UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
June 28, 2011
TYRUS COLLLINS AND JAMES GREER, ON OWW MJS BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, PLAINTIFFS,
CARGILL MEAT SOLUTIONS CORPORATION, A KANSAS CORPORATION; AND DOES 1 THROUGH 50, INCLUSIVE,
The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION RE UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT (DOC. 46) AND FOR ATTORNEYS' FEES AND COSTS (DOC. 47)
This is a wage-and-hour class action brought on behalf of 16 meat workers employed by Cargill Meat Solutions Corp., in Fresno County, California. Declaration of Anthony J. Orshansky 19 ("Orshansky Decl."), Doc. 48 ¶ 5; see also Second Amended Class 20 Action Complaint ("SAC"), Doc. 32, filed Dec. 17, 2010. The 21 action is brought on behalf of Plaintiffs and approximately 239 22 current and former employees of Defendants' from August 1, 2008 23 to March 7, 2011 for alleged violations of state wage-and-hour 24 laws. Orshansky Decl. at ¶ 16. 25 26 The parties have entered into a Joint Stipulation of 27 Settlement Agreement. Orshansky Decl. at ¶ 11. A March 7, 2011 28 memorandum decision:
(1) conditionally certified a Settlement Class; (2) appointed Class Counsel; (3) appointed Class Representatives; (4) appointed a Settlement Administrator; (5) preliminarily approved the Class Settlement; (6) approved the class Notice and related materials for distribution; (7) directed the mailing, by first-class mail, of the Notice Packet by March 25, 2011; and (8) scheduled a final approval hearing for June 27, 2011. Doc. 41. Plaintiffs have filed a motion for final approval of the settlement, Doc. 44, along with supporting 10 declarations, Docs. 48-48-1. Plaintiffs have also moved for 11 approval of their request for attorneys' fees and costs, Doc. 45, 12 and filed a supporting declaration, Doc. 48. No objections to 13 approval have been received. See Declaration of Amanda J. Myette 14 15 ("Myette Decl."), Doc. 48-1 ¶ 15.
Plaintiffs allege Defendants failed to reimburse Employees 18 for expenses they necessarily incurred in the performance of 19 their job duties; failed to provide legally required rest 20 21 periods; failed to pay premium pay for each day on which 22 requisite rest periods were not provided or were deficiently 23 provided; failed to pay out wages twice per calendar month; 24 failed to provide accurate itemized wage statements; and 25 willfully failed to pay all wages due upon termination or 26 separation of employment. Plaintiffs sought to certify a class 27 composed of themselves and similarly situated individuals, and 28 sought declaratory relief and recovery of unreimbursed business expenditures, back wages, interest, penalties, attorneys' fees, and costs. See SAC.
Both prior and subsequent to the complaint being filed, Plaintiffs conducted substantial discovery and non-discovery investigation regarding class certification and the merits of their claims. Oshansky Decl. ¶ 7. After suit was filed, Plaintiffs propounded written discovery requesting documents and 10 information relating to Defendant's employment policies and 11 practices; pay and time records; Class Members' wages, paychecks, 12 wage statements, and termination wages; Defendant's policies and 13 practices relating to reimbursement for work-related expenses; 14 15 Defendant's policies and practices relating to safety equipment 16 and devices required; and other matters relating to certification 17 issues. Id. at ¶ 9. Prior to mediation, Class Counsel also 18 devoted substantial time and resources to meeting and conferring 19 with opposing counsel regarding discovery; negotiating a 20 protective order; reviewing the documentation provided by 21 Defendant; doing follow-up research on relevant legal and 22 23 procedural questions; preparing damage models; and developing 24 settlement and negotiation strategies. Id. at ¶ 10.
III. SUMMARY OF THE SETTLEMENT
The case was resolved with the aid of a mediator, Michael 27 Loeb, Esq. The Settlement covers approximately 239 current and 28 former meat workers employed by Defendant in California ("Class Members") from August 1, 2008 to March 7, 2011 ("Covered Period"). Settlement Agreement ("Settlement"), Doc. 38-1, § 9(c); see also Oshansky Decl. ¶ 16.
Under the Settlement, Defendant will make payments totaling
approximately $260,000.00, which will be paid out within 15 business
days following the final approval of the settlement. 10 See Settlement
§§ 9, 11. This sum will cover:
settlement awards to be paid to Class Members who timely
submit valid claims (paid out of the Net Settlement Fund of
$150,000.00); 15 a $2,000 payment to the California Labor and
Workforce 16 Development Agency for the amount in penalties due to it
under Labor Code § 2699, et seq.
the Settlement Administrator's reasonable fees and expenses
(no more than $10,000); 21 (subject to court approval) payments
to Plaintiffs, in 22 addition to their Settlement Awards, of $4,000
each in 23 compensation of their services as Class Representatives; 24
(also subject to court approval) payments to Class Counsel 25 26 of
$82,500, for their reasonable attorneys' fees, as well as 27 actual
litigation costs, up to $7,500.
See Settlement, §§ 9, 11. There will be no reversion of the Net Settlement Fund to Defendant. Id. at § 9(a).
B.Payment of Settlement Awards.
The Net Settlement Fund ("NSF") of $150,000 will be completely separate from any other payments the Defendant makes. Oshansky Decl. ¶ 12. It will be distributed to all Class Members who timely submit valid claims ("Qualified Claimants"), based upon the following allocation formula: 10 Each Qualified Claimant shall receive a payment based on the 11 number of weeks that he or she worked during the Covered 12 Period, which shall be from August 1, 2008 through preliminary approval. Each Qualified Claimant will be 13 entitled to a provisional share of the settlement calculated by (1) taking the Qualified Claimant's number of workweeks, 14 (2) dividing that number by the total number of workweeks of all Qualified Claimants, and (3) multiplying the resulting 15 number by the NSF. For purposes of this calculation, the 16 number of employee's "Workweeks" shall be calculated by (1) subtracting the employee's first workday during the Covered 17 Period from his or her last workday of the Covered Period, (2) dividing that number of days by 7, and then (3) rounding 18 to the nearest integer. 19 Settlement, § 9(c). A Claim Form, which was mailed to Class 20 Members with the "Notice of Pendency of Class Action, Proposed 21 Settlement, Your Rights, and Options for you to Consider" 22 ("Notice"), included for each Class Member the number of weeks 23 worked during the Class Period and the Class Member's estimated 24 25 Settlement Amount.
See Claim Form, Doc. 38-3.
For tax purposes, one-quarter (1/4) of each settlement 27 amount awarded will be deemed wages, one-half (1/2) will be 28 characterized as expense reimbursement, and one-quarter (1/4) will be treated as penalties and interest. Settlement Awards will be subject to applicable tax withholding and reporting. Settlement, § 9(e).
The formula relies upon objective evidence of the number of weeks worked during the Class Period, provided by the Defendant. Settlement, § 17. Class Members could also review and confirm this information, and the Claim Form permitted Class Members to challenge the number of weeks worked. See Claim Form, § 2(B). 10 11 C. Distribution of Unclaimed Funds and Uncashed Checks. 12 The Settlement is structured so as to distribute the 13 entirety of the NSF, regardless of whether or not every member of 14 the class files a valid claim form. There will be no unclaimed 15 funds. See Settlement, § 9(c). Checks that remain uncashed 16 after one hundred and eighty (180) calendar days shall revert to 17 the California Uncashed Check Fund in the name of the Qualified 18 Claimant. Settlement, § 18. 19 20 D.Scope of the Release. 21 The Settlement provides that all Class Members, other than 22 those who elect not to participate in the Settlement, shall have 23 released the "Released Parties" from the "Covered Claims." The 24 Notice contains the following release: 25 26 Upon the final approval by the Court of the settlement, each
Class member who does not opt out of the settlement, shall, 27 for the period of time extending from August 1, 2008 to [preliminary approval], fully release and forever discharge 28 Defendant and its respective present and former officers, directors, employees, shareholders, agents, trustees, representatives, attorneys, insures, parent companies, subsidiaries, divisions, affiliates, predecessors, successors, assigns, and any individual or entity that could be jointly liable with Defendant (the foregoing are collectively referred to hereafter as the "Releasees") from any and all acclaims, causes of action, damages, wages, benefits, expenses, penalties, debts, liabilities, demands, obligations, attorney's fees, costs, and any other form of relief or remedy at law or in equity, of whatever kind or nature, asserted by the Covered Claims based on the facts alleged in the Second Amended Complaint ("Complaint") filed in the Lawsuit.
"Covered Claims" means any and all claims, demands, rights liabilities, and/or causes of actions arising out of the facts alleged in the Complaint for: (1) violation of 10 Labor Code § 2802(a); (2) rest-period violations, Labor Code 11 § 226.7; (3) violation of Labor Code § 204; (4) violation of Labor code § 226(a); (5) penalties pursuant to Labor Code § 12 203; (6) penalties under California Labor Code §2609 et seq.; (7) any penalties that could have been brought based 13 on the violations alleged in the Complaint, and (8) violation of Business & Professions Code §17200, et seq. 14 based on the foregoing alleged violations. 15 Claim Form, § 4. Furthermore: 16 Representative Plaintiffs additionally expressly waive any 17 and all rights they have under Section 1542 of the Civil
Code of the State of California, which provides: 18 19 "A general release does not extend to claims which the creditor does not know or suspect to exist in his or 20 her favor at the time of executing the release, which if known by him or her must have materially affected 21 his or her settlement with the debtor." 22 Notwithstanding the provision of Section 1542, and for the 23 purpose of implementing a complete release and discharge, Representative Plaintiffs expressly acknowledge the this 24 Settlement Agreement is intended to include in its effect, without limitation, claims and causes of action which they 25 do not know of or suspect to exist in their favor at the time of execution hereof and that his agreement contemplates 26 the extinguishment of all such claims and causes of action.
Settlement, § 10(c). The § 1542 release does not extend to non-representative class members.
E.Objections and Opt-Out Process.
Any Class Member who so wishes may object or elect not to participate in the Settlement. Settlement, §§ 19, 20. The Notice fully explains the objection and opt-out procedures. See Notice, § VI; see also "Exclusion Form", Doc 38-4.
10 F.Class Representative Payments; Class Counsel Attorneys' Fees
Payment and Class Counsel Litigation Expenses Payment. 11 The settlement also permits Plaintiffs and their counsel to 12 seek by separate motion:
payments to Plaintiffs, in addition to their Settlement
15 Awards, of $4,000 each in compensation of their 16 services as Class Representatives; and 17 payments to Class Counsel of $82,500, for their 18 reasonable attorneys' fees, as well as litigation 19 costs, up to $7,500.
See Settlement, §§ 11(a), (b).
A.Certification of a Class for Settlement.
As the Class has only been conditionally certified, final 25 certification is required and is governed by Federal Rule of 26 Civil Procedure Rule 23. 27 28 1. Rule 23(a) Requirements.
Federal Rule of Civil Procedure 23(a) states in pertinent part that "[o]ne or more members of a class may sue or be sued as representative parties on behalf of all." As a threshold matter, in order to certify a class, a court must be satisfied that (1) the class is so numerous that joinder of all members is impracticable (the "numerosity" requirement); (2) there are questions of law or fact common to the class (the "commonality" requirement); (3) the claims or defenses of representative parties are typical of the claims or defenses of the class (the "typicality" requirement); and (4) the representative parties will fairly and adequately protect the interests of the class 10 (the "adequacy of representation" requirement).
In re Intel Secs. Litig., 89 F.R.D. 104, 112 (N.D. Cal. 12 1981)(citing Fed. R. Civ. P. 23(a)). 13 14 a. Numerosity. 15 Here, the proposed class is comprised of all individuals who 16 have been employed by Defendant in their Fresno Grind Facility 17 from August 1, 2008 to March 7, 2011. There are approximately 18 239 Class Members. Courts have routinely found the numerosity 19 requirement satisfied when the class comprises 40 or more 20 21 members.
Ansari v. New York Univ., 179 F.R.D. 112, 114 (S.D.N.Y. 22 1998). Numerosity is also satisfied where joining all Class 23 members would serve only to impose financial burdens and clog the 24 court's docket. In re Intel Secs. Litig., 89 F.R.D. at 112. 25 Here, the joinder of approximately 239 individual current and 26 former employees would only further clog this court's already 27 overburdened docket.
b. Common Questions of Fact and Law.
Commonality exists when there is either a common legal issue stemming from divergent factual predicates or a common nucleus of facts resulting in divergent legal theories. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). It does not require that all questions of law or fact be common to every single member of the class. To satisfy the commonality requirement, plaintiffs need only point to a single issue common to the class. 10 Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1177 (9th Cir. 2007); 11 Slaven v. BP Am., Inc., 190 F.R.D. 649, 655 (C.D. Cal. 2000). 12 Here, Class Members share the following legal and factual 13 questions: 14 15 Whether Defendant violated California Labor Code 16 ("CLC") § 2802 by failing to reimburse Employees for 17 necessary expenditures incurred in the course of their 18 employment; 19 Whether Defendant violated CLC § 226.7 and the 20 applicable IWC Wage Orders, by failing to provide 21 Employees with rest periods for every four consecutive 22 23 hours of work without paying them one hour of wages at 24 their regular rates of pay for each day that requisite 25 rest periods were not provided or were deficiently 26 provided; 27 Whether Defendant violated CLC § 204 by failing to pay Employees all wages due at least twice per calendar month;
Whether Defendant violated CLC § 226(a) by not providing employees accurate itemized wage statements;
Whether Defendant violated CLC §§ 201-203 by failing to pay wages and compensation due and owing at the time of termination;
Whether Defendant violated California Business & 10 Professions Code § 17200 et seq. based on the above; 11 and, 12 13
Whether Plaintiffs and members of the proposed class
14 are entitled to equitable relief pursuant to § 17200. 15 Every Class Member was paid under the same pay practices as 16 every other class members. The commonality requirement is 17 satisfied. 18 19 c. Typicality. 20 Typicality is satisfied if the representatives' claims arise 21 from the same course of conduct as the class claims and are based 22 on the same legal theory. See, e.g., Kayes v. Pac. Lumber Co., 23 51 F.3d 1449, 1463 (9th Cir. 1995)(claims are typical where named 24 plaintiffs have the same claims as other members of the class and 25 26 are not subject to unique defenses). Because every class member 27 was paid under the same pay practices as every other class 28 member, the Class Representatives' claims are typical of those of the other Class Members. The typicality requirement is satisfied.
d. Fair and Adequate Representation.
The final Rule 23(a) requirement is that the class representative fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a)(4). "The proper resolution of this issue requires that two questions be addressed: (a) do the named plaintiffs and their counsel have any conflicts of interest with 10 other class members and (b) will the named plaintiffs and their 11 12 counsel prosecute the action vigorously on behalf of the class?" 13 In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 14 2000). 15 Both requirements are satisfied here. Class counsel, 16 Anthony J. Orshansky, Esq., of the law firm Orshansky & Yeremian, 17 LLP, has significant experience litigating class actions, serving 18 as class counsel, and representing plaintiffs in wage and hour 19 litigation. See Orshansky Decl. at ¶ 2. Class counsel has no 20 21 conflicts with the class, id. at ¶ 18, and has devoted a significant amount of time to the lawsuit, id. at ¶ 35. 23 In addition, the Class Representatives' interests are 24 completely aligned with those of the class. The Class 25 Representatives' interest is in maximizing their recovery. 26 Although they will each receive an additional $4,000, this amount 27 is reasonable compensation for the time and expense they devoted to pursuing this case, as well as for the inherent risk involved in their doing so. See id. at ¶¶ 42-49.
2. Certification of a Class under Rule 23(b)(3).
Once the threshold requirements of Rule 23(a) are satisfied, a class may be certified only if the class action satisfies the requirements of Rule 23(b)(1), (b)(2), and/or (b)(3). Here, the parties agree for purposes of the Settlement only that certification of the Class is appropriate under Rule 23(b)(3) 10 because "questions of law or fact common to the members of the 11 12 class predominate over any questions affecting only individual 13 members, and ... a class action is superior to other available 14 methods for the fair adjudication of the controversy." Fed. R. 15 Civ. P. 23(b)(3). 16 17 B. The Terms of the Preliminary Approval Have Been Satisfied. 18 The March 7, 2011 preliminary approval of the Settlement and 19 conditional certification of the Class ordered that the Class be 20 sent notice of the Settlement, approved the form of notice 21 proposed by the parties, approved the forms of claims for 22 settlement share and election not to participate, and set the 23 hearing for final approval. Doc. 41. The Settlement 24 Administrator, Rust Consulting, Inc. ("Rust"), has carried out 25 this Court's order to the extent possible. See generally 26 27 Declaration of Amanda J. Myette, Doc. 40. On March 25, 2011, 28 Class Notices were mailed to all 239 Class Members. Id. at ¶ 9.
The U.S. Postal Service returned 23 Class Notices as undeliverable. Id. at ¶ 10. Two of these were returned after the Claim Form deadline, but Rust performed address traces on the 21 undeliverable Class Notices that were returned before the deadline. Id. The traces yielded 17 updated addresses and Class Notices were promptly mailed to those Class Members via First-Class mail. Of these 17 re-mailings, 3 were returned as undeliverable. Id. Nine Class Notices remained undeliverable 10 because the administrator was unable to find a deliverable 11 address. Id. On April 19, 2011, the Settlement Administrator 12 mailed a reminder to class members who had not yet submitted a 13 Claim Form or an Exclusion Form to do so by the May 9, 2011 14 15 deadline.
Id. at ¶ 13.
16 Despite these difficulties, 167 Claim Forms (~70%) were 17 received and accepted by the Settlement Administrator. Id. at ¶ 18 11. These Claim Forms also account for 88.15% of the total 19 possible claimed work weeks. Id. According to Plaintiffs, these 20 figures represent a strongly positive response for a wage-and-21 hour class-action-settlement. Oshansky Decl., at ¶ 17. 22 23 Additionally, zero individuals submitted Exclusion Forms, and no 24 class member has submitted an objection to the Settlement. 25 Myette Decl., at ¶¶ 14, 15. 26 C.Approval of the Settlement. 27 "The court must approve any settlement ... of the claims ...
of the Plaintiff's case (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed; (6) the stage of the proceedings; (7) the views and experience of counsel; (8) any opposition by class members; (9) the presence of a governmental participant. Linney v. Cellular Alaska Pshp., 151 F.3d 1234,1242 (9th Cir. 1998). This list of 10 factors is not exclusive and the court may balance and weigh 11 different factors depending on the circumstances of each case. 12 Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir. 13 1993). 14 15 1. The Relative Strengths of the Parties' Cases Supports 16 Approval of the Settlement. 17 Defendants contest liability in this action and disputed 18 Class Counsel at every step. Oshansky Decl., at ¶ 6. If the 19 litigation proceeds, Plaintiffs would face significant risks. 20 For example, one of the primary issues in this case revolves 21 around the reimbursement for steel-toe footwear. However, 22 whether or not an employer must reimburse purchases required for 23 operational safety absent a regulation in the industry is not 24 settled law. Compare Appeal of: Kaiser Steel Corp. Steel Mfg., 25 26 1981 WL 140491 (Mar. 5, 1981), *3 (California Occupational Health 27 and Safety Appeals Board held that regulation required employer 28 to pay for safety shoes); with In re Newman Flange & Fitting Co.,
Co. 07-R2D4-2581, 2009 CA-OSHA App. Bd. Lexis 101 (Cal-OSHA) App., Sept. 30, 2009) (holding that employer was not required to pay for safety shoes).
Another major issue in this case involves the provision of rest breaks. Whether rest break claims result in individual inquiries predominating, thus frustrating class certification, under California law is currently before the California Supreme Court (see Brinkley v. Public Storage, Inc., 198 P.3d 1087, 87 10 Cal.Rptr 674 (Jan. 14, 2009) (review granted) and Brinker 11 Restaurant Corp. v. Superior Court, 196 P.3d 216, 85 Cal. Rptr. 12 388 (Oct. 22, 2008) (review granted). A defense ruling in 13 Brinker would impair Plaintiff's ability to proceed on these 14 15 causes of action.
See Brown v. Federal Express, 249 FRD 580, 585 (C.D. Cal. 2008) (denying class certification of employees 17 alleging employers denied them meal breaks and rest breaks, and 18 failed to pay additional one hour of pay to employees who missed 19 meal breaks). 20 In light of these risks, the significant recovery is fair, 21 reasonable, and adequate, and is in the best interest of the 22 23 Settlement Class in light of all known facts and circumstances. 24 2. The Settlement Amount is Fair and Reasonable. 25 26 The Settlement provides for a payment of about $260,000.00 27 by Defendants. The average payment to Class Members is $898.20.
Myette Decl., at ¶ 11. All Settlement shares will be distributed to each Claimant on the basis of the number of weeks actively worked by each Claimant during the Class Period. Settlement, § 9(c).
The Class Representative Payments and the Class Counsel Attorneys' Fees Payment are appropriate, and are separately approved below.
Finally, the expected Settlement Administrator's fees and 10 costs of approximately $10,000 are reasonable in light of the 11 amount of work achieved. See Myette Decl., Doc 48-1. 12 13 3. The Release is Appropriate. 14 As part of the Settlement, Class Members release the 15 16 following claims: "any and all Covered Claims [listed in the 17 Complaint] in addition to any claims relating to or arising from 18 their employment with Defendant, whether known or unknown, that 19 could have asserted in the Complaint." Settlement, § 10(c). 20 These released claims appropriately track the breadth of 21 Plaintiffs' allegations in the action and the settlement does not 22 release unrelated claims that class members may have against 23 24 defendants. 25 4. The Settlement Was the Project of Informed, Arm's 26 Length Negotiations. 27 The Settlement was reached after informed, arm's length 28 negotiations between the parties. See Oshansky Decl., at ¶¶10,
11. Plaintiffs' counsel had access to documents including all of the Defendant's expenses, equipment, and reimbursement policies as well as time records for Class Members. Id. at ¶ 10. Plaintiffs' counsel reviewed and analyzed all these materials. Id. Counsel was also informed by lengthy interviews with the Representative Plaintiffs. Id. at ¶ 7. In addition, there is no evidence of collusion.
5. Reaction of the Class Members.
"The reactions of the members of a class to a proposed 11 12 settlement is a proper consideration for the trial court." 13 Vasquez v. Coast Valley Roofing, 266 F.R.D. 482 (E.D. Cal. 2010) 14 (citing 5 Moore's Fed. Practice § 23.85[d]). Class 15 Representative's opinion of the settlement are especially 16 important as "[t]he representatives' views may be important in 17 shaping the agreement and will usually be presented at the 18 fairness hearing; they may be entitled to special weight because 19 the representatives may have a better understanding of the case 20 21 than most members of the class." Manual for Complex Litigation, 22 Third, § 30.44 (1995). 23 Here, the Class Members strongly support the settlement as 24 evidenced by the relatively high response rate and the absence of 25 any Requests for Exclusion. See Oshansky Decl., at ¶¶ 16, 17. 26 Each of the Class Representatives and their attorneys have 27 extensive understanding of the merits of this settlement having participated extensively in the strategy, formulation, filing, litigation and negotiation process. See id. at ¶ 44. There have been no objections to the Settlement by Class Members or any other members of the public.
The settlement is fair and reasonable.
D.Class Counsel's Requested Fees and Costs.
By separate motion, Plaintiffs' counsel also requests approval of payments for attorneys' fees and costs in the amount 10 of $82,500 and $7,500, respectively. Courts have long recognized 11 12 the "common fund" or "common benefit" doctrine, under which 13 attorneys who create a common fund or benefit for a group of 14 persons may be awarded their fees and costs to be paid out of the 15 fund. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 16 1998). "[A] lawyer who recovers a common fund for the benefit of 17 persons other than himself or his client is entitled to a 18 reasonable attorney's fee from the fund as a whole." Staton v. 19 Boeing Co., 327 F.3d 938, 972 (9th Cir. 2003) (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). Awarding a percentage of the common fund is particularly appropriate "'when each member 23 of a certified class has an undisputed and mathematically 24 ascertainable claim to part of a lump-sum judgment recovered on 25 his behalf.'" Id. (quoting Boeing Co., 444 U.S. at 478-79). 26 Here, where the Settlement requires lump sum allocations to 27 each Settlement Class and applies distribution formulas pursuant to which each Class Member who submits a valid claim will receive a mathematically ascertainable payment, application of the percentage of common fund doctrine is appropriate.
The typical range of acceptable attorneys' fees in the Ninth Circuit is 20% to 33 1/3% of the total settlement value, with 25% considered the benchmark. Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 2000); Hanlon, 150 F.3d at 1029; Staton, 327 F.3d at 952. However, the exact percentage varies depending on the facts 10 of the case, and in "most common fund cases, the award exceeds 11 that benchmark." Knight v. Red Door Salons, Inc., 2009 WL 248367 12 (N.D. Cal. 2009); see also In re Activision Sec. Litig., 723 F. 13 Supp. 1373, 1377-78 (N.D. Cal. 1989) ("nearly all common fund 14 15 awards range around 30%"). 16 Class Counsel seeks an attorney's fee award of $82,500, or 17 31.7% of the total Settlement amount. When assessing whether the 18 percentage requested is reasonable, courts look to factors such 19 as: (a) the results achieved; (b) the risk of litigation; (c) the 20 skill required, (d) the quality of work; (e) the contingent 21 nature of the fee and the financial burden; and (f) the awards 22 made in similar cases. Vizcaino v. Microsoft Corp 23 ., 290 F.3d 24 1043, 1047 (9th Cir.2002); Six Mexican Workers v. Arizona Citrus 25 Growers, 904 F.2d 1301 (9th Cir.1990). 26 1. The Results Achieved. 27 The individual claims in this case concerned defendants' failure to reimburse Class Members for required safety footwear; failure to provide proper rest periods; failure to pay Employees all wages due at least twice per calendar month; and failure to pay all wages due upon termination or separation of employment. Such claims would not ordinarily produce large recoveries per claimant. Here, the NSF of $150,000 will provide the 167 Qualified Claimants with an average recovery of approximately $898.20 per claimant. Myette Decl., at ¶ 11. 10 11 2. The Risks Involved. 12 There were significant risks in pursuing this case. One of 13 the primary issues involved in this case has to do with 14 reimbursement for safety footwear, an unsettled are of the law. 15 Another major issue was the timely provision of rest periods -- an 16 issue that is currently before the California Supreme Court in 17 the Brinker and Brinkley cases. It is unknown what the outcome 18 of the Supreme Court's decision will be, but an adverse decision 19 could be prejudicial to the recovery in this case. 20 21 The Defendants also posed serious defenses to the claims. 22 And defense counsel demonstrated that they were competent in 23 defense of their client. 24 Plaintiffs' Counsel invested $76,171.50 in lodestar time and 25 $10,000 in costs in litigating this case with no guarantee of 26 recovery. 27 28 3. The Skill Required.
This case required specialized skills in litigating cutting-edge legal theories surrounding expense-reimbursement and rest periods. Oshansky Decl., at ¶ 26. Additionally, the case required extensive review and analysis of time records and information regarding Class Members' job duties in order to determine what violations of rest break and reimbursement law actually occurred. Id. at ¶ 26. Class Counsel has extensive experience in class action wage and hour litigation of this 10 nature. See id. at ¶ 2. 11 12 4. The Contingent Nature of the Fee and the Financial Burden. 13 This case was conducted on a contingent fee basis against a 14 well-represented Defendant. Counsel has received no money from 15 plaintiffs or any other source to litigate this case. See id., 16 17 at ¶ 27. The plaintiffs are all low-wage workers who could never 18 meaningfully contribute to any such expenses. Plaintiffs' 19 counsel accepted the entire risk of litigation and chose to 20 forego other meritorious, potentially fee-generating cases in 21 order to vigorously litigate this cause. Id. Class Counsel was 22 successful in effectuating a $260,000 settlement. 23 24 5. Awards in Similar Cases. 25 The requested fee is comparable to similar wage and hour 26 cases litigated in the Central Valley. For example, this court 27 has awarded the following fees:
33.3% in Vasquez v. Coast Valley Roofing, 266 F.R.D. 482 (E.D. Cal. 2010), Case No. 1:07-cv-00227 OWW DLB;
30% in Vasquez v. Aartman, E.D. Cal. Case No. 1:02-CV05624 AWI LJO;
31.25% in Baganha v. California Milk Transport, Case No. 1:01-cv-05729 AWI LJO;
33.3% in Randall Willis et al. v. Cal Western Transport, and Earl Baron et al. v. Cal Western Transport, Coordinated Case 10 No. 1:00-cv-05695 AWI LJO; 11 12
33.3% in Benitez, et al. v. Jeff Wilbur and Lisa Wilbur,
13 Case No. 1:08-cv-01122 LJO GSA; 14 33.3% in Chavez, at al. v. Petrissans, Case No. 1:08-cv-15 00122 LJO GSA. 16 In light of the overall success, skill employed, the 17 substantial legal risks associated with Plaintiffs' claims, the 18 19 financial risks borne by Plaintiffs' Counsel, and similar awards 20 made in similar cases, under a percentage-of-fund approach the 21 requested attorney's fee award of 31.7% of the total amount 22 created by the settlement (or $82,500) is reasonable under the 23 circumstances. 24 25 6. Lodestar Cross-Check. 26 Calculation of the lodestar amount may be used as a cross-27 check to assess the reasonableness of the percentage award. 28 Fernandez v. Victoria Secret Stores, 2008 WL 8150856 (C.D. Cal 2008); Vizacaino v. Microsoft Corp., 290 F.3d 1043, 1050-51 (9th Cir. 2002). First, the court must calculate the lodestar amount by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. Cunningham v. County of Los Angeles, 879 F.2d 481 (9th Cir. 1988). Next, the court may increase or reduce the presumptively reasonable lodestar fee. Quesada v. Thomason, 850 F.2d 537, 539 (9th Cir. 1998) (citing City of Riverside v. Rivera, 477 U.S. 561 (1986)). 10 The billing records of Class Counsel Orshansky & Yeremian 11 LLP reveal the following hours billed (both completed and to be 12 completed) by three lawyers: 13 NAME HOURS RATE TOTAL 14 Orshansky & Yeremian LLP 15 Anthony J. Orshansky 59.2 $520 $30,784.00
David H. Yeremian 58.5 $450 $26,325.00 16 Justin Kachadoorian 49.7 $325 $16,152.50 Anthony J. Orshansky (future) 3.0 $520 $1,560.00 17 David H. Yeremian (future) 3.0 $450 $1,350.00 18 Total 173.4 $76,171.50 19 See Orshansky Decl., at ¶ 35. 20 The number of hours billed in this case is reasonable under 21 the circumstances. In addition to considerable discovery and 22 preparation for mediation, there were also unique, cutting-edge 23 issues of law to investigate. Similar cases have reached 24 settlement with over 200 billed hours of attorney time. See Alvarado v. Nederend, 1:08-cv-01099 OWW DLB (wage and hour class action involving unsettled issues related to meal and rest breaks with approximately 150 class members reached settlement after Class Counsel expended over 300 hours).
Likewise, the hourly rates presented by counsel are also reasonable. Though prevailing hourly rates in the Eastern District of California are in the $400/hour range, Class Counsels' rates appear to fall within the reasonable rates of the Laffey Matrix. The Laffy Matrix is a widely recognized compilation of attorney and paralegal rate data used in the District of Columbia, frequently used in fee awards cases. The 10 Laffey Matrix reflects a paralegal rate of $161, a 1-3 year 11 lawyer rate of $294, a 4-7 year lawyer rate of $361, an 8-10 year 12 lawyer rate of $522, an 11-19 year lawyer rate of $589, and a 20 13 year lawyer rate of $709. The district court in Fernandex v. Victoria Secret Stores, LLC, 2008 WL 8150856, *15 (C.D. Cal. July 16 21, 2008), increased the Laffey Matrix amounts by the difference 17 between the cost of living increase provided to Judicial branch 18 employees in the Washington D.C. area and that provided to 19 employees in the Los Angeles area. That difference is 2.94 20 percent as of the 2011 pay tables. Taking the 11-19 years out 21 bracket as an example, the adjusted Laffey Rate for a 11-19 year 22 23 lawyer is $606 ($589 * 1.0294). Mr. Orshansky's rate of $520 is 24 lower than the adjusted Laffey Matrix for an attorney with equal 25 years in practice. The $450 billed by Mr. Yeremian is about 15% 26 lower than the 8-10 year attorney rate of $537. Finally, Mr. 27 Kachedoorian's rate of $325 is also about 15% lower than the 4-7 year attorney rate of $371. The lodestar cross-check shows that Class Counsels' hourly rate and resulting fees of $76,171.50 are reasonable. The Court does not intend this finding to have any precedential effect, as the fee scale is higher than rates prevailing in the Central Valley.
The amount requested by Class Counsel of $82,500.00 is greater than its lodestar amount of $76,171.50. However, adjustments to increase or decrease the lodestar amount are 10 sometimes appropriate to justify use of a "lodestar multiplier." 11 Clark v. City of Los Angeles, 803 F.2d 987, 991 (9th Cir. 1986); 12 see also Fischel v. Equitable Life Assur. Society of U.S., 307 13 F.3d 997, 1008 (9th Cir. 2002). "It is an established practice 14 15 in the private legal market to reward attorneys for taking the 16 risk of non-payment by paying them a premium over their normal 17 hourly rates for winning contingency cases." Fischel, 307 F.3d 18 at 1008 (citing In re Washington Public Power Supply System 19 Securities Litig. v. Continental Ins. Co., 19 F.3d 1291, 1299 20 (9th Cir. 2002)). Generally, a district court has discretion to 21 apply a multiplier to the attorney's fees calculation to 22 compensate for the risk of nonpayment. Fischel 23 , 307 F.3d at 24 1008; see also In re Coordinated Pretrial Proceedings in 25 Petroleum Products Antitrust Litig. v. Exxon Corp., 109 F.3d 602 26 (9th Cir. 1997). 27 The "lodestar multiplier" is calculated by dividing the percentage fee award by the lodestar calculation. Fischel, 307 F.3d at 1008. Here, the multiplier of 1.08 is calculated by dividing $82,500.00 by $76,171.50. To determine whether the lodestar multiplier is reasonable the following factors may be considered: (1) the amount involved and the results obtained, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance 10 of the case, (5) the customary fee, (6) whether the fee is fixed 11 or contingent, (7) time limitations imposed by the client or the 12 circumstances, (8) the amount involved and the results obtained 13 (9) the experience, reputation, and ability of the attorneys, 14 15 (10) the 'undesirability' of the case, (11) the nature and length 16 of the professional relationship with the client, and (12) awards 17 in similar cases. Id. (citing Kerr v. Screen Extras Guild, Inc., 18 526 F.2d 6 (9th Cir. 1975)). 19 First, Class Counsel achieved a good result and generated a 20 significant benefit for the class amounting to the Net Settlement 21 Fund of $150,000 for the benefit of a class of approximately 239 22 23 members. Based on the claims rate, the 167 Class Members who 24 submitted claims will receive the entirety of the NSF, an average 25 of $898.20. See Myette Decl., at ¶ 11. 26 Second, Plaintiff's safety footwear reimbursement claims 27 presented arguable questions for Class Counsel in light of the competing precedent proffered by both parties. Similarly, Plaintiff's rest break claims raise doubts as California's rest break law is currently in flux with Brinker currently pending before the California Supreme Court.
Third, Class Counsel competently performed. Class Counsel avoided protracted litigation by conducting significant investigation of the class claims, and efficiently communicating and exchanging information with Defense counsel so that the 10 parties could successfully mediate the case. In preparation for 11 this case, Class Counsel investigated the potential claims and 12 class members; comprehensively reviewed many pages of documents; 13 interviewed the named Plaintiffs; and conducted substantial 14 15 discovery into Defendant's policies regarding rest periods, 16 expense reimbursement, and safety requirements. Orshansky Decl., 17 at ¶ 28. 18 Lastly, Class Counsel undertook considerable financial risks 19 in this litigation by accepting this case on a contingency basis. 20 Orshansky Decl., at ¶ 27. There was no guarantee they would 21 recoup their fees or costs. Id. Class Counsel has not received 22 23 any payment for their time or their expenses, which they began 24 incurring over a year ago. Id. Additionally, Class Counsel had 25 to forego other work in order to maintain this case. Id. 26 Finally, the requested amount, 31.7% of the total settlement, was 27 less than the 40% contingency percentage that Plaintiffs agreed Class Counsel could receive. Id. at ¶ 30.
Based on the overall success, the skill with which the case was prosecuted, the substantial legal risks associated with Plaintiffs' claims, and the financial risks borne by Plaintiffs' Counsel, Plaintiff's request for a multiplier of 1.08 of its lodestar is reasonable. See, e.g. Steiner v. Am. Broadcasting Co., Inc., 248 Fed. Appx. 780, 783 (9th Cir. 2007)(approving multiplier of 6.85 and citing cases with comparable or higher 10 multipliers); Vizcaino, 290 F.3d at 1051 (finding no abuse of 11 discretion in awarding a multiplier of 3.65). 12 13 E.Class Counsel's Request for Costs. 14 Class Counsel incurred out-of-pocket costs totaling 15 approximately $6,737.19. The bulk of the incurred costs included 16 filing fees, costs related to the service of process, mediation 17 fees, courier and attorney-service costs for court filings, copy 18 and printing charges for documents, and parking and postage 19 charges. Orshansky Decl., at ¶¶ 40, 41. Such costs are 20 21 routinely reimbursed in these types of cases.
See, In re United Energy Corp. Sec. Litig., 1989 WL 73211, at *6 (C.D. Cal. 1989) 23 (quoting Newberg, Attorney Fee Awards, § 2.19 (1987)); see e.g. 24 Vasquez, 266 F.R.D. at 493 (Class Counsel litigation expenses 25 payment of approximately $9,000 was fair and reasonable in 26 similar case). 27 Here, the actual costs incurred are less than the estimated $7,500, which was included in the Class Notice and to which no Class Member objected. Plaintiff's request, which is $6,737.19, is reasonable.
F.Class Representative Enhancement.
Pursuant to the Settlement, Plaintiff seeks an enhancement in the amount of $4,000 to the named Plaintiffs Tyrus Collins and James Greer. Orshansky Decl., at ¶ 47. This payment is intended to recognize the time and efforts that the named Plaintiffs spent 10 on behalf of the Class Members. Id. at ¶¶ 44-46. 11 12 "Courts routinely approve incentive awards to compensate 13 named plaintiffs for the services they provide and the risks they 14 incurred during the course of the class action litigation." 15 Ingram v. The Coca-Cola Company, 200 F.R.D. 685, 694 (N.D. Ga. 16 2001) (internal quotations and citations omitted). In Coca-Cola, 17 the Court approved service awards of $300,000 to each named 18 plaintiff in recognition of the services they provided to the 19 class by responding to discovery, participating in the mediation 20 21 process, and taking the risk of stepping forward on behalf of the 22 class. Coca-Cola, 200 F.R.D. at 694; see, e.g., Van Vranken v. 23 Atl. Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995) 24 (approving $50,000 participation award to plaintiffs); Glass v. 25 UBS Financial Services, Inc., 2007 WL 221862, at *17 (N.D. Cal. 26 Jan. 26, 2007) (approving $25,000 enhancement to each named 27 plaintiff).
In this case, among other things, the named Plaintiffs: (1) provided significant assistance to Class Counsel; (2) endured lengthy interviews; (3) provided documents and information; (4) helped analyze documents produced by defendants; (5) and participated in the mediation, which was a full day session requiring very careful consideration, evaluation and approval of the terms of the Settlement Agreement on behalf of the Class. See Orshansky Decl., at ¶44. Moreover, as with any plaintiff who 10 files a civil action, Plaintiffs undertook the financial risk 11 that, in the event of a judgment in favor of Defendant in this 12 action, they could have been personally responsible for the costs 13 awarded in favor of the Defendant. See, e.g., Whiteway v. Fed Ex 14 15
Kinkos Office & Print Services, Inc., No. C 08-2320 SBA, 2007 WL
4531783, at **2-4 (N.D. Cal. Dec. 17, 2007). 17 G.Claims
Administrator Fee. 18 The Class Notice provided that the Claims
Administrator 19 would receive a fee of up to $10,000. Plaintiffs
request that 20 21 the full amount of $10,000 be approved as Rust's
fee. The 22 Declaration of Amanda J. Myette, a Project Manager at
Rust, 23 explains the tasks undertaken by Rust to accomplish notifying
the 24 Class of the settlement and administering its terms. Ms. Myette
25 estimates administration costs of $10,000, taking into 26
consideration both costs incurred to date and those anticipated 27 to
be incurred in the future. This request is substantially
lower than previous administrator fees awarded in this District. See
Vasquez, 266 F.R.D.at 483-84 ($25,000 administrator fee awarded in
wage and hour case involving 177 potential class members).
For all the reasons set forth above:
(1) The Settlement Class is CERTIFIED;
(2) The Class Settlement is APPROVED;
(3) The payment of $82,500 in attorney's fees (31.7% of the Maximum Settlement Value and $7,500 in costs is APPROVED;
(4) The payment of $4,000 enhancement to each of the named Plaintiffs, Tyrus Collins and James Greer, is APPROVED;
(5) The payment of $10,000 to the Settlement Administrator is APPROVED.
IT IS SO ORDERED.
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