Penalties Will Be Recalculated And Likely Still Result In A Sizeable Penalty Award Despite Reversal, So Fee Award Was Not Disturbed.
In Gunther v. Alaska Airlines, Inc., Case No. D077313 (4th Dist., Div. 1 Dec. 1, 2021) (partially published; fee discussion published), Alaska Airlines was found to be in noncompliance with California state wage statement requirements, resulting in a substantial PAGA penalty award of $25 million under Labor Code section 226.3. The lower court, substantially adopting a lodestar request but only granting a 1.25 positive multiplier rather than the 4.3 requested multiplier, awarded plaintiffs postjudgment fees of $944,860 under Labor Code sections 226(h) and 2699(g)(1)—with the defense not contesting fee entitlement. However, the appellate court reversed the PAGA penalty award, finding it should be calculated under the less heavy-handed penalty of PAGA section 2699(f)(2).
Alaska Airlines argued that this reversal meant the fee award should fall also, along with other challenges. The 4/1 DCA upheld the fee award. It found that the error in adoption of an incorrect penalty would not disturb the overall success of plaintiff, given penalties were still going to be recalculated and likely would be substantial in nature. Put another way, plaintiffs still succeeded. The trial court’s refusal to reduce for time spent on dismissed claims was sustained because jettisoning those claims resulted in a more efficient trial such that plaintiffs would be awarded for their counsel’s good judgment. The appellate court also rejected the defense’s limited success challenge, finding that the unsuccessful claims were related to the successful claims, drawing upon civil rights and CEQA cases for its analysis. Fee award affirmed even though the penalty award was sent for a remand calculation.
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