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Jose Morales, Manuel Cruz, and Maria Cruz, On Behalf of Themselves and All Others Similarly Situated v. Stevco

March 22, 2013



I. History

Defendants Stevco, Inc. and Fal Inc. are commercial table grape growers based in Kern County. Plaintiffs Jose Morales, Manuel Cruz, and Maria Cruz are former employees of Defendants. The operative complaint is the third amended complaint and is brought as a class action. Doc. 174. In it, Plaintiffs allege Defendants failed to properly pay wages by forcing employees to work off the clock, forcing employees to purchase tools out of pocket, failing to pay minimum required wages, failing to provide meal and rest periods, failing to provide accurate itemized wage statements, and failing to maintain time records. Plaintiffs' claims are divided into nine causes of action: (1) violations of the federal Migrant and Seasonal Agricultural Workers Protection Act, 29 U.S.C. §1801 et seq. through misinformation concerning the terms and conditions of employment, noncompliance with the terms of the working arrangement, failure to pay wages when due, and failing to provide accurate itemized written statements; (2) failure to pay wages; (3) failure to pay reporting time wages; (4) failure to provide required meal and rest periods as required by the Industrial Welfare Commission Work Order 14 and Cal. Labor Code §226.7; (5) failure to pay wages in a timely manner at the termination of employment; (6) failure to provide itemized employee wage statements; (7) recovery for these violations under the Private Attorney General Act, Cal. Labor Code §2699 et seq.; (8) breach of contract; and (9) violation of the Unfair Competition Law, Cal. Bus. & Prof. Code §17200 et seq. ("UCL") through the above described activities. The current incarnation of this case was filed in 2009. The full history of the legal dispute can partially be traced back to cases filed in state court in 2004-2005. At present, there is a related case, Lara v. Casimiro, Civ. Case No. 06-0028 that is also against Defendants, making similar claims with a different set of named plaintiffs.

Plaintiffs and Defendants have come to a settlement. The parties agree to the certification of a class covering workers in 2000-2004. Defendants will provide $925,000 to resolve claims centered on improper rest and meal periods. Of more than 400 potential class members, 119 have made claims and are in line to receive part of the award. Magistrate Judge Thurston issued a findings and Recommendations ("F&R) granting in part and denying in part Plaintiffs' motion for final approval of the class settlement. Doc. 66. Plaintiffs made objections to the F&R. Doc. 67, Defendants have made no objections.

II. Legal Standards

"A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. §636(b)(1).

III. Discussion

Judge Thurston agreed with the parties on most of their requests. She found that the certification of a class comprising all workers jointly employed by Defendants and Golden Grain Farm Labor Contractor in 2000-2004 was appropriate. She also approved of the overall settlement amount, incentive payments to the named plaintiffs in this case, fees for the settlement administrator, payment to the State of California under the terms of the Private Attorney General Act, and costs for Plaintiffs' counsel. These findings are not objected to.

Judge Thurston disagreed with the parties' proposal on two points. First, Plaintiffs' counsel seek attorneys fees under a common fund calculation of 30%. Judge Thurston found 25% to be more appropriate. Second, Plaintiffs seek incentive payments for the named plaintiffs in Lara v. Casimiro in addition to the named plaintiffs in this case. Judge Thurston found no basis to grant those incentive payments. Plaintiffs object to these two findings.

A. Attorneys Fees

Judge Thurston made a finding of attorneys fees in the F&R under the common fund method, putting aside the lodestar method. Plaintiffs do not argue the lodestar, confining their assertions to the common fund method. Within the courts of the Ninth Circuit, an award of 25% is considered the benchmark common fund percentage; deviations from that amount must be specifically justified by the facts of the case. Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 2000). Factors to be considered in deciding upon the appropriate percentage include the results obtained, risk undertaken by counsel, complexity of the issues, length of the professional relationship, the market rate, and awards in similar cases. Romero v. Producers Dairy Foods, Inc., 2007 U.S. Dist. LEXIS 86270, *8-9 (E.D. Cal. 2007), citing Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048-50 (9th Cir. 2002). Plaintiffs assert that all factors favor increasing the percentage from the benchmark. Doc. 67, Plaintiffs' Objections, 1:20-21.

1. Results Obtained

The total settlement amount of $925,000 (minus proposed fees) would provide the 119 claimants with an average recovery of over $4,300 each. Plaintiffs assert that this amount of recovery is excellent as "individual class member claims in this case were never huge, as they revolved around Defendants' failure to pay class members for portions of days on an intermittent basis and a failure to provide rest and meal periods." Doc. 67, Plaintiffs' Objections, 4:8-10. The main thrust of Plaintiffs' claim is that they may not have received appropriate wages/penalties for improper rest and meal periods; all other claims for relief appear to be ancillary to that central assertion. Doc. 35, Order Granting Preliminary Approval of Class Settlement, 9:1-12.

Under Cal. Labor Code ยง226.7(b), "If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided." The class covers five years, the seasonal spring-fall work periods of 2000 through 2004. Assuming that covers approximately 150 work days per year, the class period is 750 work days. The settlement is to be distributed pro-rata based, in part, upon how long each member was actually employed by Defendants during 2000-2004. If each claimant was working for all 750 days and established a rest/meal period violation of each of those days, then they would each receive approximately $4,300 or $7.50 per work day. This recovery calculation amount is inflated by the unfortunate fact that only 23% of potential class members have stepped forward to make claims and deflated by the assumption that each claimant was employed by ...

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