Gomez et al v. H & R Gunlund Ranches, Inc
Filing
113
NOTICE RE: ISSUES FOR FINAL SETTLEMENT HEARING signed by District Judge Lawrence J. O'Neill on November 9, 2011. (Munoz, I)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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REGINO PRIMITIVO GOMEZ,
et al.,
CASE NO. CV F 10-1163 LJO MJS
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NOTICE RE ISSUES FOR FINAL
SETTLEMENT HEARING
Plaintiffs,
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vs.
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H & R GUNLUND RANCHES, INC.,
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Defendant.
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/
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This Court has read and reviewed Plaintiffs' unopposed motion for approval of settlement in this
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FLSA class action suit. This motion is set for a hearing, pursuant to this Court’s October 7, 2011Order
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to Set Final Approval of Settlement and Fees Hearing, to take place on November 15, 2011 in
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Courtroom 4 (LJO). This Court NOTIFIES counsel that it is not inclined to approve the stipulated
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amount of attorneys’ fees, for the following reasons:
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Class counsel request attorneys’ fees in an amount of $497, 191.50, with additional fees expected
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to administer the settlement. The parties arrive at this amount using the Lodestar method rather than
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the common fund method. Applying the common fund method, the amount of attorneys fees’ sought
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equals 45% of the settlement fund.
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This Court has discretion to apply either the Lodestar method or common fund method. The
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“choice between lodestar and percentage calculation depends on the circumstances[.]” Six Mexican
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Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990). Either “method may . . . have
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its place in determining what would be reasonable compensation for creating a common fund." Paul,
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Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989). In re Coordinated Pretrial
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Proceedings in Petroleum Prods. Antitrust Litig., 105 F.3d 602, 607 (9th Cir. 1997). In using either
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method of attorneys’ fees calculation, “[r]easonableness is the goal, and mechanical or formulaic
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application of either method, where it yields an unreasonable result, can be an abuse of discretion.”Id.
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The Court is not inclined to use the lodestar method. Instead, it intends to use the “primary basis
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of a fee award” which is the “percentage method” or common fund method. See, Vizcaino v. Microsoft
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Corp., 290 F.3d 1043, 1050 (9th Cir. 2002). As set forth above, the “benchmark percentage should be
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adjusted, or replaced by a lodestar calculation, when special circumstances indicate that the percentage
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recovery would be either too small or too large in light of the hours devoted to the case or other relevant
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factors.” Six Mexican Workers, 904 F.2d at 1311.
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Here, this Court finds that the parties have not established that circumstances require this Court
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to use the lodestar method. Several factors favor use of the common fund method. These factors
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include the short length of the proceedings (only one year), the relatively low complexity of the legal
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issue (one FLSA claim of unpaid wages), the small size of the class (82 members), the relatively low
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complexity of discovery (informal discovery propounded, discovery deadlines stayed to allow parties
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to pursue resolution), the difficulty in determining the reasonableness of the lodestar calculation
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(plaintiffs counsel failed to submit records and requested the Court’s assistance to determine a
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reasonable way to submit the voluminous records), and class counsel’s reliance on evidence of hourly
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rates outside our forum. For these reasons, this Court intends to use the common fund percentage
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calculation, not the lodestar method.
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In addition, this Court it not inclined to increase the benchmark from 25% to the requested 45%.
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The typical range of acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% of the total
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settlement value, with 25% considered the benchmark. Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir.
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2000). The Court considers that the purpose of the attorney fee provision of FLSA to promote the
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policy that prevailing employees not incur expenses in enforcing their rights under the Act; that policy
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is achieved, in action by union on behalf of workers, by award that adequately, but not overly,
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compensates union for having undertaken their representation. Sabey v United States, 6 Cl Ct 36 (1984).
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This policy does not contain element of encouragement of suits to vindicate fundamental rights, as does
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Civil Rights Attorney's Fees Awards Act of 1976, nor punitive element as contained in Equal Access
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to Justice Act. Id. The Court considers the following factors to support the benchmark: (1) this litigation
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was not protracted, having been settled in about a year; (2) the parties did not engaged in extensive
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discovery; (3) the size of the class is small; (4) the complexity of the legal issue is low; and (5) the
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parties did not engaged in protracted law and motion practice. The Court acknowledges because
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communication with the plaintiffs was difficult, the following factors that support an increase from the
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benchmark: (1) none of the plaintiffs speaks English fluently; (2) none of the plaintiffs has familiarity
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with the United States civil legal system; (3) plaintiffs were spread out across a large territory and
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frequently moved; (5) many of the plaintiffs had low literacy levels in their mother languages. In
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addition, class counsel has demonstrated that they engaged in claim administration and that they deserve
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compensation for that administration.
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For the foregoing reasons, this Court is inclined to grant an award of attorneys fees, including
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claim administration expenses, in the amount of 35% of the settlement fund, or $320,250. The Court
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is inclined to approve all other terms of the settlement agreement. Because final approval of the
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settlement agreement is an “all or nothing” proposition, this Court requests the parties to submit a
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response or supplemental briefing to this Court’s notice no later than Monday, November 14, 2011
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at 2:00 p.m.
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IT IS SO ORDERED.
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Dated:
b9ed48
November 9, 2011
/s/ Lawrence J. O'Neill
UNITED STATES DISTRICT JUDGE
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