Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00145/USCOURTS-casd-3_15-cv-00145-3/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332pr Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JEFF EUBANK,

Plaintiff,

v.

TERMINIX INTERNATIONAL,

INC.,

Defendant.

Case No.: 15-cv-0145-WQH-JMA

ORDER

HAYES, Judge:

The matters before the Court are the Motion for Approval of PAGA Settlement 

(ECF No. 45) filed by Plaintiff Jeff Eubank and the Motion to Intervene as Additional 

Named Plaintiff (ECF No. 47) filed by Rodrigo Rivas.

I. Background

A. Plaintiff Jeff Eubank

On December 15, 2014, Plaintiff Jeff Eubank sent a letter to the California Labor 

and Workforce Development Agency (the “LWDA”) asking it to “take notice that Jeff 

Eubank . . . allege[s] that Terminix International Inc., . . . ha[s] violated, and continue[s] to 

violate, [] provisions of the Labor Code and wage orders promulgated by the Industrial 

Welfare Commission.” (ECF No. 7-1 at 1). The notice letter 

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alleges that Terminix’s actions are subject to civil penalties pursuant to the 

following provisions of the Labor Code and Industrial Welfare Commission 

Wage Order 7:

a. Sections 1194 and 1197 for failing to pay minimum wage;

b. Sections 510, 1194 and 1998, for failing to pay overtime wages;

c. Sections 226.7 and 512, for failing to provide duty-free meal and rest 

periods;

d. Section 5 of IWC Wage Order 7-2001, for failure to pay reporting time 

wages;

e. Section 203 for failing to pay all wages due and owning [sic] when 

employees [were] terminated;

f. Section 226 for failing to provide accurate, itemized wage statements; and, 

g. Section 1199, Wage Order No. 5 § 20 [and] Wage Order 16 § 18, for failing 

to pay proper wages and/or provide required working conditions and/or for 

violating the applicable Wage Order/regulations. 

Id. at 1–2. Eubank’s submission to the LWDA included a copy of the complaint that he 

eventually filed in this case (the “Complaint”). Id. at 3–22. On February 4, 2015, the 

LWDA wrote Eubank a response informing him that it had received his notice letter and 

did not intend to investigate his allegations. (ECF No. 57-1 at 28). 

On December 18, 2014, Eubank initiated this action by filing the Complaint in the 

Superior Court of California. (ECF No. 1-2 at 3). On January 21, 2015, Defendant 

Terminix International, Inc. (“Terminix”) removed this action to this Court. (ECF No. 1). 

On February 7, 2015, Eubank filed the First Amended Complaint (ECF No. 7) (the “FAC”). 

The FAC brings claims under California Labor Code (the “Labor Code”) §§ 201-204, 

218.6, 226, 226.3, 226.7, 510, 512, 558, 1194, 1194.2, 1197, 1197.1, 1198, and 1199 and 

Wage Order 5. (ECF No. 7). The FAC brings individual claims seeking damages and 

PAGA claims seeking civil penalties. Id. 

On April 21, 2015, the Court issued an Order directing Eubank and Terminix (the 

“Parties”) to arbitrate Eubank’s individual claims. (ECF No. 19 at 8). “Pursuant to the 

[C]ourt’s order, Eubank’s individual claims were submitted to the AAA for arbitration.” 

Declaration of Adrian R. Bacon, ECF No. 45-3, at ¶ 16. The Parties “mutually desire to

enter into a . . . Confidential Settlement Agreement and general Release of All Claims with 

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respect to Plaintiff’s Individual Claims.” Id.; see also ECF No. 61 at 9 (stating that 

Eubank’s individual claims have been “resol[ved]” in arbitration). 

B. Prospective Intervenor Rodrigo Rivas

Prospective Intervenor Rodrigo Rivas sent the LWDA “written notice . . . of [his] 

claims against [his] employer, Terminix” on July 25, 2013 (approximately eighteen months 

before Eubank sent his notice letter to the LWDA). (ECF No. 46-1 at 14). 

Specifically, [Rivas] allege[d] that Terminix:

1. Violated Labor Code §§ 510, 1194 and 1997 by failing to pay minimum 

and overtime wages for all hours worked. . . . 

2. Violated Labor Code § 226(a) by failing to identify the accurate number 

of hours worked and the applicable rates of pay on [Rivas’s] pay stubs. . . . 

3. Violated Labor Code §§ 201–203 by failing to pay for all wages due upon 

termination of employment. . . . [and]

4. Violated Labor Code § 2802 by failing to provide reimbursements for all 

work-related tools. 

Id. Rivas filed a complaint against Terminix in Alameda County Superior Court on 

December 13, 2013 (about one year before Eubank initiated this action). Id. at 6. Rivas’s 

complaint “seeks recovery of all applicable civil penalties and wages for Defendants’ 

violation of Labor Code §§ 201-203, 226(a), 510, 558, 1194, 1197, and 2802.” Id. at 11. 

C. The Settlement

The Settlement Agreement between Eubank and Terminix (the “Settlement”) 

provides for a total settlement amount of $620,000 (the “Settlement Sum”). ECF No. 45-

3 at 27. Approximately $325,000 of the Settlement Sum will be paid to the LWDA, 

approximately $25,000 will be paid to the settlement administrator, and approximately 

$160,000 will be paid towards Eubank’s attorney’s fees and litigation costs. Id. at 28; 

Bacon Decl. at ¶¶ 7, 8. The remaining approximately $110,000 will be paid to the 

Aggrieved Employees, id., defined as 

all other persons employed by [Terminix] . . . in the position of ‘pest control 

technician’ covered by Wage Order 5 who were not paid wages pursuant to 

California law . . . during the PAGA Period (which commences one year prior 

to the filing of this action and continues until judgment is rendered herein). 

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(the “Aggrieved Employees”). (ECF No. 7 at ¶ 4; ECF No. 45-3 at 28). Each Aggrieved 

Employee “shall receive a pro rata share of th[at] amount.” ECF No. 45-3 at 28. 

The Settlement provides that the LWDA and each Aggrieved Employee 

fully releases and forever discharges their rights to bring any cause of action 

under PAGA, stemming from any and all claims under California Labor Code 

Sections 558 and 2698 et seq., which includes California Labor Code Sections 

201-204, 218.6, 226, 226.3, 226.7, 510, 512, 558, 1194, 1194.2, 1197, 1197.1,

1198, 1199, 2802, Section 3, 4, 5, 11, and 12 of the Wage Order, and/or any 

other California Labor Code provisions that could have been asserted as a 

basis for a PAGA claim, during the period of July 25, 2012 through the 

Effective Date against Terminix . . . . This Agreement shall not be construed 

to release any of the aforementioned substantive Labor Code claims of any 

potentially Aggrieved Employees, except insofar as such claims are asserted 

as a basis for a PAGA Action . . . . 

Id. at 27. The Settlement also provides that “Terminix shall stipulate to permit [Eubank] 

to file a Second Amended Complaint, where [Eubank] will add a PAGA allegation under 

Labor Code § 2802.” Id. at 29. 

D. The Motions Before the Court 

On December 15, 2017, Eubank filed the Motion for Approval of PAGA Settlement 

(ECF No. 45) (the “Motion for Settlement Approval”). On January 10, 2018, Rivas filed 

an Objection to Motion for Approval of PAGA Settlement. (ECF No. 46). On January 18, 

2018, Eubank filed a Response to Rodrigo Rivas’ Comment re Unopposed Motion for 

Approval of PAGA Settlement. (ECF No. 57). On February 2, 2018, Terminix filed a 

Response to Rodrigo Rivas’ Comment Re Unopposed Motion for Approval of PAGA 

Settlement. (ECF No. 58). On February 9, 2018, Rivas filed a Reply to Plaintiff and 

Defendant’s Response re Motion for Approval on PAGA Settlement. (ECF No. 59).1 On 

February 26, 2018, Jimmy Renteria filed a Notice of Joinder in Rodrigo Rivas’ Objection 

 

1 Rivas also filed a Request for Judicial Notice (ECF No. 60) asking the Court to take judicial notice 

of the Declaration of Marlene Muraco. Rivas’s Request for Judicial Notice (ECF No. 60) is denied. 

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to Motion for Approval of PAGA Settlement. (ECF No. 67). Renteria is not a party to this 

case and has not filed a Motion to Intervene. 

On January 11, 2018, Rivas filed the Motion to Intervene as Additional Named 

Plaintiff (ECF No. 47) (the “Motion to Intervene”). On February 12, 2018, Terminix filed 

an Opposition to Motion to Intervene (ECF No. 61) and Eubank filed a Response to 

Rodrigo Rivas’ Motion to Intervene (ECF No. 62). On February 16, 2018, Rivas filed a 

Reply in Support of Motion to Intervene. (ECF No. 63).

On May 4, 2018, the Court held oral argument on the Motion for Settlement 

Approval and the Motion to Intervene. (ECF No. 71).

II. PAGA 

California’s Private Attorneys General Act of 2004, California Labor Code § 2698 

et seq., “authorizes an employee to bring an action for civil penalties on behalf of the state 

against his or her employer for Labor Code violations committed against the employee and 

fellow employees, with most of the proceeds of that litigation going to the state.” Iskanian 

v. CLS Transp. Los Angeles, LLC, 327 P.3d 129, 133 (Cal. 2014). Under California Labor 

Code § 2699(a),

any provision of [the Labor Code] that provides for a civil penalty to be 

assessed and collected by the Labor and Workforce Development 

Agency . . . for a violation of [the Labor Code], may, as an alternative, be 

recovered through a civil action brought by an aggrieved employee on behalf 

of himself or herself and other current or former employees pursuant to the 

procedures specified in Section 2699.3. 

“An employee bringing a PAGA action does so ‘as the proxy or agent of the state’s labor 

law enforcement agencies,’ who are the real parties in interest.” Sakkab v. Luxottica Retail 

N. Am., Inc., 803 F.3d 425, 435–36 (9th Cir. 2015) (quoting Iskanian, 327 P.3d at 147). 

“As the state’s proxy, an employee-plaintiff may obtain civil penalties for violations 

committed against absent employees, Cal. Lab. Code § 2699(g)(1), just as the state could 

if it brought an enforcement action directly.” Id. at 148. A PAGA action is a type of qui 

tam action. Id. 

The California Supreme Court described PAGA’s purpose in Iskanian:

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PAGA addressed two problems. First, the bill sponsors observed that 

“many Labor Code provisions are unenforced because they are punishable 

only as criminal misdemeanors, with no civil penalty or other sanction 

attached. Since district attorneys tend to direct their resources to violent 

crimes and other public priorities, Labor Code violations rarely result in 

criminal investigations and prosecutions.” (Sen. Judiciary Com., Analysis of 

Sen. Bill No. 796 (Reg.Sess. 2003–2004) as amended Apr. 22, 2003, p. 5.) 

The solution was to enact civil penalties for Labor Code violations 

“significant enough to deter violations.” (Ibid.) . . . . 

The second problem was that even when statutes specified civil 

penalties, there was a shortage of government resources to pursue 

enforcement. . . . Evidence gathered by the Assembly Committee on Labor 

and Employment indicated that the Department of Industrial Relations (DIR) 

“was failing to effectively enforce labor law violations. . . .” . . . . 

We summarized the Legislature’s response to this problem in Arias v. 

Superior Court (2009) . . . , 209 P.3d 923 (Arias): “In September 2003, the 

Legislature enacted [PAGA] [citations]. The Legislature declared that 

adequate financing of labor law enforcement was necessary to achieve 

maximum compliance with state labor laws, that staffing levels for labor law 

enforcement agencies had declined and were unlikely to keep pace with the 

future growth of the labor market, and that it was therefore in the public 

interest 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. (Stats.2003, ch. 906, § 1.)

327 P.3d at 146.

There are prerequisites with which an employee-plaintiff must comply before he or 

she can file a PAGA claim. 

Before bringing a civil action for statutory penalties, an employee must 

comply with Labor Code section 2699.3. That statute requires the employee 

to give written notice of the alleged Labor Code violation to both the employer 

and the Labor and Workforce Development Agency, and the notice must 

describe facts and theories supporting the violation. If the agency notifies the 

employee and the employer that it does not intend to investigate . . . , or if the 

agency fails to respond within 33 days, the employee may then bring a civil

action against the employer. 

Arias v. Superior Court, 209 P.3d 923, 930 (Cal. 2009).

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III. Motion for Settlement Approval

Eubank moves the Court to approve the Settlement. (ECF No. 45). California Labor 

Code § 2699(l)(2) provides that trial courts “shall review and approve any settlement of 

any civil action filed pursuant to [§ 2699].” Cal. Lab. Code § 2699(l)(2). “However, 

‘neither the California legislature, nor the California Supreme Court, nor the California 

Courts of Appeal, nor the [LWDA] has provided any definitive answer’ as to what the 

appropriate standard is for approval of a PAGA settlement.” Anthony Jordan v. NCI Grp., 

Inc., et al., No. EDCV161701JVSSPX, 2018 WL 1409590, at *2 (C.D. Cal. Jan. 5, 2018)

(alteration in original) (quoting Flores v. Starwood Hotels & Resorts Worldwide, Inc., 253 

F. Supp. 3d 1074, 1075 (C.D. Cal. 2017)). A number of district courts in the Ninth Circuit 

have employed a rule authorizing approval of a PAGA settlement only “upon a showing 

that the settlement terms are fundamentally fair, adequate, and reasonable in light of 

PAGA’s policies and purposes.” Id. (collecting cases). The Court adopts this standard. 

Rivas contends that the Settlement is unreasonable because it releases the LWDA’s 

and Aggrieved Employee’s claims for violations of § 28022even though neither Eubank’s 

notice letter nor the Complaint alleges any violations of that provision. (ECF No. 46 

at 17).3

Section 2699.3(a)(1) provides that a PAGA action “shall commence only 

after . . . the aggrieved employee . . . give[s] written notice . . . [to] the Labor and Workforce 

Development Agency . . . of the specific provisions of this code alleged to have been 

violated . . . .” Cal. Lab. Code § 2699.3(a)(1). Eubank attempted to comply with this 

provision by sending the LWDA his notice letter and a copy of the Complaint. Second 

Declaration of Adrian Bacon, ECF No. 57-1, at ¶ 3; ECF No. 57-1 at 5–26. However, 

neither Eubank’s notice letter nor the Complaint alleges any violations of § 2802. See ECF 

 

2 All statutory references are to the California Labor Code unless otherwise noted. 

3 The Court considers all of the facts and arguments in the record when fulfilling its obligation to

review and approve the Settlement. See Cal. Lab. Code § 2699(l)(2). 

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No. 57-1 at 5–26. Consequently, Eubank is not authorized to commence a PAGA action 

for violations of § 2802. See Cal. Lab. Code § 2699.3(a)(1) (A PAGA action “shall 

commence only after . . . the aggrieved employee . . . give[s] written notice . . . [to] the 

Labor and Workforce Development Agency . . . of the specific provisions of this code

alleged to have been violated . . . .” (emphasis added)). 

However, under the terms of the Settlement, the LWDA and Aggrieved Employees 

“fully release[] and forever discharge[] their rights to bring any cause of action under 

PAGA, stemming from . . . Section[] . . . 2802 . . . .” (ECF No. 45-3 at 27). The Court 

concludes that the terms of the Settlement are not “reasonable in light of PAGA’s policies 

and purposes” because the Settlement releases claims for violations of § 2802 and Eubank 

has not been authorized to commence a PAGA action for violations of § 2802. Anthony

Jordan, 2018 WL 1409590 at *2.4

IV. Motion to Intervene

“Mr. Rivas seeks leave to intervene as a matter of right, or alternatively, requests 

permissive intervention, to protect the interests of aggrieved Terminix employees and 

maintain the integrity of the PAGA settlement process.” (ECF No. 47-1 at 6). The Parties

contend that Rivas has no right to intervene and that the Court should not grant Rivas’s 

request for permissive intervention. (ECF No. 61 at 11–21; ECF No. 62 at 7–8). 

A. Intervention as a Matter of Right 

Under Federal Rule of Civil Procedure 24(a)(2), 

On timely motion, the court must permit anyone to intervene who claims an 

interest relating to the property or transaction that is the subject of the action, 

and is so situated that disposing of the action may as a practical matter impair 

or impede the movant’s ability to protect its interest, unless existing parties 

adequately represent that interest.

 

4 Rivas’s notice to the LWDA does not give Eubank the authority to bring (or settle) claims against 

Terminix for violations of § 2802. See Cal. Lab. Code § 2699.3(a)(1) (A PAGA action “shall commence 

only after . . . the aggrieved employee . . . give[s] written notice . . . [to] the Labor and Workforce 

Development Agency . . . of the specific provisions of this code alleged to have been violated . . . .” 

(emphasis added)). 

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The Court of Appeals has held that an applicant seeking intervention as of right must show 

that: 

(1) it has a “significant protectable interest” relating to the property or 

transaction that is the subject of the action; (2) the disposition of the action 

may, as a practical matter, impair or impede the applicant’s ability to protect 

its interest; (3) the application is timely; and (4) the existing parties may not 

adequately represent the applicant’s interest. 

Donnelly v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998) (citing Cabazon Band of Mission 

Indians v. Wilson, 124 F.3d 1050, 1061 (9th Cir. 1997), cert. denied, 524 U.S. 926 (1998)). 

The party seeking to intervene bears the burden of showing that all the requirements for 

intervention have been met. United States v. Alisal Water Corp., 370 F.3d 915, 919 (9th 

Cir. 2004) (citing United States v. City of Los Angeles, 288 F.3d 391, 397 (9th Cir. 2002)). 

In determining whether intervention is appropriate, courts are guided primarily by practical 

and equitable considerations, and the requirements for intervention are broadly interpreted 

in favor of intervention. Id. (citing City of Los Angeles, 288 F.3d at 397). 

Rivas contends that “[t]he inadequacy of representation demonstrated by Mr. 

Eubank and his counsel is evidenced by the unavoidable conflict created by the nondisclosed side agreement to settle Mr. Eubank’s individual wage and hour claims.” (ECF 

No. 47-1 at 22). The Parties contend that Rivas “has not shown and cannot show that his 

interests will not be adequately protected by Eubank [because] Eubank has the same

interest that Rivas does—to settle the PAGA claim at issue for as much compensation as 

possible.” ECF No. 61 at 14; see also ECF No. 62 at 6. Terminix notes that Eubank 

“settled the PAGA claim such that every allegedly aggrieved employee, including Rivas 

and Plaintiff Eubank, will recover the same amount.” Id. Terminix also contends that 

“there was no ‘non-disclosed side agreement,’ but rather a separate settlement for 

individual claims pending in arbitration rather than in court.” Id. at 15 (citing ECF No. 47-

1 at 22). 

Three factors are relevant to whether a present party adequately represents the 

interests of a prospective intervenor:

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(1) whether the interest of a present party is such that it will undoubtedly make 

all of a proposed intervenor’s arguments; 

(2) whether the present party is capable and willing to make such arguments; 

and 

(3) whether a proposed intervenor would offer any necessary elements to the 

proceeding that other parties would neglect. 

Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003), as amended (May 13, 2003)

(citations omitted). According to the Court of Appeals, 

The most important factor in determining the adequacy of representation is 

how the interest compares with the interests of existing parties. When an 

applicant for intervention and an existing party have the same ultimate 

objective, a presumption of adequacy of representation arises. If the 

applicant’s interest is identical to that of one of the present parties, a 

compelling showing should be required to demonstrate inadequate 

representation. 

Id. 

Rivas’s interest in this matter is identical to Eubank’s: both want to obtain as much 

compensation for the LWDA and Aggrieved Employees as possible for the PAGA claims 

at issue. Consequently, for Rivas to have a right to intervene under Federal Rule of Civil 

Procedure 24(a)(2), there must be “compelling” evidence that Eubank does not adequately 

represent their shared interest. Arakaki, 324 F.3d at 1086. The evidence in the record 

concerning Eubank’s individual claims is not compelling evidence that Eubank does not 

adequately represent Rivas’s interest in this matter. Consequently, the Court concludes 

that Rivas does not have a right to intervene under Federal Rule of Civil Procedure 24(a)(2).

B. Permissive Intervention

Rivas also seeks permission to intervene under Federal Rule of Civil Procedure 

24(b)(2). (ECF No. 47-1 at 22–23). “[A] court may grant permissive intervention where 

the applicant for intervention shows (1) independent grounds for jurisdiction; (2) the 

motion is timely; and (3) the applicant’s claim or defense, and the main action, have a 

question of law or a question of fact in common.” Northwest Forest Res. Council v. 

Glickman, 82 F.3d 825, 839 (9th Cir. 1996). “Even if an applicant satisfies those threshold 

requirements, the district court has discretion to deny permissive intervention.” Donnelly 

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v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998) (citing Cabazon Band of Mission Indians 

v. Wilson, 124 F.3d 1050, 1061 (9th Cir. 1997), cert. denied, 524 U.S. 926 (1998)). 

Assuming, without deciding, that the Court may permit Rivas to intervene in this matter, 

the Court declines to do so at this stage in the litigation. 

V. Conclusion

The Motion for Settlement Approval (ECF No. 45) is DENIED without prejudice. 

The Motion to Intervene (ECF No. 47) is DENIED without prejudice. 

Dated: May 15, 2018

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