The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge
ORDER GRANTING PLAINTIFF'S UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; [Doc. No. 43] ORDER GRANTING PLAINTIFF'S UNOPPOSED MOTION FOR ATTORNEYS' FEES [Doc. No. 44]
Currently before the Court are Plaintiff's unopposed motion for final approval of settlement [Doc. No. 43] and Plaintiff's unopposed motion for attorney fees, litigation expense award, approval of administrative expenses, an enhancement award for the named plaintiff and PAGA penalties [Doc. No. 44].
Plaintiff Shawnda Jack ("Plaintiff") commenced the above-referenced wage and hour class action ("Action") against Defendant Hartford Fire Insurance Company ("Defendant") on August 3, 2009, and filed the operative First Amended Complaint ("FAC") on February 22, 2010. Plaintiff worked as a customer care representative for Defendant from August 2004 to February 2009.
Plaintiff's FAC alleges Defendant's employment practices violated state and federal law, including the Fair Labor Standards Act ("FLSA") of 1938, the California Wage Orders, the California Business & Professions Code, the California Labor Code, and California's Private Attorneys General Act ("PAGA") of 2004.
The parties engaged in extensive discovery and then participated in mediation in front of Robert Kaplan, Esq. The parties ultimately reached a settlement. On December 15, 2010, the parties filed a joint motion for preliminary approval of settlement. [Doc. No. 38.] On January 20, 2011, the Court granted preliminary approval of the settlement ("Preliminary Approval Order") [Doc. No. 40], appointing Class Counsel and provisionally certifying the Class for settlement purposes only, defined as:
Any person who worked for Hartford Fire Insurance Company in a non-exempt position in California at any time between August 4, 2005 and January 20, 2011.
After the preliminary approval of the settlement, the claims administrator sent via first-class U.S. mail to all Class Members a Notice Form, Claim Form, and Request for Exclusion Form. The claims administrator performed an address trace prior to the initial mailing, and again upon receipt of returned/undeliverable mail. The claims administrator also traced and re-sent returned mailings; the obligation to trace and resend ceased after the two mailings or 25 days after the initial mailing. Heirs of Class Members were entitled to participate, but notices were only sent to Class Members' last known addresses.
Class Members had 45 days from the initial mailing to exercise their option to: (1) object to the settlement; (2) opt out of the class; (3) submit a claim; (4) not respond and be bound to the terms of the Agreement, but not recover or be entitled to any portion of the settlement. The notice informed Class Members that by submitting a claim they agreed to release their California and federal claims; if they did not timely submit opt-out forms, their California-based claims would be released.
On April 24, 2011, Plaintiff filed the present motions for final approval of settlement and for attorneys' fees. As set forth in the parties' joint stipulation of class action settlement and release of class action claims ("Stipulation of Settlement"), Defendant established a settlement fund of $1,200,000, allocated as follows: (1) net settlement amount, aka "Payout Fund" $801,100; (2) attorneys' fees $360,000; (3) cost reimbursement $15,000; (4) enhancement award to Class Representative $2,500; (5) claims administration $18,400; and (6) penalties pursuant to Private Attorneys General Act of 2004 $3,000. On June 3, 2011, the parties submitted supplemental briefing in support of the motions. [Doc. No. 50.]
On October 3, 2011, the parties appeared before the Court for a final approval hearing. Plaintiff was represented by William Sullivan of Sullivan & Christiani, LLC. Defendant was represented by David Dow of Littler Mendelson. No individual appeared at the hearing to object to the proposed settlement. At the conclusion of the hearing, the Court took the motions under submission.
After due consideration of the evidence and arguments presented to the Court in the parties' moving papers as well as at the October 3, 2011 hearing, the Court concludes that good cause supports final approval of the proposed settlement. Therefore, for the reasons set forth below, the Court GRANTS final approval of the settlement and GRANTS the motion for attorneys' fees, subject to the Court's revision of Plaintiff's proposed fee award. Additionally, the Court GRANTS Plaintiffs' motion for costs, enhancements for the Class Representative, claims administration expenses and PAGA penalties.
A. Collective Class Action under FLSA, 29 U.S.C. § 216(b)
Under the Fair Labor Standards Act ("FLSA"), an aggrieved employee may bring a collective action on behalf of himself and other employees "similarly situated" based on an employer's failure to adequately pay overtime wages. 29 U.S.C. § 216(b); Adams v. Inter-Con Sec. Sys., 242 F.R.D. 530, 535-36 (N.D. Cal. 2007). The FLSA limits participation in a collective action to only those parties that 'opt-in' to the suit. § 216(b) ("No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought").
The standards for a collective action are set forth in Federal Rule of Civil Procedure 23 ("Rule 23"). Courts have found that collective action is proper under a two-part test. Under the first part, a court must determine whether the proposed class should be notified of the action and whether the putative Class Members were subject to a single illegal policy, plan or decision. Murillo v. Pacific Gas & Elec. Co., 2010 WL 2889728 * 2 (C.D. Cal. 2010) (internal marks and citation omitted). The second part usually occurs after discovery is complete, at which time the defendants may move to decertify the class. Id. In this step, the court makes a factual determination about whether the plaintiffs are similarly situated by weighing such factors as "(1) the disparate factual and employment settings of the individual plaintiffs, (2) the various defenses available to the defendant which appeared to be individual to each plaintiff, and (3) fairness and procedural considerations." Misra v. Decision One Mortg. Co., 673 F. Supp. 2d 987, 993 (C.D. Cal. 2008)
Here, the notice provides that if a Class Member does not timely submit opt-out forms, the California-based claims are released [Hanson Dec., Doc 43-3, P. 7-8, § III, ¶ 1]. However, if a Class Member returns a valid Claim Form (thereby opting-in), the Class Member releases both California-based and FLSA claims [Id. at P. 7-8, § III, ¶ 2]. Accordingly, the notice complies with the FLSA requirements by requiring the Class Members to affirmatively consent to releasing FLSA claims through the opt-in procedure.
The requirement that the putative Class Members were subject to a single illegal policy, plan, or decision is also satisfied. Plaintiff alleges that Defendant violated the FLSA by failing to pay and properly calculate overtime to Plaintiff and all other employees similarly situated. Defendant admits that it relied solely upon FLSA members' timesheets and ignored several more accurate time records such as phone log-in reports and computer log-in/out reports. In addition, Defendant relied on time schedules--as opposed to actual work-time--to calculate compensable time. According to Plaintiff, these policies and practices led to inaccurate compensation of Defendant's employees. Defendants' failure to take into account the more accurate time records that were readily available constitutes a single illegal policy, to which all Class Members were subjected.
Finally, because this case settled prior to the close of discovery, Defendant did not move to decertify the Class. See Misra v. Decision One Mortg. Co., 2009 U.S. Dist. LEXIS 119468, 2009 WL 4581276, at *4 (C.D. Cal. April 13, 2009). Since the analysis required by the second step, including issues of factual similarities between the employees and their claims, largely overlaps with class certification analysis under Rule 23(a) and (b), the Court now considers the propriety of class certification under Rule 23. See id.
B. Certification of the Settlement Class under Rule 23(a) and (b)
Rule 23(e) requires that a court approve a class action settlement. "[I]n the context of a case in which the parties reach a settlement agreement prior to class certification, courts must peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). A court must confirm the propriety of certification by assessing the following Rule 23(a) prerequisites: "(1) numerosity of plaintiffs; (2) common questions of law or fact predominate; (3) the named plaintiffs claims and defenses are typical; and (4) the ...