Chinitz v. Intero Real Estate Services, No. 5:2018cv05623 - Document 305 (N.D. Cal. 2022)
Court Description: ORDER GRANTING 294 MOTION FOR FINAL APPROVAL AND GRANTING 289 MOTION FOR AWARD OF ATTORNEYS' FEES AND COSTS AND SERVICE AWARDS. Signed by Judge Beth Labson Freeman on 10/28/2022. (blflc2, COURT STAFF) (Filed on 10/28/2022)
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 RONALD CHINITZ, et al., Plaintiffs, 8 v. United States District Court Northern District of California 9 10 INTERO REAL ESTATE SERVICES, 11 Defendant. 13 15 ORDER GRANTING MOTION FOR FINAL APPROVAL AND GRANTING MOTION FOR AWARD OF ATTORNEYS’ FEES AND COSTS AND SERVICE AWARDS [Re: ECF Nos. 294, 289] 12 14 Case No. 18-cv-05623-BLF Before the Court are (1) Plaintiffs’ Motion for Final Approval of Class Action Settlement (“Final Approval Motion”) and (2) Plaintiffs’ Motion for an Award of Attorneys’ Fees and Costs and Service Awards (“Fees Motion”). See ECF Nos. 294, 289. Three opt-outs have been filed 16 and there are no objectors. The Court held a hearing on the motions on October 20, 2022. For the 17 reasons stated on the record and explained below, the Court GRANTS both motions. 18 19 I. BACKGROUND On September 13, 2018, former named plaintiff Ronald Chinitz initiated a class action 20 lawsuit alleging Intero violated the Telephone Consumer Protection Act, 47 U.S.C. § 227 21 22 (“TCPA”), and its implementing regulations, 47 C.F.R. § 64.1200, as well as California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200-17210 (“UCL”). ECF No. 1. Chinitz alleged 23 he received, inter alia, unwanted telephone solicitations on behalf of Intero to residential telephone 24 lines he had previously registered on the National Do Not Call (“DNC”) Registry and repeated 25 unwanted telemarketing calls on his residential telephone lines after he had asked Intero and/or its 26 agents not to call him back. The Court certified the National DNC Class and the Internal DNC 27 Class (the latter as to injunctive relief only). ECF No. 126 at 27. Chinitz sought approval of a 28 1 class notice plan for the National DNC Class, ECF No. 131, which the Court approved in part, 2 ECF No. 151. United States District Court Northern District of California 3 Plaintiffs moved for partial summary judgment and Intero moved for summary judgment. 4 ECF Nos. 157, 159. In March 2021, Plaintiffs filed a motion to amend the scheduling order, 5 amend the Complaint, and substitute the class representative (“Motion to Substitute”) because 6 Chinitz, unbeknownst to Class Counsel, had attempted to negotiate a settlement directly with 7 Intero. See ECF No. 178-1. On April 12, 2021, the Court granted in part and denied in part the 8 certified class’s motion for partial summary judgment, holding Intero “vicariously liable for calls 9 made by its corporate sales associates and agents based on apparent authority.” ECF No. 191 at 8. 10 The Court denied Intero’s summary judgment motion, except as to the UCL claim. Id. at 13-16. 11 The Court granted the Motion to Substitute, ECF No. 210, and Plaintiffs filed a First Amended 12 Complaint adding allegations specific to Mitchell and Kelly, ECF No. 211. Intero moved to 13 dismiss, ECF No. 217, and the Court dismissed the UCL claim, ECF No. 221. Intero filed an 14 amended answer. ECF No. 226. 15 Meanwhile, on April 1, 2021, the Court referred the parties to Chief United States 16 Magistrate Judge Joseph C. Spero for settlement discussions. ECF No. 186. On April 13, 2021, 17 based on Intero’s professed limited ability to pay any judgment secured at trial, Chief Magistrate 18 Judge Spero ordered Intero to produce to Plaintiffs various financial documents. See ECF Nos. 19 192-193. In advance of the settlement conference, Intero provided to Class Counsel various 20 documents, and Class Counsel hired a forensic accounting expert to examine the financials. ECF 21 Nos. 289-2 (“Soneji Decl.”) ¶ 21, 289-3 (“Reese Decl.”) ¶ 32. The parties participated in Zoom 22 settlement conferences before Chief Magistrate Judge Spero in July and September 2021. See 23 ECF Nos. 232, 261. Chief Magistrate Judge Spero scheduled an additional 2.5-hour settlement 24 conference on September 22, 2021, at which the parties reached agreement in principle on the 25 terms of a settlement of the entire case. See ECF Nos. 265, 267. They then negotiated the precise 26 terms of the Settlement Agreement, which was executed on October 27, 2021. Soneji Decl. ¶ 26; 27 Reese Decl. ¶¶ 33-35. 28 Plaintiffs filed their Motion for Preliminary Approval on October 29, 2021. See ECF Nos. 2 1 277, 279. The Parties did not discuss fees and expenses until after agreement on the terms of the 2 settlement for the class. Soneji Decl. ¶ 25; Reese Decl. ¶ 34. This Court held a hearing on the 3 Motion for Preliminary Approval on April 7, 2022 and entered an order granting preliminary 4 approval the same day. See ECF No. 285 (“Preliminary Approval Order”). 5 6 7 8 9 10 United States District Court Northern District of California 11 12 The Settlement Class is defined as: All persons in the United States who: (a) received two or more calls on their residential telephone number; (b) that had a duration of more than zero seconds; (c) initiated by, or on behalf of, a real estate salesperson at a time when Intero or Intero Referral Services was the salesperson’s responsible broker (as reflected in the records maintained by the California Department of Real Estate (‘DRE’)); (d) promoting the purchase of Intero’s goods or services; (e) placed through the dialing platform provided by Mojo Dialing Solutions, LLC, the call records for which appear in one of 35 account files, identified in Appendix A to the Court’s order granting class certification in the Litigation; (f) within a 12-month period; (g) whose telephone number(s) were on the NDNCR for at least 31 days prior to the calls; and (h) at any time since September 13, 2014. 13 Excluded from the Settlement Class are: “(a) Intero; (b) any entity in which Intero has a 14 controlling interest; (c) Intero’s officers, directors, legal representatives, successors, subsidiaries, 15 and assigns; (d) any judicial officer presiding over this matter, as well as members of their 16 immediate family and members of their judicial staff; and (e) any judge sitting in the presiding 17 court system who may hear an appeal of any judgment entered.” Preliminary Approval Order ¶ 5; 18 see also ECF No. 277-2 Ex. A (“Settlement”) §§ 2.43, 2.44, 3.1, 14.2. Any class member who 19 submits a timely, valid Approved Claim will receive a payment of $350. Settlement §§ 4.1.1, 7.3. 20 The Settlement Agreement also provides injunctive relief, including development and 21 implementation of procedures to ensure compliance with the TCPA’s do-not-call provisions and 22 training for Intero representatives. Settlement §§ 4.2-4.3. 23 After preliminary approval, the parties provided Notice of the Settlement in accordance 24 with the Settlement Agreement and Preliminary Approval Order. See ECF No. 294-3 (“Admin. 25 Decl.”) ¶¶ 2-14. The Settlement Class is comprised of all individuals who used a total of 37,962 26 unique telephone numbers over an approximately 7.5-year period. Settlement § 3.1. Thus, the 27 precise number of individuals in the Settlement Class is unknown. The contact information for 28 Settlement Class Members was generated using the list of 37,962 telephone numbers, which Intero 3 1 provided to the Settlement Administrator (“KCC”). Admin. Decl. ¶ 2. Because the list included 2 multiple “hits” for each phone number where applicable, the contact list for notice purposes was 3 much larger. See id. To disseminate the notice, KCC carried out the terms of the Settlement 4 Agreement. See id. ¶¶ 2-13. United States District Court Northern District of California 5 The deadline to submit claims, objections, and requests for exclusion was July 6, 2022. 6 Admin. Decl. ¶¶ 14, 17, 18. As of July 26, 2022, KCC had received 11,119 Claim Forms. Id. ¶ 7 14. Upon notice from KCC that it had deemed 1,922 of these claims late—around 17% of the 8 total claims received—the Parties met and conferred regarding acceptance of claims received by 9 KCC after the deadline. ECF No. 294-2 (“Granade Decl.”) ¶ 13. The Parties ultimately agreed 10 that all claims that had been signed by the claims deadline would be deemed valid, so long as they 11 had been postmarked by July 11, 2022, or, if not postmarked, received by KCC by July 14, 2022. 12 Id. Under this agreement, 1,275 additional claims were deemed timely. See ECF No. 301-1 13 (“Supp. Admin. Decl.”) ¶ 11. As to requests for exclusion and objections, KCC received three 14 requests for exclusion and no objections. Admin. Decl. ¶¶ 17-18. 15 KCC requested supplemental information from claimants where multiple claimants 16 submitted claims on the same telephone number, as contemplated by the Settlement Agreement. 17 Admin. Decl. ¶ 16; Settlement Agreement § 7.3. Plaintiffs moved the Court for supplemental 18 notice to these claimants, ECF No. 298, which Defendant opposed, ECF No. 299, and the Court 19 granted, ECF No. 303. 20 Plaintiffs moved for final approval on August 19, 2022. See Final Approval Motion. On 21 October 19, 2022, Plaintiffs filed a supplemental declaration from the Settlement Administrator. 22 See Supp. Admin. Decl. 23 Plaintiffs seeks (1) final approval of the proposed class action settlement; (2) approval of 24 Class Counsel’s application for $2,775,000 in attorneys’ fees and costs; and (3) approval of 25 Named Plaintiffs’ request for service awards of $5,000 each. See Final Approval Motion at 2; 26 Fees Motion at 1. The Court heard Plaintiffs’ motions on October 20, 2022. 27 28 4 1 2 II. MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT A. Rule 23 Certification Requirements In order to grant final approval of the class action settlement, the Court must determine 3 that (a) the class meets the requirements for certification under Federal Rule of Civil Procedure 23, 4 and (b) the settlement reached on behalf of the class is fair, reasonable, and adequate. See Staton 5 v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). 6 1. The Class Meets the Requirements for Certification Under Rule 23 7 A class action is maintainable only if it meets the four requirements of Rule 23(a): 8 (1) the class is so numerous that joinder of all members is impracticable; 10 (2) there are questions of law or fact common to the class; 11 (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. United States District Court Northern District of California 9 12 13 14 Fed. R. Civ. P. 23(a). In a settlement-only certification context, the “specifications of the Rule— 15 those designed to protect absentees by blocking unwarranted or overbroad class definitions— 16 demand undiluted, even heightened, attention.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 17 620 (1997). 18 In addition to satisfying the Rule 23(a) requirements, “parties seeking class certification 19 must show that the action is maintainable under Rule 23(b)(1), (2), or (3).” Amchem, 521 U.S. at 20 614. Plaintiffs seek certification under Rule 23(b)(3), which requires that (1) “questions of law or 21 fact common to class members predominate over any questions affecting only individual 22 members” and (2) “a class action is superior to other available methods for fairly and efficiently 23 adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). 24 The Court previously granted class certification in this case for a class that is quite similar 25 to the Settlement Class. See ECF No. 126. Since the Court granted class certification, the parties 26 stipulated to amend the class definition. See ECF No. 284. The Court certified the following 27 National DNC Class: “All persons in the United States who: (a) received more than one call made 28 on behalf of Intero by, or on behalf of, one of Intero’s California sales associates; (b) promoting 5 1 Intero’s goods or services; (c) that was placed through the dialing platform provided by Mojo 2 Dialing Solutions, Inc., the calling records for which appear in one of 35 account files, identified 3 in Appendix A; (d) in a 12-month period; (e) on their non-business telephone lines; (f) whose 4 telephone number(s) were on the NDNCR for at least 31 days; (g) at any time since September 13, 5 2014.” ECF No. 126. The parties stipulated to amend the class definition as follows: 6 7 8 9 10 United States District Court Northern District of California 11 12 All persons in the United States who: (a) received two or more calls on their residential telephone number (b) that had a duration of more than zero seconds; (c) initiated by, or on behalf of, a real estate salesperson at a time when Intero or Intero Referral Services was the salesperson’s responsible broker (as reflected in the records maintained by the California Department of Real Estate (“DRE”)); (d) promoting the purchase of Intero’s goods or services; (e) placed through the dialing platform provided by Mojo Dialing Solutions, LLC, the call records for which appear in one of 35 account files, identified in Appendix A to the Court’s order granting class certification in the Litigation; (f) within a 12-month period; (g) whose telephone number(s) were on the NDNCR for at least 31 days prior to the calls; and (h) at any time since September 13, 2014. 13 ECF No. 284. The amendment does not change the Court’s analysis in the class certification 14 order. Further, the Court is not aware of any facts that undermine the Court’s conclusion in 15 certifying the class, either in the class certification order or the preliminary approval order. But 16 the Court reviews briefly each of the Rule 23 requirements again. 17 Under Rule 23(a), the Court concludes that joinder of thousands class members would be 18 impracticable under the circumstances of this case. See Arroyo v. Int’l Paper Co., No. 17-cv- 19 06211-BLF, 2019 WL 1508457, at *2 (N.D. Cal. Apr. 4, 2019) (“Numerosity is presumed where 20 the plaintiff class contains forty or more members.”). The commonality requirement is met 21 because the key issue in the case is the same for all class members—whether Intero made phone 22 calls in violation of the TCPA. Named Plaintiffs’ claims are typical of those of the Settlement 23 Class, as they suffered the same injury from the same course of conduct. See Hanlon v. Chrysler 24 Corp., 150 F.3d 1011, 1020 (9th Cir. 1998) (typicality requires that the claims of the class 25 representative are “reasonably co-extensive with those of absent class members”). Finally, to 26 determine Plaintiffs’ adequacy, the Court must answer two questions: “(1) do the named plaintiffs 27 and their counsel have any conflicts of interest with other class members and (2) will the named 28 plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” Ellis v. Costco 6 1 Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011) (quoting Hanlon, 150 F.3d at 1020). There is 2 no evidence of any conflict of interest that would preclude Mitchell and Kelly from acting as class 3 representatives or their counsel from acting as Class Counsel, and the Court is not concerned that 4 Class Counsel has not vigorously litigated this action on behalf of the class. United States District Court Northern District of California 5 Now turning to Rule 23(b)(3), the “predominance inquiry tests whether proposed classes 6 are sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 623. 7 The common question in this case—whether Defendant violated the TCPA—predominates over 8 individual questions among the class members. Further, the damages are the same for each class 9 member. See Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013). And a class action is the 10 superior method of adjudication given the small individual recovery and its manageability. See 11 Leyva v. Medline Indus. Inc., 716 F.3d 510, 515 (9th Cir. 2013) (“In light of the small size of the 12 putative class members’ potential individual monetary recovery, class certification may be the 13 only feasible means for them to adjudicate their claims.”). 14 15 16 17 Accordingly, the Court concludes that the requirements of Rule 23 are met and thus that certification of the class for settlement purposes is appropriate. 2. The Settlement is Fundamentally Fair, Adequate, and Reasonable Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a 18 certified class . . . may be settled, voluntarily dismissed, or compromised only with the court’s 19 approval.” Fed. R. Civ. P. 23(e). “Adequate notice is critical to court approval of a class 20 settlement under Rule 23(e).” Hanlon, 150 F.3d at 1025. Moreover, “[a] district court’s approval 21 of a class-action settlement must be accompanied by a finding that the settlement is ‘fair, 22 reasonable, and adequate.’” Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012) (quoting 23 Fed. R. Civ. P. 23(e)). “[A] district court’s only role in reviewing the substance of that settlement 24 is to ensure that it is fair, adequate, and free from collusion.” Id. at 819 (internal quotation marks 25 and citation omitted). In making that determination, the district court is guided by an eight-factor 26 test articulated by the Ninth Circuit in Hanlon. Those factors include: 27 28 the strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and 7 1 2 the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement. Hanlon, 150 F.3d at 1026; see also Lane, 696 F.3d at 819 (discussing Hanlon factors). 3 4 a. Notice Was Adequate The Court previously approved Plaintiffs’ plan for providing notice to the class when it 5 granted preliminary approval of the class action settlement. Preliminary Approval Order ¶ 8. 6 Prior to granting preliminary approval, the Court carefully examined the proposed class notice and 7 notice plan, and determined that they complied with Federal Rule of Civil Procedure 23 and the 8 constitutional requirements of Due Process. See id. Plaintiffs now provide two declarations from 9 a Senior Project Manager at the Settlement Administrator explaining the implementation of the 10 plan. See Admin. Decl.; Supp. Admin. Decl. Based on those declarations, the Settlement 11 United States District Court Northern District of California Administrator complied with the notice plan, and it ultimately received 11,713 claims based on the 12 37,962 Settlement Class telephone numbers. See id. ¶ 2. Based on the implementation details of 13 14 the notice plan, the Court is satisfied that the Settlement Class has received the “best notice that is practicable under the circumstances.” Fed. R. Civ. P. 23(c)(2)(B). 15 16 b. Hanlon Factors The Court now turns to the Hanlon factors. Under the first and second factors, the court 17 considers (1) the strength of Plaintiffs’ case, weighing the likelihood of success on the merits and 18 the range of possible recovery; and (2) the risk, expense, complexity, and duration of further 19 litigation. See Hanlon, 150 F.3d at 1026. Plaintiffs recognize the risks in going to trial, such as 20 21 the possibility that a jury could decline to credit Plaintiffs’ evidence and expert. Further, a jury may choose to award less than $350 in damages per class member, and Intero’s ability to pay 22 could limit any final judgment. The complexities in this case are evident, as it has already been in 23 litigation for almost four years. Accordingly, Plaintiffs’ success was not assured, and significant 24 risk, expense, complexity, and time likely lay ahead if the parties did not settle. Therefore, the 25 Court finds that the first and second Hanlon factors favor settlement. 26 Under the third factor—the risk of maintaining class action status throughout the trial— 27 since the Court granted class certification, there was little risk related to maintaining class action 28 8 1 2 Fourth, the settlement recovery for the class members is substantial given the 3 circumstances of the case. Each class member who submits a claim will receive a payment of 4 $350. See Settlement Agreement §§ 4.1.1, 7.3. The Court finds this to be a significant payout, 5 particularly considering the scale of the alleged harm. 6 United States District Court Northern District of California status throughout the trial. See Hanlon, 150 F.3d at 1026. Under the fifth Hanlon factor, courts consider “the extent of discovery completed and the 7 stage of the proceedings.” Hanlon, 150 F.3d at 1026. In this case, settlement was reached after 8 years of litigation and substantial discovery, including depositions of Rule 30(b)(6) witnesses, 9 experts, and class members; production of records; and use of experts. Granade Decl. ¶ 5; Soneji 10 Decl. ¶ 6-10, 15, 29; Reese Decl. 25-27. The Court is satisfied that the parties were sufficiently 11 familiar with the issues in this case to have informed opinions regarding its strengths and 12 weaknesses under factor five. 13 The sixth Hanlon factor—the experience and views of counsel—favors approving the 14 settlement. See Hanlon, 150 F.3d at 1026. Class Counsel’s conclusion is that the Settlement is 15 fair and reasonable and in the best interest of the settlement class. Granade Decl. ¶ 11. Further, 16 Class Counsel has demonstrated their thorough understanding of the strengths and weaknesses of 17 this case and their extensive experience litigating prior employment class actions cases. See In re 18 Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1043 (N.D. Cal. 2008) (finding class counsel’s 19 recommendation in favor of settlement presumptively reasonable because counsel demonstrated 20 knowledge about the case and the type of litigation in general). 21 22 The seventh Hanlon factor is neutral, since there was no government participant in the case. See Hanlon, 150 F.3d at 1026. 23 Under the eighth Hanlon factor, the Court considers the “reaction of the class members to 24 the proposed settlement.” See Hanlon, 150 F.3d at 1026. While notice was given to thousands of 25 class members, no objections have been filed and there have only been three opt-outs from the 26 class. See Admin. Decl. ¶¶ 17-18. “A court may appropriately infer that a class action settlement 27 is fair, adequate, and reasonable when few class members object to it.” Knapp v. Art.com, Inc., 28 283 F. Supp. 3d 823, 834 (N.D. Cal. 2017) (quoting Larsen v. Trader Joe’s Co., No. 11-cv-051889 1 WHO, 2014 WL 3404531, at *5 (N.D. Cal. July 11, 2014)). 2 Based on those factors, and after considering the record as a whole guided by the Hanlon 3 factors, the Court finds that notice of the proposed settlement was adequate, the settlement is not 4 the result of collusion, and that the settlement is fair, adequate, and reasonable. * 5 MOTION FOR ATTORNEYS’ FEES AND COSTS AND SERVICE AWARDS III. Class Counsel seeks an award of $2,775,000 in attorneys’ fees and costs. See Fees Motion 8 9 10 United States District Court Northern District of California 11 12 * Plaintiffs’ Motion for Final Approval of Class Action Settlement is GRANTED. 6 7 * at 1. Further, Named Plaintiffs seek service awards of $5,000 each. See id. A. Attorney’s Fees and Costs 1. Legal Standard “While attorneys’ fees and costs may be awarded in a certified class action where so 13 authorized by law or the parties’ agreement, Fed. R. Civ. P. 23(h), courts have an independent 14 obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have 15 already agreed to an amount.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 16 (9th Cir. 2011). “In this circuit, there are two primary methods to calculate attorneys fees: the 17 lodestar method and the percentage-of-recovery method.” In re Online DVD-Rental Antitrust 18 Litig., 779 F.3d 934, 949 (9th Cir. 2015). “For claims-made settlements,” as here, “the lodestar 19 method is appropriate.” Norton v. LVNV Funding, LLC, No. 18-cv-05051-DMR, 2021 WL 20 3129568, at *11 (N.D. Cal. July 23, 2021). 21 Under the lodestar method, attorneys’ fees are “calculated by multiplying the number of 22 hours the prevailing party reasonably expended on the litigation (as supported by adequate 23 documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.” 24 Bluetooth, 654 F.3d at 941. This amount may be increased or decreased by a multiplier that 25 reflects factors such as “the quality of representation, the benefit obtained for the class, the 26 complexity and novelty of the issues presented, and the risk of nonpayment.” Id. at 941-42 27 (quoting Hanlon, 150 F.3d at 1029). 28 In claims-made settlements, a cross-check on the reasonableness of the attorneys’ fee 10 United States District Court Northern District of California 1 award can be done using the percentage-of-recovery method. See Online DVD-Rental, 779 F.3d at 2 949 (“One way that a court may demonstrate that its use of a particular method or the amount 3 awarded is reasonable is by conducting a cross-check using the other method.”). Under the 4 percentage-of-recovery method, the attorneys are awarded fees in the amount of a percentage of 5 the common fund recovered for the class. Bluetooth, 654 F.3d at 942. Courts applying this 6 method “typically calculate 25% of the fund as the benchmark for a reasonable fee award, 7 providing adequate explanation in the record of any special circumstances justifying a departure.” 8 Id. (internal quotation marks omitted). If there is no common fund, the Court uses a constructive 9 fund. The Court “may include settlement administration costs, litigation expenses, and the 10 allotment for attorneys’ fees in its valuation of a constructive fund for its percentage of recovery 11 cross-check analysis because this is the ‘total amount defendants were willing to spend to settle 12 the case.’” Theodore Broomfield v. Craft Brew All., Inc., No. 17-cv-01027-BLF, 2020 WL 13 1972505, at *16 (N.D. Cal. Feb. 5, 2020) (quoting In re Bluetooth, 654 F.3d at 945). Further, 14 “Ninth Circuit precedent requires courts to award class counsel fees based on the total benefits 15 being made available to class members rather than the actual amount that is ultimately claimed.” 16 Patel v. Trans Union, LLC, No. 14-CV-00522-LB, 2018 WL 1258194, at *6 (N.D. Cal. Mar. 11, 17 2018). If the settlement includes injunctive relief, there is a danger that the parties will 18 overestimate its value to inflate fees, so “courts must be particularly careful when ascribing value 19 to injunctive relief for purposes of determining attorneys’ fees, and avoid doing so altogether if the 20 value of the injunctive relief is not easily measurable.” Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 21 1035, 1055 (9th Cir. 2019). 22 An attorney is also entitled to “recover as part of the award of attorney’s fees those out-of- 23 pocket expenses that would normally be charged to a fee paying client.” Harris v. Marhoefer, 24 24 F.3d 16, 19 (9th Cir. 1994) (internal quotation marks and citations omitted). 25 2. Discussion 26 Class Counsel seeks an award of attorneys’ fees and costs totaling $2,775,000. Fee Motion 27 at 7-15. The costs total $349,695.56 and the fees total $2,425,304.44. Id. at 13. Based on 5,224.8 28 hours of work, there is a lodestar of $3,946,054.90, producing a negative multiplier of 0.62. Id. 11 1 2 Counsel’s itemized lists of costs and finds that all of the expenses were necessary to the 3 prosecution of this litigation. See Soneji Decl. ¶ 35, Ex. B; Reese Decl. ¶ 47, Ex. 2. 4 United States District Court Northern District of California The Court first approves the $349,695.56 in costs. The Court has reviewed Class The Court also finds the amount of attorneys’ fees to be reasonable and in line with rates 5 approved in this District for attorneys of similar skill and experience. A percentage of the 6 common fund cross-check supports the reasonableness of the fees requested. Class Counsel states 7 that the total lodestar from inception of this case through settlement is $3,946,054.90. See Fees 8 Motion at 7. The hourly rates charged by Class Counsel have been approved by multiple courts in 9 California as well as New York and Washington, D.C., which is where Class Counsel are located. 10 See Fees Motion at 7-10; Soneji Decl. ¶¶ 34-40; Reese Decl. ¶¶ 43-46. Further, the Court finds 11 the number of hours expended to be reasonable. See Fees Motion at 10-13, Soneji Decl. ¶¶ 34, 39, 12 Exs. A, C; Reese Decl. ¶ 42, Ex. 1. Using $3,946,054.90 as the lodestar results in a negative 13 multiplier of approximately 0.62 after subtracting costs and expenses from the total amount of fees 14 requested. See Fees Motion at 13-14. “A negative multiplier ‘strongly suggests the 15 reasonablenesss of [a] negotiated fee.’” Moreno v. Cap. Bldg. Maint. & Cleaning Servs., Inc., No. 16 19-cv-07087-DMR, 2021 WL 4133860, at *6 (N.D. Cal. Sept. 10, 2021) (quoting Rosado v. Ebay 17 Inc., No. 12-cv-04005-EJD, 2016 WL 3401987, at *8 (N.D. Cal. June 21, 2016)). The Court 18 considers this to be a reasonable multiplier, particularly in light of the significant effort Class 19 Counsel expended litigating this case. 20 The percentage-of-recovery cross-check also supports the reasonableness of the fee award. 21 See Fees Motion at 15. As a preliminary matter, the Court disagrees with the value of the 22 constructive fund calculated by Plaintiffs. See id. The Court calculates a constructive fund value 23 of approximately $11.4 million based on the following: (1) $170,000 in administration costs, see 24 ECF No. 277-3 ¶ 21; (2) $2,775,000 in attorneys’ fees and costs; (3) $3.5 million in cash value, 25 calculated based on the $350 cash payment being paid to those who submitted claims, see ECF 26 Supp. Admin. Decl. ¶ 2 (stating 11,713 claims received); and (4) $5 million as the value of 27 injunctive relief, based on an estimated 45,000 fewer calls, each valued at one-third of the $350 28 claim rate, see Final Approval Motion at 7 (estimating 45,000 fewer calls due to injunctive relief). 12 1 Using this total amount, the attorneys’ fees award (including costs) is 21% of the constructive 2 fund, which is below the 25% “benchmark” in this circuit. Bluetooth, 654 F.3d at 942. 3 Accordingly, the requested fee amount is reasonable. 4 B. 5 Named Plaintiffs Ruby Mitchell and Edward J. Kelly each seek a service award of $5,000. 6 See Fee Motion at 6-7. Incentive awards “are discretionary . . . and are intended to compensate 7 class representatives for work done on behalf of the class, to make up for financial or reputational 8 risk undertaken in bringing the action, and, sometimes, to recognize their willingness to act as a 9 private attorney general.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958-59 (9th Cir. 2009) 10 11 United States District Court Northern District of California Service Award (internal citation omitted). “Incentive awards typically range from $2,000 to $10,000.” Bellinghausen v. Tractor 12 Supply Co., 306 F.R.D. 245, 267 (N.D. Cal. 2015). The declaration of Plaintiffs’ attorney 13 describes the work they did for this case, including meeting with the attorneys, searching for and 14 providing documents, assisting with the drafting of pleadings and documents for the case, 15 reviewing pleadings and documents for the case, preparing for depositions, sitting for depositions, 16 joining a Settlement Conference with Chief Magistrate Judge Spero, and planning the logistics for 17 their anticipated trial appearances. Soneji Decl. ¶¶ 27-33. The work Plaintiffs describe in 18 connection with this case is typical for a named plaintiff. 19 The Court typically awards an enhancement award around $5,000. See Wong v. Arlo 20 Techs., Inc., No. 5:19-cv-00372-BLF, 2021 WL 1531171, at *12 (N.D. Cal. Apr. 19, 2021) 21 (“Service awards as high as $5,000 are presumptively reasonable in this judicial district.”). This 22 award is also consistent with other service awards for TCPA actions in California. See Cabiness 23 v. Ed. Fin. Sols., LLC, No. 16-cv-01109-JST, 2019 WL 1369929, at *8 (N.D. Cal. Mar. 26, 2019) 24 (approving $5,000 service award for named plaintiff in TCPA case); Vandervort v. Balboa Cap. 25 Corp., 8 F. Supp. 3d 1200, 1208 (C.D. Cal. 2014) (approving combined $10,000 service award in 26 TCPA case with two named plaintiffs). Accordingly, the Court approves a $5,000 service award 27 for both Mitchell and Kelly. 28 13 1 IV. ORDER For the foregoing reasons, IT IS HEREBY ORDERED that: 2 (1) Plaintiffs’ Motion for Final Approval of Class Action Settlement is GRANTED; (2) $2,775,000 in attorneys’ fees and costs for Class Counsel is APPROVED; (3) A service award for Mitchell and Kelly is APPROVED in the amount of $5,000 each; 3 4 5 and 6 (4) The timely requests for exclusion by Joseph Ponte, Hosea Colvin, and Ada Colvin 7 are APPROVED. 8 9 IT IS SO ORDERED. 10 11 United States District Court Northern District of California Dated: October 28, 2022 12 13 14 ______________________________________ BETH LABSON FREEMAN United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14
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