALTIES
26 Plaintiffs withdrew any claims for “actual damages” and agreed to seek only statutory
27 penalties under Labor Code section 226 for individual Plaintiffs and the Class. Plaintiffs Trial
28 Brief, p. 7.
6
Proposed Statement of Decision
1 Plaintiffs claim for failure to provide accurate itemized wage statement requires a
2 showing that (1) wage statements provided to the employees failed to comply with Labor Code §
3 226 (a)(1)-(9); (2) the employees suffered injury because of the missing information; and (3) the
4 employer’s failure was knowing and intentional. Labor Code § 226(e)(1).
5 Defendants argue that Plaintiffs claims fail for two reasons.
6 First, Defendants argue that Plaintiffs failed to prove that they suffered any injury.
7 However, for purposes of 226(e), a plaintiff is injured “if the accuracy of any items enumerated
8 in 226(a) [] cannot be ascertained from the four corners of the wage statement.” Raines v.
9 Coastal Pac. Food Distributors, Inc. (2018) 23 Cal.App.5th 667, 676 (citation omitted); Arroyo
10 v. International Paper Company (N.D. Cal. 2020) 611 F.Supp.3d 824, 843. The statute provides
11 that “a]n employee is deemed to suffer injury … if the employer fails to provide accurate and
12 complete information” as required by section 226, subdivision (a) and “the employee cannot
13 promptly and easily determine from the wage statement alone one or more of the following: (i)
14 The amount of gross wages or net wages paid to the employee during the pay period or any of
15 the other information required to be provided on the itemized wage statement…” Section
16 226(e)(2)(B) & (e)(2)(B)(i)); Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308,
17 1335. “An actual injury is shown where there is need for both additional documentation and
18 additional mathematical calculations in order to determine whether Plaintiffs were correctly paid
19 and what they may be owed.” See Cal. Lab. Code section 226(e)(2)(C); Arroyo v. International
20 Paper Company, supra at 843. In this case, the Court finds based on the evidence presented at
21 the trial and listed in listed in their Phase 3 trial briefs and supplemental brief (and incorporated
22 by reference) that the Plaintiffs have proven the elements above to be awarded statutory penalties
23 pursuant to Labor Code section 226.
24 Second, Defendants argue that “While individual Plaintiffs may be able to recover
25 penalties under Labor Code section 226, there can be no class action recovery for that claim
26 because it was not a certified claim.” Plaintiffs concede that the Itemized Wage Statement Class
27 was not certified by the Court but argue that the certified classes are entitled to Labor Code
28 section 226 damages as a derivative claim to their other claims. Plaintiffs’ Rebuttal Br. at pp. 4-
7
Proposed Statement of Decision
1 6. As an initial matter, Plaintiffs fail to offer any direct argument or authority in support of their
2 position, and it should be deemed abandoned or forfeited. See In re Phoenix H. (2009) 47
3 Cal.4th 835, 845 [“ ‘ “Contentions supported neither by argument nor by citation of authority are
4 deemed to be without foundation and to have been abandoned.” [Citations.]’ [Citation.]”];
5 Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [A court may deem an issue or
6 assertion as forfeited or waived if a party “fails to raise a point or asserts it but fails to support it
7 with reasoned argument and citations to authority[.]”].
8 In the Motion for Class Certification, the Plaintiffs sought to certify an “Itemized Wage
9 Statement Class” as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple
10 Overtime Class, and Double Time Class, and who were employed by Defendants on or after June
11 16, 2016. The Plaintiffs also sought to certify a “Waiting Time Penalties Class” as “All
12 members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime Class, and Double
13 Time Class, and whose employment with Defendants ended on or after July 7, 2014.” Order Re:
14 Motion for Class Certification dated April 3, 2022 (“Order”), p. 6.
15 The Court explained in the Order that “Plaintiffs submit evidence showing that the
16 proposed classes, with the exception of the Itemized Wage Statement Class, are sufficiently
17 numerous.” Id. at p. 7. “Plaintiffs do not present any argument or evidence regarding the
18 estimated number of individuals in the Itemized Wage Statement …[thus] Plaintiffs fail to
19 establish that the Itemized Wage Statement Class is sufficiently numerous.” Id.
20 At the hearing for Class Certification, Plaintiffs argued “that the Itemized Wage
21 Statement Class is derivative of other claims, such as the Apple Off-The-Clock-Claim, and is
22 therefore sufficiently numerous and should be certified to the extent the other claims are
23 certified.” The Court rejected this argument, finding the individuals defined in the Itemized
24 Wage Statement Class to not be “coextensive with the Apple Off-The-Clock Class” and
25 therefore the Court could not determine the appropriate number of individuals. Order at pp. 8-9.
26 Specifically, the Court noted that the Itemized Wage Statement Class consisted of individuals
27 employed by Defendants on or after June 16, 2016, while the Apple Off-The-Clock, Apple
28 Overtime, Overtime, and Double Time Classes consisted of individuals employed by Defendants
8
Proposed Statement of Decision
1 after July 7, 2013. Id. at pp. 6-7, 9. In other words, there was a substantial three-year difference
2 in the class periods.
3 In contrast to the Itemized Wage Statement Class, the Waiting Time Penalties Class was
4 certified. Like the Itemized Wage Statement Class, the Waiting Time Penalties Class was
5 defined as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime
6 Class, and Double Time Class, and whose employment with the Defendants ended on or after
7 July 7, 2014.” Order at p.6. This too was identified as a derivative claim.
8 Plaintiffs argued at the hearing that they sought to certify classes, not claims. They
9 contend that since this is a derivative claim, it does not matter that the Wage Statement Class was
10 not certified. Again, Plaintiffs provide no legal support for their position. Plaintiffs’ argument
11 that both the Itemized Wage Statement Class and the Waiting Time Penalties Class are derivative
12 claims involving classes that were already certified, then they would logically suggest that they
13 never needed to seek certification of either. However, contrary to that argument, they did
14 appropriately seek certification, and the Court certified one and not the other.
15 If a class is not certified, Plaintiffs do not have the right to act on behalf of and bind
16 absent proposed class members. Smith v. Bayer Corp. (2011) 564 U.S. 299, 315 (Smith)1
17 [“Neither a proposed class action nor a rejected class action may bind nonparties. What does
18 have this effect is a class action approved under Rule 23.”]; id. at 316, fn. 11 [“The great weight
19 of scholarly authority—from the Restatement of Judgments to the American Law Institute to
20 Wright and Miller—agrees that an uncertified class action cannot bind proposed class members.
21 [Citations.]”]; Daniels v. Bursey (7th Cir. 2005) 430 F.3d 424, 4282 [where no class is certified,
22 absent class members cannot be bound by the parties]; AAL High Yield Bond Fund v. Deloitte &
23 Touche LLP (11th Cir. 2004) 361 F.3d 1305, 1310 [“Persons who are not class members are not
24 bound at all.”]; see Williams, supra, 50 Cal.App.5th at p. 125 [“[U]nder California law, an order
25
26
1
“Smith held that putative class members in a case where the court refused to certify a class are not bound by that
decision; they may relitigate certification in a subsequent case. [Citation.]” (Williams v. U.S. Bancorp Investments,
27 Inc. (2020) 50 Cal.App.5th 111, 119 (Williams). “Although Smith was decided under federal law, its reasoning has
since been applied to class actions brought under California law.” (Id. at p. 120.)
2
28 Decisions from federal courts of appeal may be considered persuasive authority. (People v. Bradford (1997) 15
Cal.4th 1229, 1292 [Decisions from federal courts of appeals “provide persuasive rather than binding authority.
[Citations.]”].)
9
Proposed Statement of Decision
1 decertifying a class has no preclusive effect on absent class members.”]; Bridgeford v. Pacific
2 Health Corp. (2012) 202 Cal.App.4th 1034, 1044 [following Smith and concluding that “under
3 California law, that the denial of class certification cannot establish collateral estoppel against
4 unnamed putative class members on any issue because unnamed putative class members were
5 neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to
6 be considered in privity with such a party for purposes of collateral estoppel”].
7 Plaintiffs may not bypass the carefully crafted requirements for class treatment which
8 places the burden on the party moving for class certification to demonstrate “the existence of an
9 ascertainable and sufficiently numerous class[.]” Brinker Restaurant Corp. v. Superior Court
10 (2012) 53 Cal.4th 1004, 1021 (Brinker). Indeed, Plaintiffs themselves recognized the necessity
11 of moving for class certification of the Itemized Wage Statement Class, but now focus their
12 arguments on the merits of their claims, largely repeating the argument they made before the
13 Court (Judge Lucas), asserting that “[b]ecause the underlying violations were proven, the wage
14 statements must be inaccurate on a derivative basis. Thus, there is no outstanding question
15 regarding numerosity or whether class members have suffered an injury.” Plaintiffs’ Rebuttal
16 Br. at p. 5. Whether Plaintiffs’ claims are meritorious is not the same as whether the procedural
17 requirements for maintaining a class action are met. (Brinker, supra, 53 Cal.4th at pp. 1023-
18 1024 [noting that while merits issues may overlap with class action requirements, they are
19 distinct].)
20 While the Court maintains discretion to alter or amend the Class Certification Order,
21 Plaintiffs did not move to certify the Itemized Wage Statement Class before or even during the
22 trial. In fact, at the PAGA hearing, Plaintiffs’ counsel specifically argued that they were not
23 seeking reconsideration of the Certification Order. Plaintiffs could have asked the Court at an
24 earlier stage to revisit the class certification—and presented the Court with evidence establishing
25 that the Itemized Wage Statement Class was sufficiently numerous, but they chose not to.
26 Furthermore, the Court may modify a class certification order only before a decision on
27 the merits. (See B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341,
28 1348 [“[A] class certification order may be conditional and may be altered or amended before a
10
Proposed Statement of Decision
1 decision on the merits. [Citations.]”]; see also Espejo v. The Copley Press, Inc. (2017) 13
2 Cal.App.5th 329, 358 [suggesting in the class action context a later judge is not necessarily
3 bound by the class certification ruling of a prior judge].) Here, the jury has already made its
4 findings in the first phase of the trial regarding the accuracy of the wage statements at issue.
5 Even if Plaintiffs were seeking to modify the Class Certification Order at this stage, it would be
6 untimely. See In re Citizens Bank, N.A. (3d Cir. 2021) 15 F.4th 607, 618-619, fn. 11 [post-trial
7 class certification generally improper].
8 The Court finds that 226 Penalties are appropriate for the named Plaintiffs but declines to
9 award them for the Class that was not certified by the Court. The Court awards Labor Code 226
10 penalties for named plaintiffs in the following amounts:
11 George Jordan: $450
12 Eddie Giron: $2,350
13 Jesus Alarcon: $2,550
14 Martin Verducci: $2,550
15 Timothy Russ Oleyer: $2,950
16 Jose Segura: $2,250
17 Douglas Martin: $1,950
18 Francisco Ibarra: $1,550
19 PAGA CLAIMS (civil penalties)
20 Plaintiffs seek penalties under the Private Attorney General Act (“PAGA”) against
21 Defendants for violations to Labor Code sections 510, 512, 1194, 1197, 226, 203, 1198, and
22 2802. PAGA penalties are separate from and in addition to any civil recoveries. Z.B., N.A. v.
23 Superior Court (2019) 8 Cal. 5th 175, 195.
24 In support of their PAGA claims, Plaintiffs request for this Court to take judicial notice of
25 Exhibits A-C (“RFJN”). Similarly, in their Trial Brief, Defendants request the Court to take
26 judicial notice of their Exhibits A & B. Judicial Notice may be taken of facts and propositions
27 that are not reasonably subject to dispute and are capable of immediate and accurate
28 determination by resort to sources of reasonably indisputable accuracy. Evid. Code section
11
Proposed Statement of Decision
1 452(h). Plaintiffs Request for Judicial Notice of Exhibits A-C and Defendants Request for
2 Judicial Notice of Exhibits A and B are granted.
3 Plaintiffs satisfied the procedural requirements of PAGA pursuant to Labor Code section
4 2699.3. Plaintiffs Jason Lara, Jose Segura, George Jordan, Francisco Ibarra sent written notice
5 to the LWDA and Defendants. Plaintiffs’ RFJN A, B, C. Plaintiffs did not receive any notice
6 from LWDA of an intent to investigate the alleged violations within 65 calendar days. In
7 addition, the jury’s verdict in Phase I found that all Plaintiffs have suffered at least one of the
8 Labor Code violations during the PAGA period. The PAGA claim period is one year and sixty-
9 five days (Cal. Labor Code section 2699.3(d), Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42,
10 59. The statute of limitations for PAGA claims is one year plus any additional time during
11 which the PAGA claim is equitably tolled. Code Civ. Proc. Section 340(b); Brown v. Ralphs
12 Grocery Co (2018) 28 Cal.App.5th 824, 839. In this case, Plaintiffs have agreed to limit the
13 PAGA period to the end date reflected on the time and pay data produced by Defendants,
14 rendering the period July 30, 2016 to July 30, 2021.
15 PAGA penalties in this case were calculated by Plaintiffs’ expert, William Roberts, PhD.
16 Dr. Roberts created modeling for civil penalties recoverable under PAGA such as those at issue
17 in this case. Roberts Decl. ¶ 7. While Plaintiffs argue that Defendants were required to pay
18 employees on a weekly basis (see infra), Dr. Roberts used the Defendants’ two-week payroll
19 period to estimate PAGA penalties (with the exception of penalties for failure to provide weekly
20 wage statements), suggesting an underestimate of penalties. Roberts Decl. ¶ 6.
21 Plaintiffs’ expert and his team reviewed time and payroll records produced by Arriaga &
22 Associates as well as data derived from those documents and incorporated into the excel
23 spreadsheet prepared by iBridge and entered into evidence as Exhibit 273. Roberts Decl. ¶ 25.
24 Dr. Roberts and his team determined that there were 9,817 pay periods worked by covered
25 employees from July 30, 2016 to July 30, 2021 (all future references to “employees” will refer to
26 “covered employees from July 30, 2016 to July 30, 2021). Roberts Decl. ¶ 26.
27 1. PAGA Penalties for Failure to Pay Overtime and Double-time Wages
28
12
Proposed Statement of Decision
1 Plaintiffs’ expert calculated 4,992 pay periods worked by employees in which the
2 employee’s workday exceeded 8 hours, giving rise to a potential overtime violation. Id. ¶ 29. In
3 addition, there were 700 pay periods worked by employees in which the employee’s workday
4 exceeded twelve hours, giving rise to a potential double time violation. Id. ¶ 30. Plaintiffs’
5 expert calculated the PAGA penalties at $50 for each pay period for each individual for a total of
6 $76,200 civil penalty. Id. ¶ 32. It is clear from the evidence at trial that Defendants never paid
7 its guards overtime or double-time. The Court awards Plaintiffs $76,200.
8 2. PAGA Penalties for Failure to Pay Minimum Wages
9 The expert considered for this calculation only the employees that worked at the Apple
10 Campus during the PAGA period. This is consistent with the jury verdict related to the Apple
11 Off-the-Clock Class which found that Defendants owed the Apple Off-the-Clock Class wages
12 under the terms of its employment. VF-2700. The expert calculated the penalties at $100 for
13 each period for each individual for a total of $612,190 for violations of Labor Code 1194, 1197.
14 Roberts Decl. ¶ 32. This calculation had a margin of error of 2.16% with an upper estimate of
15 $625,400 and a lower estimate of $598,900, with an average of $612,190. Given the variation in
16 testimony from workers at the Apple Campus as well as the margin of error, in the interest of
17 justice, the Court awards the lower estimate of $598,900.
18 3. PAGA Penalties for Failure to Provide Rest Breaks
19 The expert determined there were 9,698 pay periods worked by employees in which the
20 workday exceeded 3.5 hours, giving rise to a potential rest break violation in violation of Labor
21 Code 226.7. Roberts Decl. ¶ 27 and Table 1. Dr. Roberts calculated the PAGA penalties for
22 violation of Labor Code 512 at $100 for each pay period for each individual for a total of
23 $950,508. Id. ¶ 32. The Court awards the average estimate of $950,508.
24 4. PAGA Penalties for Failure to Provide Meal Breaks
25 The expert determined that there were 9,532 pay periods worked by employees in which
26 the workday exceed five hours, giving rise to a potential meal break violation in violation of
27 Labor Code 512. Roberts Decl. ¶ 28. The expert calculated the PAGA penalties at $50 per pay
28 period for each individual for a total of $459,665. Id. ¶ 32.
13
Proposed Statement of Decision
1 5. PAGA Penalties for Failure to Pay Premium Wages for Missed Meal or Rest Breaks
2 Plaintiffs’ expert calculated Defendants failure to pay meal or rest break premiums at
3 $100 for each pay period for each individual for a total of $919,330 for missing meal premiums
4 and $950,509 for missing rest premiums pursuant to Labor code section 226.7. Roberts Decl. ¶
5 32 and Table 1. The Court awards Plaintiffs the average amount of $919,330 for failure to pay
6 meal premiums and $950,509 for failure to pay rest premiums.
7 6. PAGA Penalties for Violation of Labor Code section 2802
8 The expert determined there were 5,300 months worked by employees at the Apple
9 Campus and/or Dave & Busters giving rise to a potential unpaid reimbursement violation.
10 Roberts Decl. ¶ 31. Dr. Roberts calculated the PAGA penalties to be $334,342. Id. ¶ 32. The
11 margin of error is 7.57% with the lower amount being $308,300 and the upper amount being
12 $358,900. Given the variation of testimony at trial regarding reimbursements and the margin of
13 error, in the interest of justice, the Court awards the lower amount of $308,300.
14 7. PAGA Penalties for Violation of Labor Code 226(a)
15 Plaintiffs seek “PAGA penalties for failure to provide an itemized wage statement at
16 $250 for each work week during the two-week pay period where an employee worked both
17 weeks but received only one wage statement pursuant to section 210 [sic]”3 for a total civil
18 penalty of $1,985,500. Plaintiffs’ Trial Br. at p. 15.
19 Plaintiffs also seek “PAGA penalties for failure to provide accurate wage statements at
20 [$]100 for each pay period, for each individual, for a $975,811 civil penalty.” Plaintiffs’ Trial
21 Br. at p. 15. There is no citation to specific statute, but Plaintiffs cite to the Roberts Declaration
22 at paragraph 32, which in turn references section 226. Based on Plaintiffs’ argument that
23
24
3
Plaintiffs’ citation to section 210 appears to be a typographical error. (Plaintiff’s Trial Br. at p. 15.) Section 210
applies to “fail[ure] to pay the wages of each employee” and not failure to provide a wage statement. (§ 210, subd.
25 (a).) It also provides for a penalty of $100 for the initial violation and $200 for subsequent or willful and intentional
violations (§ 210, subds. (a)(1) & (a)(2)) and not the $250 penalty asserted by Plaintiffs. Plaintiffs likely meant to
26 cite to section 226.3, which provides for “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
27 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.” That Plaintiffs likely meant to reference section 226.3
28 is consistent with their citation to paragraph 32 of the Declaration of William Roberts, Ph.D. [] (Roberts Decl.),
which cites to section 226.3 in relation to the $1,985,500 penalty. Accordingly, this Court will analyze the
$1,985,500 civil penalty sought as pursuant to section 226.3.
14
Proposed Statement of Decision
1 “PAGA allows a claim for a violation of section 226(a) without any reference to subdivision (e)”
2 and citation to Lopez v. Friant & Associates, LLC (2017) 15 Cal.App.5th 773, 784-785 (Lopez)
3 [“Because section 226(e)(1) sets forth the elements of a private cause of action for damages and
4 statutory penalties, its requirement that a plaintiff demonstrate ‘injury’ resulting from a ‘knowing
5 and intentional’ violation of section 226(a) is not applicable to a PAGA claim for recovery of
6 civil penalties.”], Plaintiffs seek PAGA default civil penalties pursuant to section 2699,
7 subdivision (f)(2)4 for violation of section 226, subdivision (a). (See FAC at ¶ 188 [“Thus, under
8 Labor Code § 2699(f)(2), Defendants are subject to a civil penalty of $100 for each aggrieved
9 employee per pay period for the initial violation of Labor Code §§ 226(a) and 1198, and $200 for
10 each aggrieved employee per pay period for each subsequent violation.”].)
11 In short, Plaintiffs seek civil penalties under both section 226.3 and section 2699,
12 subdivision (f)(2).
13 A. Civil Penalties for Violating Section 226, Subdivision (a)
14
15 Depending on the facts, a civil penalty for violation of § 226, subd. (a) is available under
16 the default penalty provision of § 2699, subd. (f)(2) or the heightened penalty provision of
17 § 226.3. Gunther v. Alaska Airlines, Inc. (2021) 72 Cal.App.5th 334, 355-356 (Gunther).
18 In Raines, the plaintiff sought PAGA penalties under section 2699, subdivision (f)(2) for
19 failing to provide accurate itemized wage statements showing “all applicable hourly rates in
20 effect during the pay period” as required under section 226, subdivision (a)(9). (Raines, supra,
21 23 Cal.App.5th at pp. 673-674.) The appellate court explained that there were three possible
22 remedies for a violation of section 226, subdivision (a): (1) statutory penalties to employees who
23 suffered an injury pursuant to section 226, subdivision (e)(1); (2) injunctive relief pursuant to
24 section 226, subdivision (h); and (3) civil penalties pursuant to section 226.3. (Id. at p. 673; see
25
26 4
“The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to
27 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
28 and a private right of action’ for aggrieved employees. [Citation.]” (Home Depot U.S.A., Inc. v. Superior Court
(2010) 191 Cal.App.4th 210, 216; Lopez, supra, 15 Cal.App.5th at p. 778.)
15
Proposed Statement of Decision
1 Gunther, supra, 72 Cal.App.5th at p. 354 (discussing Raines).) While “Raines sought recovery
2 under the default provision of section 2699, subdivision (f), applicable where there is no existing
3 civil penalty[,]” “section 226.3 provides civil penalties for a violation of section 226(a)[,]” so the
4 appellate court concluded that Raines’ “PAGA claim [fell] under subdivision (a) of section
5 2699.” (Raines, supra, 23 Cal.App.5th at p. 674; see id. at p. 675 [“We find more persuasive a
6 decision that found section 226.3 sets out a civil penalty for all violations of section 226.
7 [Citation.]” (Emphasis original.)]; Culley v. Lincare Inc. (E.D. Cal. 2017) 236 F.Supp.3d 1184,
8 1194 [“Because § 226.3 sets out a civil penalty for all violations of § 226, PAGA’s default civil
9 penalties do not apply to wage statement violations. Thus, a PAGA plaintiff can collect civil
10 penalties set out in § 226.3, and, if the wage statement violations create ‘injury as a result of a
11 knowing and intentional’ violation, the statutory penalties set out in § 226(e)(1).” (Emphasis
12 original.)].)
13 In Gunther, the trial court, relying on Raines v. Coastal Pacific Food Distributors, Inc.
14 (2018) 23 Cal.App.5th 667, 674-675 (Raines) (§ 226.3 sets forth the civil penalty for all § 226
15 violations) awarded the plaintiff over $25 million in civil penalties under section 226.3 for
16 “violat[ing] section 226(a)(2), (3), and (9) by failing to state the total hours worked, the number
17 of piece-rate units earned, and the corresponding rate of pay for each.” Gunther, supra, 72
18 Cal.App.5th at pp. 343, 353. The defendant challenged this civil penalty award on the basis that
19 “the trial court wrongly imposed heightened penalties under section 226.3.” Id. at p. 347.
20 Specifically, the defendant argued that “[b]ecause it provided wage statements and kept the
21 required records, . . . the $25 million in heightened penalties awarded by the trial court should be
22 vacated and the matter remanded with an instruction to apply the default penalty amounts set
23 forth in subdivision (f)(2) of section 2699.” Id. at p. 353. Citing Raines, the plaintiff asserted
24 “that section 226.3 provides a civil penalty for all violations of section 226 and is not limited to
25 situations where the employer fails to provide a wage statement or to keep records.” Id. The
26 appellate court declined to follow Raines, explaining:
27 Of course the choice is not, as Raines suggests, between a penalty
28 under section 226.3 and no penalty for an inadequate wage
16
Proposed Statement of Decision
1 statement. Instead, the question is which penalty provision
2 applies—the default penalty in section 2699, subdivision (f) or the
3 heightened penalty under section 226.3?
4
5 Gunther, supra, 72 Cal.App.5th at p. 355, (emphasis original).
6 The Gunther court continued:
7 Here, it is undisputed that Alaska provided wage statements to its
8 flight attendants, and Gunther dismissed her challenge that Alaska
9 failed to maintain records. Because the violations found by the
10 trial court resulted from Alaska’s failure to include certain
11 information in its wage statements, Alaska should have been
12 subject to the default civil penalties in section 2699, subdivision
13 (f)(2), not the heightened penalties in section 226.3. Accordingly,
14 we reverse the section 226.3 penalties and remand the matter to the
15 trial court for further proceedings regarding civil penalties under
16 section 2699, subdivision (f)(2)[.]
17
18 Gunther, supra, 72 Cal.App.5th at pp. 355-356.
19 In this case, consistent with Gunther, Plaintiffs seek to recover civil penalties under
20 section 226.3 for instances where they did not receive a wage statement at all and additionally
21 separate civil penalties under section 2699, subdivision (f)(2) for different instances where they
22 did receive a wage statement, but that wage statement was inaccurate. Gunther, supra, 72
23 Cal.App.5th at pp. 355-356.) Plaintiffs seek $1,985,500 at $250 per violation based on 7,942
24 violations of failing to provide a wage statement. Roberts Decl. ¶ 32. In addition, Plaintiffs seek
25 $975,811 at $100 per violation based on 9,758.11 violations of providing inaccurate wage
26 statements. Id.
27
28
17
Proposed Statement of Decision
1 B. Civil Penalties Pursuant to 2699(f)(2) for Failure to Provide Accurate Wage
2 Statements
3 There is no question that based on the evidence presented at trial and supplemented in the
4 papers and declarations presented for Phase III that Defendants failed to provide accurate wage
5 statements. Thus, the Court awards $975,811 in civil penalties for the inaccurate wage
6 statements as determined by the Plaintiffs’ expert pursuant to 2699(f)(2).
7 C. Civil Penalties Pursuant to 226.3 for Failure to Provide A Weekly Wage
8 Statement
9 In their initial Trial Brief, Plaintiffs argue that “[a]ny employer who is the security
10 services industry providing security guards to clients is required by Labor Code section 201.3 to
11 establish weekly pay period.” (Plaintiffs’ Trial Br. P. 13 citing Labor Code section
12 201.3(b)(1)(B)). In their Trial Brief, Defendants argue that Plaintiffs did not meet the specific
13 requirements of that section. Labor Code section 201.3(b)(1)(B) states:
14 (B) …, if an employee of a temporary services employer in the security services industry
15 is a security guard who is registered pursuant to Chapter 11.5 (commencing with Section
16 7580) of Division 3 of the Business and Professions Code, is employed by a private
17 patrol officer licensed pursuant to that chapter and is assigned to work for a client, that
18 employee’s ages are due and payable no less frequently than weekly, regardless of when
19 the assignment ends, and wages for work performed during any workweek, as defined
20 under Section 500, shall be due and payable not later than the regular payday of the
21 following work week.
22
23 Defendants contend that pursuant to section 201.3, subdivision (b)(1)(B), Plaintiffs failed
24 to prove that Defendants were a “temporary services employer[,]” each security guard was
25 “registered pursuant to Chapter 11.5 (commencing with Section 7580) of Division 3 of the
26 Business and Professions Code,” and Plaintiffs were “employed by a private patrol operator[.]”
27 Defendants’ Trial Br. at pp. 7-8. Plaintiffs respond that the evidence reflects that Defendants
28 were a “temporary services employer” and “[s]everal class members testified that they were
18
Proposed Statement of Decision
1 registered security guards and that they have a guard card.” Plaintiffs’ Rebuttal Br. at pp. 7-8.
2 Plaintiffs’ Rebuttal Brief does not challenge Defendants’ contention that Plaintiffs failed to prove
3 the licensed private patrol operator element.
4 1. Plaintiffs Failed to Satisfy the Procedural Requirements of PAGA
5 Regarding their Claim of Failure to Provide Weekly Statements
6 Unlike their other PAGA claims, Plaintiffs did not send written notice to the LWDA and
7 Defendants of claimed violations by the Defendants for failure to provide weekly statements.
8 Plaintiffs RFJN A-C. In contrast, they did send written notice of Defendants’ failure to provide
9 accurate statements.
10 2. Plaintiffs Failed to Provide Sufficient Evidence of Defendants’ Failure to
11 Provide Weekly Statements Prior to the Matter Being Submitted.
12 At the PAGA hearing, the Court inquired as to whether Defendants were “licensed as a
13 private patrol operator.” The Plaintiffs discussed at the hearing and then later filed a Request for
14 Judicial Notice. The Request for Judicial Notice and the Lenett Declaration were both filed on
15 June 30, 2023, after the matter was deemed submitted on June 21, 2023. Minute Order of June
16 21, 2023. Plaintiffs’ Request for Judicial Notice seeks judicial notice pursuant to Evidence Code
17 sections 451 to 453 of licensing information about Defendants from the Bureau of Security and
18 Investigative Services, section 201.3, and Business and Professions Code sections 7580.4,
19 7580.6 to 7580.10. In particular, Exhibit A of Plaintiffs’ Request for Judicial Notice (Exhibit A)
20 seeks to introduce evidence showing that Defendants were licensed by the Bureau of Security
21 and Investigative Services as a private patrol operator and a private patrol operator qualified
22 manager.5
23 Prior to filing their request for Judicial Notice, Plaintiffs did not move to vacate
24 submission and reopen the case for the Court to receive additional evidence, concerning, among
25 other things, Defendants’ status as a licensed private patrol operator.
26
27
5
28 Specifically, Exhibit A comprises of printouts of search results from the California Department of Consumer
Affairs’ website at https://search.dca.ca.gov/ reflecting that Arriaga & Associates is currently licensed as a private
patrol operator and Louis Christopher Arriaga, Jr. is a PPO qu
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA Case No. JCCP 4980 (Coordinated); n Re: ARRIAGA AND ASSOCIATES PROPOSED] STATEMENT OF WAGE AND HOUR CASES DECISION JUDICIAL COUNCIL COORDINATION PROCEEDING NO. 4980 orable Julia Alloggiamen Department 9 The matter was part of a consolidated and bifurcated/trifurcated case. After the jury verdict the wage and hour class action claims, both sides w ved jury a d requested a co trial on the defamation claim The defamation ourt trial was heard before the Honorable Julia Alloggiamento on April 10, 11, and 12th Based on a prior court order dated December 15, 2022 re: M tions Bifurcate Trifurcate Court receive evidence as it may relate t PAGA and indemnification claims at the same time it is presented to the jury for the wage hour claims. After the jury verdict, if additional evidence is required for the benc al, the court will receive it at that time. The Court has received further evidence and argument from Plaintiff and t class an Defendant through submitted briefs, evidence and declarations. These claims were argued before the Court on June 21, Proposed Statement of Decisi 1 At the hearing, Nathan Reese and Vilmarie Cordero represented Plaintiff George Jordan 2 and the class, Ron Bidgoli represented Plaintiffs Eddie Giron and Jesus Alarcon and the class, 3 Jean Paul LeClerq represented Plaintiffs Jason Lara, Jose Segura, Doug Martin, Russ Oleyer, 4 Martin Verducci and the class, and Steven Berki and Sumble Manzoor represented Plaintiff 5 Francisco Ibarra and the class (collectively “Plaintiffs”). 6 Mr. Stephen Ilg and Ms. Dania Baker represented Defendants Arriaga & Associates and 7 Mr. Christopher Arriaga (collectively “Defendants”). 8 BACKGROUND 9 The jury reached verdicts in this matter on April 6, 2023 in favor of the Plaintiffs and the 10 Class, completing Verdict Forms 2700, 2702, 2703, 2706, 2707, and special verdict forms under 11 Labor Code section 558.1 as stipulated by the parties. 12 LABOR CODE SECTION 203 PENALTIES 13 Labor Code § 203 provides: 14 If an employer willfully fails to pay, without abatement or reduction, in accordance with 15 Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, and 205.5, any wages of an employee who is 16 discharged or who quits, the wages of the employee shall continue as a penalty form the due date 17 thereof at the same rate until paid or until an action therefor is commenced. “Waiting time” 18 penalties may be collected only after an employee is discharged or quit until a lawsuit is filed. 19 Id.; see also Triad Data Servs. Inc. v. Jackson, 153 Cal.App.3d Supp 1, 12 (1984) (overruled in 20 part on other grounds). 21 For each named plaintiff, the jury found that the plaintiff performed work for Arriaga & 22 Associates, that their employment ended, that Arriaga & Associates willfully failed to pay the 23 full amount of wages earned by the plaintiff on the last day of employment, and that the Arriaga 24 & Associates willfully failed to pay the full amount of wages for 30+ calendar days after the 25 plaintiffs’ last day of employment. Verdict Forms (“VF”) 2703 for plaintiffs Doug Martin, Eddie 26 Giron, Francisco Ibarra, Jesus Alarcon, Jose Segura, Martin Verducci, Timothy Russ Oleyer, 27 George Jordan. In addition, the jury found that the Waiting Time Penalties Class performed 28 work for Arriaga & Associates, that the Waiting Time Penalties Class’s employment ended, and 2 Proposed Statement of Decision 1 that Arriaga & Associates willfully failed to pay the full amount of wages earned by the Waiting 2 Time Penalties Class on their last day of employment. VF 2703. Finally, the jury found that 3 Christopher Arriaga was an owner, director, officer, or managing agent of Arriaga & Associates 4 and that he engaged in some affirmative action beyond his states as an owner, officer, or director 5 of Arriaga & Associates and/or had some oversight of Arriaga & Associates’ operations and/or 6 some influence on Arriaga & Associates policies that resulted in the willful failure to pay the full 7 amount of wages earned on the last day of employment. Special Verdict Form LC 558.1 Waiting 8 Time Penalties. 9 WAITING TIME PENALTIES FOR NAMED PLAINTIFFS 10 The jury further found the daily rate for each named plaintiff. Therefore, the Waiting 11 Time Penalties for the Named Plaintiffs are as follows: 12 13 Daily Rate found by jury 30 days plus penalty 14 Doug Martin $306.25 $9,187.50 15 Eddie Giron $280.00 $8,400.00 16 Francisco Ibarra $385.00 $11,550.00 17 Jesus Alacron $210.00 $6,300.00 18 Jose Segura $280.00 $8,400.00 19 Martin Verducci $262.50 $7,875.00 20 Russ Oleyer $280.00 $8,400.00 21 George Jordan $308.00 $9,240.00 22 23 WAITING TIME PENALTIES FOR WAITING TIME PENALTIES CLASS 24 The Waiting Time Penalties Class is defined as “All members of the Overtime Class, 25 Apple Off-the-Clock Class, Apple Overtime Class and Double Time Class whose employment 26 with Defendants ended on or after July 7, 2014 and up to July 31, 2021. 27 Defendants argue that any final pay penalties awarded in this action should be limited to 28 the final pay penalties under Labor Code section 203 allegedly earned prior to the date the first 3 Proposed Statement of Decision 1 class action claim commenced on July 7, 2017. See Defendant’s RJN 3, Exh. B. This argument 2 was raised in Defendant’s Motion in Limine 23 which was denied by the Court. See Declaration 3 of Nathan Reese in Support of Plaintiff’s Trial Brief-Rebuttal, Exh. A. There is no authority to 4 support Defendants’ argument that this initial action commenced on July 7, 2017 should preclude 5 class members prior to the certification of the class. Class members are entitled to receive notice 6 of a pending class action, along with an opportunity to opt out. See People v. Pacific Land 7 Research Co, 20 Cal.3d 10, 17 (1977). In this case, the Waiting Time Penalty Class was 8 certified on April 3, 2022. The class composition became final on December 22, 2022 since the 9 opt out deadline was December 21, 2022. However, Plaintiffs have requested the period only 10 continue to July 31, 2021, which was when they received the last batch of records produced by 11 the Defendants. This period falls clearly before the time in which the “action was commenced” 12 for class members. 13 Plaintiffs’ expert, Dr. William Roberts, PhD., calculated the Waiting Time Penalties. Dr. 14 Roberts is an economist/statistician with the firm of Phillips, Fractor & Company, LLC which 15 offers consulting services to firms, governmental agencies, and other organizations as well as 16 expert witness and consulting services in support of litigation, primarily in the areas of statistics, 17 economics, finance and survey related research. Declaration of William Roberts, Ph.D., 18 hereinafter “Roberts Decl.”¶ 1. Dr. Roberts testified at trial on March 13, 2023, and this Court 19 qualified him as an expert witness regarding econometrics and damage modeling for wage and 20 hour class actions. Id. at ¶ 3 21 Dr. Roberts first considered the time and pay data to determine who separated 22 employment during the class period. Dr. Roberts and his team constructed a list of 817 names 23 based on the records provided by Defendant, but made calculations for only 798, excluding those 24 who worked four or fewer days and for whom they were not able to match time and pay records. 25 Id. at ¶¶ 10, 11 and fn.1. Then Dr. Roberts determined the average daily rate for Waiting Time 26 Penalties Class Members by looking at the pay data for the class member’s last year of 27 employment. Dr. Roberts calculated the average daily rate of pay for the 798 class members as 28 $208.88325 per day. Id. at ¶ 12. Finally, he assumed that each class member would be owed 4 Proposed Statement of Decision 1 their daily rate for 30 days. The amount of each member of the Waiting Time Penalty Class was 2 added together to total $5,000,665.00. Id. at ¶¶ 10-11. 3 Defendants argue that Dr. Roberts’ testimony lacked credibility and that the Court should 4 completely disregard his analysis. However, the jury and this Court found him to be credible. 5 Defendants argue that Plaintiffs have not proven that all 798 no longer work for the Defendants. 6 However, Defendant offer no evidence other than conjecture to support that Dr. Roberts 7 calculations were inaccurate. 8 Mr. Arriaga contends that it is not uncommon for employees to leave and then come back 9 and that therefore departure does not necessarily mean their position was terminated 10 permanently. Arriaga Decl. ¶ 6. However, Arriaga has also stated that in 2017 and 2018, 11 Arriaga & Associates “lost its primary client Dave & Busters” and “shrunk down to a shell of its 12 former self” and that the “Apple-related projects ended soon after that.” Defendants’ Trial Brief, 13 p. 10. This is consistent with the evidence that Arriaga no longer employed a substantial number 14 of its guards. Arriaga provides no evidence to support an argument that every person he ever 15 employed simply remains on “inactive but not terminated” status simply because he did not 16 officially provide a notice of termination. Such an analysis would permit Arriaga to avoid his 17 obligations under the law based on semantics but not reality. Moreover, the jury specifically 18 found that the “Waiting Time Penalties Class’s employment with Arriaga” ended. VF-2303. 19 20 UNFAIR COMPETITION LAW (UCL) CLAIM (Restitution) 21 22 Plaintiffs seek an award of restitution under the Cal. Bus. & Prof. Code sec. 17200 23 (“UCL”) in the amount of unpaid wages. The statute of limitations for bringing an action under 24 UCL is four years, while damages for unpaid wages are recoverable for a three-year statutory 25 period. See Cal. Bus. & Prof. §17208; Cortez v. Purolator Air Filtration Products Co. (2000) 23 26 Cal.4th 163, 168, 178. During the hearing, both sides acknowledged that the jury’s findings as to 27 overtime, double time, meal period and rest period breaks were calculated (by stipulation of both 28 sides) from July 7, 2013 for the class and July 7, 2014 for the individual plaintiffs. See Reporters 5 Proposed Statement of Decision 1 Transcript (“RT”) attached as Exh. B to the Supplemental Declaration of Nathan Reese, p.3670. 2 While the Plaintiffs initial papers seemed to request the Court award additional damages (above 3 what the jury awarded) for 2013-2014, the Plaintiffs acknowledged both in their rebuttal papers 4 and at the hearing that the jury analyzed the claims from 2013 and therefor the request is simply 5 that the Court confirm the jury’s award of damages. Plaintiffs have been clear in their intention 6 that they are not seeking double recovery, nor does the Court intend to award it. 7 Defendants additionally argue that Plaintiffs should not be allowed to recover both for the 8 individual plaintiffs and the class as the individual plaintiffs’ awards would necessarily be 9 subsumed in the class. However, Plaintiffs argue (and evidence supports this in the record) that 10 damages awarded to individualized plaintiffs were based on their specific claims, some of which 11 fell outside the class due to timing or location. Defendants seems to be requesting an offset for 12 individual damages but have presented no evidence to the Court on where the damages overlap. 13 Defendants have not presented the jury nor this court with any alternative damages nor 14 information or evidence to support an alternative calculation. Defendants challenge Plaintiffs’ 15 expert but simultaneously made a strategic decision to not hire an expert of their own, neither for 16 the jury trial nor for the court trial. Similarly, Plaintiffs have not provided any updated or 17 different damage calculation for the individual Plaintiffs for the period of 2013-2014. 18 Defendants conclude that “if any individual recovery occurs, it should be limited to the amounts 19 tabulated by the jury already.” Defendants’ Trial Brief – Phase 3, p. 5. Plaintiffs conclude that 20 they “do not seek duplicative recovery … [and] the Court should confirm the jury’s award of 21 damages.” Plaintiffs Rebuttal, p.4. The Court has no additional evidence from either side to 22 calculate any award different than what was awarded by the jury and confirms the jury awards 23 for damages. 24 25 LABOR CODE SECTION 226 STATUTORY PENALTIES 26 Plaintiffs withdrew any claims for “actual damages” and agreed to seek only statutory 27 penalties under Labor Code section 226 for individual Plaintiffs and the Class. Plaintiffs Trial 28 Brief, p. 7. 6 Proposed Statement of Decision 1 Plaintiffs claim for failure to provide accurate itemized wage statement requires a 2 showing that (1) wage statements provided to the employees failed to comply with Labor Code § 3 226 (a)(1)-(9); (2) the employees suffered injury because of the missing information; and (3) the 4 employer’s failure was knowing and intentional. Labor Code § 226(e)(1). 5 Defendants argue that Plaintiffs claims fail for two reasons. 6 First, Defendants argue that Plaintiffs failed to prove that they suffered any injury. 7 However, for purposes of 226(e), a plaintiff is injured “if the accuracy of any items enumerated 8 in 226(a) [] cannot be ascertained from the four corners of the wage statement.” Raines v. 9 Coastal Pac. Food Distributors, Inc. (2018) 23 Cal.App.5th 667, 676 (citation omitted); Arroyo 10 v. International Paper Company (N.D. Cal. 2020) 611 F.Supp.3d 824, 843. The statute provides 11 that “a]n employee is deemed to suffer injury … if the employer fails to provide accurate and 12 complete information” as required by section 226, subdivision (a) and “the employee cannot 13 promptly and easily determine from the wage statement alone one or more of the following: (i) 14 The amount of gross wages or net wages paid to the employee during the pay period or any of 15 the other information required to be provided on the itemized wage statement…” Section 16 226(e)(2)(B) & (e)(2)(B)(i)); Maldonado v. Epsilon Plastics, Inc. (2018) 22 Cal.App.5th 1308, 17 1335. “An actual injury is shown where there is need for both additional documentation and 18 additional mathematical calculations in order to determine whether Plaintiffs were correctly paid 19 and what they may be owed.” See Cal. Lab. Code section 226(e)(2)(C); Arroyo v. International 20 Paper Company, supra at 843. In this case, the Court finds based on the evidence presented at 21 the trial and listed in listed in their Phase 3 trial briefs and supplemental brief (and incorporated 22 by reference) that the Plaintiffs have proven the elements above to be awarded statutory penalties 23 pursuant to Labor Code section 226. 24 Second, Defendants argue that “While individual Plaintiffs may be able to recover 25 penalties under Labor Code section 226, there can be no class action recovery for that claim 26 because it was not a certified claim.” Plaintiffs concede that the Itemized Wage Statement Class 27 was not certified by the Court but argue that the certified classes are entitled to Labor Code 28 section 226 damages as a derivative claim to their other claims. Plaintiffs’ Rebuttal Br. at pp. 4- 7 Proposed Statement of Decision 1 6. As an initial matter, Plaintiffs fail to offer any direct argument or authority in support of their 2 position, and it should be deemed abandoned or forfeited. See In re Phoenix H. (2009) 47 3 Cal.4th 835, 845 [“ ‘ “Contentions supported neither by argument nor by citation of authority are 4 deemed to be without foundation and to have been abandoned.” [Citations.]’ [Citation.]”]; 5 Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [A court may deem an issue or 6 assertion as forfeited or waived if a party “fails to raise a point or asserts it but fails to support it 7 with reasoned argument and citations to authority[.]”]. 8 In the Motion for Class Certification, the Plaintiffs sought to certify an “Itemized Wage 9 Statement Class” as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple 10 Overtime Class, and Double Time Class, and who were employed by Defendants on or after June 11 16, 2016. The Plaintiffs also sought to certify a “Waiting Time Penalties Class” as “All 12 members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime Class, and Double 13 Time Class, and whose employment with Defendants ended on or after July 7, 2014.” Order Re: 14 Motion for Class Certification dated April 3, 2022 (“Order”), p. 6. 15 The Court explained in the Order that “Plaintiffs submit evidence showing that the 16 proposed classes, with the exception of the Itemized Wage Statement Class, are sufficiently 17 numerous.” Id. at p. 7. “Plaintiffs do not present any argument or evidence regarding the 18 estimated number of individuals in the Itemized Wage Statement …[thus] Plaintiffs fail to 19 establish that the Itemized Wage Statement Class is sufficiently numerous.” Id. 20 At the hearing for Class Certification, Plaintiffs argued “that the Itemized Wage 21 Statement Class is derivative of other claims, such as the Apple Off-The-Clock-Claim, and is 22 therefore sufficiently numerous and should be certified to the extent the other claims are 23 certified.” The Court rejected this argument, finding the individuals defined in the Itemized 24 Wage Statement Class to not be “coextensive with the Apple Off-The-Clock Class” and 25 therefore the Court could not determine the appropriate number of individuals. Order at pp. 8-9. 26 Specifically, the Court noted that the Itemized Wage Statement Class consisted of individuals 27 employed by Defendants on or after June 16, 2016, while the Apple Off-The-Clock, Apple 28 Overtime, Overtime, and Double Time Classes consisted of individuals employed by Defendants 8 Proposed Statement of Decision 1 after July 7, 2013. Id. at pp. 6-7, 9. In other words, there was a substantial three-year difference 2 in the class periods. 3 In contrast to the Itemized Wage Statement Class, the Waiting Time Penalties Class was 4 certified. Like the Itemized Wage Statement Class, the Waiting Time Penalties Class was 5 defined as “All members of the Overtime Class, Apple Off-the-Clock Class, Apple Overtime 6 Class, and Double Time Class, and whose employment with the Defendants ended on or after 7 July 7, 2014.” Order at p.6. This too was identified as a derivative claim. 8 Plaintiffs argued at the hearing that they sought to certify classes, not claims. They 9 contend that since this is a derivative claim, it does not matter that the Wage Statement Class was 10 not certified. Again, Plaintiffs provide no legal support for their position. Plaintiffs’ argument 11 that both the Itemized Wage Statement Class and the Waiting Time Penalties Class are derivative 12 claims involving classes that were already certified, then they would logically suggest that they 13 never needed to seek certification of either. However, contrary to that argument, they did 14 appropriately seek certification, and the Court certified one and not the other. 15 If a class is not certified, Plaintiffs do not have the right to act on behalf of and bind 16 absent proposed class members. Smith v. Bayer Corp. (2011) 564 U.S. 299, 315 (Smith)1 17 [“Neither a proposed class action nor a rejected class action may bind nonparties. What does 18 have this effect is a class action approved under Rule 23.”]; id. at 316, fn. 11 [“The great weight 19 of scholarly authority—from the Restatement of Judgments to the American Law Institute to 20 Wright and Miller—agrees that an uncertified class action cannot bind proposed class members. 21 [Citations.]”]; Daniels v. Bursey (7th Cir. 2005) 430 F.3d 424, 4282 [where no class is certified, 22 absent class members cannot be bound by the parties]; AAL High Yield Bond Fund v. Deloitte & 23 Touche LLP (11th Cir. 2004) 361 F.3d 1305, 1310 [“Persons who are not class members are not 24 bound at all.”]; see Williams, supra, 50 Cal.App.5th at p. 125 [“[U]nder California law, an order 25 26 1 “Smith held that putative class members in a case where the court refused to certify a class are not bound by that decision; they may relitigate certification in a subsequent case. [Citation.]” (Williams v. U.S. Bancorp Investments, 27 Inc. (2020) 50 Cal.App.5th 111, 119 (Williams). “Although Smith was decided under federal law, its reasoning has since been applied to class actions brought under California law.” (Id. at p. 120.) 2 28 Decisions from federal courts of appeal may be considered persuasive authority. (People v. Bradford (1997) 15 Cal.4th 1229, 1292 [Decisions from federal courts of appeals “provide persuasive rather than binding authority. [Citations.]”].) 9 Proposed Statement of Decision 1 decertifying a class has no preclusive effect on absent class members.”]; Bridgeford v. Pacific 2 Health Corp. (2012) 202 Cal.App.4th 1034, 1044 [following Smith and concluding that “under 3 California law, that the denial of class certification cannot establish collateral estoppel against 4 unnamed putative class members on any issue because unnamed putative class members were 5 neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to 6 be considered in privity with such a party for purposes of collateral estoppel”]. 7 Plaintiffs may not bypass the carefully crafted requirements for class treatment which 8 places the burden on the party moving for class certification to demonstrate “the existence of an 9 ascertainable and sufficiently numerous class[.]” Brinker Restaurant Corp. v. Superior Court 10 (2012) 53 Cal.4th 1004, 1021 (Brinker). Indeed, Plaintiffs themselves recognized the necessity 11 of moving for class certification of the Itemized Wage Statement Class, but now focus their 12 arguments on the merits of their claims, largely repeating the argument they made before the 13 Court (Judge Lucas), asserting that “[b]ecause the underlying violations were proven, the wage 14 statements must be inaccurate on a derivative basis. Thus, there is no outstanding question 15 regarding numerosity or whether class members have suffered an injury.” Plaintiffs’ Rebuttal 16 Br. at p. 5. Whether Plaintiffs’ claims are meritorious is not the same as whether the procedural 17 requirements for maintaining a class action are met. (Brinker, supra, 53 Cal.4th at pp. 1023- 18 1024 [noting that while merits issues may overlap with class action requirements, they are 19 distinct].) 20 While the Court maintains discretion to alter or amend the Class Certification Order, 21 Plaintiffs did not move to certify the Itemized Wage Statement Class before or even during the 22 trial. In fact, at the PAGA hearing, Plaintiffs’ counsel specifically argued that they were not 23 seeking reconsideration of the Certification Order. Plaintiffs could have asked the Court at an 24 earlier stage to revisit the class certification—and presented the Court with evidence establishing 25 that the Itemized Wage Statement Class was sufficiently numerous, but they chose not to. 26 Furthermore, the Court may modify a class certification order only before a decision on 27 the merits. (See B.W.I. Custom Kitchen v. Owens-Illinois, Inc. (1987) 191 Cal.App.3d 1341, 28 1348 [“[A] class certification order may be conditional and may be altered or amended before a 10 Proposed Statement of Decision 1 decision on the merits. [Citations.]”]; see also Espejo v. The Copley Press, Inc. (2017) 13 2 Cal.App.5th 329, 358 [suggesting in the class action context a later judge is not necessarily 3 bound by the class certification ruling of a prior judge].) Here, the jury has already made its 4 findings in the first phase of the trial regarding the accuracy of the wage statements at issue. 5 Even if Plaintiffs were seeking to modify the Class Certification Order at this stage, it would be 6 untimely. See In re Citizens Bank, N.A. (3d Cir. 2021) 15 F.4th 607, 618-619, fn. 11 [post-trial 7 class certification generally improper]. 8 The Court finds that 226 Penalties are appropriate for the named Plaintiffs but declines to 9 award them for the Class that was not certified by the Court. The Court awards Labor Code 226 10 penalties for named plaintiffs in the following amounts: 11 George Jordan: $450 12 Eddie Giron: $2,350 13 Jesus Alarcon: $2,550 14 Martin Verducci: $2,550 15 Timothy Russ Oleyer: $2,950 16 Jose Segura: $2,250 17 Douglas Martin: $1,950 18 Francisco Ibarra: $1,550 19 PAGA CLAIMS (civil penalties) 20 Plaintiffs seek penalties under the Private Attorney General Act (“PAGA”) against 21 Defendants for violations to Labor Code sections 510, 512, 1194, 1197, 226, 203, 1198, and 22 2802. PAGA penalties are separate from and in addition to any civil recoveries. Z.B., N.A. v. 23 Superior Court (2019) 8 Cal. 5th 175, 195. 24 In support of their PAGA claims, Plaintiffs request for this Court to take judicial notice of 25 Exhibits A-C (“RFJN”). Similarly, in their Trial Brief, Defendants request the Court to take 26 judicial notice of their Exhibits A & B. Judicial Notice may be taken of facts and propositions 27 that are not reasonably subject to dispute and are capable of immediate and accurate 28 determination by resort to sources of reasonably indisputable accuracy. Evid. Code section 11 Proposed Statement of Decision 1 452(h). Plaintiffs Request for Judicial Notice of Exhibits A-C and Defendants Request for 2 Judicial Notice of Exhibits A and B are granted. 3 Plaintiffs satisfied the procedural requirements of PAGA pursuant to Labor Code section 4 2699.3. Plaintiffs Jason Lara, Jose Segura, George Jordan, Francisco Ibarra sent written notice 5 to the LWDA and Defendants. Plaintiffs’ RFJN A, B, C. Plaintiffs did not receive any notice 6 from LWDA of an intent to investigate the alleged violations within 65 calendar days. In 7 addition, the jury’s verdict in Phase I found that all Plaintiffs have suffered at least one of the 8 Labor Code violations during the PAGA period. The PAGA claim period is one year and sixty- 9 five days (Cal. Labor Code section 2699.3(d), Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42, 10 59. The statute of limitations for PAGA claims is one year plus any additional time during 11 which the PAGA claim is equitably tolled. Code Civ. Proc. Section 340(b); Brown v. Ralphs 12 Grocery Co (2018) 28 Cal.App.5th 824, 839. In this case, Plaintiffs have agreed to limit the 13 PAGA period to the end date reflected on the time and pay data produced by Defendants, 14 rendering the period July 30, 2016 to July 30, 2021. 15 PAGA penalties in this case were calculated by Plaintiffs’ expert, William Roberts, PhD. 16 Dr. Roberts created modeling for civil penalties recoverable under PAGA such as those at issue 17 in this case. Roberts Decl. ¶ 7. While Plaintiffs argue that Defendants were required to pay 18 employees on a weekly basis (see infra), Dr. Roberts used the Defendants’ two-week payroll 19 period to estimate PAGA penalties (with the exception of penalties for failure to provide weekly 20 wage statements), suggesting an underestimate of penalties. Roberts Decl. ¶ 6. 21 Plaintiffs’ expert and his team reviewed time and payroll records produced by Arriaga & 22 Associates as well as data derived from those documents and incorporated into the excel 23 spreadsheet prepared by iBridge and entered into evidence as Exhibit 273. Roberts Decl. ¶ 25. 24 Dr. Roberts and his team determined that there were 9,817 pay periods worked by covered 25 employees from July 30, 2016 to July 30, 2021 (all future references to “employees” will refer to 26 “covered employees from July 30, 2016 to July 30, 2021). Roberts Decl. ¶ 26. 27 1. PAGA Penalties for Failure to Pay Overtime and Double-time Wages 28 12 Proposed Statement of Decision 1 Plaintiffs’ expert calculated 4,992 pay periods worked by employees in which the 2 employee’s workday exceeded 8 hours, giving rise to a potential overtime violation. Id. ¶ 29. In 3 addition, there were 700 pay periods worked by employees in which the employee’s workday 4 exceeded twelve hours, giving rise to a potential double time violation. Id. ¶ 30. Plaintiffs’ 5 expert calculated the PAGA penalties at $50 for each pay period for each individual for a total of 6 $76,200 civil penalty. Id. ¶ 32. It is clear from the evidence at trial that Defendants never paid 7 its guards overtime or double-time. The Court awards Plaintiffs $76,200. 8 2. PAGA Penalties for Failure to Pay Minimum Wages 9 The expert considered for this calculation only the employees that worked at the Apple 10 Campus during the PAGA period. This is consistent with the jury verdict related to the Apple 11 Off-the-Clock Class which found that Defendants owed the Apple Off-the-Clock Class wages 12 under the terms of its employment. VF-2700. The expert calculated the penalties at $100 for 13 each period for each individual for a total of $612,190 for violations of Labor Code 1194, 1197. 14 Roberts Decl. ¶ 32. This calculation had a margin of error of 2.16% with an upper estimate of 15 $625,400 and a lower estimate of $598,900, with an average of $612,190. Given the variation in 16 testimony from workers at the Apple Campus as well as the margin of error, in the interest of 17 justice, the Court awards the lower estimate of $598,900. 18 3. PAGA Penalties for Failure to Provide Rest Breaks 19 The expert determined there were 9,698 pay periods worked by employees in which the 20 workday exceeded 3.5 hours, giving rise to a potential rest break violation in violation of Labor 21 Code 226.7. Roberts Decl. ¶ 27 and Table 1. Dr. Roberts calculated the PAGA penalties for 22 violation of Labor Code 512 at $100 for each pay period for each individual for a total of 23 $950,508. Id. ¶ 32. The Court awards the average estimate of $950,508. 24 4. PAGA Penalties for Failure to Provide Meal Breaks 25 The expert determined that there were 9,532 pay periods worked by employees in which 26 the workday exceed five hours, giving rise to a potential meal break violation in violation of 27 Labor Code 512. Roberts Decl. ¶ 28. The expert calculated the PAGA penalties at $50 per pay 28 period for each individual for a total of $459,665. Id. ¶ 32. 13 Proposed Statement of Decision 1 5. PAGA Penalties for Failure to Pay Premium Wages for Missed Meal or Rest Breaks 2 Plaintiffs’ expert calculated Defendants failure to pay meal or rest break premiums at 3 $100 for each pay period for each individual for a total of $919,330 for missing meal premiums 4 and $950,509 for missing rest premiums pursuant to Labor code section 226.7. Roberts Decl. ¶ 5 32 and Table 1. The Court awards Plaintiffs the average amount of $919,330 for failure to pay 6 meal premiums and $950,509 for failure to pay rest premiums. 7 6. PAGA Penalties for Violation of Labor Code section 2802 8 The expert determined there were 5,300 months worked by employees at the Apple 9 Campus and/or Dave & Busters giving rise to a potential unpaid reimbursement violation. 10 Roberts Decl. ¶ 31. Dr. Roberts calculated the PAGA penalties to be $334,342. Id. ¶ 32. The 11 margin of error is 7.57% with the lower amount being $308,300 and the upper amount being 12 $358,900. Given the variation of testimony at trial regarding reimbursements and the margin of 13 error, in the interest of justice, the Court awards the lower amount of $308,300. 14 7. PAGA Penalties for Violation of Labor Code 226(a) 15 Plaintiffs seek “PAGA penalties for failure to provide an itemized wage statement at 16 $250 for each work week during the two-week pay period where an employee worked both 17 weeks but received only one wage statement pursuant to section 210 [sic]”3 for a total civil 18 penalty of $1,985,500. Plaintiffs’ Trial Br. at p. 15. 19 Plaintiffs also seek “PAGA penalties for failure to provide accurate wage statements at 20 [$]100 for each pay period, for each individual, for a $975,811 civil penalty.” Plaintiffs’ Trial 21 Br. at p. 15. There is no citation to specific statute, but Plaintiffs cite to the Roberts Declaration 22 at paragraph 32, which in turn references section 226. Based on Plaintiffs’ argument that 23 24 3 Plaintiffs’ citation to section 210 appears to be a typographical error. (Plaintiff’s Trial Br. at p. 15.) Section 210 applies to “fail[ure] to pay the wages of each employee” and not failure to provide a wage statement. (§ 210, subd. 25 (a).) It also provides for a penalty of $100 for the initial violation and $200 for subsequent or willful and intentional violations (§ 210, subds. (a)(1) & (a)(2)) and not the $250 penalty asserted by Plaintiffs. Plaintiffs likely meant to 26 cite to section 226.3, which provides for “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 27 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.” That Plaintiffs likely meant to reference section 226.3 28 is consistent with their citation to paragraph 32 of the Declaration of William Roberts, Ph.D. [] (Roberts Decl.), which cites to section 226.3 in relation to the $1,985,500 penalty. Accordingly, this Court will analyze the $1,985,500 civil penalty sought as pursuant to section 226.3. 14 Proposed Statement of Decision 1 “PAGA allows a claim for a violation of section 226(a) without any reference to subdivision (e)” 2 and citation to Lopez v. Friant & Associates, LLC (2017) 15 Cal.App.5th 773, 784-785 (Lopez) 3 [“Because section 226(e)(1) sets forth the elements of a private cause of action for damages and 4 statutory penalties, its requirement that a plaintiff demonstrate ‘injury’ resulting from a ‘knowing 5 and intentional’ violation of section 226(a) is not applicable to a PAGA claim for recovery of 6 civil penalties.”], Plaintiffs seek PAGA default civil penalties pursuant to section 2699, 7 subdivision (f)(2)4 for violation of section 226, subdivision (a). (See FAC at ¶ 188 [“Thus, under 8 Labor Code § 2699(f)(2), Defendants are subject to a civil penalty of $100 for each aggrieved 9 employee per pay period for the initial violation of Labor Code §§ 226(a) and 1198, and $200 for 10 each aggrieved employee per pay period for each subsequent violation.”].) 11 In short, Plaintiffs seek civil penalties under both section 226.3 and section 2699, 12 subdivision (f)(2). 13 A. Civil Penalties for Violating Section 226, Subdivision (a) 14 15 Depending on the facts, a civil penalty for violation of § 226, subd. (a) is available under 16 the default penalty provision of § 2699, subd. (f)(2) or the heightened penalty provision of 17 § 226.3. Gunther v. Alaska Airlines, Inc. (2021) 72 Cal.App.5th 334, 355-356 (Gunther). 18 In Raines, the plaintiff sought PAGA penalties under section 2699, subdivision (f)(2) for 19 failing to provide accurate itemized wage statements showing “all applicable hourly rates in 20 effect during the pay period” as required under section 226, subdivision (a)(9). (Raines, supra, 21 23 Cal.App.5th at pp. 673-674.) The appellate court explained that there were three possible 22 remedies for a violation of section 226, subdivision (a): (1) statutory penalties to employees who 23 suffered an injury pursuant to section 226, subdivision (e)(1); (2) injunctive relief pursuant to 24 section 226, subdivision (h); and (3) civil penalties pursuant to section 226.3. (Id. at p. 673; see 25 26 4 “The central provision of PAGA is section 2699. Subdivision (a) of the statute permits aggrieved employees to 27 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 28 and a private right of action’ for aggrieved employees. [Citation.]” (Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 216; Lopez, supra, 15 Cal.App.5th at p. 778.) 15 Proposed Statement of Decision 1 Gunther, supra, 72 Cal.App.5th at p. 354 (discussing Raines).) While “Raines sought recovery 2 under the default provision of section 2699, subdivision (f), applicable where there is no existing 3 civil penalty[,]” “section 226.3 provides civil penalties for a violation of section 226(a)[,]” so the 4 appellate court concluded that Raines’ “PAGA claim [fell] under subdivision (a) of section 5 2699.” (Raines, supra, 23 Cal.App.5th at p. 674; see id. at p. 675 [“We find more persuasive a 6 decision that found section 226.3 sets out a civil penalty for all violations of section 226. 7 [Citation.]” (Emphasis original.)]; Culley v. Lincare Inc. (E.D. Cal. 2017) 236 F.Supp.3d 1184, 8 1194 [“Because § 226.3 sets out a civil penalty for all violations of § 226, PAGA’s default civil 9 penalties do not apply to wage statement violations. Thus, a PAGA plaintiff can collect civil 10 penalties set out in § 226.3, and, if the wage statement violations create ‘injury as a result of a 11 knowing and intentional’ violation, the statutory penalties set out in § 226(e)(1).” (Emphasis 12 original.)].) 13 In Gunther, the trial court, relying on Raines v. Coastal Pacific Food Distributors, Inc. 14 (2018) 23 Cal.App.5th 667, 674-675 (Raines) (§ 226.3 sets forth the civil penalty for all § 226 15 violations) awarded the plaintiff over $25 million in civil penalties under section 226.3 for 16 “violat[ing] section 226(a)(2), (3), and (9) by failing to state the total hours worked, the number 17 of piece-rate units earned, and the corresponding rate of pay for each.” Gunther, supra, 72 18 Cal.App.5th at pp. 343, 353. The defendant challenged this civil penalty award on the basis that 19 “the trial court wrongly imposed heightened penalties under section 226.3.” Id. at p. 347. 20 Specifically, the defendant argued that “[b]ecause it provided wage statements and kept the 21 required records, . . . the $25 million in heightened penalties awarded by the trial court should be 22 vacated and the matter remanded with an instruction to apply the default penalty amounts set 23 forth in subdivision (f)(2) of section 2699.” Id. at p. 353. Citing Raines, the plaintiff asserted 24 “that section 226.3 provides a civil penalty for all violations of section 226 and is not limited to 25 situations where the employer fails to provide a wage statement or to keep records.” Id. The 26 appellate court declined to follow Raines, explaining: 27 Of course the choice is not, as Raines suggests, between a penalty 28 under section 226.3 and no penalty for an inadequate wage 16 Proposed Statement of Decision 1 statement. Instead, the question is which penalty provision 2 applies—the default penalty in section 2699, subdivision (f) or the 3 heightened penalty under section 226.3? 4 5 Gunther, supra, 72 Cal.App.5th at p. 355, (emphasis original). 6 The Gunther court continued: 7 Here, it is undisputed that Alaska provided wage statements to its 8 flight attendants, and Gunther dismissed her challenge that Alaska 9 failed to maintain records. Because the violations found by the 10 trial court resulted from Alaska’s failure to include certain 11 information in its wage statements, Alaska should have been 12 subject to the default civil penalties in section 2699, subdivision 13 (f)(2), not the heightened penalties in section 226.3. Accordingly, 14 we reverse the section 226.3 penalties and remand the matter to the 15 trial court for further proceedings regarding civil penalties under 16 section 2699, subdivision (f)(2)[.] 17 18 Gunther, supra, 72 Cal.App.5th at pp. 355-356. 19 In this case, consistent with Gunther, Plaintiffs seek to recover civil penalties under 20 section 226.3 for instances where they did not receive a wage statement at all and additionally 21 separate civil penalties under section 2699, subdivision (f)(2) for different instances where they 22 did receive a wage statement, but that wage statement was inaccurate. Gunther, supra, 72 23 Cal.App.5th at pp. 355-356.) Plaintiffs seek $1,985,500 at $250 per violation based on 7,942 24 violations of failing to provide a wage statement. Roberts Decl. ¶ 32. In addition, Plaintiffs seek 25 $975,811 at $100 per violation based on 9,758.11 violations of providing inaccurate wage 26 statements. Id. 27 28 17 Proposed Statement of Decision 1 B. Civil Penalties Pursuant to 2699(f)(2) for Failure to Provide Accurate Wage 2 Statements 3 There is no question that based on the evidence presented at trial and supplemented in the 4 papers and declarations presented for Phase III that Defendants failed to provide accurate wage 5 statements. Thus, the Court awards $975,811 in civil penalties for the inaccurate wage 6 statements as determined by the Plaintiffs’ expert pursuant to 2699(f)(2). 7 C. Civil Penalties Pursuant to 226.3 for Failure to Provide A Weekly Wage 8 Statement 9 In their initial Trial Brief, Plaintiffs argue that “[a]ny employer who is the security 10 services industry providing security guards to clients is required by Labor Code section 201.3 to 11 establish weekly pay period.” (Plaintiffs’ Trial Br. P. 13 citing Labor Code section 12 201.3(b)(1)(B)). In their Trial Brief, Defendants argue that Plaintiffs did not meet the specific 13 requirements of that section. Labor Code section 201.3(b)(1)(B) states: 14 (B) …, if an employee of a temporary services employer in the security services industry 15 is a security guard who is registered pursuant to Chapter 11.5 (commencing with Section 16 7580) of Division 3 of the Business and Professions Code, is employed by a private 17 patrol officer licensed pursuant to that chapter and is assigned to work for a client, that 18 employee’s ages are due and payable no less frequently than weekly, regardless of when 19 the assignment ends, and wages for work performed during any workweek, as defined 20 under Section 500, shall be due and payable not later than the regular payday of the 21 following work week. 22 23 Defendants contend that pursuant to section 201.3, subdivision (b)(1)(B), Plaintiffs failed 24 to prove that Defendants were a “temporary services employer[,]” each security guard was 25 “registered pursuant to Chapter 11.5 (commencing with Section 7580) of Division 3 of the 26 Business and Professions Code,” and Plaintiffs were “employed by a private patrol operator[.]” 27 Defendants’ Trial Br. at pp. 7-8. Plaintiffs respond that the evidence reflects that Defendants 28 were a “temporary services employer” and “[s]everal class members testified that they were 18 Proposed Statement of Decision 1 registered security guards and that they have a guard card.” Plaintiffs’ Rebuttal Br. at pp. 7-8. 2 Plaintiffs’ Rebuttal Brief does not challenge Defendants’ contention that Plaintiffs failed to prove 3 the licensed private patrol operator element. 4 1. Plaintiffs Failed to Satisfy the Procedural Requirements of PAGA 5 Regarding their Claim of Failure to Provide Weekly Statements 6 Unlike their other PAGA claims, Plaintiffs did not send written notice to the LWDA and 7 Defendants of claimed violations by the Defendants for failure to provide weekly statements. 8 Plaintiffs RFJN A-C. In contrast, they did send written notice of Defendants’ failure to provide 9 accurate statements. 10 2. Plaintiffs Failed to Provide Sufficient Evidence of Defendants’ Failure to 11 Provide Weekly Statements Prior to the Matter Being Submitted. 12 At the PAGA hearing, the Court inquired as to whether Defendants were “licensed as a 13 private patrol operator.” The Plaintiffs discussed at the hearing and then later filed a Request for 14 Judicial Notice. The Request for Judicial Notice and the Lenett Declaration were both filed on 15 June 30, 2023, after the matter was deemed submitted on June 21, 2023. Minute Order of June 16 21, 2023. Plaintiffs’ Request for Judicial Notice seeks judicial notice pursuant to Evidence Code 17 sections 451 to 453 of licensing information about Defendants from the Bureau of Security and 18 Investigative Services, section 201.3, and Business and Professions Code sections 7580.4, 19 7580.6 to 7580.10. In particular, Exhibit A of Plaintiffs’ Request for Judicial Notice (Exhibit A) 20 seeks to introduce evidence showing that Defendants were licensed by the Bureau of Security 21 and Investigative Services as a private patrol operator and a private patrol operator qualified 22 manager.5 23 Prior to filing their request for Judicial Notice, Plaintiffs did not move to vacate 24 submission and reopen the case for the Court to receive additional evidence, concerning, among 25 other things, Defendants’ status as a licensed private patrol operator. 26 27 5 28 Specifically, Exhibit A comprises of printouts of search results from the California Department of Consumer Affairs’ website at https://search.dca.ca.gov/ reflecting that Arriaga & Associates is currently licensed as a private patrol operator and Louis Christopher Arriaga, Jr. is a PPO qu