Moorer v. Noble LA Events Inc. ( 2019 )

Filed 2/11/19; Certified for Publication 2/27/19 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
DAVID MOORER, B282631
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC578016)
v.
NOBLE L.A. EVENTS, INC.,
Defendant and
Respondent.
APPEAL from the judgment of the Superior Court of Los
Angeles County, Samantha P. Jessner, Judge. Affirmed.
Pedersen Law, Neil Pedersen and Jamie Gottschalk-Hall
for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
______________
David Moorer appeals from the March 23, 2017 order
denying his request for entry of a default judgment against Noble
L.A. Events, Inc. (Noble), and dismissing the case. The trial
court denied Moorer’s request because Moorer refused to comply
with the court’s order to distribute 25 percent of the penalties to
be allocated under the Labor Code Private Attorney General Act
of 2004 (Lab. Code, § 2698 et seq. (PAGA))1 to the 23 aggrieved
employees in a pro rata amount. Instead, Moorer allocated the
entire 25 percent to himself. On appeal, Moorer contends a
PAGA action is a qui tam action, and therefore, 25 percent of the
civil penalties should be distributed to the aggrieved employee
who brought the claim. Moorer’s position is contrary to the
California Supreme Court’s rulings interpreting PAGA. We
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
From August 18, 2013 to late December 2014, Moorer was
employed as a full-time security guard and “lobby ambassador”
by Noble, which provides security services to other companies.
He and other employees provided security services to Apex, The
Theatre at Ace Hotel (Ace), and Black Entertainment Television,
LLC (BET). On January 14, 2015 Moorer sent notices under
PAGA to Noble, Apex, Ace, BET, and the Labor and Workforce
Development Agency (LWDA), alleging violations of the Labor
Code and Industrial Welfare Commission (IWC) wage order
No. 4-2001 (Cal. Code Regs., tit. 8, § 11040.).
1 Unless otherwise noted, further statutory references are to
the Labor Code.
2
On April 7, 2015 Moorer filed a complaint, as an individual
and on behalf of all aggrieved employees, against Noble, Apex,
Ace, and BET, alleging individual wage and hour and
representative PAGA claims for violations of the Labor Code and
IWC wage order No. 4. Noble filed an answer on June 24, 2015.
On August 5, 2015 Moorer voluntarily dismissed Apex, Ace, and
BET without prejudice.
Noble failed to respond to discovery that Moorer had served
in February 2016. On March 24, 2016 Noble’s counsel filed an ex
parte application to be relieved as counsel. The trial court
granted the motion on March 25, and set an April 5 hearing on
an order to show cause to strike Noble’s answer “if new counsel
has not been retained.” (Capitalization omitted.)
At the hearing on April 5, 2016, the trial court struck
Noble’s answer and deemed Noble to be in default because it had
not retained new counsel and, as a corporation, Noble was unable
to represent itself. The trial court directed Moorer to file a first
amended complaint because the complaint did not allege specific
damage amounts owed by Noble to support entry of a judgment
on Moorer’s wage and hour claims, as required by Code of Civil
Procedure section 425.10, subdivision (a)(2). The court ordered
Moorer to submit a default judgment package no later than
June 10. The court set a June 21 hearing for an order to show
cause regarding entry of a default judgment against Noble.
On April 22, 2016 Moorer filed a first amended complaint
against Noble, alleging individual and representative PAGA
claims for failure to provide and maintain accurate itemized wage
statements and records (§§ 226, subd. (a), 1174 & 1198), failure to
provide meal breaks and rest periods (§ 226.7), and failure to pay
Moorer his wages upon termination (§ 203). Moorer also alleged
3
Noble engaged in unlawful business practices in violation of
Business and Professions Code section 17200 et seq.
On July 25, 2016 the court clerk entered a default against
Noble on the first amended complaint. On the same day Moorer
submitted a request for entry of a default judgment in the
amount of $679,374.52, including $594,550.00 in PAGA penalties,
$9,513.59 in penalties for Moorer’s individual claims, $8,675.34 in
costs, and $66,635.59 in attorneys’ fees. The civil penalties under
PAGA in the proposed judgment were calculated based on wage
violations for 23 aggrieved employees during the period from
April 7, 2014 to April 7, 2015.
The trial court rejected Moorer’s first three requests for
entry of default judgment because of clerical errors in the
proposed judgments. At the January 31, 2017 hearing the court
denied a later request by Moorer because the proposed judgment
“fail[ed] to account for the distribution requirements for PAGA
penalties.” Specifically, as the court explained, “[Moorer’s]
proposed judgment seeks to give all penalties to [Moorer] making
no reference to the 75% of PAGA penalties owed to LWDA. [¶]
Furthermore, the judgment must also distribute the remaining
25% of the PAGA penalties to each of the 23 aggrieved employees,
not just [Moorer].” According to Moorer’s counsel, at the
January 31, 2017 hearing, the trial court continued the hearing
to March 7, 2017, and stated Moorer “had ‘one last time’ to
submit a correct default judgment package,” but “did not indicate
what measures it would take should it deny” the request.2
2 Moorer did not include the reporter’s transcript of the
January 31, 2017 hearing or a settled statement as part of the
appellate record. (See Cal. Rules of Court, rules 8.120(b),
8.121(b)(1)(C), 8.130, 8.137.) Similarly, the record does not
include any information about whether a hearing took place on
4
On March 23, 2017 the trial court held another hearing on
Moorer’s request for entry of a default judgment. On that date
Moorer filed a brief in support of his request. Moorer admitted in
his brief the revised proposed judgment was only “in partial
compliance” with the trial court’s January 31, 2017 ruling in that
the judgment allocated penalties to the LWDA, but not other
aggrieved employees. He acknowledged the trial court was
correct “the LWDA is entitled to 75% of all PAGA penalties
awarded.” But Moorer contended the remaining 25 percent of the
PAGA penalties should be distributed only to the named plaintiff
bringing the PAGA action, not all aggrieved employees.
At the March 23 hearing, the trial court denied Moorer’s
request for entry of a default judgment against Noble. The trial
court explained in its written order: “[Moorer] seeks PAGA
penalties in the amount of $594,550.00. [Moorer] has now made
about eight attempts to obtain a default judgment against Noble
LA. Each time the court denied the relief requested, the court
provided plaintiff with specific reasons for the denial. Yet again,
[Moorer] has failed to heed the court’s direction and follow the
law. [This] time around, [Moorer’s] proposed judgment allocates
the amount of PAGA penalties pursuant to the percentage
mandated by Labor Code § 2699(i), but the judgment continues to
improperly provide the entire 25% of the PAGA penalties sought
to [Moorer] individually, rather than each of the 23 aggrieved
employees in a pro-rata amount. [¶] Rather than amend the
judgment to comply with the court’s order, [Moorer] now argues
that the entire PAGA award should be allocated to [Moorer] only,
despite clear and unambiguous language from the California
March 7, 2017 and, if a hearing occurred, what transpired at the
hearing.
5
Supreme Court: ‘The PAGA conforms to these traditional
criteria, except that a portion of the penalty goes not only to the
citizen bringing the suit but all employees affected by the Labor
Code violation.’ (Iskanian v. CLS Transp. Los Angeles, LLC
(2014) 59 Cal.4th 348, 382 . . .)” (Italics and boldface omitted.)
The trial court added, “Additionally, allowing [Moorer],
whose individual claim amounts to only $9,513.59, to individually
and personally recover $148,912.50 in PAGA penalties would run
afoul of the purpose of PAGA and makes no sense under the
PAGA scheme. . . . [Citation.] To award [Moorer] roughly 14
times the amount to which he would be entitled clearly flies in
the face of the intent not to benefit private parties.” At the
hearing, Moorer’s counsel stated Moorer did “not want another
opportunity to submit an amended judgment package that
compl[ied] with the court’s order,” and the court dismissed the
case.
Moorer timely appealed.3
DISCUSSION
A. Standard of Review
The interpretation of PAGA is an issue of law, which we
review de novo. (United Riggers & Erectors, Inc. v. Coast Iron &
Steel Co. (2018) 4 Cal.5th 1082, 1089; Weatherford v. City of San
Rafael (2017) 2 Cal.5th 1241, 1247.) “Our role in interpreting
statutes is to ascertain and effectuate the intended legislative
purpose. [Citations.] We begin with the text, construing words
3 The order of dismissal, signed by the trial court and
entered by the court clerk, constitutes a judgment under Code of
Civil Procedure section 581d.
6
in their broader statutory context and, where possible,
harmonizing provisions concerning the same subject. [Citations.]
If this contextual reading of the statute’s language reveals no
ambiguity, we need not refer to extrinsic sources.” (United
Riggers, at p. 1089; accord, 926 North Ardmore Ave., LLC v.
County of Los Angeles (2017) 3 Cal.5th 319, 328.)
B. PAGA Civil Penalties Must Be Distributed to All Aggrieved
Employees
In 2003 the Legislature enacted PAGA “to allow aggrieved
employees, acting as private attorneys general, to recover civil
penalties for Labor Code violations, with the understanding that
labor law enforcement agencies were to retain primacy over
private enforcement efforts.” (Arias v. Superior Court (2009)
46 Cal.4th 969, 980 (Arias); accord, Mendoza v. Nordstrom, Inc.
(2017) 2 Cal.5th 1074, 1079, fn. 5 [“PAGA authorizes an
aggrieved employee to bring suit for specified Labor Code
violations in a representative capacity and obtain civil penalties,
which are then shared between the affected employees and the
state.”].) An “‘aggrieved employee’” is “any person who was
employed by the alleged violator and against whom one or more
of the alleged violations was committed.” (§ 2699, subd. (c); see
Donohue v. AMN Services, LLC (2018) 29 Cal.App.5th 1068,
1099.) Section 2699, subdivision (i), provides that “civil penalties
recovered by aggrieved employees shall be distributed as follows:
75 percent to the [LWDA] . . . and 25 percent to the aggrieved
employees.”
Moorer contends that because a PAGA action is a type of
qui tam action, under which the private citizen enforces a statute
on behalf of the government, the 25 percent of the civil penalties
not allocated to the government should be distributed to the
7
aggrieved employee who brings the PAGA action. Although
Moorer asserts policy arguments for why this approach would
serve the goals of PAGA, the Supreme Court in Iskanian v. CLS
Transportation Los Angeles, LLC, supra, 59 Cal.4th 348(Iskanian) held otherwise. As the Supreme Court explained, a
PAGA representative action “conforms to the traditional criteria”
for bringing a qui tam action, “except that a portion of the
penalty goes not only to the citizen bringing the suit but to all
employees affected by the Labor Code violation.” (Iskanian, at
p. 382; see Williams v. Superior Court (2017) 3 Cal.5th 531, 545
(Williams) [PAGA “deputiz[es] employees harmed by labor
violations to sue on behalf of the state and collect penalties, to be
shared with the state and other affected employees”].)4
Allocation of 25 percent to all aggrieved employees is
consistent with the statutory scheme under which the judgment
binds all aggrieved employees, including nonparties. (Iskanian,
supra, 59 Cal.4th at p. 381 [“‘Because an aggrieved employee’s
4 Moorer relies on Amaral v. Cintas Corp. No. 2 (2008)
163 Cal.App.4th 1157, 1195, Cunningham v. Leslie’s Poolmart,
Inc. (C.D.Cal., June 25, 2013, No. CV 13-2122 CAS (CWx)) 2013
U.S.Dist. Lexis 90256 *1, *17, and Admona v. University of
Phoenix, Inc. (2012) 913 F.Supp.2d 964, 978, footnote 5, to
support his contention 25 percent of the penalties recovered in a
PAGA action are paid to the named plaintiff. (See Amaral, at
p. 1195 [“If an employee successfully recovers an award of civil
penalties, PAGA requires that 75 percent of the recovery be paid
to the [LWDA], with the remaining 25 percent going to the
employee.”].) But these cases predated the Supreme Court’s
Iskanian and Williams decisions and cite only to the language in
section 2699, subdivision (i). (See, e.g., Cunningham, supra, at
p. *17, fn. 1 [“the [c]ourt has not been presented with any case
law or other authority directly addressing how penalties
recovered by an employee are to be distributed . . . .”].)
8
action under the [PAGA] functions as a substitute for an action
brought by the government itself, a judgment in that action binds
all those, including nonparty aggrieved employees, who would be
bound by a judgment in an action brought by the government.’”];
accord, Arias, supra, 46 Cal.4th at p. 986.)
Moreover, “‘an action to recover civil penalties “is
fundamentally a law enforcement action designed to protect the
public and not benefit private parties.”’” (Iskanian, supra,
59 Cal.4th at p. 381; accord, Arias, supra, 46 Cal.4th at p. 986.)
As the trial court observed, allowing Moorer to recover
$148,912.50 in civil penalties, although his individual claims only
amounted to $9,513.59, would be contrary to PAGA’s intent to
protect the public, not to benefit private parties.
C. The Trial Court Did Not Err in Dismissing the Case
Moorer contends the trial court erred in dismissing the case
because he was unable to distribute 25 percent of the penalties to
the other aggrieved employees given that Noble never provided
him with a contact list for the other employees. However,
Moorer’s right to discovery would not end with the entry of a
default judgment. Rather, Moorer could have complied with the
trial court’s order, then obtained discovery from Noble as a
judgment creditor. “A judgment creditor may conduct discovery
directly against the judgment debtor by means of a judgment
debtor examination ([Code of Civ. Proc.,] § 708.110), written
interrogatories (§ 708.020), and requests for production of
documents (§ 708.030).” (SCC Acquisitions, Inc. v. Superior
Court (2015) 243 Cal.App.4th 741, 751-752 (SCC Acquisitions,
Inc.); accord, Li v. Yan (2016) 247 Cal.App.4th 56, 65 [“a
judgment creditor may obtain documents from a judgment debtor
9
either by subpoena duces tecum or by a discovery request for
production”].)
Code of Civil Procedure section 708.030, subdivision (a),
allows a judgment creditor to obtain information about a third
party, provided the document “is in the possession, custody, or
control” of the judgment debtor and “the demand requests
information to aid in enforcement of the money judgment.” (See
SCC Acquisitions, Inc., supra, 243 Cal.App.4th at pp. 752-753.)
Moreover, Moorer can obtain the other aggrieved employees’
contact information pursuant to a protective order, which would
safeguard their privacy rights.5 (Id. at p. 755.)
Moorer also argues allowing the dismissal to stand would
permit an employer to defeat an employee’s ability to obtain a
judgment by simply not defending the action. But this is not
such a case. The trial court dismissed the case after allowing
Moorer approximately eight attempts to obtain a default
judgment against Noble. At the January 31 hearing, the court
informed Moorer that he had “one last time” to submit a correct
default judgment package. Moorer refused to follow the court’s
order, acknowledging the revised proposed judgment was only “in
partial compliance” with the January 31 order. At the March 23,
2017 hearing, the trial court dismissed the case only after
Moorer’s counsel stated he did not want “another opportunity to
submit an amended judgment package that compl[ied] with the
court’s order.” Thus, the order of dismissal was the result of
Moorer’s decision not to submit a default judgment in compliance
5 The superior court could also follow the notice procedure we
set forth in Belaire-West Landscape, Inc. v. Superior Court (2007)
149 Cal.App.4th 554, 562, under which the employer would
provide notice to nonparty employees and an opportunity for
them to opt out from disclosure of their contact information.
10
with the trial court’s order, not Noble’s failure to defend the
action.6
DISPOSITION
The dismissal order is affirmed.
FEUER, J.
WE CONCUR:
PERLUSS, P. J. ZELON, J.
6 Counsel for Moorer at oral argument stated that Moorer
made the purposeful decision not to submit a judgment allocating
25 percent of the PAGA penalties to all aggrieved employees in
order to preserve the issue for appeal, not out of intransigence.
Although dismissal of the action will mean the LWDA and
aggrieved employees will not recover any PAGA penalties in this
lawsuit, they would not be barred by issue preclusion from
bringing a future PAGA claim because the dismissal does not
“conclusively resolve[] an issue actually litigated and determined
in the first action.” (DKN Holdings LLC v. Faerber (2015)
61 Cal.4th 813, 824; accord, Samara v. Matar (2018) 5 Cal.5th
322, 327 [issue preclusion prevents “‘relitigation of previously
decided issues’”].) Neither would claim preclusion apply because
the LWDA and other aggrieved employees were not parties or in
privity with parties to this lawsuit. (Samara, at p. 327; DKN
Holdings LLC, at p. 824.) As discussed, the LWDA and aggrieved
employees would have been bound had a judgment been entered
on Moorer’s PAGA claims. (Iskanian, supra, 59 Cal.4th at
p. 381.)
11
Filed 2/27/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
DAVID MOORER, B282631
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC578016)
v.
ORDER CERTIFYING
NOBLE LA EVENTS INC., OPINION FOR
PUBLICATION
Defendant and
Respondent. NO CHANGE IN
JUDGMENT
THE COURT:*
The opinion in the above-entitled matter filed on
February 11, 2019 was not certified for publication in the Official
Reports. For good cause it now appears that the opinion should
be published in the Official Reports and it is so ordered.
* PERLUSS, P. J. ZELON, J. FEUER, J.
1