United States District Court, S.D. California
ORDER RE CLASS REPRESENTATIVE AWARD
Cathy Ann Bencivengo, United States District Judge.
April 12, 2018, the Court entered an order of final approval
of the class settlement and awards of attorney's fees,
costs, and expenses in this lawsuit. [Doc. No. 162.] The
order awarded attorney's fees totaling $3, 600, 000,
which was half of the amount sought, and reduced lead
plaintiff Carl Schwartz's request for $17, 500 in costs
and expenses to a $2, 000 incentive award. Lead counsel
Kaplan, Fox & Kilsheimer LLP and Schwartz appealed the
attorney's fee award and class representative award,
respectively, to the Ninth Circuit.
Ninth Circuit affirmed the fee award, but it reversed on the
incentive award, holding that the Private Securities
Litigation Reform Act (PSLRA) does not allow for incentive
awards for class representatives. [Doc. No. 176 at 5.] The
PSLRA, however, provides that a class representative may
recover “reasonable costs and expenses (including lost
wages) directly relating to the representation of the class,
” 15 U.S.C. § 78u-4(a)(4), and the Ninth Circuit
stated that the Court “failed to consider Schwartz'
request for lost wages.” [Doc. No. 176 at 6.] Thus, the
opinion instructed the Court to address Schwartz's
request for $17, 500 in lost wages to determine whether
Schwartz has shown that the lost wages were “directly
relat[ed] to the representation of the class.” 15
U.S.C. § 78u-4(a)(4).
the Ninth Circuit's mandate, the Court has reviewed the
record and finds that Schwartz has not shown any
lost wages related to his representation of the class. In his
declaration supporting his request for reasonable costs and
expenses, Schwartz stated that he “spent a total of at
least 50 hours on the prosecution of this Action . . . over
the course of seven years, ” and that this “was
time that [he] otherwise would have spent on other
work.” [Doc. No. 160-6 at ¶ 15.] Schwartz goes on
to assert that he is “co-managing partner of RRBB
Accountants & Advisors and head of the firm's Tax
Department, ” and that his “regular billing rate
is $350 per hour.” Thus, Schwartz arrives at his
request for $17, 500 simply by multiplying 50 hours by $350.
declaration does not describe any lost wages. Indeed,
Schwartz is “not in fact requesting ‘reasonable
costs and expenses,' but asking to be paid for [his]
estimated time spent on the litigation at unjustified hourly
rates.” In re Heritage Bond Litig., No.
02-ML-1475 DT, 2005 WL 1594403, at *17 (C.D. Cal. June 10,
2005) (holding that “[t]o the extent Lead Plaintiffs
request ‘reasonable costs and expenses' under the
PLSRA, no such award is shown to be appropriate.”).
Schwartz's generalized statement that he would have spent
the time he spent on this case “on other work”
fails to provide any basis for determining whether
Schwartz, as opposed to his company, lost any wages
or income as a result of the time spent on this case. Cf.
Swack v. Credit Suisse First Bos., LLC, No. CIV A
02-11943-DPW, 2006 WL 2987053, at *5 (D. Mass. Oct. 4, 2006)
(declining to enter a class representative award, noting that
“the representative plaintiff should document the value
of any lost opportunities-such as lost employer-granted
vacation time, lost sales commissions, or missed business
opportunities-and costs paid in relation to the
litigation”). That Schwartz's accounting firm bills
clients at a rate of $350 per hour for Schwartz's time
does not mean that Schwartz's income or wages equals $350
per hour. To that end, Schwartz does not declare that his
income was actually reduced at all as result of his work on
this case or that it would have been higher (and by how much)
but for the time he spent on this case. In sum,
Schwartz's declaration amounts to a request for
compensation for the time he spent on this case, similar to
how an expert would be compensated, and not evidence of
actual income that Schwartz lost as a result of the time he
worked on this case.
light of the foregoing, the Court finds that Schwartz has not
provided evidence of any “reasonable costs and expenses
(including lost wages) directly relating to the
representation of the class.” 15 U.S.C. §
78u-4(a)(4). Accordingly, Schwartz is not entitled to any
payment out of the settlement fund beyond his pro rata share
of recovery. See id.; see also 15 U.S.C. §
this was the only issue remaining after remand from the Ninth
Circuit, the Clerk of Court is instructed to close this case.
 On December 6, 2019, the Court held a
hearing to spread the mandate. At that hearing, the Court
noted that Schwartz had submitted a declaration in connection
with Plaintiff's motion for final approval of the
settlement [Doc. No. 160-6], and asked whether there was
anything else Plaintiff would like the Court to consider in
connection with its analysis ...