Tyrus Collins et al v. Cargill Meat Logistic Solutions Inc et al, No. 1:2010cv00500 - Document 50 (E.D. Cal. 2011)

Court Description: MEMORANDUM DECISION Re Unopposed Motion For Final Approval of Class Action Settlement 46 and for Attorney's Fees and Costs 47 , signed by Judge Oliver W. Wanger on 6/28/2011. ((1) The Settlement Class is CERTIFIED;(2) The Class Settlement is APPROVED; (3) The payment of $82,500 in attorneys 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.)(Gaumnitz, R)
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1 2 3 UNITED STATES DISTRICT COURT 4 FOR THE EASTERN DISTRICT OF CALIFORNIA 5 6 7 TYRUS COLLLINS and JAMES GREER, on behalf of themselves and others similarly situated, 8 Plaintiffs, 9 10 11 12 13 v. MEMORANDUM DECISION RE UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT (DOC. 46) AND FOR ATTORNEYS FEES AND COSTS (DOC. 47) CARGILL MEAT SOLUTIONS CORPORATION, a Kansas corporation; and DOES 1 through 50, inclusive, Defendants. 14 15 1:10-cv-00500 OWW MJS I. INTRODUCTION This is a wage-and-hour class action brought on behalf of 16 meat workers employed by Cargill Meat Solutions Corp., in Fresno 17 18 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. 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 The 24 laws. Orshansky Decl. at ¶ 16. 25 The parties have entered into a Joint Stipulation of 26 27 28 Settlement Agreement. Orshansky Decl. at ¶ 11. A March 7, 2011 memorandum decision: (1) conditionally certified a Settlement 1 PDF created with pdfFactory trial version www.pdffactory.com 1 Class; (2) appointed Class Counsel; (3) appointed Class 2 Representatives; (4) appointed a Settlement Administrator; (5) 3 preliminarily approved the Class Settlement; (6) approved the 4 class Notice and related materials for distribution; (7) directed 5 the mailing, by first-class mail, of the Notice Packet by March 6 7 25, 2011; and (8) scheduled a final approval hearing for June 27, 8 2011. 9 approval of the settlement, Doc. 44, along with supporting 10 declarations, Docs. 48-48-1. 11 approval of their request for attorneys fees and costs, Doc. 45, 12 Doc. 41. Plaintiffs have filed a motion for final Plaintiffs have also moved for 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. 16 17 18 II. BACKGROUND Plaintiffs allege Defendants failed to reimburse Employees 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 2 PDF created with pdfFactory trial version www.pdffactory.com 1 sought declaratory relief and recovery of unreimbursed business 2 expenditures, back wages, interest, penalties, attorneys fees, 3 and costs. See SAC. 4 Both prior and subsequent to the complaint being filed, 5 Plaintiffs conducted substantial discovery and non-discovery 6 7 investigation regarding class certification and the merits of 8 their claims. 9 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 Oshansky Decl. ¶ 7. After suit was filed, 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. 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 Id. at ¶ 9. Prior to mediation, Class Counsel also 21 Defendant; doing follow-up research on relevant legal and 22 procedural questions; preparing damage models; and developing 23 24 settlement and negotiation strategies. 25 26 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 3 PDF created with pdfFactory trial version www.pdffactory.com 1 former meat workers employed by Defendant in California ( Class 2 Members ) from August 1, 2008 to March 7, 2011 ( Covered 3 Period ). Settlement Agreement ( Settlement ), Doc. 38-1, § 4 9(c); see also Oshansky Decl. ¶ 16. 5 6 A. Settlement Payment. 7 8 9 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: 11 12 ¢ settlement awards to be paid to Class Members who timely 13 submit valid claims (paid out of the Net Settlement Fund of 14 $150,000.00); 15 ¢ 16 a $2,000 payment to the California Labor and Workforce Development Agency for the amount in penalties due to it 17 under Labor Code § 2699, et seq. 18 19 ¢ (no more than $10,000); 20 21 the Settlement Administrator s reasonable fees and expenses ¢ (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 of $82,500, for their reasonable attorneys fees, as well as 26 27 actual litigation costs, up to $7,500. 28 4 PDF created with pdfFactory trial version www.pdffactory.com 1 See Settlement, §§ 9, 11. 2 Settlement Fund to Defendant. There will be no reversion of the Net Id. at § 9(a). 3 4 5 B. Payment of Settlement Awards. The Net Settlement Fund ( NSF ) of $150,000 will be 6 completely separate from any other payments the Defendant makes. 7 Oshansky Decl. ¶ 12. 8 who timely submit valid claims ( Qualified Claimants ), based 9 It will be distributed to all Class Members upon the following allocation formula: 10 11 12 13 14 15 16 17 18 Each Qualified Claimant shall receive a payment based on the number of weeks that he or she worked during the Covered Period, which shall be from August 1, 2008 through preliminary approval. Each Qualified Claimant will be entitled to a provisional share of the settlement calculated by (1) taking the Qualified Claimant s number of workweeks, (2) dividing that number by the total number of workweeks of all Qualified Claimants, and (3) multiplying the resulting number by the NSF. For purposes of this calculation, the number of employee s Workweeks shall be calculated by (1) subtracting the employee s first workday during the Covered Period from his or her last workday of the Covered Period, (2) dividing that number of days by 7, and then (3) rounding to the nearest integer. 19 Settlement, § 9(c). 20 Members with the Notice of Pendency of Class Action, Proposed 21 Settlement, Your Rights, and Options for you to Consider 22 A Claim Form, which was mailed to Class ( Notice ), included for each Class Member the number of weeks 23 worked during the Class Period and the Class Member s estimated 24 Settlement Amount. See Claim Form, Doc. 38-3. 25 26 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) 5 PDF created with pdfFactory trial version www.pdffactory.com 1 will be treated as penalties and interest. 2 will be subject to applicable tax withholding and reporting. 3 Settlement, § 9(e). Settlement Awards 4 The formula relies upon objective evidence of the number of 5 weeks worked during the Class Period, provided by the Defendant. 6 7 Settlement, § 17. Class Members could also review and confirm 8 this information, and the Claim Form permitted Class Members to 9 challenge the number of weeks worked. See Claim Form, § 2(B). 10 C. Distribution of Unclaimed Funds and Uncashed Checks. 11 The Settlement is structured so as to distribute the 12 13 entirety of the NSF, regardless of whether or not every member of 14 the class files a valid claim form. 15 funds. 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 See Settlement, § 9(c). Claimant. There will be no unclaimed Checks that remain uncashed Settlement, § 18. 19 20 21 D. Scope of the Release. 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 27 28 Upon the final approval by the Court of the settlement, each Class member who does not opt out of the settlement, shall, for the period of time extending from August 1, 2008 to [preliminary approval], fully release and forever discharge Defendant and its respective present and former officers, 6 PDF created with pdfFactory trial version www.pdffactory.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 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 Labor Code § 2802(a); (2) rest-period violations, Labor Code § 226.7; (3) violation of Labor Code § 204; (4) violation of Labor code § 226(a); (5) penalties pursuant to Labor Code § 203; (6) penalties under California Labor Code §2609 et seq.; (7) any penalties that could have been brought based on the violations alleged in the Complaint, and (8) violation of Business & Professions Code §17200, et seq. based on the foregoing alleged violations. Claim Form, § 4. Furthermore: Representative Plaintiffs additionally expressly waive any and all rights they have under Section 1542 of the Civil Code of the State of California, which provides: 18 19 20 21 22 23 24 25 26 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. Notwithstanding the provision of Section 1542, and for the purpose of implementing a complete release and discharge, Representative Plaintiffs expressly acknowledge the this Settlement Agreement is intended to include in its effect, without limitation, claims and causes of action which they do not know of or suspect to exist in their favor at the time of execution hereof and that his agreement contemplates the extinguishment of all such claims and causes of action. 27 28 7 PDF created with pdfFactory trial version www.pdffactory.com 1 Settlement, § 10(c). 2 representative class members. The § 1542 release does not extend to non- 3 4 E. Objections and Opt-Out Process. Any Class Member who so wishes may object or elect not to 5 6 participate in the Settlement. Settlement, §§ 19, 20. The Notice 7 fully explains the objection and opt-out procedures. See Notice, 8 § VI; see also Exclusion Form , Doc 38-4. 9 10 F. 11 Class Representative Payments; Class Counsel Attorneys Fees Payment and Class Counsel Litigation Expenses Payment. The settlement also permits Plaintiffs and their counsel to 12 seek by separate motion: 13 ¢ payments to Plaintiffs, in addition to their Settlement 14 15 Awards, of $4,000 each in compensation of their 16 services as Class Representatives; and ¢ payments to Class Counsel of $82,500, for their 17 18 reasonable attorneys fees, as well as litigation 19 costs, up to $7,500. 20 See Settlement, §§ 11(a), (b). 21 22 23 24 25 III. DISCUSSION A. Certification of a Class for Settlement. As the Class has only been conditionally certified, final certification is required and is governed by Federal Rule of 26 Civil Procedure Rule 23. 27 28 1. Rule 23(a) Requirements. 8 PDF created with pdfFactory trial version www.pdffactory.com 1 Federal Rule of Civil Procedure 23(a) states in pertinent 2 part that [o]ne or more members of a class may sue or be sued as 3 representative parties on behalf of all. As a threshold matter, 4 in order to certify a class, a court must be satisfied that 5 (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 (the "adequacy of representation" requirement). 6 7 8 9 10 11 12 In re Intel Secs. Litig., 89 F.R.D. 104, 112 (N.D. Cal. 1981)(citing Fed. R. Civ. P. 23(a)). 13 a. 14 15 Numerosity. 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. 18 239 Class Members. There are approximately 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). 23 members would serve only to impose financial burdens and clog the 24 court s docket. 25 Here, the joinder of approximately 239 individual current and 26 Numerosity is also satisfied where joining all Class In re Intel Secs. Litig., 89 F.R.D. at 112. former employees would only further clog this court s already 27 overburdened docket. 28 9 PDF created with pdfFactory trial version www.pdffactory.com 1 b. Common Questions of Fact and Law. 2 Commonality exists when there is either a common legal issue 3 stemming from divergent factual predicates or a common nucleus of 4 facts resulting in divergent legal theories. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). It does not require 5 6 that all questions of law or fact be common to every single 7 8 member of the class. To satisfy the commonality requirement, 9 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 13 14 15 Here, Class Members share the following legal and factual questions: ¢ Whether Defendant violated California Labor Code ( CLC ) § 2802 by failing to reimburse Employees for 16 17 necessary expenditures incurred in the course of their 18 employment; 19 ¢ 20 Whether Defendant violated CLC § 226.7 and the applicable IWC Wage Orders, by failing to provide 21 Employees with rest periods for every four consecutive 22 hours of work without paying them one hour of wages at 23 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 28 10 PDF created with pdfFactory trial version www.pdffactory.com 1 Employees all wages due at least twice per calendar 2 month; 3 ¢ Whether Defendant violated CLC § 226(a) by not 4 providing employees accurate itemized wage statements; 5 6 ¢ Whether Defendant violated CLC §§ 201-203 by failing to 7 pay wages and compensation due and owing at the time of 8 termination; 9 ¢ 10 Whether Defendant violated California Business & Professions Code § 17200 et seq. based on the above; 11 and, 12 13 ¢ are entitled to equitable relief pursuant to § 17200. 14 15 Whether Plaintiffs and members of the proposed class Every Class Member was paid under the same pay practices as 16 every other class members. 17 satisfied. The commonality requirement is 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. 23 51 F.3d 1449, 1463 (9th Cir. 1995)(claims are typical where named 24 See, e.g., Kayes v. Pac. Lumber Co., plaintiffs have the same claims as other members of the class and 25 are not subject to unique defenses). Because every class member 26 27 28 was paid under the same pay practices as every other class member, the Class Representatives claims are typical of those of 11 PDF created with pdfFactory trial version www.pdffactory.com 1 the other Class Members. 2 satisfied. The typicality requirement is 3 d. 4 5 Fair and Adequate Representation. The final Rule 23(a) requirement is that the class 6 representative fairly and adequately protect the interests of the 7 class. 8 issue requires that two questions be addressed: (a) do the named 9 Fed. R. Civ. P. 23(a)(4). The proper resolution of this plaintiffs and their counsel have any conflicts of interest with 10 other class members and (b) will the named plaintiffs and their 11 counsel prosecute the action vigorously on behalf of the class? 12 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 22 23 conflicts with the class, id. at ¶ 18, and has devoted a significant amount of time to the lawsuit, id. at ¶ 35. In addition, the Class Representatives interests are 24 completely aligned with those of the class. 25 Representatives interest is in maximizing their recovery. 26 The Class Although they will each receive an additional $4,000, this amount 27 is reasonable compensation for the time and expense they devoted 28 12 PDF created with pdfFactory trial version www.pdffactory.com 1 to pursuing this case, as well as for the inherent risk involved 2 in their doing so. See id. at ¶¶ 42-49. 3 4 2. Certification of a Class under Rule 23(b)(3). 5 Once the threshold requirements of Rule 23(a) are satisfied, 6 a class may be certified only if the class action satisfies the 7 requirements of Rule 23(b)(1), (b)(2), and/or (b)(3). 8 parties agree for purposes of the Settlement only that 9 Here, the 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 class predominate over any questions affecting only individual 12 13 members, and ... a class action is superior to other available 14 methods for the fair adjudication of the controversy. 15 Civ. P. 23(b)(3). Fed. R. 16 B. The Terms of the Preliminary Approval Have Been Satisfied. 17 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 28 Declaration of Amanda J. Myette, Doc. 40. On March 25, 2011, Class Notices were mailed to all 239 Class Members. 13 PDF created with pdfFactory trial version www.pdffactory.com Id. at ¶ 9. 1 The U.S. Postal Service returned 23 Class Notices as 2 undeliverable. 3 the Claim Form deadline, but Rust performed address traces on the Id. at ¶ 10. Two of these were returned after 4 21 undeliverable Class Notices that were returned before the 5 deadline. Id. The traces yielded 17 updated addresses and Class 6 7 Notices were promptly mailed to those Class Members via First- 8 Class mail. 9 undeliverable. 10 because the administrator was unable to find a deliverable 11 address. 12 Of these 17 re-mailings, 3 were returned as Id. Id. Nine Class Notices remained undeliverable On April 19, 2011, the Settlement Administrator 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. Despite these difficulties, 167 Claim Forms (~70%) were 16 17 received and accepted by the Settlement Administrator. Id. at ¶ 18 11. 19 possible claimed work weeks. 20 figures represent a strongly positive response for a wage-and- These Claim Forms also account for 88.15% of the total Id. According to Plaintiffs, these 21 hour class-action-settlement. Oshansky Decl., at ¶ 17. 22 Additionally, zero individuals submitted Exclusion Forms, and no 23 24 25 class member has submitted an objection to the Settlement. Myette Decl., at ¶¶ 14, 15. 26 C. Approval of the Settlement. 27 The court must approve any settlement ... of the claims ... 28 14 PDF created with pdfFactory trial version www.pdffactory.com 1 of a certified class. 2 settlement may be approved only after a hearing and on finding 3 that it is fair, reasonable, and adequate. Fed. R. Civ. P. 23(e)(1)(A). A Fed. R. Civ. P. 4 23(e)(1)(C). Such approval is required to make sure that any 5 settlement reached is consistent with plaintiffs fiduciary 6 7 obligations to the class. See Ficalora v. Lockheed Cal. Co., 751 8 F.2d 995, 996 (9th Cir. 1985). 9 for the absent class members who will be bound by the settlement, 10 and therefore must independently determine the fairness of any 11 settlement. 12 Id. The court also serves as guardian However, the district court s role in intruding upon what is otherwise a private consensual agreement is limited 13 to the extent necessary to reach a reasoned judgment that the 14 15 agreement is not the product of fraud or collusion between the 16 negotiating parties, and that the settlement, taken as a whole, 17 is fair, reasonable, and adequate to all concerned. 18 Alshuler, 92 F.3d 1503, 1506 (9th Cir. 1996). 19 settlement hearing is not to be turned into a trial or rehearsal 20 for trial on the merits. FDIC v. Therefore, the Officers for Justice v. Civil Service 21 Com., 688 F.2d 615, 625 (9th Cir. 1982). Ultimately, the 22 district court's determination is nothing more than an amalgam of 23 24 delicate balancing, gross approximations, and rough justice. Id. 25 In determining whether a settlement agreement is fair, 26 adequate, and reasonable to all concerned, a district court may 27 consider some or all of the following factors: (1) the strength 28 15 PDF created with pdfFactory trial version www.pdffactory.com 1 of the Plaintiff's case (2) the risk, expense, complexity, and 2 likely duration of further litigation; (3) the risk of 3 maintaining class action status throughout the trial; (4) the 4 amount offered in settlement; (5) the extent of discovery 5 completed; (6) the stage of the proceedings; (7) the views and 6 7 experience of counsel; (8) any opposition by class members; (9) 8 the presence of a governmental participant. 9 Alaska Pshp., 151 F.3d 1234,1242 (9th Cir. 1998). 10 factors is not exclusive and the court may balance and weigh 11 different factors depending on the circumstances of each case. 12 Linney v. Cellular This list of 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 Approval of the Settlement. 16 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. 22 whether or not an employer must reimburse purchases required for However, 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., 16 PDF created with pdfFactory trial version www.pdffactory.com 1 Co. 07-R2D4-2581, 2009 CA-OSHA App. Bd. Lexis 101 (Cal-OSHA) 2 App., Sept. 30, 2009) (holding that employer was not required to 3 pay for safety shoes). 4 Another major issue in this case involves the provision of 5 rest breaks. Whether rest break claims result in individual 6 7 inquiries predominating, thus frustrating class certification, 8 under California law is currently before the California Supreme 9 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 16 (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 Settlement Class in light of all known facts and circumstances. 23 24 2. The Settlement Amount is Fair and Reasonable. 25 26 27 The Settlement provides for a payment of about $260,000.00 by Defendants. The average payment to Class Members is $898.20. 28 17 PDF created with pdfFactory trial version www.pdffactory.com 1 Myette Decl., at ¶ 11. 2 to each Claimant on the basis of the number of weeks actively 3 worked by each Claimant during the Class Period. All Settlement shares will be distributed Settlement, § 4 9(c). 5 The Class Representative Payments and the Class Counsel 6 7 8 9 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. 20 These released claims appropriately track the breadth of 21 Plaintiffs allegations in the action and the settlement does not Settlement, § 10(c). 22 release unrelated claims that class members may have against 23 defendants. 24 25 26 27 28 4. The Settlement Was the Project of Informed, Arm s Length Negotiations. The Settlement was reached after informed, arm s length negotiations between the parties. See Oshansky Decl., at ¶¶ 10, 18 PDF created with pdfFactory trial version www.pdffactory.com 1 11. 2 the Defendant s expenses, equipment, and reimbursement policies 3 as well as time records for Class Members. Plaintiffs counsel had access to documents including all of Id. at ¶ 10. 4 Plaintiffs counsel reviewed and analyzed all these materials. 5 Id. Counsel was also informed by lengthy interviews with the 6 7 8 Representative Plaintiffs. Id. at ¶ 7. In addition, there is no evidence of collusion. 9 5. Reaction of the Class Members. 10 The reactions of the members of a class to a proposed 11 settlement is a proper consideration for the trial court. 12 13 Vasquez v. Coast Valley Roofing, 266 F.R.D. 482 (E.D. Cal. 2010) 14 (citing 5 Moore s Fed. Practice § 23.85[2][d]). 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 Class fairness hearing; they may be entitled to special weight because 19 the representatives may have a better understanding of the case 20 21 22 23 than most members of the class. Manual for Complex Litigation, Third, § 30.44 (1995). 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. 26 See Oshansky Decl., at ¶¶ 16, 17. Each of the Class Representatives and their attorneys have 27 extensive understanding of the merits of this settlement having 28 19 PDF created with pdfFactory trial version www.pdffactory.com 1 participated extensively in the strategy, formulation, filing, 2 litigation and negotiation process. 3 been no objections to the Settlement by Class Members or any See id. at ¶ 44. There have 4 other members of the public. 5 The settlement is fair and reasonable. 6 7 D. Class Counsel s Requested Fees and Costs. 8 9 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 the common fund or common benefit doctrine, under which 12 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. 16 1998). 17 persons other than himself or his client is entitled to a 18 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. [A] lawyer who recovers a common fund for the benefit of 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. 20 21 v. Van Gemert, 444 U.S. 472, 478 (1980)). Awarding a percentage 22 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. 26 Id. (quoting Boeing Co., 444 U.S. at 478-79). Here, where the Settlement requires lump sum allocations to 27 each Settlement Class and applies distribution formulas pursuant 28 20 PDF created with pdfFactory trial version www.pdffactory.com 1 to which each Class Member who submits a valid claim will receive 2 a mathematically ascertainable payment, application of the 3 percentage of common fund doctrine is appropriate. 4 The typical range of acceptable attorneys' fees in the Ninth 5 Circuit is 20% to 33 1/3% of the total settlement value, with 25% 6 7 considered the benchmark. Powers v. Eichen, 229 F.3d 1249, 1256 8 (9th Cir. 2000); Hanlon, 150 F.3d at 1029; Staton, 327 F.3d at 9 952. 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. 12 Knight v. Red Door Salons, Inc., 2009 WL 248367 (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 16 awards range around 30% ). 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., 290 F.3d 23 24 25 1043, 1047 (9th Cir.2002); Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir.1990). 26 1. The Results Achieved. 27 The individual claims in this case concerned defendants 28 21 PDF created with pdfFactory trial version www.pdffactory.com 1 failure to reimburse Class Members for required safety footwear; 2 failure to provide proper rest periods; failure to pay Employees 3 all wages due at least twice per calendar month; and failure to 4 pay all wages due upon termination or separation of employment. 5 Such claims would not ordinarily produce large recoveries per 6 7 claimant. Here, the NSF of $150,000 will provide the 167 8 Qualified Claimants with an average recovery of approximately 9 $898.20 per claimant. Myette Decl., at ¶ 11. 10 2. The Risks Involved. 11 There were significant risks in pursuing this case. One of 12 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. 18 It is unknown what the outcome 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 25 26 Plaintiffs Counsel invested $76,171.50 in lodestar time and $10,000 in costs in litigating this case with no guarantee of recovery. 27 28 3. The Skill Required. 22 PDF created with pdfFactory trial version www.pdffactory.com 1 This case required specialized skills in litigating cutting- 2 edge legal theories surrounding expense-reimbursement and rest 3 periods. Oshansky Decl., at ¶ 26. Additionally, the case 4 required extensive review and analysis of time records and 5 information regarding Class Members job duties in order to 6 7 determine what violations of rest break and reimbursement law 8 actually occurred. Id. at ¶ 26. Class Counsel has extensive 9 experience in class action wage and hour litigation of this 10 nature. See id. at ¶ 2. 11 12 13 14 4. The Contingent Nature of the Fee and the Financial Burden. This case was conducted on a contingent fee basis against a 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. 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. 22 successful in effectuating a $260,000 settlement. Id. Plaintiffs Class Counsel was 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. 27 has awarded the following fees: 28 23 PDF created with pdfFactory trial version www.pdffactory.com For example, this court 1 ¢ 2 3 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 4 AWI LJO; 5 6 ¢ 1:01-cv-05729 AWI LJO; 7 8 31.25% in Baganha v. California Milk Transport, Case No. ¢ 9 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 ¢ Case No. 1:08-cv-01122 LJO GSA; 13 14 33.3% in Benitez, et al. v. Jeff Wilbur and Lisa Wilbur, ¢ 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 financial risks borne by Plaintiffs Counsel, and similar awards 19 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 26 6. Lodestar Cross-Check. 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 24 PDF created with pdfFactory trial version www.pdffactory.com 1 2008); Vizacaino v. Microsoft Corp., 290 F.3d 1043, 1050-51 (9th 2 Cir. 2002). 3 by multiplying the number of hours reasonably expended on the First, the court must calculate the lodestar amount 4 litigation by a reasonable hourly rate. Cunningham v. County of 5 Los Angeles, 879 F.2d 481 (9th Cir. 1988). Next, the court may 6 7 increase or reduce the presumptively reasonable lodestar fee. 8 Quesada v. Thomason, 850 F.2d 537, 539 (9th Cir. 1998) (citing 9 City of Riverside v. Rivera, 477 U.S. 561 (1986)). 10 11 12 The billing records of Class Counsel Orshansky & Yeremian LLP reveal the following hours billed (both completed and to be completed) by three lawyers: 13 14 15 16 17 18 19 20 NAME Orshansky & Yeremian LLP Anthony J. Orshansky David H. Yeremian Justin Kachadoorian Anthony J. Orshansky (future) David H. Yeremian (future) Total HOURS 59.2 58.5 49.7 3.0 3.0 173.4 RATE $520 $450 $325 $520 $450 TOTAL $30,784.00 $26,325.00 $16,152.50 $1,560.00 $1,350.00 $76,171.50 See Orshansky Decl., at ¶ 35. The number of hours billed in this case is reasonable under 21 the circumstances. 22 preparation for mediation, there were also unique, cutting-edge 23 issues of law to investigate. In addition to considerable discovery and Similar cases have reached 24 settlement with over 200 billed hours of attorney time. See 25 Alvarado v. Nederend, 1:08-cv-01099 OWW DLB (wage and hour class 26 27 28 action involving unsettled issues related to meal and rest breaks with approximately 150 class members reached settlement after 25 PDF created with pdfFactory trial version www.pdffactory.com 1 2 3 Class Counsel expended over 300 hours). Likewise, the hourly rates presented by counsel are also reasonable. Though prevailing hourly rates in the Eastern 4 District of California are in the $400/hour range, Class 5 Counsels rates appear to fall within the reasonable rates of the 6 7 Laffey Matrix. The Laffy Matrix is a widely recognized 8 compilation of attorney and paralegal rate data used in the 9 District of Columbia, frequently used in fee awards cases. 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 The 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. 14 15 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 lawyer is $606 ($589 * 1.0294). Mr. Orshansky s rate of $520 is 23 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. 27 Kachedoorian s rate of $325 is also about 15% lower than the 4-7 28 26 PDF created with pdfFactory trial version www.pdffactory.com Finally, Mr. 1 year attorney rate of $371. 2 Class Counsels hourly rate and resulting fees of $76,171.50 are 3 reasonable. The lodestar cross-check shows that The Court does not intend this finding to have any 4 precedential effect, as the fee scale is higher than rates 5 prevailing in the Central Valley. 6 7 The amount requested by Class Counsel of $82,500.00 is 8 greater than its lodestar amount of $76,171.50. 9 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 However, 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. 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)). Fischel, 307 F.3d 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, 307 F.3d at 23 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 28 27 PDF created with pdfFactory trial version www.pdffactory.com 1 percentage fee award by the lodestar calculation. 2 F.3d at 1008. 3 dividing $82,500.00 by $76,171.50. Fischel, 307 Here, the multiplier of 1.08 is calculated by To determine whether the 4 lodestar multiplier is reasonable the following factors may be 5 considered: (1) the amount involved and the results obtained, (2) 6 7 the novelty and difficulty of the questions involved, (3) the 8 skill requisite to perform the legal service properly, (4) the 9 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. 18 526 F.2d 6 (9th Cir. 1975)). 19 20 Id. (citing Kerr v. Screen Extras Guild, Inc., First, Class Counsel achieved a good result and generated a 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 members. Based on the claims rate, the 167 Class Members who 23 24 25 26 27 submitted claims will receive the entirety of the NSF, an average of $898.20. See Myette Decl., at ¶ 11. Second, Plaintiff s safety footwear reimbursement claims presented arguable questions for Class Counsel in light of the 28 28 PDF created with pdfFactory trial version www.pdffactory.com 1 competing precedent proffered by both parties. 2 Plaintiff s rest break claims raise doubts as California s rest 3 break law is currently in flux with Brinker currently pending Similarly, 4 before the California Supreme Court. 5 Third, Class Counsel competently performed. Class Counsel 6 7 avoided protracted litigation by conducting significant 8 investigation of the class claims, and efficiently communicating 9 and exchanging information with Defense counsel so that the 10 parties could successfully mediate the case. 11 this case, Class Counsel investigated the potential claims and 12 In preparation for 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. 17 Orshansky Decl., 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 any payment for their time or their expenses, which they began 23 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 28 29 PDF created with pdfFactory trial version www.pdffactory.com 1 Class Counsel could receive. 2 3 Id. at ¶ 30. Based on the overall success, the skill with which the case was prosecuted, the substantial legal risks associated with 4 Plaintiffs claims, and the financial risks borne by Plaintiffs 5 Counsel, Plaintiff s request for a multiplier of 1.08 of its 6 7 lodestar is reasonable. See, e.g. Steiner v. Am. Broadcasting 8 Co., Inc., 248 Fed. Appx. 780, 783 (9th Cir. 2007)(approving 9 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 14 E. Class Counsel s Request for Costs. Class Counsel incurred out-of-pocket costs totaling 15 approximately $6,737.19. 16 filing fees, costs related to the service of process, mediation 17 fees, courier and attorney-service costs for court filings, copy 18 The bulk of the incurred costs included 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 22 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 28 30 PDF created with pdfFactory trial version www.pdffactory.com 1 $7,500, which was included in the Class Notice and to which no 2 Class Member objected. 3 is reasonable. Plaintiff s request, which is $6,737.19, 4 5 6 F. Class Representative Enhancement. Pursuant to the Settlement, Plaintiff seeks an enhancement 7 in the amount of $4,000 to the named Plaintiffs Tyrus Collins and 8 James Greer. 9 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 Courts routinely approve incentive awards to compensate 12 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). 17 the Court approved service awards of $300,000 to each named 18 In Coca-Cola, 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). 28 31 PDF created with pdfFactory trial version www.pdffactory.com 1 In this case, among other things, the named Plaintiffs: (1) 2 provided significant assistance to Class Counsel; (2) endured 3 lengthy interviews; (3) provided documents and information; (4) 4 helped analyze documents produced by defendants; (5) and 5 participated in the mediation, which was a full day session 6 7 requiring very careful consideration, evaluation and approval of 8 the terms of the Settlement Agreement on behalf of the Class. 9 See Orshansky Decl., at ¶44. 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 Moreover, as with any plaintiff who 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 16 17 18 Kinkos Office & Print Services, Inc., No. C 08-2320 SBA, 2007 WL 4531783, at **2-4 (N.D. Cal. Dec. 17, 2007). G. Claims Administrator Fee. 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. 25 estimates administration costs of $10,000, taking into 26 Ms. Myette consideration both costs incurred to date and those anticipated 27 to be incurred in the future. This request is substantially 28 32 PDF created with pdfFactory trial version www.pdffactory.com 1 lower than previous administrator fees awarded in this District. 2 See Vasquez, 266 F.R.D.at 483-84 ($25,000 administrator fee 3 awarded in wage and hour case involving 177 potential class 4 members). 5 6 IV. CONCLUSION 7 For all the reasons set forth above: 8 (1) The Settlement Class is CERTIFIED; 9 (2) The Class Settlement is APPROVED; 10 (3) The payment of $82,500 in attorney s fees (31.7% of the 11 Maximum Settlement Value and $7,500 in costs is APPROVED; 12 13 14 15 16 (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. 17 18 IT IS SO ORDERED. 19 Dated: June 28, 2011 20 21 /s/ Oliver W. Wanger United States District Judge 22 23 24 25 26 27 28 33 PDF created with pdfFactory trial version www.pdffactory.com