Opinion
G059006
06-29-2021
CHARLES FINLEY et al., Plaintiffs and Respondents, v. PORTERMATT ELECTRIC, INC. et al., Defendants and Respondents FRANK RUBIO, Movant and Appellant.
Justice Law Corporation, Douglas Han, Shunt Tatavos-Gharajeh, Daniel J. Park; Yoon Law, Kenneth H. Yoon, Stephanie E. Yasuda and Brian G. Lee for Movant and Appellant. Wilshire Law Firm, Bobby Saadian, Justin F. Marquez, Nicol E. Hajjar and Robert J. Dart for Plaintiffs and Respondents. Hirschfeld Kraemer, Gregory S. Glazer and Benjamin J. Treger for Defendants and Respondents.
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 30-2018-01038088, Peter J. Wilson, Judge. Affirmed. Plaintiffs and respondents request for judicial notice denied.
Justice Law Corporation, Douglas Han, Shunt Tatavos-Gharajeh, Daniel J. Park; Yoon Law, Kenneth H. Yoon, Stephanie E. Yasuda and Brian G. Lee for Movant and Appellant.
Wilshire Law Firm, Bobby Saadian, Justin F. Marquez, Nicol E. Hajjar and Robert J. Dart for Plaintiffs and Respondents.
Hirschfeld Kraemer, Gregory S. Glazer and Benjamin J. Treger for Defendants and Respondents.
OPINION
MOORE, J.
Frank Rubio filed a putative class action lawsuit against employer PorterMatt Electric, Inc. (PorterMatt) for alleged wage and hour violations. Charles Finley and Chris Mills (collectively plaintiffs) later filed a similar class action lawsuit against PorterMatt, John F. Porter III, and Tim Matthews (collectively PorterMatt). After plaintiffs and PorterMatt agreed to a proposed class action settlement, Rubio filed a motion to intervene in plaintiffs' lawsuit. The trial court denied the motion.
On appeal, Rubio argues he was entitled to mandatory intervention and the trial court abused its discretion by denying permissive intervention. We disagree and affirm the trial court's denial of Rubio's motion to intervene.
I
PROCEDURAL BACKGROUND
In July 2018, Rubio filed a complaint in San Bernardino County asserting eight labor related causes of action against PorterMatt. Rubio generally alleged PorterMatt failed to pay its employees for all hours worked, as well as for missed meal and rest breaks. Rubio filed the action on his own behalf and on behalf of a putative class (current and former PorterMatt employees).
In December 2018, plaintiffs filed a complaint in Orange County asserting four labor related causes of action against PorterMatt. Plaintiffs generally alleged PorterMatt failed to provide itemized pay stubs and did not fully compensate for wages and hours. Plaintiffs filed the action on their own behalf and on behalf of a putative class (current and former PorterMatt employees). Plaintiffs also sought civil penalties on behalf of the Labor Workforce Development Agency (LWDA), under the Private Attorneys General Act (PAGA). (Lab. Code, § 2699 et seq.)
In April 2019, Rubio and PorterMatt participated in a mediation hearing and were unable to settle the San Bernardino County case.
In August 2019, plaintiffs and PorterMatt participated in a mediation hearing and agreed to a proposed a class-wide settlement. The proposed settlement agreement stated it had res judicata effect on Rubio's claims, “except to the extent that... Rubio may opt out of this Settlement.” In his San Bernardino County case, Rubio filed a first amended complaint to add a claim for PAGA penalties.
In October 2019, plaintiffs filed a motion for preliminary approval of the class action settlement with PorterMatt; the court later continued the motion.
Rubio's Motion to Intervene
In January 2020, Rubio filed a motion to intervene in plaintiffs' Orange County lawsuit against PorterMatt.
In February 2020, following a hearing on the matter, the trial court denied Rubio's motion to intervene (the ruling will be covered more thoroughly in the discussion section of this opinion). The court also continued the plaintiffs' motion for preliminary approval of the class action settlement.
In March 2020, Rubio filed a notice of appeal from the trial court's order denying his motion for intervention.
II
DISCUSSION
Rubio contends the trial court: A) erred in denying his motion for mandatory intervention; and B) abused its discretion in denying his motion for permissive intervention. We shall review both contentions.
The standard of review for the denial of a motion for mandatory intervention is subject to dispute. Several appellate courts have impliedly applied the de novo standard, but at least one court has applied the abuse of discretion standard. (See Siena Court Homeowners Assn. v. Green Valley Corp. (2008) 164 Cal.App.4th 1416, 1425 [recognizing the split of authority].) However, we need not weigh in on the matter because we would reach the same conclusion under either standard. (Ibid.)
Further, our review is limited to the evidence before the trial court at the time of its ruling on Rubio's motion to intervene. (See Scates v. Rydingsword (1991) 229 Cal.App.3d 1085, 1096 [an appellate court's “review is limited to evidence that was presented to the trial court on the motion”].) Therefore, we need not address the parties' various claims based on what may have occurred after the trial court's ruling.
For this reason we are denying plaintiffs' request for judicial notice of a check that was purportedly cashed after the trial court's denial of Rubio's motion to intervene.
A. Rubio was not entitled to mandatory intervention.
Class action lawsuits provide a process whereby the claims of many persons can be resolved at the same time, eliminating the need for repetitious litigation. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) Persons identified as class members are not required to give their consent to class representation prior to certification of the class. (State of California ex rel. Dept. of Motor Vehicles v. Superior Court (Woosley) (1998) 66 Cal.App.4th 421, 433.) However, courts have held that once a class is certified, and its members are notified, due process is served by allowing notified class members to opt out of the class action settlement. (Ibid.)
In a class action, a trial court “must approve any settlement in order to prevent fraud, collusion or unfairness to the class.” (Edwards v. Heartland Payment Systems, Inc. (2018) 29 Cal.App.5th 725, 733 (Edwards).) In considering whether to approve a proposed settlement, the court has the fiduciary responsibility to ensure that the recovery represents a reasonable compromise in order to protect the rights of absentee class members. (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 94-95.)
The purpose of a PAGA claim is to “create a means of ‘deputizing' citizens as private attorneys general to enforce the Labor Code.” (Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 501.) A PAGA plaintiff is an “‘“aggrieved employee”'” who brings an action “personally and on behalf of other current or former employees to recover civil penalties” as the “‘proxy or agent of'” the LWDA. (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380; Lab. Code, § 2699.) A lawsuit brought under PAGA is therefore “a dispute between an employer and the” LWDA, rather than between the employer and the aggrieved employee. (Iskanian, at pp. 384, 386-387.)
A nonparty can move to intervene in an ongoing civil lawsuit. (Code Civ. Proc., § 387, subd. (c).) In order “to establish mandatory intervention, a proposed intervener must show (1) ‘“an interest relating to the property or transaction which is the subject of the action”'; (2) the party is “‘so situated that the disposition of the action may as a practical matter impair or impede that person's ability to protect that interest'”; and (3) the party is not adequately represented by existing parties.” (Edwards, supra, 29 Cal.App.5th at p. 732.)
In this case, the trial court found: “Mandatory intervention is improper. Rubio is unable to establish the second prong of the test. The settlement does not impair or impede Rubio's ability to protect his interests. In particular, if Rubio is unhappy with the settlement, he may opt out. Or, if he does not want to opt out, he may object and explain why it is unfair or inadequate.”
In denying Rubio's motion, the trial court relied on a published opinion that is almost directly on point. (See Edwards, supra, 29 Cal.App.5th 725.) In Edwards, an employee filed a putative class action lawsuit alleging wage and hour violations against an employer. (Id. at pp. 727-728.) Later, two other employees (the Torres plaintiffs) filed a putative class action lawsuit alleging similar violations against the same employer. (Id. at pp. 728-729.) The trial court denied a motion by the Torres plaintiffs to intervene because their “ability to protect their interest would not be practically impaired or impeded by the settlement in Edwards because they could opt out of or object to the settlement.” (Id. at pp.733.) The appellate court agreed, amplifying that if the Torres plaintiffs “are unhappy with the settlement, they can opt out and fully preserve their causes of action. [Citation.] If they do not want to opt out, they may object to the class settlement and point out why they believe it is unfair or inadequate.” (Ibid.)
Here, at the time of Rubio's motion to intervene, the plaintiffs' proposed class action settlement agreement had not been approved by the trial court. Therefore, just as in Edwards, Rubio's ability to protect his own interests was not impaired or impeded because he could have objected to the proposed class action settlement, or he could have opted out and continued to pursue his own claims against PorterMatt. Thus, we agree with the court's legal analysis, its application of the Edwards opinion, and the court's conclusion that: “Mandatory intervention is improper.” Further, we would find no abuse of discretion were we to apply that standard of review.
Rubio argues Hodge v. Kirkpatrick Development Inc. (2005) 130 Cal.App.4th 540 (Hodge), compels a different result. We disagree. In Hodge, an insurance company paid money to its insured homeowner for damages caused by third parties. (Id. at pp. 545-546.) The court held that when the homeowner subsequently initiated a lawsuit against the third parties, the insurance company was entitled-by way of its contractual subrogation rights-to intervene in the homeowner's lawsuit to seek recovery of the monies it had previously paid to the homeowner. (Id. at p. 551.) Here, it is difficult to see the applicability of Hodge to the facts of this case. Rubio was not obligated by contract (or otherwise) to accept plaintiffs' proposed class action settlement with PorterMatt; again, Rubio could either object to the settlement or opt out of the class.
Finally, Rubio argues that due to plaintiff's PAGA claims, he would be unable to opt out of those claims and so he had a remaining interest in the plaintiffs' case against PorterMatt. While it is true that Rubio could not have opted out of plaintiffs' PAGA claims, that would be true even if the trial court had granted Rubio's motion to intervene. (See Robinson v. Southern Counties Oil Co. (2020) 53 Cal.App.5th 476, 483 [a plaintiff “cannot opt out of [a PAGA] settlement and thereafter pursue civil penalties for the same violations again on behalf of the LWDA”].) Moreover, plaintiffs' PAGA claims were brought on behalf of the LWDA (not the plaintiffs or Rubio). (See Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81 [“PAGA is designed primarily to benefit the general public, not the party bringing the action”].) Therefore, because plaintiffs were merely acting as a proxy for the LWDA (as to the PAGA claims), Rubio was not entitled to mandatory intervention due to plaintiffs' PAGA claims.
B. The trial court did not abuse its discretion in denying permissive intervention.
The appropriate test for abuse of discretion is whether the trial court “exceeded the bounds of reason.” (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478.) When we review for an abuse of discretion, we will not disturb a trial court's ruling unless “it ‘was arbitrary, capricious or without rational basis.'” (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 9.) That is, we will reverse only if the court's “decision is so irrational or arbitrary that no reasonable person could agree with it.” (People v. Carmony (2004) 33 Cal.4th 367, 377.)
“The court may, upon timely application, permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.” (Code Civ. Proc., § 387, subd. (d)(2).) A “‘“trial court has discretion to permit a nonparty to intervene where the following factors are met: (1) the proper procedures have been followed; (2) the nonparty has a direct and immediate interest in the action; (3) the intervention will not enlarge the issues in the litigation; and (4) the reasons for the intervention outweigh any opposition by the parties presently in the action.”'” (Edwards, supra, 29 Cal.App.5th at p. 736.)
In this case, the trial court ruled as follows:
“Rubio's request for permissive intervention is denied. The Court finds that Rubio's application is timely, he has followed proper procedures, he may have a direct and immediate interest in the action, and that his intervention will not enlarge the issues in this litigation. However, the reasons for intervention do not outweigh the objections of plaintiffs... and [PorterMatt].
“First, there is insufficient evidence to establish the Settlement is a collusive ‘reverse auction.' ‘A reverse auction is said to occur when the defendant in a series of class actions picks the most ineffectual class lawyers to negotiate a settlement with in the hope that the district court will approve a weak settlement that will preclude other claims against the defendant. It has an odor of mendacity about it.' (Negrete v. Allianz Life Ins. Co. of North America (9th Cir. 2008) 523 F.3d 1091, 1099 [internal quotations and citations omitted].) There is no evidence of deception by Plaintiffs and Defendants. None of the circumstances highlighted by Rubio appear deceptive.
“Second, as noted above, Rubio can opt out or object to the settlement rather than intervening in this case. (See, e.g., Edwards, supra, 29 Cal.App.5th at p. 736.)
“Third, the Court has the responsibility to ensure the settlement is fair. (Edwards, supra, 29 Cal.App.5th at p. 733.) Thus, there is no need for Rubio to intervene to protect the interests of the class.
“Fourth, Rubio has not established that there are sufficient discovery issues that would warrant intervention.
“Fifth, if Rubio chooses to object to the settlement, he may include any of his fairness arguments that are set forth in the motion. [Citation.] However, the Court does not find them persuasive in the context of intervention.”
Here, the trial court considered the proper legal authorities and applied those authorities to the relevant facts. Based on its five stated reasons, the court found Rubio had not established the need for permissive intervention under the fourth prong of the legal test for permissive intervention. (See Edwards, supra, 29 Cal.App.5th at p. 736 [“the reasons for the intervention outweigh any opposition by the parties presently in the action”].) After reviewing the appellate record, we find substantial evidence to support the court's ruling (e.g., there is no evidence of deception in the proposed settlement between plaintiffs and PorterMatt). Thus, we find the court did not abuse its discretion when it denied Rubio's motion for permissive intervention.
Primarily relying on the reasons asserted for mandatory intervention, Rubio argues “the trial court failed to properly consider the significant and cognizable impairment to his interests, and therefore failed to properly weigh his reasons for intervention against the opposition.” We disagree.
It appears the trial court did, in fact, “properly consider” Rubio's alleged impairments to his interests, but the court determined his arguments were not “persuasive in the context of intervention.” Perhaps Rubio may have persuaded a different trial court to grant him permissive intervention, but there is certainly nothing in the record to suggest the lower court's discretionary decision to deny him permissive intervention was “‘arbitrary, capricious or without rational basis.'” (Yamaha Corp. of America v. State Bd. of Equalization, supra, 19 Cal.4th at p. 9.)
III
DISPOSITION
The trial court's denial of Rubio's motion to intervene is affirmed. The respondents are entitled to recover their costs on appeal.
WE CONCUR: O'LEARY, P.J., BEDSWORTH, J.