Topete, et al. v. Ramos Furniture, No. 1:2016cv00271 - Document 146 (E.D. Cal. 2018)
Court Description: FINDINGS and RECOMMENDATIONS recommending as follows: 1. Plaintiffs' motion to dismiss all class claims be GRANTED; 2. Plaintiffs' motion for default judgment against Furniture Deals, Inc. dba Ramos Furniture and Dimas Manual, Inc. on the i ndividual claims be GRANTED, documents 141 and 142 ; 3. Judgment be entered as follows: a. Plaintiff Rosalba Maldonado be awarded damages and interest thereon in the amount of $17,546.04; b. Plaintiff Marisol Topete be awarded damages and int erest thereon in the amount of $22,890.91; c. Plaintiffs be awarded costs in the amount of $8,511.37; and d. Plaintiffs be awarded attorney's fees in the amount of $56,072.80; and 4. The Clerk of the Court be directed to CLOSE thi s case. These findings and recommendations are submitted to the United States District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen (14) days after being served with these findings and recommen dations, the parties may file written objections with the Court. Such a document should be captioned "Objections to Magistrate Judge's Findings and Recommendations." Order signed by Magistrate Judge Erica P. Grosjean on 8/20/2018. (Rooney, M)
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 MARISOL TOPETE and ROSALBA MALDONADO, 11 Plaintiffs, 12 13 14 v. RAMOS FURNITURE; FURNITURE DEALS, INC.; DIMAS MANUEL, INC.; and DOES 1-100, inclusive, 15 Defendants. 16 Case No. 1:16-cv-00271-DAD-EPG FINDINGS AND RECOMMENDATIONS THAT PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT UNDER FEDERAL RULE OF CIVIL PROCEDURE 55(b) AND TO DISMISS CLASS CLAIMS UNDER FEDERAL RULE OF CIVIL PROCEDURE 23(e) BE GRANTED (ECF Nos. 141, 142) FOURTEEN (14) DAY DEADLINE 17 In this putative class action alleging violations of the Fair Labor Standards Act, California 18 Labor Code, California Industrial Welfare Commission (“IWC”) Wage Orders, and California 19 Business and Professions Code, Marisol Topete and Rosalba Maldonado (“Plaintiffs”) now move 20 for dismissal of their class claims and entry of default judgment on their individual claims against 21 Furniture Deals, Inc. dba Ramos Furniture (“FDI”) and Dimas Manuel, Inc. (“Dimas”) 22 (collectively, “Defendants”). (ECF Nos. 141,142.) Defendants have not filed any opposition to 23 the motion. 24 25 26 27 For the reasons set forth below, the Court recommends dismissing the class claims and entering judgment as described herein. I. BACKGROUND Plaintiffs commenced this class action on February 25, 2015, naming Ramos Furniture as 28 1 1 defendant. (ECF No. 1.) On August 10, 2016, Plaintiffs filed a First Amended Complaint, joining 2 Dimas Manuel, Inc. and Furniture Deals, Inc.1 as party defendants and setting forth the following 3 causes of action: (1) failure to provide meal periods in violation of California Labor Code § 512 4 and § 11 of the applicable IWC Wage Order; (2) failure to provide rest periods in violation of § 5 12 of the applicable IWC Wage Order; (3) failure to provide overtime wages in violation of 6 California Labor Code § 510; (4) failure to provide accurate wage statements in violation of 7 California Labor Code § 226; (5) unlawful business practices in violation of California Business 8 and Professions Code § 17200 et seq.; and (6) failure to pay overtime in violation of the Fair 9 Labor Standards Act. (ECF No. 79.) 10 Plaintiffs allege that FDI and Dimas operate furniture stores throughout California, and is 11 engaged in commerce or the production of goods for commence. Id. at 3. Each corporation has a 12 gross volume of sales that has exceeded $500,000. Id. The corporations are interrelated and 13 integrated in their activities, labor relations, ownership, and management, and there is continuity 14 between the operations and workforce of each corporation. Id. 15 Plaintiff Rosalba Maldonado was employed as a furniture store employee by Dimas 16 Manual, Inc. from approximately May 2011 through April 2012. Id. Plaintiff Marisol Topete was 17 employed as a furniture store employee by Furniture Deals, Inc. from approximately November 18 2013 through January 2015. Id. at 2. Defendants required Plaintiffs to work for more than eight 19 (8) hours per day and more than forty (40) hours per week without providing the opportunity to 20 take a thirty (30) minute off-duty meal break or a ten (10) minute rest break. Id. at 5. Plaintiffs did 21 not waive their right to a 30-minute meal period by mutual consent. Id. at 11. Defendants paid 22 Plaintiffs a straight hourly rate for all hours worked. Id.at 5. Defendants did not pay Plaintiffs one 23 and one-half (1-1/2) times their regular rate of pay for any overtime hours worked over eight 24 hours per day and/or forty hours per week. Id. Additionally, Defendants did not issue paycheck 25 stubs. Id. Instead, Defendants paid Plaintiffs under the table in cash without payment of overtime 26 wages, standard deductions, or contributing to the employers’ share of payroll taxes. Id. Plaintiffs 27 1 28 Ramos Furniture filed an answer to the original complaint in which it identified itself as “Furniture Deals, Inc. dba Ramos Furniture.” (ECF No. 6.) The Court will refer to Ramos Furniture and Furniture Deals Inc. as one entity, Furniture Deals, Inc. dba Ramos Furniture, as it appears the defendants are in fact one and the same. 2 1 were involuntarily discharged, constructively terminated, or voluntarily terminated their 2 employment, and did not receive all pay due and owing at the time their employment was 3 terminated. Id. at 6. 4 On August 29, 2016, FDI filed an answer. (ECF No. 84.) On June 6, 2017, Plaintiffs 5 requested, (ECF No. 115), and on June 20, 2017, the Clerk of the Court entered default as to 6 Dimas, (ECF No. 116). 7 On August 4, 2016, the parties appeared for a scheduling conference before this Court. 8 (ECF No. 78.) On August 16, 2016, the Court issued a scheduling order providing that all 9 discovery regarding class certification and the defendant entities be completed no later than 10 February 28, 2017, and all non-expert discovery be completed no later than October 27, 2017. 11 (ECF No. 82.) 12 On November 29, 2016, the parties requested a Telephonic Informal Discovery Dispute 13 Conference. (ECF No. 86.) The parties appeared for the conference on December 1, 2016, and 14 the Court granted Plaintiffs permission to file a motion to compel. (ECF No. 87.) On December 15 5, 2016, the parties filed a stipulation resolving the discovery dispute and extending the non- 16 expert discovery, which the Court endorsed. (ECF Nos. 88, 89.) 17 On April 21, 2017, Plaintiffs filed a motion to compel further discovery responses, 18 specifically the names and telephone numbers of putative class members. (ECF No. 102.) On 19 May 4, 2017, the parties filed a stipulation to modify and extend, among other things, the non- 20 expert discovery deadline to March 16, 2018. (ECF No. 104.) The Stipulation stated that Isidro 21 Ramos, a representative of FDI, “is no longer willing and/or able to participate in litigation” 22 because he has “experienced a relapse of a prior medical condition and is battling personal 23 challenges that prevent him from being able to effectively attend mediation and is unable to 24 respond to Plaintiff’s discovery requests at this time.” Id. At a hearing on May 19, 2017, the 25 Court granted the motion to compel and granted Plaintiffs leave to move for sanctions. (ECF No. 26 107.) The Court also vacated the non-expert discovery deadline. Id. On June 6, 2017, the Court 27 issued an order, directing FDI to respond to Plaintiff’s interrogatories and requests for 28 production within 30 days. (ECF No. 114.) 3 1 On or about June 27, 2017, the parties again requested a discovery dispute conference. 2 (ECF No. 117.) On July 6, 2017, an Informal Discovery Dispute Conference was held at which 3 the Court granted Plaintiffs leave to file a motion to compel and a motion for sanctions. (ECF 4 No. 120). The Court warned FDI that failure to participate in discovery and/or non-compliance 5 with the Court’s orders will result in sanctions, which may include terminating sanctions. Id. 6 On June 29, 2017, counsel for FDI, Paul J. Bauer, Esq., filed a motion to withdraw as 7 counsel. (ECF No. 118.) The Court held a hearing on the motion to withdraw on July 26, 2017. 8 (ECF No. 125.) A representative for FDI, Isidro Ramos, was present at the hearing. Id. The Court 9 noted that Mr. Bauer had been put in an intractable position in defending the case by having to 10 propound untenable legal arguments. Id. In addition, FDI agreed to provide discovery, but later 11 reneged and refused to participate in the discovery process. Id. FDI said it could not compensate 12 counsel and could not afford to continue its business practices. Id. And, FDI informed Mr. Bauer 13 that it “no longer intends to defend itself and [] asked [counsel] not to perform any other work.” 14 (ECF No. 118-1 at 5.) On this basis, the Court relieved Mr. Bauer as counsel of record for FDI. 15 (ECF No. 126.) 16 The Court, however, explained to Mr. Ramos that because FDI is a corporation, it cannot 17 appear in an action without an attorney. (ECF No. 125.) In its order relieving Mr. Bauer as 18 counsel, the Court also stated, “Defendants Ramos Furniture and Furniture Deals, Inc. shall not 19 be permitted to proceed without an attorney in this action. If Defendants do not secure alternate 20 counsel, they will be subject to default judgment.” (ECF No. 26). 21 On July 24, 2017, Plaintiffs filed a Motion to Compel Discovery Responses, arguing that 22 FDI had failed to respond to Requests for Admission and Interrogatories under Fed. R. Civ. P. 33 23 and 36. (ECF No. 123.) On September 5, 2017, the Court granted Plaintiffs’ motion, and directed 24 FDI to serve written responses to Plaintiffs’ Interrogatories within 10 days. (ECF No. 130.) The 25 Court also granted Plaintiffs leave to move for any sanctions, including a default judgment and 26 attorney’s fees, without further order of the Court. Id. On October 13, 2017, Plaintiffs moved for 27 the entry of default against FDI, (ECF No. 131), which the Court granted, (ECF No. 134). 28 Now before the Court is Plaintiffs’ motion to dismiss their class action claims pursuant to 4 1 Rule 23(e) and for entry of default judgment on their individual claims pursuant to Rule 55(b). 2 (ECF No. 141.) 3 II. DISCUSSION 4 A. Dismissal of the Putative Class Claims 5 Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a 6 certified class may be settled, voluntarily dismissed, or compromised only with the court's 7 approval.” Fed. R. Civ. P. 23(e). “The court's duty to inquire into a settlement or dismissal differs 8 before and after certification. Before certification, the dismissal is not res judicata against the 9 absent class members and the court does not need to perform the kind of substantive oversight 10 required when reviewing a settlement binding upon the class.” Diaz v. Tr. Territory of P. Islands, 11 876 F.2d 1401, 1408 (9th Cir. 1989) (internal citation omitted). Rule 23(e) was specifically 12 amended in 2003 to make clear that court approval was not required for “settlements with 13 putative class representatives that resolved only individual claims.” Fed. R. Civ. P. 23 advisory 14 committee’s note to 2003 amendment. Nevertheless, the Ninth Circuit has held that in deciding 15 whether the putative class should receive notice of voluntary dismissal of putative class claims, 16 courts: 17 18 19 20 should inquire into possible prejudice from (1) class members' possible reliance on the filing of the action if they are likely to know of it either because of publicity or other circumstances, (2) lack of adequate time for class members to file other actions, because of a rapidly approaching statute of limitations, (3) any settlement or concession of class interests made by the class representative or counsel in order to further their own interests. 21 Diaz, 876 F.2d at 1408. While there remains some uncertainty about whether the Diaz holding 22 applies in the wake of the 2003 amendments to Rule 23(e), the standard articulated in Diaz 23 “strikes the right balance between the full-bore fairness review for settlement of certified class 24 claims, and doing nothing at all to ensure that putative class members are protected from 25 collusive deals.” Dunn v. Teachers Ins. & Annuity Ass'n of Am., No. 13-CV-05456-HSG, 2016 26 WL 153266, at *3 (N.D. Cal. Jan. 13, 2016). 27 28 In the present action, there is no prejudice to absent class members. First, there is no indication that this action has been publicized or that any potential class member has relied on the 5 1 filing of this action. Second, the statute of limitations has been tolled since the suit was filed, see 2 American Pine and Construction v. Utah, 414 U.S. 538(1974), and the class was to encompass 3 past, present, and future employees of Defendants. (ECF No. 79 at 6). Third, there has been no 4 concession of class interests made by the class representative or counsel to further their own 5 interests. Plaintiffs seek only to resolve their individual claims. (ECF No.141-1 at 11.) Moreover, 6 pursuing the class claims is impracticable. After more than three years of litigation with multiple 7 conferences and extensions, Plaintiffs have yet to obtain even basic discovery. While Plaintiffs 8 diligently pursued this action and satisfied their obligations as representative, Defendants failed to 9 meaningfully participate in the legal process, leaving Plaintiffs to seek entry of default. Thus, 10 there is no potential for prejudice that would require providing notice and an opportunity to 11 intervene to the absent class members. Accordingly, the motion for dismissal of the class claims 12 pursuant to Rule 23(e) without prejudice is granted. 13 14 15 B. Default Judgment on Individual Claims i. Legal Standard Federal Rule of Civil Procedure 55(a) provides that default shall be entered “[w]hen a 16 party against whom a judgment for affirmative relief is sought has failed to plead or otherwise 17 defend, and that failure is shown by affidavit or otherwise.” Upon entry of default, the factual 18 allegations of the complaint, except those relating to the amount of damages, are taken as true. 19 TeleVideo Sys, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); Nishimatsu Constr. Co., 20 Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“The defendant, by his default, 21 admits the plaintiff’s well-pleaded allegations of facts, is concluded on those facts by the 22 judgment, and is barred from contesting on appeal the facts thus established.”). However, 23 “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not 24 established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) 25 (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir.1978)). 26 Federal Rule of Civil Procedure 55(b) permits a court-ordered default judgment following 27 the entry of default under Rule 55(a). “A defendant's default does not automatically entitle the 28 plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 6 1 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir.1986)). Instead, 2 the decision to grant or deny an application for default judgment lies within the district court’s 3 sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this 4 determination, courts consider the following factors: 5 “(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) 6 the sufficiency of the complaint, (4) the sum of money at stake in the action[,] (5) the possibility 7 of a dispute concerning material facts[,] (6) whether the default was due to excusable neglect, and 8 (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the 9 merits. Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986). 10 After determining that a party is entitled to entry of default judgment, the court must 11 determine the terms of the judgment to be entered. However, the scope of relief available on “[a] 12 default judgment must not differ in kind from, or exceed in amount, what is demanded in the 13 pleadings.” Fed. R. Civ. P. 54(c). 14 15 16 ii. Analysis of Eitel Factors 1. The Possibility of Prejudice to Plaintiff “The first Eitel factor considers whether the plaintiff would suffer prejudice if default 17 judgment is not entered, and such potential prejudice to the plaintiff militates in favor of granting 18 a default judgment.” Joe Hand Promotions, Inc. v. Dhillon, No. 2:15–cv–1108–MCE–KJN, 2015 19 WL 7572076, at *2 (E.D. Cal. Nov. 25, 2015). 20 Here, Plaintiffs would suffer prejudice if the Court declines to enter a default judgment. 21 Defendant Dimas has not appeared in this action. And, while Defendant FDI has appeared, it has 22 failed to meaningfully participate in this action. Counsel for FDI withdrew from representation 23 because of the Defendant’s failure to participate in this legal proceeding. Specifically, Isidro 24 Ramos, a representative of FDI, stated that he was “no longer willing and/or able to participate in 25 litigation” because he has “experienced a relapse of a prior medical condition and is battling 26 personal challenges that prevent him from being able to effectively attend mediation and . . . 27 respond to Plaintiff’s discovery requests at this time.” (ECF No. 104.) FDI also informed its 28 counsel that it “no longer intends to defend itself.” (ECF No. 118-1 at 5). FDI made an intentional 7 1 choice not to participate in this action, prompting the Court to thrice compel disclosure, (ECF 2 Nos. 107, 114, 130), and to grant leave to file a motion for any sanctions, including a default 3 judgment and attorney’s fees, (ECF. No 130.) Defendants’ failure to participate in this litigation 4 has prejudiced Plaintiffs by leaving them with no recourse to recover for any harm caused by 5 Defendants’ employment practices. Thus, the first Eitel factor weighs in favor of the entry of 6 default judgment. See, e.g., Otter Prods. LLC v. Ace Colors Fashion, Inc., No. 2:14–cv–00141– 7 ODW(PJWx), 2014 WL 4187947, at *3 (C.D. Cal. Aug. 21, 2014) (stating that “[a] plaintiff 8 suffers prejudice” under the first Eitel factor “if there is no recourse for recovery absent default”) 9 (citing Phillip Morris, USA, Inc. v. Catsworld Prods., Inc., 219 F.R.D. 494, 499 (C.D. Cal. 10 2003)). 11 12 2. The Merits of the Claims and the Sufficiency of the Complaint Plaintiff moves for a default judgment on five causes of action: (1) failure to provide meal 13 periods, (2) failure to provide rest periods, (3) failure to pay overtime wages, (4) failure to 14 provide wage statements, and (5) failure to pay waiting time penalties. “The second and third 15 Eitel factors address the merits and sufficiency of [the] claims pled in the complaint.” Lyon v. 16 Bergstrom Law, Ltd., No. 116CV00401DADSKO, 2017 WL 2350447, at *3 (E.D. Cal. May 31, 17 2017) (quoting HICA Educ. Loan Corp. v. Warne, No. 11–CV–04287–LHK, 2012 WL 1156402, 18 at *2 (N.D. Cal. Apr. 6, 2012)); see generally U.S. ex rel. Hajoca Corp. v. Aeroplate Corp., No. 19 1:12–cv–1287–AWI–BAM, 2013 WL 3729692, at *3 (E.D. Cal. July 12, 2013) (addressing the 20 second and third Eitel factors “together because of the relatedness of the two inquiries”). To 21 weigh these factors, courts evaluate whether the complaint is sufficient to state a claim that 22 supports the relief sought. See Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978); see also 23 DirecTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (“[A] defendant is not held to admit 24 facts that are not well-pleaded or to admit conclusions of law.”) (internal quotation marks 25 omitted). 26 27 28 a. Meal Periods The allegations pled in the operative complaint sufficiently state a claim of a failure to provide off-duty meal periods. California requires non-exempt employees who work more than 8 1 five hours in a day be afforded a meal period of “not less than 30 minutes.” See Cal. Lab. Code §§ 2 226.7, 512 (West 2000). The meal period may be waived by mutual consent of the employer and 3 the employee when a work period of not more than six hours will complete the workday. Id. The 4 applicable regulation governing meal periods in the mercantile industry, Wage Order 7-2001 (the 5 “Wage Order”), requires employees be relieved of “all duty” during the meal period. Cal. Code 6 Regs. tit. 8, § 11070, subd. 11(C). It provides, in relevant part: 7 Unless the employee is relieved of all duty during a 30 minute meal period, the meal period shall be considered an “on duty” meal period and counted as time worked. An “on duty” meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to. The written agreement shall state that the employee may, in writing, revoke the agreement at any time. 8 9 10 11 12 Id. “[E]mployers fulfill their obligation to provide meal periods to their employees when they relieve their ‘employees of all duty, relinquish[ ] control over their activities and permit[ ] them a 13 reasonable opportunity to take an uninterrupted 30-minute break, and do[ ] not impede or 14 discourage them from doing so.’” Rodriguez v. Taco Bell Corp., 16-15465, 2018 WL 3446948, at 15 *4 (9th Cir. July 18, 2018) (quoting Brinker Restaurant Corp. v. Superior Court, 273 P.3d 513, 16 17 18 536-537 (Cal. 2012)). “The remedy for failure to provide a meal or rest break required by statute or regulation is premium wages: ‘one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided.’” Id. 19 (quoting Cal. Labor Code § 226.7(c)). 20 Here, Plaintiffs allege that it was Defendants’ “systematic business policy and practice to 21 work Plaintiffs [] more than five hours per day without the provision of an off-duty 30-minute 22 meal period.” (ECF No. 79 at 11.) Plaintiffs did not waive their right to a 30-minute meal period 23 by mutual consent, and did not receive premium wages. Id. These allegations are sufficient to 24 state a claim for violation of the meal period requirement under California law. 25 \\\ 26 \\\ 27 \\\ 28 9 b. Rest Period2 1 2 The allegations pled in the operative complaint sufficiently state a claim of a failure to 3 provide rest periods. California requires non-exempt employees be afforded one paid 10-minute 4 rest period per four hours of work, or a major fraction thereof. Murphy v. Kenneth Cole Prods., 5 Inc., 40 Cal. 4th 1094, 1104 (2007) (citing Cal. Code Regs. tit. 8, § 11070). The applicable 6 regulation for the mercantile industry provides, in relevant part: 7 (A) Every employer shall authorize and permit all employees to take rest periods, which in so far as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate often (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3 ½) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction for wages. 8 9 10 11 12 Cal. Code Regs. tit. 8, § 11070, subd. 12 (a). The California Supreme Court has defined the 13 phrase “major fraction thereof” to mean more than half. Brinker Rest. Corp., 273 P.3d at 14 529. Employers who violate these requirements must pay premium wages. Id. at subd. 12(b). 15 Here, Plaintiffs allege that they were not provided ten-minute rest periods after working 16 more than three and a half hours per day, and were not paid premium wages. (ECF No. 79 at 12- 17 13.) These allegations are sufficient to state a claim for the violation of the Wage Order. 18 c. Overtime Wages 19 The allegations pled in the operative complaint sufficiently state a claim of a failure to pay 20 overtime wages. California Labor Code § 510 and § 3 of the Wage Order governs payment of 21 overtime wages. Specifically, Labor Code § 510 provides, in pertinent part: Eight hours of labor constitutes a day’s work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of 22 23 24 25 26 27 28 2 In the operative complaint, Plaintiffs cite to California Labor Code § 512; however, this statute is silent as to any rest period requirement. Plaintiffs also cite to Industrial Welfare Commission Wage Order No. 9-2001, which pertains to the Transportation Industry. It appears this was done in error as Plaintiffs were furniture store employees. Accordingly, the Court will analyze the claims under the applicable Wage Order, Wage Order No. 7, which pertains to employees in “any industry, business, or establishment operated for the purpose of purchasing, selling, or distributing goods or commodities at wholesale or retail; or for the purpose of renting goods or commodities.” Cal. Code Regs. tit. 8, § 11070. 10 1 pay for an employee. Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate of pay for an employee. In addition, any work in excess of eight hours on any seventh day of a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee. Nothing in this section requires an employer to combine more than one rate of overtime compensation in order to calculate the amount to be paid to an employee for any hour of overtime work. 2 3 4 5 6 Cal. Labor Code § 510(a). Plaintiffs allege that during all relevant periods, they worked more than eight hours per 7 8 day and forty hours per week, as well as more than twelve hours per day without payment of 9 overtime wages. These allegations are sufficient to state a claim for the violation of § 510 of the 10 Labor Code and § 3 of the Wage Order. d. Wage Statements 11 The allegations pled in the operative complaint sufficiently state a claim of a failure to 12 13 provide accurate wage statements. Section 226(a) of the California Labor Code requires 14 employers to provide employees with accurate itemized statements. Section 226(e) allows 15 employees “suffering injury as a result of a knowing and intentional failure by an employer” to 16 abide by Section 226(a) to recover the greater of all actual damages, or $50 for an initial violation 17 and $100 per employee for each violation in a subsequent pay period, not to exceed $4,000 total. 18 Cal. Lab. Code § 226(e)(1).3 Further, if an employer fails to provide a wage statement altogether, 19 “[a]n employee is deemed to suffer injury[.]” Cal. Lab. Code § 226(e)(2)(A). Here, Plaintiffs allege that Defendants failed to maintain and provide them the required 20 21 pay records, and instead paid them in cash. (ECF No. 79 at 16.) Because of Defendants’ failure to 22 provide the required records, Plaintiffs “cannot easily and readily ascertain the information 23 required by Labor Code § 226(a)(1) through (9) without reference to other documents and 24 information.” Id. These allegations are sufficient to state a claim for the violation of § 226. 25 \\\ 26 \\\ 27 Section 226(e) was amended effective January 1, 2013 to define “injury” in part to include situations where an employer “fails to provide a wage statement.” 2012 Cal. Legis. Serv. Ch. 844 (A.B.1744) (West). 3 28 11 1 2 e. Waiting Time Penalties The allegations pled in the operative complaint sufficiently state a claim of a failure to pay 3 waiting time penalties. Section 201 of the California Labor Code requires employers who 4 discharge employees to pay the employee the wages “due and payable immediately.” Section 202 5 of the California Labor Code requires employers to pay employees not having a written contract 6 for a definite period their wages not later than 72 hours after quitting, or if the employee has 7 given 72 hours previous notice of his or her intention to quit, then at the time of quitting. Where 8 an employer willfully fails to pay in accordance with § 201 or § 202, § 203 provides that the 9 employee’s wages continue as a penalty at the normal rate of pay from the due date to the date 10 11 paid, not to exceed 30 days. Cal. Lab. Code § 203(a). Plaintiffs allege that they were involuntarily discharged, were constructively terminated, 12 or voluntarily terminated their employment, and did not receive all pay due and owing at the time 13 their employment ended. (ECF No. 79 at 6.) Plaintiffs further allege that Defendants’ violations 14 of law were committed knowingly and willfully with full knowledge of the required laws. These 15 allegations are sufficient to state a claim for violation of § 201 and § 202, and for entitlement to 16 waiting time penalties pursuant to § 203. 17 18 19 Accordingly, the second and third Eitel factors favor entry of default judgment. 3. The Sum of Money at Stake Turning to the fourth Eitel factor, “the court must consider the amount of money at stake 20 in relation to the seriousness of [the defendant’s] conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 21 1176-77. “This requires the court [to] assess whether the recovery sought is proportional to the 22 harm caused by [the] defendant's conduct.” Landstar Ranger, Inc. v. Parth Enters., Inc., 725 F. 23 Supp. 2d 916, 921 (C.D. Cal. 2010) (citing Walters v. Statewide Concrete Barrier, Inc., No. C 24 04– 2559 JSW, 2006 WL 2527776, at *4 (N.D. Cal. Aug. 30, 2006)). “Default judgment is 25 disfavored when a large sum of money is involved.” See Moore v. Cisneros, No. 1:12–cv–00188– 26 LJO–SKO, 2012 WL 6523017, at *4 (E.D. Cal. Dec. 12, 2013) (citation omitted); see also BR 27 North 223, LLC v. Glieberman, No. 1:10–cv–02153 LJO–BAM, 2012 WL 639500, at *5 (E.D. 28 Cal. Feb. 27, 2012) (“In general, the fact that a large sum of money is at stake is a factor 12 1 disfavoring default judgment.” (citations omitted)). “The Court considers Plaintiff's declarations, 2 calculations, and other documentation of damages in determining if the amount at stake is 3 reasonable.” HICA Educ. Loan Corp. v. Warne, No. 11–CV–04287–LHK, 2012 WL 1156402, at 4 *3 (N.D. Cal. Apr. 6, 2012) (citation omitted). 5 Here, Plaintiffs seeks an award of $51,640.94, which represents the statutory damages for 6 unpaid wages, including interest thereon, and costs. Though the amount is not insignificant, it is 7 reasonable in light of Defendants’ extended failure to provide the wages and statements to which 8 Plaintiffs were entitled. Thus, the fourth Eitel factor slightly favors entry of default judgment. 9 10 4. The Possibility of a Dispute Concerning the Material Facts “The fifth Eitel factor examines the likelihood of dispute between the parties regarding the 11 material facts surrounding the case.” United States v. Sterling Centrecorp, Inc., No. 2:08–cv– 12 02556 MCE JFM, 2011 WL 2198346, at *6 (E.D. Cal. June 6, 2011) (quoting Craigslist, Inc. v. 13 Naturemarket, Inc., 694 F. Supp. 2d 1039, 1060 (N.D. Cal. 2010)). Here, there is little possibility 14 of dispute in this case. Defendant Dimas has not appeared in this action, and does not contradict 15 the well-pled allegations. Furthermore, while Defendant FDI did file an answer denying the 16 allegations in the complaint, it withdrew from defending and taking part in this legal proceeding 17 and has declined to oppose the instant motion for default judgment. Thus, the fifth Eitel factor too 18 weighs in favor of granting default judgment. 19 20 5. Whether Defendant's Default Was Due to Excusable Neglect “The [sixth] Eitel factor considers whether a defendant's default may have resulted from 21 excusable neglect.” Vogel, 992 F. Supp. 2d at 1013 (citation omitted). See generally United States 22 v. Sanders, Case No. 1:16–cv–00031–DAD–SAB, 2016 WL 5109939, at *4 (E.D. Cal. Sept. 20, 23 2016) (“Due process requires that all interested parties be given notice reasonably calculated to 24 apprise them of the pendency of the action and be afforded opportunity to present their objections 25 before a final judgment is rendered.”). In the present action, there is no evidence that Defendants’ 26 failure to participate in the litigation is due to excusable neglect. Defendant Dimas was properly 27 served with the summons and complaint, (ECF No. 101), but has not appeared in this action. 28 Defendant FDI has appeared in this action, but has now willfully chosen not to further defend this 13 1 2 3 action. (ECF No. 118-1 at 5.) Thus, this factor weighs in favor of the entry of default judgment. 6. Policy Favoring Decisions on the Merits The seventh Eitel factor requires consideration of the strong policy favoring decisions on 4 the merits. Eitel, 782 F.2d at 1472 (citation omitted). Of course, the “general rule” is “that default 5 judgments are ordinarily disfavored” and “[c]ases should be decided upon their merits whenever 6 reasonably possible.” Id.; see also United States v. Signed Pers. Check No. 730 of Ybran S. Mesle, 7 615 F.3d 1085, 1091 (9th Cir. 2010) (“[J]udgment by default is a drastic step appropriate only in 8 extreme circumstances; a case should, whenever possible, be decided on the merits.”). This factor 9 inherently weighs strongly against awarding default judgment in every case. See United States v. 10 Ordonez, No. 1:10–cv–01921–LJO–SKO, 2011 WL 1807112, at *3 (E.D. Cal. May 11, 2011). 11 The instant action is no different. Nevertheless, this factor alone cannot preclude the entry of 12 default judgment. See Levine v. Sleep Train, 2:15-CV-0002 WBS AC, 2016 WL 2961100, at *6 13 (E.D. Cal. May 23, 2016), report and recommendation adopted sub nom. Levine v. Train, 2:15- 14 CV-0002 WBS AC, 2016 WL 3418350 (E.D. Cal. June 22, 2016). 15 In summary, six of the seven factors weigh in favor of default judgment. In the aggregate, 16 however, the factor favoring decisions on the merits is outweighed when compared with the other 17 factors, which weigh in favor of granting default judgment. Accordingly, the Eitel factors weigh 18 in favor of entering default judgment. 19 C. Determination of the Terms of Judgment 20 On a motion for a default judgment, the relief sought may not be different in kind from, or 21 exceed in amount, what is demanded in the complaint. Fed. R. Civ. P. 54(c). Furthermore, a 22 plaintiff is required to prove all damages sought in the complaint. See Tele Video Sys., Inc., 826 23 F.2d at 917–18. “[A] default judgment must be supported by specific allegations as to the exact 24 amount of damages asked for in the complaint.” Philip Morris USA, Inc., 219 F.R.D. at 499. The 25 court looks to plaintiff’s “declarations, calculations, and other documentation of damages in 26 determining if the amount at stake is reasonable.” United States v. Yermian, Case No. SACV 15– 27 0820–DOC (RAOx), 2016 WL 1399519, at *3 (C.D. Cal. Mar. 18, 2016) (internal citations 28 omitted). If the amount claimed is a liquidated sum or capable of mathematical calculation, the 14 1 court may enter default judgment for money without a hearing. Davis v. Fendler, 650 F.2d 1154, 2 1161 (9th Cir. 1981); see also U.S. v. Yermian, SACV150820DOCRAOX, 2016 WL 1399519, at 3 *3 (C.D. Cal. Mar. 18, 2016) (“Rule 55 does not require the court to conduct a hearing on 4 damages, so long as it ensures there is an adequate basis for the damages awarded in the default 5 judgment.”) (citing Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991)). 6 Nevertheless, if the facts necessary to determine the damages are not contained in the complaint, 7 or are legally insufficient, they will not be established by default. See Cripps v. Life Ins. Co. of N. 8 Am., 980 F.2d 1261, 1267 (9th Cir.1992). 9 i. Damages 10 As aforementioned, Plaintiff seeks an award of damages on five causes of action: (1) 11 failure to provide meal periods, (2) failure to provide rest periods, (3) failure to pay overtime 12 wages, (4) failure to provide wage statements, and (5) failure to pay waiting time penalties. 13 14 1. Meal and Rest Periods “The remedy for failure to provide a meal or rest break required by statute or regulation is 15 premium wages: ‘one additional hour of pay at the employee’s regular rate of compensation for 16 each workday that the meal or rest or recovery period is not provided.’” Rodriguez, 2018 WL 17 3446948, at *4 (quoting Cal. Labor Code § 226.7(c)); see also Cal. Code Regs. tit. 8, § 11070, 18 subd. 11, 12. 19 Plaintiff Rosalba Maldonado seeks damages for the failure to provide meal periods and 20 rest periods in the amount of $5,868.00, which represents one hour of pay for each workday that 21 she was not provided a meal period and one hour of pay for each workday that she was not 22 provided a rest period. In her declaration in support of the instant motion, Maldonado states that 23 she worked for Dimas Manuel Inc., which conducted business as Ramos Furniture, at a rate of 24 pay of $9.00 per hour from May 2011 to July 2012, frequently without having the opportunity to 25 take a meal or rest break. (ECF No. 141-3 at 2). Maldonado offers a detailed spreadsheet based on 26 pay records for 16 of the 65 weeks she worked for Defendants. (ECF No. 141-3 at 6-33). 27 28 Initially, in the operative complaint, Maldonado alleges that she worked for Defendants from May 2011 to April 2012. In her calculations, however, she includes an additional 62 days of 15 1 work between May 2012 and July 2012. Maldonado cannot recover for the additional 62 days as 2 she did not allege in the operative complaint that she worked for Dimas Manuel, Inc during that 3 period. See Fed. R. Civ. P. 54(c). According to her calculations, between May 2011 and April 4 2012, she worked 264 days without meal or rest periods in accordance with Wage Order No. 7 5 and Cal. Labor Code §§ 510 and 512. This amounts to $4,572.00 in premium pay.4 6 Plaintiff Marisol Topete seeks damages for the failure to provide meal periods and rest 7 periods in the amount of $9,269.00, which represents one hour of pay for each workday that she 8 was not provided a meal period and one hour of pay for each workday that she was not provided a 9 rest period. Topete states that she worked for Defendant FDI from November 2013 to January 10 2015, and frequently worked without the opportunity to take rest or meal breaks. (ECF No. 141-4 11 at 2-3). Her hourly rate of pay was $10.00 from November 10, 2013 to December 29, 2013, 12 $10.50 from December 20, 2013 to March 9, 2014, and $11.00 from March 10, 2014 to June 20, 13 2014. Id. Topete offers a detailed spreadsheet based on her pay records and timesheets, (ECF 14 Nos. 141-4, 141-5), and they appear to accurately support her request for damages. 15 2. Overtime Wages 16 Maldonado and Topete also seek damages in the amount of $2,347.68 and $4,077.94, 17 respectively, for the failure to pay overtime wages in accordance with Labor Code § 510 and 18 Wage Order No. 7. (ECF No. 141-1 at 4). Wage Order No. 7 provides, in relevant part: 19 Employment beyond eight (8) hours in any workday or more than six (6) days in any workweek is permissible provided the employee is compensated for such overtime at not less than: 20 21 (a) One and one-half (1 1/2) times the employee's regular rate of pay for all hours worked in excess of eight (8) hours up to and including 12 hours in any workday, and for the first eight (8) hours worked on the seventh (7th) consecutive day of work in a workweek; and 22 23 24 (b) Double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight (8) hours on the seventh (7th) consecutive day of work in a workweek. 25 26 Cal. Code Regs. tit. 8, § 11070, subd. 3(A). 27 28 4 $5,868/2 = $2,394. $2,394/$9.00 = 326. 326 - 62 = 264. 264 x $9.00 = $2,376. $2,376 x 2 = $4,752.00. 16 1 Plaintiff Maldonado states that she was never paid overtime wages. (ECF No. 141-3 at 2). 2 She frequently worked more than eight hours per day and more than forty hours per week, 3 beginning work between 9:00 a.m. and 10:00 a.m. and leaving between 8:00 p.m. and 9:00 p.m. 4 Id. Plaintiff Topete states that she was not paid overtime wages for her work between November 5 10, 2013 and April 20, 2014. Both Maldonado and Topete offer calculations of their unpaid 6 overtime wages. (ECF Nos. 141-2 at 7-32). Topete’s calculations appear to accurately support her 7 request for damages. However, Maldonado’s calculations again encompass a period that she did 8 not plead in her complaint. Therefore, her damages must be reduced by $460.04, which represents 9 purported overtime wages for 57 days between May 2012 and July 2012, to $1,887.64. See Fed. 10 11 12 R. Civ. P. 54(c). 3. Wage Statements Maldonado and Topete request damages in the amount of $4,000 and $2,250, respectively, 13 for the failure to provide wage statements in violation of Labor Code § 226. (ECF No. 141-1 at 14 7). An employee suffering injury due to an employer’s failure to provide wage statements is 15 entitled to recover the greater of all actual damages, or $50 for an initial violation and $100 per 16 employee for each violation in a subsequent pay period, not to exceed $4,000 total. Cal. Lab. 17 Code § 226(e)(1). Maldonado states that she never received a standard paycheck stub at any time 18 during her employment, and was instead paid in cash. (ECF No. 141-3 at 2). This would 19 constitute violations for 52 pay periods. Topete states that she was not issued a standard paycheck 20 stub between November 10, 2013 and April 20, 2014, or approximately 23 pay periods. (ECF No. 21 141-4 at 3). Therefore, a damages award of $4,000 to Maldonado and $2,250 to Topete is 22 supported by the allegations in the complaint. 23 24 4. Waiting Time Penalties Where an employer willfully fails to pay all wages due and owing to an employee at the 25 termination of the employment relationship, the employee’s wages continue as a penalty at the 26 normal rate of pay from the due date to the date paid, not to exceed 30 days. Cal. Lab. Code § 27 203(a). Maldonado and Topete seek $2,761.64 and $2,079.30, respectively, as waiting time 28 penalty. The detailed spreadsheets offered by Maldonado and Topete appear to accurately support 17 1 the request for waiting time penalties. Maldonado earned an average daily pay of $92.06, or 2 $2,761.80 over 30 days, while Topete earned an average daily pay of $69.31, or $2,079.30 over 3 30 days. 4 ii. Interest and Litigation Costs 5 California Labor Code §§ 1194 and 218.5 provide for the award of reasonable attorney’s 6 fees, litigation costs, and interest to the prevailing party in an action to recover overtime wages. 7 Labor Code § 218.6 and Civil Code § 3289 set interest at a rate of 10 percent per annum. Topete 8 and Maldonado jointly seek $8,511.37 in litigation costs. The requested recovery for litigation 9 cost is supported by a detailed summary and calculation, and appears to be appropriate. (ECF No. 10 141-2 at 34-35.) Topete and Maldonado also seek interest on the overtime wages and premium 11 wages due and owing in the amount of $5,214.67 and $5,255.34, respectively. Plaintiffs submit a 12 detailed calculation of the interest due that appears to be accurate. However, as aforementioned, 13 the interest on damages for Maldonado must be reduced by $930.94 to reflect only the period pled 14 in the complaint. Therefore, Maldonado’s interest on damages totals $4,324.40. 15 16 iii. Attorney’s Fees As aforementioned, a plaintiff who has successfully alleged a failure to provide accurate 17 wage statements, failure to pay overtime wages, or nonpayment of wages are entitled to 18 attorney’s fees under California law. Cal. Lab. Code §§ 226(e)(1), 218.5, 1194. Plaintiffs seek 19 $76,942.00 in attorney’s fees, which is the product of 105.4 hours of work performed by Daniel 20 M. Kopfman of Wagner Jones Kopfman & Artenian LLP at an hourly rate of $730.00. (ECF No. 21 141-2 at 4.) 22 1. Lodestar Calculation 23 “‘[F]ee shifting’ refers to an award under which a party that did not prevail in the 24 litigation is ordered to pay fees incurred by the prevailing party.” Laffitte v. Robert Half Internat. 25 Inc., 376 P.3d 672, 676 (2016). Under a fee-shifting statute, courts typically use the “lodestar” 26 approach for assessing reasonable attorney’s fees. See Gonzalez v. City of Maywood, 729 F.3d 27 1196, 1202 (9th Cir. 2013); Ketchum v. Moses, 24 Cal.4th 1122, 1131 (2001). “The ‘lodestar’ is 28 calculated by multiplying the number of hours the prevailing party reasonably expended on the 18 1 litigation by a reasonable hourly rate.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th 2 Cir. 2008) (quoting Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001)). 3 The attorney’s fee applicant bears the initial burden of establishing the appropriate number of 4 hours expended. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). “Absent circumstances 5 rendering the award unjust, an attorney fee award should ordinarily include compensation for all 6 the hours reasonably spent, including those relating solely to the fee.” Ketchum, 17 P.3d 743. 7 “[T]rial courts must carefully review attorney documentation of hours expended; ‘padding’ in the 8 form of inefficient or duplicative efforts is not subject to compensation.” Id. at 741 (citing 9 Serrano v. Priest, 569 P.2d 1303 (1977)). “A district court should exclude from the lodestar 10 amount hours that are not reasonably expended because they are excessive, redundant, or 11 otherwise unnecessary.” Van Gerwin v. Guarantee Mut. Life Co., 214 F.3d 1041,1045 (9th Cir. 12 2000). 13 A reasonable hourly rate is to be calculated considering “the prevailing market rates in the 14 relevant community,” Blum v. Stenson, 465 U.S. 886, 895 and n.11 (1984), as well as the 15 lawyer’s “experience, skill, and reputation,” Schwarz v. Sec’y of Health & Human Servs., 73 F.3d 16 895, 906 (9th Cir. 1995). The “relevant community” for purposes of determining the prevailing 17 market rate is the “forum in which the district court sits.” Camacho, 523 F.3d at 979. In this 18 action, “[t]he Eastern District of California, Fresno Division, is the appropriate forum to establish 19 the lodestar hourly rate.” Jadwin v. County of Kern, 767 F. Supp.2d 1069, 1129 (E.D. Cal. 2011). 20 In evaluating hourly rates, the Court may consider “[a]ffidavits of the plaintiffs’ attorneys 21 and other attorneys regarding fees in the community” and hourly rates paid in other cases. See 22 United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990). The Court 23 may apply “either current or historically prevailing rates,” though “the use of current rates may be 24 necessary to adjust for inflation if the fee amount would otherwise be unreasonable.” Schwarz, 73 25 F.3d at 908. 26 Here, Plaintiffs submit the declaration of Daniel M. Kopfman. Mr. Kopfman offers a 27 detailed record of the number of hours he worked and the tasks he performed on this case. (ECF 28 No. 141-2 at 37). This sufficiently establishes the appropriate number of hours expended in this 19 1 litigation. See Concepcion v. Amscan Holdings, Inc., 223 Cal.App.4th 1309, 1324 (2014) 2 (“Declarations of counsel setting forth the reasonable hourly rate, the number of hours worked 3 and the tasks performed are sufficient.”). 4 Mr. Kopfman also describes his level of skill and experience. Mr. Kopfman states that he 5 graduated from San Joaquin College of Law in May 1997, and was admitted to the State Bar of 6 California in December 1997. He began working on employment and personal injury cases at 7 Wagner & Jones LLP in March 1996, and continued to do so after his admission to the State Bar. 8 Id. Mr. Kopfman has been the primary litigating attorney on all Wagner & Jones’s class action 9 lawsuits since 2001. Id. In 2013, Mr. Kopfman became a partner with Wagner Jones Kopfman & 10 Artenian LLP, and has since represented employees in federal district courts and various Superior 11 Courts throughout California. Id. The law firm has been the attorney of record in approximately 12 26 wage and hour class actions. Id. Mr. Kopfman notes that the United States District Court for 13 the Northern District of California recently awarded him $730.00 per hour for his work on two 14 class action cases: Acosta v. Frito-Lay, Inc., No. 15-CV-02128-JSC, 2018 WL 2088278, at *12 15 (N.D. Cal. May 4, 2018) and Ridgeway v. Wal-Mart Stores Inc., 269 F. Supp. 3d 975, 980 (N.D. 16 Cal. 2017). 17 Plaintiffs, however, have not offered any evidence demonstrating that $730.00 is a 18 reasonable hourly rate for attorneys of similar capabilities and experience within the Fresno legal 19 community. Although Mr. Kopfman has been awarded an hourly rate of $730.00 in the Northern 20 District of California, the Court must look to the prevailing market rate in the relevant 21 community: Fresno Division of the Eastern District of California. Therefore, the Court will look 22 to recent decisions to determine whether the rate requested by Plaintiffs is reasonable. 23 The court notes that Mr. Kopfman has previously been awarded an hourly rate of $325.00 24 by this court. See Williams v. Ruan Transport Corp., 1:13-CV-01157-LJO, 2013 WL 6623254, at 25 *6 (E.D. Cal. Dec. 16, 2013). However, this decision was rendered almost five years ago, when 26 Mr. Kopfman had fifteen years of experience. Mr. Kopfman now has over twenty years of 27 experience. During the intervening time, hourly rates have presumably increased both within the 28 Fresno market generally and for Mr. Kopfman. 20 1 The court has recently addressed prevailing rates in the local economy in a similar 2 employment action, and found that in the Fresno Division of the Eastern District of California, 3 attorneys with experience of twenty or more years are awarded an hourly rate of $350.00 to 4 $400.00. See In re Taco Bell Wage & Hour Actions, 222 F. Supp. 3d 813, 839 (E.D. Cal. 2016); 5 see also Torchia v. W.W. Grainger, Inc., 304 F.R.D. 256, 277 (E.D. Cal. 2014) (awarding 6 attorney with twenty-five years of experience $380.00 per hour in wage and hour class action); 7 Sanchez v. Frito–Lay, Inc., No. 1:14–CV–00797 AWI, 2015 WL 4662636, at *18 (E.D. Cal. Aug. 8 5, 2015), report and recommendation adopted, No. 1:14–CV–797–AWI–MJS, 2015 WL 9 5138101 (E.D. Cal. Aug. 26, 2015) (finding reasonable rate for attorney with twenty years of 10 experience was $350.00 per hour in a wage and hour class action); Torres v. Pet Extreme, No. 11 1:13–CV–01778–LJO, 2015 WL 224752, at *11 (E.D. Cal. Jan. 15, 2015), amended, No. 1:13– 12 CV–01778–LJO, 2015 WL 648241 (E.D. Cal. Feb. 5, 2015) (finding $400.00 per hour reasonable 13 hourly rate for experienced counsel in class action); Willis v. City of Fresno, No. 1:09–CV– 14 01766–BAM, 2014 WL 3563310, at *12 (E.D. Cal. July 17, 2014) adhered to on reconsideration, 15 No. 1:09–CV–01766–BAM, 2014 WL 4211087 (E.D. Cal. Aug. 26, 2014) (awarding attorneys 16 with over twenty five years of experience $380.00 per hour); Verduzco v. Ford Motor Co., No. 17 1:13–CV–01437–LJO, 2015 WL 4131384, at *4 (E.D. Cal. July 9, 2015) report and 18 recommendation adopted, No. 1:13–CV–01437–LJO, 2015 WL 4557419 (E.D. Cal. July 28, 19 2015) (awarding attorney with over 40 years of experience $380.00 per hour). Considering Mr. 20 Kopfman’s extensive experience litigating wage and hour class actions, the Court finds that an 21 hourly rate on the higher end of the spectrum is appropriate. Therefore, an hourly rate of $400.00 22 is a reasonable rate. Accordingly, the lodestar amount for the services provided by Mr. Kopfman 23 is $42,160.00. 24 25 2. Multiplier “[A] court may adjust the lodestar upward or downward using a ‘multiplier’ based on 26 factors not subsumed in the initial calculation of the lodestar.” Van Gerwen, 214 F.3d at 1045. 27 “The lodestar amount is presumptively the reasonable fee amount, and thus a multiplier may be 28 used to adjust the lodestar amount upward or downward only in ‘rare and exceptional cases, 21 1 supported by both specific evidence on the record and detailed findings by the lower courts’” that 2 the lodestar amount is unreasonably low or unreasonably high. Id. (quoting Pennsylvania v. 3 Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986)) (citations and 4 internal quotations omitted). Under California law, the lodestar may be adjusted based on factors 5 including “(1) the results obtained by plaintiff's counsel; (2) the skill and quality of 6 representation; (3) the novelty and difficulty of the questions involved; (4) the extent to which the 7 litigation precluded other employment by the attorneys; and (5) the contingent nature of the case.” 8 Jadwin v. County of Kern, 767 F.Supp.2d 1069, 1134–35 (E.D.Cal.2011) (citing Serrano v. 9 Priest, 569 P.2d 1303 (1977), and Lealao v. Beneficial Cal., Inc., 82 Cal.App.4th 19, 45(2000)). 10 “[T]he trial court is not required to include a fee enhancement to the basic lodestar figure for 11 contingent risk, exceptional skill, or other factors, although it retains discretion to do so in the 12 appropriate case; moreover, the party seeking a fee enhancement bears the burden of proof.” 13 Ketchum, 24 Cal.4th at 1138 (emphasis in original); accord Perdue v. Kenny A. ex rel. Winn, 559 14 U.S. 542, 553 (2010). 15 The present case involved an unexpected amount of time and labor. Plaintiff’s counsel 16 accepted representation of this class action alleging violations of state and federal labor law more 17 than three years ago. Despite the potential that the class would not be certified and the contingent 18 nature of success, counsel diligently and skillfully prosecuted this action. Even though the action 19 did not present novel or difficult questions of law, it nevertheless presented a difficult 20 circumstance: a corporate defendant that willfully refused to participate in the litigation process. 21 Counsel attended several conferences to resolve discovery disputes, (ECF Nos. 87, 92, 120), and 22 filed several motions to compel discovery, (ECF Nos. 102, 123). Furthermore, opposing counsel 23 withdrew from the action, (ECF No. 126), and the corporate representative made clear that he did 24 not intend to defend this action, did not intend to obtain new counsel, and did not believe the 25 corporation had finances to continue its business operations, (ECF Nos. 118-1 at 5). These 26 litigation risks, combined with the low likelihood for actual recovery, made this class action 27 undesirable and unsustainable. Plaintiffs were forced to abandon their class claims. Nevertheless, 28 under the circumstances, counsel continued to professionally litigate the case to obtain the best 22 1 results he could for his named plaintiffs. Therefore, because the lodestar is unreasonably low in 2 light of the time spent on and the issues that arose in this action, the Court will adjust the lodestar 3 upward using a 1.33 multiplier. Accordingly, this Court recommends that Plaintiff’s request for attorneys’ fees be granted in 4 5 the amount of $56,072.80. 6 III. 7 CONCLUSIONS AND RECOMMENDATIONS Based on the foregoing, IT IS HEREBY RECOMMENDED that: 8 1. Plaintiffs’ motion to dismiss all class claims be GRANTED; 9 2. Plaintiffs’ motion for default judgment against Furniture Deals, Inc. dba Ramos 10 Furniture and Dimas Manual, Inc. on the individual claims be GRANTED; 11 3. Judgment be entered as follows: 12 a. Plaintiff Rosalba Maldonado be awarded damages and interest thereon in 13 the amount of $17,546.04; 14 b. Plaintiff Marisol Topete be awarded damages and interest thereon in the 15 amount of $22,890.91; 16 c. Plaintiffs be awarded costs in the amount of $8,511.37; and 17 d. 18 Plaintiffs be awarded attorney’s fees in the amount of $56,072.80; and 4. The Clerk of the Court be directed to CLOSE this case. 19 These findings and recommendations are submitted to the United States District Judge 20 assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen (14) 21 days after being served with these findings and recommendations, the parties may file written 22 objections with the Court. Such a document should be captioned “Objections to Magistrate Judge’s 23 Findings and Recommendations.” 24 \\\ 25 \\\ 26 \\\ 27 \\\ 28 \\\ 23 1 Failure to file objections within the specified time may result in the waiver of rights on 2 appeal. Wilkerson v. Wheeler, 772 F.3d 834, 838-39 (9th Cir. 2014) (citing Baxter v. Sullivan, 3 923 F.2d 1391, 1394 (9th Cir. 1991)). 4 5 6 7 IT IS SO ORDERED. Dated: August 20, 2018 /s/ UNITED STATES MAGISTRATE JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24
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