Taduran v. James R. Glidewell, Dental Ceramics, Inc.

Facts and statutory framework

The Private Attorneys General Act authorizes an aggrieved employee to recover civil penalties for Labor Code violations. (Lab. Code, § 2698 et seq.) Penalties are computed under section 2699, subdivision (f) on a fixed amount “for each aggrieved employee per pay period” (e.g., “$100 for each aggrieved employee per pay period”), while subdivisions (g) and (h) cap certain penalties at fifteen and thirty percent of the amount “sought.” (slip opn. at pp. 10–11.) Critically, section 2699, subdivision (e)(2) permits a court to “award a lesser amount than the maximum civil penalty … if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” (slip opn. at pp. 10–11.) A prevailing employee “shall be entitled to an award of reasonable attorney’s fees and costs.” (Lab. Code, § 2699, subd. (k)(1); slip opn. at p. 14.)

Abraham Taduran sued his former employer, Glidewell, in a single PAGA cause of action. (slip opn. at pp. 2–3.) After summary adjudication and a stipulated court trial, Glidewell’s liability was established on four violations — wage-statement, rest-period, “uptime” overtime, and bonus-pay issues. (slip opn. at pp. 4–5.) The parties stipulated to the underlying numbers (pay periods, affected employees, and average underpayments). (slip opn. at p. 4.) Taduran calculated the maximum penalties at $55,985,350 but conceded the court had discretion to reduce them, without proposing a figure; Glidewell urged reductions of more than ninety-nine percent. (slip opn. at pp. 4–6.)

Procedural history

The trial court awarded $515,955 in civil penalties, explaining its reduction violation-by-violation: on the wage-statement issue, the noncompliant statements caused no unpaid wages and were supplemented by “Production Sheets,” so a penalty of $100,165 was appropriate; on the rest-period issue, the rounding method was applied in good faith and the underpayments were small, supporting $190,900; on the uptime issue, $167,400; and on the bonus-pay issue, the court declined to reduce and imposed the full $58,500. (slip opn. at pp. 6–8.) Separately, the court awarded $733,440 in attorney fees, accepting Taduran’s $1.047 million lodestar but applying a 0.70 multiplier, plus full costs. (slip opn. at pp. 8–9.) Taduran appealed; the Court of Appeal affirmed. (slip opn. at pp. 9, 19.)

Issue

First, does section 2699, subdivision (e)(2) require a court that reduces a maximum PAGA civil penalty to apply the reduction on a per-pay-period basis (mirroring how the maximum is calculated), or may it reduce on a per-employee or percentage basis? Second, did the trial court’s 0.70 negative multiplier on the lodestar withstand review — and does “heightened scrutiny” apply to such across-the-board fee reductions? (slip opn. at pp. 10, 14–16.)

Holding

Reasoning

1. Two-tier review of a penalty reduction. The court first clarified the standard: it reviewed “de novo … the scope of the trial court’s authority to reduce civil penalties under section 2699, subdivision (e)(2)” and then reviewed “the trial court’s exercise of that authority for an abuse of discretion,” because “judicial discretion must be exercised within the confines of the statute that grants the discretion.” (slip opn. at p. 10, citing Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1213, and Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112, 1135.)

2. The statute supplies no reduction formula. On the merits, the court rejected Taduran’s argument that reductions must track the per-pay-period method used to calculate the maximum. Section 2699, subdivision (f) “provides for calculation [of the maximum] on a per pay period basis,” but “does not reference reduction of a civil penalty, let alone provide any mandatory formula for reduction.” (slip opn. at pp. 11–12.) Subdivision (e)(2) authorizes only “a lesser amount,” so a court may reduce by percentage, per pay period, or per employee. (slip opn. at p. 12.)

3. The deterrence argument fails. Taduran argued that only a per-pay-period reduction preserves PAGA’s deterrent purpose, because a per-employee award lets an employer escape proportionate penalties for repeated violations. The court answered that an employer “has no foreknowledge the trial court would apply any particular reduction method, let alone apply any reduction at all,” and noted the court here imposed the full per-pay-period penalty on the bonus-pay issue, preserving deterrence. (slip opn. at p. 12.) The cases Taduran cited had applied per-pay-period reductions but none “h[e]ld that applying a reduction on [a] per employee basis is prohibited.” (slip opn. at p. 12, discussing Thurman, Carrington v. Starbucks Corp. (2018) 30 Cal.App.5th 504, and Bernstein v. Virgin America, Inc. (N.D.Cal. 2019) 365 F.Supp.3d 980.)

4. Distinguishing Moniz on allocation. The court distinguished Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56 — where a settlement’s allocation among two employee classes was disproportionate — because here “there is a single common fund from which all aggrieved employees can be compensated proportionately,” with the standard 75% LWDA / 25% employee allocation, so a per-employee reduction created no comparable unfairness. (slip opn. at pp. 12–13.) The court added that the “drastic” bottom line could “mathematically” have resulted from a per-pay-period reduction too, and that the trial court reasonably found the wage-statement and rest-period penalties should be steeply reduced for the reasons it stated. (slip opn. at pp. 13–14.)

5. The fee multiplier and the “heightened scrutiny” split. Turning to fees, the court described the lodestar-multiplier method (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 489) and the live appellate split over reviewing “across-the-board” negative multipliers: Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88 and Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24 apply a federal-borrowed “heightened scrutiny” requiring a clear explanation, while Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24 rejects any heightened standard — an issue now “pending before the California Supreme Court” in Cash v. County of Los Angeles (2025) 111 Cal.App.5th 741, review granted Aug. 20, 2025, S291827. (slip opn. at pp. 14–16.) The court declined to resolve the split because the trial judge — who had presided since 2017 — gave specific reasons for the 0.70 multiplier. (slip opn. at p. 16.)

6. The negative-multiplier factors were proper. The court upheld each factor: considering the attorneys’ lower past billing rates was permissible to “fix the fee at the fair market value,” not improper double-counting (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095; Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 156); and “relative success” — the penalties recovered were under one percent of those sought — properly bore on a fee in a representative PAGA action (Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, 746; Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 53). (slip opn. at pp. 17–19.) Finding the factors properly weighed, the court held there was no abuse of discretion and affirmed. (slip opn. at p. 19.)

Significance

Taduran is an important post-reform PAGA decision on the back end of a case — how penalties are reduced and how fees are set after liability. On penalties, it gives trial courts broad latitude: section 2699, subdivision (e)(2) imposes no reduction formula, so a court may slash a multimillion-dollar maximum to a small fraction on a per-employee basis, provided it ties the reduction to the statutory “unjust, arbitrary and oppressive, or confiscatory” touchstone and the case’s facts. For plaintiffs, that is a sobering reminder that a large “stacked” maximum is a ceiling, not a floor, and that good-faith compliance efforts and minimal actual harm will drive steep reductions. On fees, the decision both showcases a sustained negative multiplier driven heavily by “relative success” in a low-recovery PAGA case and flags that the Supreme Court will soon decide, in Cash, whether across-the-board fee cuts require “heightened scrutiny” — a holding that may reshape how trial courts must explain negative multipliers.

Key quotes

“[A]fter calculating the maximum civil penalty on a per pay period basis, the trial court is not precluded from using any reasonable method to reduce that amount, including applying a reduction on a percentage, per pay period or per employee basis.” (Taduran, supra, No. G064718 (slip opn. at pp. 11–12).)

“Whether to apply heightened scrutiny to across-the-board cuts to fee awards is pending before the California Supreme Court. … We need not resolve this dispute because we conclude the trial court here provided specific explanations for its choice of a 0.7 multiplier.” (Taduran, supra, No. G064718 (slip opn. at p. 16).)

Read the full opinion (official slip opinion) →

Practice pointer

Open questions

The decision leaves the central fee-review question to the Supreme Court: whether across-the-board negative multipliers require “heightened scrutiny” and a clear, specific explanation, as Warren and Kerkeles hold, or no heightened standard, as Morris holds. (slip opn. at pp. 15–16.) Because the trial court here gave specific reasons, Taduran does not resolve how a less fully explained reduction would fare. On penalties, the opinion blesses per-employee reductions on this record — a single common fund with proportionate distribution — but does not decide how the analysis changes where a per-employee reduction would, as in Moniz, distribute recovery unevenly among differently situated employees. (slip opn. at pp. 12–13.) The reach of subdivision (e)(2)’s “any reasonable method” latitude in cases with materially different facts thus remains to be developed.