PAGA Case Value: What a Federal-Court Estimate Includes

If your employer says a PAGA lawsuit puts more than $75,000 at stake, start by asking what the number is being used to establish. In a removal filing, the employer may be trying to show that the action belongs in federal court. That calculation can include estimated legal fees as well as penalties. Your expected payment requires a separate assessment of the claims, available relief and eventual outcome.

A San Diego case shows why the categories matter. In Pitsick-Perez v. Southwest Airlines Co., No. 25-cv-03000-DMS-BLM, ECF No. 17 (S.D. Cal. Jan. 15, 2026), the employer’s revised estimate totaled $126,025. Most of it consisted of future attorney fees. The court found the supporting proof insufficient and returned the action to state court.

Identify the question the dollar figure is answering

PAGA—the Private Attorneys General Act—allows qualifying employees to pursue specified civil penalties through an enforcement action. A filing about which court may hear that action addresses a different task from deciding liability or negotiating a resolution.

Southwest invoked ordinary diversity jurisdiction, which required different-state citizenship and an amount in controversy exceeding $75,000. The parties met the citizenship requirement. The court then examined whether the employer had adequately supported the disputed amount. That was the purpose of the $126,025 calculation.

When reading your own papers, locate the heading, requested relief and cited jurisdictional ground before comparing numbers. A notice of removal, a settlement proposal and a judgment can contain dollar figures serving very different purposes. Write down which document supplies each figure and whether it is an estimate, an assumption, a negotiated amount or a court-ordered award.

Keep penalties, legal fees and proposed awards separate

The revised calculation in Pitsick-Perez had three components: $25,400 in estimated PAGA penalties, $88,125 in projected attorney fees and a proposed $12,500 representative service award. Adding the categories produced the headline number. Reading only the total would conceal that fees supplied most of it.

The court explained that attorney fees authorized by statute or contract can be included in the amount in controversy. That inclusion describes how the federal-court calculation works. To understand your financial position, your lawyer must separately explain the potential remedies and your written fee agreement.

Keep the versions of the calculation separate as well. Southwest’s original removal notice used different fee and penalty estimates from its later opposition. If a figure changes between filings, identify the changed component, period or assumption. A sum taken from one version and a pay-period count taken from another can produce a misleading comparison.

Ask whose work supports the projected hours

An estimate based on hours and rates should explain both. Southwest used 150 hours, divided equally between $650 and $525 hourly rates, to reach $88,125. The court’s concern was the evidence supporting the workload for this claim.

A declaration supporting approval of a PAGA settlement in another matter included work on mediation exposure models, notices to employees, a settlement-approval motion and a settlement administrator’s declaration. Southwest had also drawn its equal division of hours from representations in that declaration. The listed settlement tasks served the broader group. They did not, by themselves, establish the claimed fee amount attributable to this plaintiff’s individual PAGA claim.

For your own review, distinguish work already performed from projected work, and work concerning one employee from work concerning a larger group. Then compare the legal and factual issues. A case involving multiple independent overtime, break and reimbursement disputes may require a different workload from a dispute organized around one pay practice.

The plaintiff in Pitsick-Perez described the central issue as pay for waiting for and riding a shuttle to a remote parking lot, with the other claims following from that issue. The court used the narrower dispute to test the employer’s comparisons. The lesson is to examine the actual work behind the estimate, rather than treating every wage-and-hour lawsuit as interchangeable.

Read each alternative calculation with its assumptions

A court may test a proposed amount in more than one way. Here, the court also used a percentage approach: Twenty-five percent of the employer’s $25,400 penalty estimate produced $6,350 in fees. Added together, the figures came to $31,750. Even including the disputed $12,500 service award would bring the total only to $44,250.

The order found the jurisdictional showing insufficient under both proposed methods. Treat the 25 percent figure as part of that analysis. Whether a particular fee request or penalty calculation fits your case depends on its governing law, claims and record.

Similarly, an assumption used to test a threshold is different from an amount the court has awarded. Mark phrases such as “even using” or “even considering” when reviewing a calculation with counsel. They can show that the court accepted a figure for the sake of analysis while reaching the same result.

Bring the calculation and the papers that explain it

For a focused consultation, bring the complaint, notice of removal, motion to remand, opposition, supporting declarations and any resulting order. Identify the paragraph or table containing the number you want explained. Preserve the original versions so counsel can trace changes between filings.

Ask which claims and time periods support the penalty estimate; which tasks, hours and rates support the fee estimate; and which components the other side disputes. Your employment and pay records can help explain the underlying pay practice, while the filed papers show how the parties connected that practice to the jurisdictional figures.

Our analysis of Pitsick-Perez follows the court’s reasoning in detail. The practical starting point is simpler: Identify what each number measures before treating it as an answer to what your case is worth.