Bernstein et al v. Virgin America, Inc. et al, No. 4:2015cv02277 - Document 487 (N.D. Cal. 2023)
Court Description: ORDER GRANTING PLAINTIFFS' UNOPPOSED MOTION TO APPROVE THE PLAN OF ALLOCATION, ATTORNEY'S FEES AND EXPENSES, AND SERVICE AWARDS TO CLASS REPRESENTATIVES by Judge Jon S. Tigar granting in part and denying in part 478 Motion for Attorney Fees.(mll, COURT STAFF) (Filed on 11/3/2023)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JULIA BERNSTEIN, et al., Plaintiffs, 8 v. 9 10 VIRGIN AMERICA, INC., et al., Defendants. 11 United States District Court Northern District of California Case No. 15-cv-02277-JST ORDER GRANTING PLAINTIFFS’ UNOPPOSED MOTION TO APPROVE THE PLAN OF ALLOCATION, ATTORNEY’S FEES AND EXPENSES, AND SERVICE AWARDS TO CLASS REPRESENTATIVES Re: ECF No. 478 12 13 Before the Court is Plaintiffs’ unopposed motion to approve the plan of allocation, 14 attorney’s fees and expenses, and service awards. The factual and procedural background to this 15 case is well known to the parties and is set forth in greater detail in several of this Court’s prior 16 orders. See, e.g., ECF No. 456; ECF No. 121. On January 24, 2023, the Court entered an 17 amended judgment in the amount of $30,976,831.87. After the addition of prejudgment and post- 18 judgment interest, the total judgment is now $31,637,391.85 (“Common Fund Judgment”). ECF 19 No. 468 ¶ 15. The parties subsequently reached an agreement with respect to an award of 20 statutory fees. See id. ¶ 9. Plaintiffs filed the instant motion on May 18, 2023. The Court held a 21 hearing on the motion on August 17, 2023. The Court will now grant the motion. 22 A. 23 “[T]he plan of distribution in [an] adjudicated class action is subject to the same standards Plan of Allocation 24 that apply to the allocation of a class settlement fund, i.e., ‘the distribution plan must be fair, 25 reasonable and adequate.’” Rodman v. Safeway Inc., No. 11-CV-03003-JST, 2018 WL 4030558, 26 at *2 (N.D. Cal. Aug. 23, 2018) (quoting In re Citric Acid Antitrust Litig., 145 F. Supp. 2d 1152, 27 1154 (N.D. Cal. 2001)). “A plan of allocation that reimburses class members based on the type 28 and extent of their injuries is generally reasonable.” Id. United States District Court Northern District of California 1 Plaintiffs’ Plan of Allocation will reimburse class members based on the extent of their 2 injuries. The Plan provides that each class member shall receive their pro rata share of the “Net 3 Distribution Amount”—the Common Fund Judgment less attorney’s fees, costs, service awards, 4 and the amount payable to the California Labor & Workforce Development Agency (“LWDA”)— 5 based upon that class member’s payroll data. ECF No. 469-1 ¶ 1.3.1; ECF No. 470 ¶ 13. Once 6 the class administrator calculates the amount distributable to each class member and notifies class 7 members of their respective amounts, class members will have 75 days to submit additional 8 information or documentation to the class administrator to challenge that calculation. ECF No. 9 469-1 ¶ 1.3.2. The Plan further provides that the class administrator will issue checks to class 10 members that will remain valid for 120 days and that, after 90 days, the class administrator will 11 attempt to contact all class members that have not cashed their checks. Id. ¶¶ 1.3.2, 1.4. 12 The Plan also calls for unclaimed funds to be distributed to Legal Aid at Work as a cy pres 13 beneficiary. See id. ¶ 1.7. There is a clear “driving nexus between the plaintiff class and the cy 14 pres beneficiar[y],” as the plaintiff class comprises aggrieved employees who were denied wages 15 owed, and Legal Aid at Work provides legal assistance to workers and working families. Dennis 16 v. Kellogg Co., 679 F.3d 858, 865 (9th Cir. 2012) (quoting Nachshin v. AOL, LLC, 663 F.3d 1034, 17 1038 (9th Cir. 2011)). Accordingly, the cy pres award is “guided by the objectives of the 18 underlying” California labor laws and “the interests of the silent class members,” id. at 865 19 (quoting Nachshin, 663 F.3d at 1034), and it does not “benefit a group ‘too remote from the 20 plaintiff class,’” id. (quoting Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 21 1308 (9th Cir. 1990)). 22 23 For these reasons, the Court concludes that the Plan of Allocation is fair, reasonable, and adequate and approves the Plan. Attorney’s Fees 24 B. 25 “Calculation of attorney’s fees awards in cases brought under state law is a substantive 26 matter to which state law applies.” Rodriguez v. Cnty. of Los Angeles, 891 F.3d 776, 809 (9th Cir. 27 2018). This case “is a ‘hybrid’ class action” insofar as “it was initiated under a statute with a fee- 28 shifting provision, but it reached a judgment creating a common fund.” Ridgeway v. Wal-Mart 2 United States District Court Northern District of California 1 Stores Inc., 269 F. Supp. 3d 975, 982–83 (N.D. Cal. 2017) (quoting Sobel v. Hertz Corp., 53 F. 2 Supp. 3d 1319, 1324 (D. Nev. 2014)). “In such instances, California courts permit plaintiffs to 3 seek both attorneys’ fees both under the fee-shifting law and through the common fund.” Id.; see 4 In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011) (“The award of 5 attorneys’ fees in a class action settlement is often justified by the common fund or statutory fee- 6 shifting exceptions to the American Rule, and sometimes by both.”). In California, “regardless 7 whether the percentage method or the lodestar method is used, fee awards in class actions average 8 around one-third of the recovery.” In re Consumer Privacy Cases, 176 Cal. App. 4th 545, 558 9 (2009) (quoting Chavez v. Netflix, Inc., 162 Cal. App. 4th 43, 66 n.11 (2008)). And “while the 10 California Supreme Court recognized the Ninth Circuit’s 25% benchmark for percentage awards 11 in common fund cases, it did not adopt such a benchmark for California cases.” Ridgeway, 269 F. 12 Supp. 3d at 999. Courts consider “the risks and . . . value of the litigation” as a function of 13 “contingency, novelty, and difficulty,” as well as “the skill shown by counsel, the number of hours 14 worked[,] and the asserted hourly rates.” Lafitte v. Robert Half Int’l Inc., 1 Cal. 5th 480, 504 15 (2016). 16 Plaintiffs seek attorney’s fees in the amount of $10,441,409, which equals 33% of the 17 Common Fund Judgment. ECF No. 469 ¶ 10. However, Defendants have agreed to pay 18 $6,395,874.95 in statutory fees, id., to which Plaintiffs are entitled under Sections 218.5, 1194, 19 and 2699(g)(1) of the California Labor Code, and under Section 1021.5 of the California Code of 20 Civil Procedure. See MacDonald v. Ford Motor Co., 142 F. Supp. 3d 884, 895 (N.D. Cal. 2015). 21 That $6,395,874.95 payment will be credited against the $10,441,409 fee request such that only 22 $4,045,534.49 will be paid from the $31,637,391.85 Common Fund Judgment. ECF No. 469 ¶ 10. 23 Plaintiffs thus functionally seek a fee payment of 12.8% of the Common Fund Judgment. 24 The Court finds the fee award to be reasonable under the circumstances. Plaintiffs’ 25 counsel litigated this case through to judgment over a span of nearly eight years. The case itself 26 concerned complex and novel questions of law, see generally Bernstein v. Virgin Am., Inc., 3 27 F.4th 1127 (9th Cir. 2021), one of which was undecided by the California Supreme Court until 28 after the parties litigated the case through summary judgment, see ECF No. 456 at 3 (noting that, 3 United States District Court Northern District of California 1 in partially reversing this Court’s grant of summary judgment, the Ninth Circuit “rel[ied] on a 2 California Supreme Court decision issued while [Defendants’] appeal was pending”), and another 3 of which the California Supreme Court has not decided at all, see Bernstein, 3 F.4th 1133 4 (“[T]here is no California Supreme Court case specifically interpreting the reach of the waiting 5 time penalties statute for interstate employers . . . .”). This difficulty was exacerbated by the 6 heavily contested nature of the proceedings in this case, which included motions for class 7 certification, class decertification, reconsideration, sanctions, summary judgment, judgment, as 8 well as an appeal to the Ninth Circuit, a petition for a writ of certiorari to the Supreme Court, and a 9 motion to amend the judgment. Prior defense counsel sometimes persisted in repeating arguments 10 that the Court had previously rejected, unnecessarily prolonging the proceedings. Throughout 11 these proceedings, Plaintiffs’ counsel demonstrated commendable skill, largely prevailing at each 12 juncture and eventually securing a sizable judgment of $31,637,391.85. That judgment represents 13 100% of the losses incurred by 1,869 class members as to the successful claims. ECF No. 469 ¶¶ 14 11, 26. Counsel also represented Plaintiffs “on a purely contingent basis,” id. ¶ 85, and thus 15 expended over 7300 hours of attorney time at the risk of obtaining no compensation for their 16 efforts, see ECF No. 469-2 at 2. The value of this litigation in relation to the substantial risks 17 undertaken by counsel justify an award in the amount requested, particularly given that class 18 members will pay only part of the fees, functionally representing 12.8% of the Common Fund 19 Judgment. 20 The reasonableness of the award is confirmed by counsel’s lodestar. See Vizcaino v. 21 Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002) (“Calculation of the lodestar . . . provides a 22 check on the reasonableness of the percentage award.”). Courts frequently award “[m]ultiples 23 ranging from one to four . . . in common fund cases when the lodestar method is applied.” 24 Vizcaino, 290 F.3d at 1052 n.6 (quoting In re Prudential Ins. Co. Am. Sales Practice Litig. Agent 25 Actions, 148 F.3d 283, 341 (3d Cir. 1998)). California courts consider the following factors in 26 determining the appropriate multiplier: “(1) the novelty and difficulty of the questions involved, 27 (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation 28 precluded other employment by the attorneys, (4) the contingent nature of the fee award.” 4 United States District Court Northern District of California 1 Ketchum v. Moses, 24 Cal. 4th 1122, 1132 (2001). Here, counsel’s lodestar is $5,844,319.50, see 2 ECF No. 469-2, and counsel’s hours are sufficiently documented, see id.; ECF No. 469-3; see also 3 Ridgeway, 269 F. Supp. 3d at 987 (“California courts have . . . approved fee awards based on 4 declarations describing the hours worked on various tasks, without providing underlying time 5 records of the hours worked and the type of work performed.”). Counsel’s requested fee award of 6 $10,441,409 produces a lodestar multiplier of 1.79, which is appropriate for the reasons discussed 7 above. The Court therefore approves counsel’s fee request. 8 C. Expenses 9 “[C]ourts throughout the Ninth Circuit regularly award litigation costs and expenses— 10 including photocopying, printing, postage, court costs, research on online databases, experts and 11 consultants, and reasonable travel expenses.” Thomas v. MagnaChip Semiconductor Corp., No. 12 14-cv-01160-JST, 2018 WL 2234598, at *4 (N.D. Cal. May 15, 2018) (quoting Destefano v. 13 Zynga, Inc., No. 12-cv-04007-JSC, 2016 WL 537946, at *22 (N.D. Cal. Feb. 11, 2016)). To 14 support an award of costs and expenses, Plaintiffs should file an itemized list of their expenses by 15 category, listing the total amount advanced for each category, allowing the Court to assess whether 16 the expenses are reasonable. Wren v. RGIS Inventory Specialists, No. 06-cv-05778-JCS, 2011 WL 17 1230826, at *29–30 (N.D. Cal. Apr. 1, 2011), supplemented, No. 06-cv-05778-JCS, 2011 WL 18 1838562 (N.D. Cal. May 13, 2011). 19 Counsel requests $575,293.38 in litigation expenses to be paid from the Common Fund 20 Judgment. Plaintiffs support that request with an itemized list of expenses and copies of receipts, 21 all of which detail expenses incurred in relation to this litigation. See ECF Nos. 469-4 & 469-5. 22 Plaintiffs will also receive $40,000 from Defendants as reimbursement for costs recoverable under 23 the applicable statutes. ECF No. 469 ¶ 4. The Court finds counsel’s expenses reasonable and 24 grants the request. 25 D. 26 Counsel requests that the Court approve service awards to Class Representatives Julia Service Awards 27 Bernstein, Esther Garcia, and Lisa Marie Smith in the amount of $25,000 each, or 0.001% of the 28 Common Fund Judgment. “Such awards are discretionary and are intended to compensate class 5 1 representatives for work done on behalf of the class, to make up for financial or reputational risk 2 undertaken in bringing the action, and, sometimes, to recognize their willingness to act as private 3 attorney general.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2009) (internal 4 citation omitted). The Court should consider: (1) the actions the plaintiff has taken to protect the interests of the class; (2) the degree to which the class has benefitted from those actions; (3) the duration of the litigation and the amount of time and effort the plaintiff expended in purs[u]ing it; and (4) the risks to the plaintiff in commencing the litigation, including reasonable fears of workplace retaliation, personal difficulties, and financial risks. 5 6 7 8 United States District Court Northern District of California 9 Wren, 2011 WL 1230826, at *32 (N.D. Cal. Apr. 1, 2011). “[C]ourts must be vigilant in 10 scrutinizing all incentive awards to determine whether they destroy the adequacy of the class 11 representatives.” Radcliffe v. Experian Info. Sols., Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). In this district, an incentive award of $5,000 “is presumptively reasonable.”1 Harris v. 12 13 Vector Mktg. Corp., No. C-08-5198 EMC, 2012 WL 381202, at *7 (N.D. Cal. Feb. 6, 2012). A 14 $25,000 service award significantly “exceeds the typical incentive award in the Ninth Circuit[.]” 15 Louangamath v. Spectranetics Corp., No. 18-cv-03634-JST, 2023 WL 3579319, at *1 (N.D. Cal. 16 Feb. 16, 2023) (collecting cases). “Courts will, however, grant an award that exceeds $5000 when 17 it is warranted.” Id. at *2 (collecting cases); see Coates v. Farmers Group, Inc., No. 15-CV- 18 01913-LHK, 2016 WL 5791413, at *2 (N.D. Cal. Sept. 30, 2016) ([T]he request for service 19 awards . . . in the amount of $25,000 each is reasonable given the risks these Plaintiffs assumed 20 and the amount of time they spent in conjunction with prosecuting this case”). For example, in In 21 re: High-tech Employer Antitrust Litigation, No. 11-cv-2509-LHK, 2014 WL 10520478, at *2–3 22 (N.D. Cal. May 16, 2014), the court granted a $20,000 service award to each of six class 23 representatives from a $20,000,000 settlement fund, or 0.1% of the fund. The court reasoned that 24 “the Class Representatives have expended substantial time and effort pursuing this litigation, and 25 26 27 28 1 At some point, the common law will have to reckon with inflation. $5,000 in February 2012, when the Harris decision was issued, had the same buying power as $6,790 has today. Bureau of Labor Stat., CPI Inflation Calculator, https://www.bls.gov/data/inflation_calculator.htm (measured as of September 2023). Because the Court approves incentive awards that greatly exceed the presumptive amount, it does not address the question of inflation further. 6 1 in doing so have protected the interest in the class”; that “the Class has benefitted from the efforts 2 of the Class Representatives” who “face some risk of retaliation, particularly in the employment 3 context”; and that “[e]ach Class Representative expressed a fear that other . . . companies or 4 clients might not want to work with them in the future due to their role in this case.” Id. United States District Court Northern District of California 5 Here, similar considerations favor an award in excess of $5,000 for each of the three Class 6 Representatives. The Class Representatives have expended substantial time and effort pursuing 7 this litigation over a span of nearly eight years. They worked with counsel to pull documents, 8 gather case-related information, respond to discovery, attend phone and in-person meetings, 9 discuss strategy, attend mediation and other court proceedings, attend their depositions, read case- 10 related filings, and communicate with class members about the status of the case. ECF No. 471 ¶¶ 11 7, 10; ECF No. 472 ECF No. 473 ¶¶ 8, 11; ECF No. 472 ¶ 11, 14. In connection with this case, 12 Bernstein spent approximately 150 hours, ECF No. 473 ¶ 11, Garcia spent approximately 130 13 hours, ECF No. 471 ¶ 10, and Smith spent over 500 hours, ECF No. 472 ¶ 4. The Class 14 Representatives’ efforts have also benefitted a class of approximately 1,869 members, ECF No. 15 469 ¶ 26, and resulted in a sizable judgment of $31,637,391.85, which represents 100% of the 16 losses incurred by class members as to the successful claims, id. ¶ 11. The average pro rata 17 distribution of that judgment is approximately $8,900, and 20% of the class will receive 18 distributions that exceed $15,000. ECF No. 486 at 4. 19 Further, the Class Representatives also face a risk of retaliation as employees in the airline 20 industry. Smith, for example, is still employed by Defendant Alaska Airlines, Inc. (“Alaska”). 21 ECF No. 472 ¶ 6. After the amended complaint listing Smith’s name was filed, Alaska began to 22 investigate Smith for uniform violations and performance concerns. Id. Smith additionally 23 expressed a fear of losing her job because of her active participation in this litigation. Id. Finally, 24 the Class Representatives’ willingness to act as private attorneys general warrants recognition. 25 The judgment secures more than $12 million in civil penalties under the Private Attorneys General 26 Act of 2004, Cal. Lab. Code § 2699 et seq., 75% of which will be paid to the LDWA. 27 28 However, courts adjust the amount of service awards “commensurate with the time they each expended” in connection with the litigation. Wren, 2011 WL 1230826, at *35. Smith’s 500 7 1 hours far exceeds Bernstein’s 150 hours and Garcia’s 130 hours. Additionally, Bernstein and 2 Garcia did not express similar fears of retaliation as did Smith. Accordingly, the Court approves 3 service awards of $25,000 for Smith, $12,000 for Bernstein, and $12,000 for Garcia. CONCLUSION 4 5 6 7 8 9 10 For the foregoing reasons, Plaintiffs’ motion is granted in part and denied in part for the reasons set forth above. IT IS SO ORDERED. Dated: November 3, 2023 ______________________________________ JON S. TIGAR United States District Judge United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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