George v. Acad. Mortg. Corp.
This text of 369 F. Supp. 3d 1356 (George v. Acad. Mortg. Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
CHARLES A. PANNELL, JR., UNITED STATES DISTRICT JUDGE
On March 8, 2019, Plaintiffs and Defendant ("the Parties") filed their Joint Motion for Final Approval of Class and FLSA Collective Action Settlement, accompanied by Plaintiffs' Unopposed Motion for Approval of Attorney's Fees, Costs, and Service Payments from Settlement, seeking *1363final approval of the parties' Settlement Agreement and Limited Release ("Agreement"). See Dkt. No. 28-1. In support, Plaintiffs filed declarations from Plaintiffs' counsel ("Class Counsel"), as well as from the Settlement Administrator, RG/2 Claims Administration ("RG/2" or "Settlement Administrator").
This matter came before the Court on March 20, 2019 for a Final Approval Hearing pursuant to the Court's Preliminary Approval Order dated December 10, 2018, as rescheduled by this Court's Order dated December 18, 2018. See Dkt. Nos. 32, 33. The Court reviewed all of the filings related to the Settlement and heard argument on the motions for final approval.
After careful consideration of the presentations of the Parties, the Court concludes that this Settlement provides a fair, reasonable, and adequate recovery for Settlement Class Members ("Class Members"), the net amount of which Class Counsel believes approximately compensates them for more than 100% of their allegedly unpaid overtime premium amounts for their maximum possible recovery periods, and a significant portion of maximum possible additional liquidated damages, interest, and, as applicable, waiting time penalties. The Settlement constitutes an excellent result for the Settlement Class under the circumstances and challenges presented by the Action. The Court specifically finds that the Settlement is fair, reasonable, and adequate, and a satisfactory compromise of the Settlement Class Members' claims. The Settlement fully complies with Fed. R. Civ. P. 23(e) and, thus, the Court grants Final Approval to the Settlement, certifies the Settlement Class, and awards the fees and costs requested by Class Counsel as well as the requested Service Awards for the Class Representatives.
BACKGROUND
The present evidentiary record is more than adequate for the Court to consider the fairness, reasonableness, and adequacy of the Settlement. A fundamental question is whether the district judge has sufficient facts before him to evaluate and intelligently and knowledgeably approve or disapprove the settlement. Lunsford v. Woodforest Nat'l Bank , No. 1:12-cv-103-CAP,
I. Factual and Procedural Background
Named Plaintiff George's Complaint, filed February 12, 2016, alleged that Academy Mortgage Corporation (UT), ("Academy" or "Defendant") failed to include certain bonuses, commissions, and/or incentive pay (hereinafter "bonuses") in its non-exempt hourly employees' regular rates when calculating their overtime pay, as a company-wide payroll practice, thereby paying them overtime based only on their hourly pay rates but not paying any overtime amounts based on the additional bonus compensation received for overtime hours worked. See Dkt. No. 1.
On May 27, 2016, Defendant filed its Answer and moved to transfer venue to Utah district court. See Dkt. No. 5. Plaintiffs opposed that motion, and this Court *1364denied transfer of venue by Order dated July 12, 2016. See Dkt. No. 18.
The parties filed their Joint Preliminary Report and Discovery Plan on July 5, 2016, presenting disputed positions on issues such as bifurcated discovery and the propriety of Defendant taking pre-certification discovery of Plaintiffs. See Dkt. No. 17.
By Order entered July 13, 2016, the Court set a schedule for Plaintiffs to move for conditional certification of a FLSA collective action and issuance of notice, denied bifurcated discovery, and ordered that discovery would commence 30 days after the date the Court addresses the conditional certification motion. See Dkt. No. 19.
On August 3, 2016, the parties filed a Joint Proposed Case Management Statement and Stipulation for Stay and Conditional Certification, in which the parties stipulated to conditional certification of a FLSA collective action and a stay in order to allow the parties to engage in mediation. See Dkt. No. 20.
On August 25, 2016, the Court entered an Order conditionally certifying this case to proceed as a collective action, ordering issuance of Notice, and administratively closing the case during the notice and mediation period. See Dkt. No. 22.
The Notice Administrator, RG/2, distributed Notices pursuant to the required notice and opt-in process, and by the conclusion of that process approximately 260 individuals had submitted Consents to join the lawsuit.
Beginning in late 2016, the parties began preliminary settlement discussions. As a result of negotiations in advance of the mediation, the parties agreed to negotiate at mediation a potential hybrid class/collective action settlement. Prior to the mediation, the parties entered into a tolling agreement as to certain state law class action claims in lieu of Plaintiffs filing (and Defendant having to answer) an amended pleading to add those state law claims before mediation, and requiring extensive pre-mediation exchange of information, payroll records, and pertinent documents. During informal pre-mediation discovery production, Defendant provided to Class Counsel full payroll records, bonus-related and other policy and employment documents, identification of potential state law class members, and other information and records necessary to fully assess the regular rate violation claims at issue. Class Counsel's review of the discovery enabled Plaintiffs to gain an understanding of the evidence related to central questions in the case, and the strengths and weaknesses of the case. See Head Decl. ¶ 13. Furthermore, Class Counsel's review of the documents produced by Defendant also prepared Plaintiffs to engage in well-informed settlement negotiations. Id. at ¶ 32.
Free access — add to your briefcase to read the full text and ask questions with AI
CHARLES A. PANNELL, JR., UNITED STATES DISTRICT JUDGE
On March 8, 2019, Plaintiffs and Defendant ("the Parties") filed their Joint Motion for Final Approval of Class and FLSA Collective Action Settlement, accompanied by Plaintiffs' Unopposed Motion for Approval of Attorney's Fees, Costs, and Service Payments from Settlement, seeking *1363final approval of the parties' Settlement Agreement and Limited Release ("Agreement"). See Dkt. No. 28-1. In support, Plaintiffs filed declarations from Plaintiffs' counsel ("Class Counsel"), as well as from the Settlement Administrator, RG/2 Claims Administration ("RG/2" or "Settlement Administrator").
This matter came before the Court on March 20, 2019 for a Final Approval Hearing pursuant to the Court's Preliminary Approval Order dated December 10, 2018, as rescheduled by this Court's Order dated December 18, 2018. See Dkt. Nos. 32, 33. The Court reviewed all of the filings related to the Settlement and heard argument on the motions for final approval.
After careful consideration of the presentations of the Parties, the Court concludes that this Settlement provides a fair, reasonable, and adequate recovery for Settlement Class Members ("Class Members"), the net amount of which Class Counsel believes approximately compensates them for more than 100% of their allegedly unpaid overtime premium amounts for their maximum possible recovery periods, and a significant portion of maximum possible additional liquidated damages, interest, and, as applicable, waiting time penalties. The Settlement constitutes an excellent result for the Settlement Class under the circumstances and challenges presented by the Action. The Court specifically finds that the Settlement is fair, reasonable, and adequate, and a satisfactory compromise of the Settlement Class Members' claims. The Settlement fully complies with Fed. R. Civ. P. 23(e) and, thus, the Court grants Final Approval to the Settlement, certifies the Settlement Class, and awards the fees and costs requested by Class Counsel as well as the requested Service Awards for the Class Representatives.
BACKGROUND
The present evidentiary record is more than adequate for the Court to consider the fairness, reasonableness, and adequacy of the Settlement. A fundamental question is whether the district judge has sufficient facts before him to evaluate and intelligently and knowledgeably approve or disapprove the settlement. Lunsford v. Woodforest Nat'l Bank , No. 1:12-cv-103-CAP,
I. Factual and Procedural Background
Named Plaintiff George's Complaint, filed February 12, 2016, alleged that Academy Mortgage Corporation (UT), ("Academy" or "Defendant") failed to include certain bonuses, commissions, and/or incentive pay (hereinafter "bonuses") in its non-exempt hourly employees' regular rates when calculating their overtime pay, as a company-wide payroll practice, thereby paying them overtime based only on their hourly pay rates but not paying any overtime amounts based on the additional bonus compensation received for overtime hours worked. See Dkt. No. 1.
On May 27, 2016, Defendant filed its Answer and moved to transfer venue to Utah district court. See Dkt. No. 5. Plaintiffs opposed that motion, and this Court *1364denied transfer of venue by Order dated July 12, 2016. See Dkt. No. 18.
The parties filed their Joint Preliminary Report and Discovery Plan on July 5, 2016, presenting disputed positions on issues such as bifurcated discovery and the propriety of Defendant taking pre-certification discovery of Plaintiffs. See Dkt. No. 17.
By Order entered July 13, 2016, the Court set a schedule for Plaintiffs to move for conditional certification of a FLSA collective action and issuance of notice, denied bifurcated discovery, and ordered that discovery would commence 30 days after the date the Court addresses the conditional certification motion. See Dkt. No. 19.
On August 3, 2016, the parties filed a Joint Proposed Case Management Statement and Stipulation for Stay and Conditional Certification, in which the parties stipulated to conditional certification of a FLSA collective action and a stay in order to allow the parties to engage in mediation. See Dkt. No. 20.
On August 25, 2016, the Court entered an Order conditionally certifying this case to proceed as a collective action, ordering issuance of Notice, and administratively closing the case during the notice and mediation period. See Dkt. No. 22.
The Notice Administrator, RG/2, distributed Notices pursuant to the required notice and opt-in process, and by the conclusion of that process approximately 260 individuals had submitted Consents to join the lawsuit.
Beginning in late 2016, the parties began preliminary settlement discussions. As a result of negotiations in advance of the mediation, the parties agreed to negotiate at mediation a potential hybrid class/collective action settlement. Prior to the mediation, the parties entered into a tolling agreement as to certain state law class action claims in lieu of Plaintiffs filing (and Defendant having to answer) an amended pleading to add those state law claims before mediation, and requiring extensive pre-mediation exchange of information, payroll records, and pertinent documents. During informal pre-mediation discovery production, Defendant provided to Class Counsel full payroll records, bonus-related and other policy and employment documents, identification of potential state law class members, and other information and records necessary to fully assess the regular rate violation claims at issue. Class Counsel's review of the discovery enabled Plaintiffs to gain an understanding of the evidence related to central questions in the case, and the strengths and weaknesses of the case. See Head Decl. ¶ 13. Furthermore, Class Counsel's review of the documents produced by Defendant also prepared Plaintiffs to engage in well-informed settlement negotiations. Id. at ¶ 32.
The parties then conducted an in-person mediation on April 28, 2017, with nationally renowned wage and hour class/collective action mediator Steven G. Pearl, Esq., in Costa Mesa, California. The Parties signed a term sheet at the conclusion of that full-day mediation, memorializing their agreement in principle to a hybrid FLSA collective action and eight state class action settlement. After extensive additional negotiations, the Parties ultimately executed a final signed Agreement in late October, 2018.
On November 29, 2018, the Parties filed their joint motion to reopen the case, accompanied by Plaintiffs' First Amended Complaint asserting eight state law class claims. See Dkt. No. 26, 26-2. The Court granted that motion to reopen the case and permit the filing of the First Amended Complaint by Order dated December 3, 2018. See Dkt. No. 30.
*1365On November 29, 2018, the Parties also filed their joint motion for preliminary settlement approval. See Dkt. No. 28. The Court granted the parties' motion for preliminary settlement approval and certified the Rule 23 settlement classes by Order entered December 20, 2018. See Dkt. No. 32. The Court set a rescheduled final approval hearing for March 20, 2019. See Dkt. No. 33.
The approved Settlement Administrator then issued Court-approved settlement Notice to the eligible class and collective settlement members, which included details on how to object, opt-out, or claim an additional offered FLSA payment, in addition to notifying Class Members of the Final Approval Hearing set for March 20, 2019. The settlement Notice also informed all Class Members that Plaintiffs would request approval of service payments from the Court, the specific amounts of which were specified in the Settlement Agreement1 that has been posted on the Settlement Administrator's notice website listed in the Notice since December 21, 2018. The Notice also informed all Class Members that Plaintiffs would request approval of attorney's fees in the amount of 33% of the $ 925,000 Settlement Fund, in addition to advanced litigation costs as awarded by the Court, both of which terms were specified in the Settlement Agreement posted on the Notice website.
Pursuant to the Court's Order, the period for filing timely objections ended on February 9, 2019. There were no objections filed within the Court-ordered objection period, and there have been no objections filed to date. RG/2 issued the required CAFA notices, and there have been no objections from any government officials. Only one individual filed a request for exclusion from the settlement.
II. Summary of the Terms of the Settlement and Notice Process
The Settlement's terms are detailed in the Agreement. See Dkt. No. 28-1.
A. The Settlement Class.
The Settlement Class preliminarily certified by the Court in this hybrid action consists of a FLSA Collective opt-in class under
FLSA Collective: The FLSA Collective consists of all Named Plaintiffs and Opt-In Plaintiffs who filed or submitted opt-in Consents by the settlement date. The FLSA Collective, combined with those State Settlement Class members who timely submit a Claim form to opt-in and receive payment on their FLSA claim, together will constitute the final "FLSA Settlement Collective."
State Settlement Class: The State Settlement Class consists of the individuals reflected in the final comprehensive spreadsheet produced by Academy prior to mediation, who were paid during any applicable Claim Periods in the manner covered by the Claim in the states of Arizona, California, Colorado, Idaho, Illinois, Maryland, Ohio, and Washington, unless removed from the State Settlement Class by timely filing a request for exclusion from the Settlement in compliance with the Agreement, for the Claim from the applicable State Class Start Date through the end of the Claims Period as applicable for each item addressed therein (each state identified in this subsection a "State Class," each member of a State Class a "State Settlement Class member," and collectively the "State Settlement Classes").
*1366B. Monetary Relief for the Class.
Pursuant to the Agreement, Academy agrees to pay the total sum of Nine Hundred Twenty-Five Thousand Dollars ($ 925,000.00) (the "Total Settlement Amount") into a Qualified Settlement Fund ("QSF") in order to fully and finally resolve and settle the Claim for the Participating Class Members. See Agreement, ¶ 6(a). The Total Settlement Amount is inclusive of the Settlement Administrator's administration costs; Class Counsel's fees paid at 33% of the Total Settlement Amount, and Class Counsel's reasonable advanced litigation costs and expenses; back wages; liquidated/statutory damages or penalties; and service payments to Named Plaintiffs, if awarded by the Court; arising out of the Claim.
C. Additional Non-Monetary Benefits to the Class.
The Parties represent that Plaintiffs' lawsuit prompted Defendant to change its pay practices; thus, since April 2016, all of Defendant's currently employed non-exempt employees (including but not limited to employed Class Members) have benefitted from this Action by receiving overtime pay on their production bonus amounts among other benefits.2
D. Class Release.
In exchange for the benefits conferred by the Settlement, all participating Class Members who did not exclude themselves from the Settlement will be deemed to have granted the applicable releases as detailed in the Agreement. The Settlement results in release of the specific Claim (as defined more fully in the Agreement) under the FLSA of the named and opt-in Plaintiffs, and certifying settlement-purposes-only class actions under Fed. R. Civ. P. 23, limited to those arising out of the specific factual predicate of the Complaint, covering all individuals whose bonuses paid were not factored into overtime premiums paid, who were employed within the states of Arizona, California, Colorado, Idaho, Illinois, Maryland, Ohio, and Washington who did not timely exclude themselves resulting in the limited release of the Claim under those applicable state laws.
E. The Settlement Notice Process.
The Settlement Administrator sent each member of the classes their respectively applicable Court-approved Notice ("Notice") and, for absent class members eligible to claim their additional offered FLSA payment, a Court-approved Claim Form ("Claim Form"), by U.S. Mail and email. The Notice set forth the material settlement terms and instructions on whether any action is required and how to exercise their settlement options. The Notices for Rule 23 members explained how to submit objections to the settlement, when and where to appear at the final fairness hearing, or how to opt-out of the Settlement altogether. The Claim Form could be electronically signed and submitted directly by online portal, or by mail, email, or facsimile, to the Settlement Administrator no later than February 25, 2019.
The Settlement Administrator performed skip tracing for returned undeliverable Notice packets, processed Claim Forms, and reallocated unclaimed offered additional FLSA payments among all Class Members participating in the FLSA Collective.
III. DISCUSSION.
The federal courts have long recognized a strong policy and presumption in favor of class settlements. "Compromises of disputed claims are favored by the courts." Williams v. First Nat'l Bank ,
Class settlements minimize the litigation expenses of the parties and reduce the strain that litigation imposes upon already scarce judicial resources. Lunsford v. Woodforest Nat'l Bank , No. 1:12-cv-103-CAP,
A. The Class Received Adequate Notice and Had Opportunity to Be Heard.
In addition to having personal jurisdiction over Plaintiffs, who are parties to this Action, the Court also has personal jurisdiction over all members of the Settlement Class because they received the requisite notice and due process. See *1368Lunsford ,
1. The Best Notice Practicable Was Furnished.
The Settlement Notice Program administered by the Settlement Administrator was multi-faceted, and included (1) distribution of Court-approved Notice and Claim Forms by U.S. Mail with self-addressed stamped return envelopes ("Mailed Notice") and by email including a hyperlink to the Settlement Administrator's online portal for submitting Claim Forms directly online ("Emailed Notice") to all identifiable Settlement Class Members; and (2) publication notice ("Published Notice") on the Settlement Administrator's case website designed to reach those Settlement Class Members in addition to Mailed Notice and Emailed Notice.
Each facet of the Notice Program was timely and properly accomplished. See Declaration of Melissa E. Baldwin, ¶¶ 2, 5-8, 10-18 (Dkt. No. 35-1) ("RG/2 Decl."); Head Decl. ¶ 19. The Settlement Administrator received the data files that identified the names and last known addresses of all Settlement Class Members, ran the addresses through the National Change of Address Database, timely issued Mailed and Emailed Notice, obtained SSN information for returned undeliverables, conducted skip tracing and requested updated address information from counsel if available, and reissued Mailed Notice accordingly for any returned undeliverables. The Settlement Administrator mailed 659 Notices, and because the Settlement Administrator was able to locate updated address information for all 41 of the Notices returned as undeliverable and reissue Notice for each, it may reasonably be presumed that all Notices have been successfully delivered to the potential Settlement Class Members (and receipt of concurrent emailed Notice may also be presumed). RG/2 Decl., ¶ 17.
In addition, a toll free number has been operational since December 21, 2018. RG/2 Decl. ¶ 16. By calling this number, Settlement Class Members could leave a message and receive a return call from RG/2 personnel to provide answers to questions, process address updates, explain the settlement and settlement process, and address any concerns.
2. The Notice Was Reasonably Calculated to Inform Settlement Class Members of Their Rights.
The Court-approved Notice satisfied due process requirements because it described "the substantive claims ... [and] contain[ed] information reasonably necessary to make a decision to remain a class member and be bound by the final judgment." Lunsford ,
The Court finds the Notice was "reasonably calculated, under [the] circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections."
B. The Settlement Is Fair, Adequate, and Reasonable.
In deciding whether to approve the Settlement, the Court analyzes whether it is "fair, adequate, reasonable, and not the product of collusion."
The Eleventh Circuit has identified six factors to be considered in analyzing the fairness, reasonableness, and adequacy of a class settlement under Rule 23(e) :
(1) the existence of fraud or collusion behind the settlement;
(2) the complexity, expense, and likely duration of the litigation;
(3) the stage of the proceedings and the amount of discovery completed;
(4) the probability of the plaintiffs' success on the merits;
(5) the range of possible recovery; and
(6) the opinions of the class counsel, class representatives, and the substance and amount of opposition to the settlement.
1. There Was No Fraud or Collusion.
The parties engaged in prolonged adversarial litigation and negotiations, demonstrating the absence of fraud or collusion behind the Settlement. See, e.g., Lunsford ,
2. The Settlement Averts Years of Complex and Expensive Litigation.
"FLSA claims typically involve complex mixed questions of fact and law." Barrentine v. Arkansas-Best Freight Sys., Inc. ,
In contrast, the Settlement provides immediate and substantial benefits to approximately 657 Settlement Class Members, all of whom are current or former Academy employees. RG/2 Decl. ¶ 19; Head Decl. ¶ 24. Particularly because the "demand for time on the existing judicial system must be evaluated in determining the reasonableness of the settlement," Ressler v. Jacobson ,
3. The Factual Record Is Sufficiently Developed to Enable Class Counsel to Make a Reasoned Judgment.
Courts also consider "the degree of case development that class counsel have accomplished prior to settlement" to ensure that "counsel had an adequate appreciation of the merits of the case before negotiating." Lunsford ,
Plaintiffs settled the Action with the benefit of extensive class and merits-based discovery. Head Decl. ¶¶ 30, 32. Class Counsel's review of the payroll, class identification, and other documents produced positioned them to evaluate with confidence the strengths and weaknesses of Plaintiffs' claims, Academy's defenses, and the prospects for success on issues of Rule 23 class certification, FLSA collective action decertification, FLSA preemption of state law claims, willfulness and "good faith" defenses, potential preclusive effects of later-filed California state court class action claims, summary judgments, and trial.
4. Plaintiffs Would Have Faced Obstacles to Prevailing and Delay.
The "likelihood and extent of any recovery from the defendants absent ... settlement" is another important factor in assessing the reasonableness of a settlement.
Apart from the risks, continued litigation would have involved substantial delay and expense, which further counsels in favor of Final Approval. Given the risks attending these claims, as well as the certainty of substantial delay and expense from ongoing litigation and class certification/decertification proceedings, the Settlement cannot be seen as anything except a fair compromise. Lunsford ,
5. The Benefits Provided by the Settlement Are Fair, Adequate, and Reasonable Compared to the Range of Possible Recovery.
In determining whether a settlement is fair given the potential range of recovery, the Court is guided by the principle that "the fact that a proposed settlement amounts to only a fraction of the *1372potential recovery does not mean the settlement is unfair or inadequate."
Through this Settlement, Plaintiffs and the Settlement Class Members have achieved a recovery of full unpaid overtime wages and close to the amount of full liability as assessed under various scenarios, without any further risk or delay. Head Decl. ¶ 25. The total settlement amount is fair and reasonable given the obstacles confronted and the complexity of the action, and the significant barriers that stood between the pre-settlement status of the case and final judgment, including the prospect of contested class certification/decertification and potential interlocutory Rule 23(f) appeal of any order granting class certification; motions for summary judgment; trial; and post-trial appeals. Head Decl. ¶ 24. Taking these risks into account, the $ 925,000 Settlement Fund represents an outstanding result. See Head Decl. ¶ 25.
Courts also take into account the fact that non-monetary relief adds value to a settlement. Ingram ,
The Court finds that the financial recovery for the Settlement Class, combined with the non-monetary "programmatic relief" inuring to the benefit of certain Settlement Class Members and in fact all non-exempt employees since 2016, is a significant achievement by any objective measure. See Lunsford ,
6. The Opinions of Class Counsel, the Class Representatives, and Absent Class Members Favor Approval of the Settlement.
The Court should give "great weight to the recommendations of counsel for the parties, given their considerable experience in this type of litigation."
In addition, there has been no opposition to the Settlement, either before the February 9, 2019 deadline for objections or thereafter. See Columbus Drywall & Insulation, Inc. v. Masco Corp. , No. 1:04-cv-3066-JEC,
And as of the February 9, 2019, deadline for requesting exclusion, only one Settlement Class Member requested to be excluded from the Settlement Class. RG/2 Decl., ¶ 21. See Lunsford ,
Moreover, as required by the Class Action Fairness Act ("CAFA"), notice of this settlement was provided to the United States Department of Justice and all applicable state attorneys general and required government agency recipients. RG/2 Decl., ¶ 10. Not one CAFA notice recipient objected to the settlement, which also weighs in favor of its approval here. See , e.g. , Hall v. Bank of Am., N.A. , No. 1:12-CV-22700-FAM,
C. The Settlement Class.
This Court has previously found the requirements of Rules 23(a) and 23(b)(3) satisfied in this Action for purposes of settlement. See Dkt. No. 32. The Court hereby reiterates its findings that: (a) the Settlement Class Members are so numerous that joinder of them is impracticable; (b) there are questions of law and fact common to the Settlement Class that predominate over any individual questions; (c) the claims of the Class Representatives are typical of the claims of the Settlement Class; (d) the Class Representatives and Class Counsel fairly and adequately represent and protect the interests of the Settlement Class Members; and (e) a class action is superior to other available methods for the fair and efficient adjudication of the present controversy. For similar reasons, the Court enters final certification of the FLSA Collective under
One individual listed in the RG/2 Declaration timely elected to opt out of the Settlement. The Court therefore finds and decrees that the individual who timely filed an exclusion is not part of the Settlement Class, is not bound by the Settlement or release contained therein, and will not receive any distribution from the Settlement Fund.
D. The Application for Incentive Awards is Approved.
Service payments "compensate named plaintiffs for the services they *1374provided and the risks they incurred during the course of the class action litigation." Lunsford ,
The original named Plaintiff George, and the named plaintiffs who agreed to serve as class representatives in 2017 prior to the mediation and throughout the remainder of this litigation, provided invaluable assistance to counsel in this litigation by, among other things, submitting to interviews, locating and forwarding responsive documents, and participating in conferences with Class Counsel. See
The Court finds that the named Plaintiffs/Class Representatives expended substantial time and effort in representing the Settlement Class, and deserve to be compensated for such time and effort on behalf of the Settlement Class. See Lunsford ,
D. Class Counsel's Attorney's Fees and Costs Are Approved.
Plaintiffs request approval of Class Counsel's attorneys' fees equal to thirty-three percent (33%) of the $ 925,000 Settlement Fund created through Class Counsel's efforts. See Agreement, ¶ 6(b). The Court analyzes this fee request under Camden I Condominium Ass'n v. Dunkle ,
1. The Law Awards Class Counsel Fees From the Common Fund Created Through Their Efforts.
It is well established that when a representative party has conferred a substantial benefit upon a class, counsel is entitled to attorneys' fees based upon the benefit obtained. Lunsford ,
In Camden I - the controlling authority regarding attorneys' fees in common-fund class actions - the Eleventh Circuit held that:
the percentage of the fund approach [as opposed to the lodestar approach] is the better reasoned in a common fund case. Henceforth in this circuit, attorneys' fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit of the class.
Under the Eleventh Circuit's Camden I precedent and this Court's rulings, the Court determines a reasonable fee by determining the appropriate fee percentage for this case rather than by conducting a lodestar analysis.
*1376Based on the findings below, the Court finds that Class Counsel are entitled to an award of thirty-three percent (33%) of the $ 925,000 Settlement Fund secured through their efforts.
2. Application of the Camden I Factors Supports the Requested Fee.
The Eleventh Circuit has provided a set of factors the Court should use to determine a reasonable percentage to award class action counsel:
(1) the time and labor required;
(2) the novelty and difficulty of the relevant questions;
(3) the skill required to properly carry out the legal services;
(4) the preclusion of other employment by the attorney as a result of his acceptance of the case;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
(7) time limitations imposed by the clients or the circumstances;
(8) the results obtained, including the amount recovered for the clients;
(9) the experience, reputation, and ability of the attorneys;
(10) the "undesirability" of the case;
(11) the nature and the length of the professional relationship with the clients; and
(12) fee awards in similar cases.
Lunsford ,
a. Achieving Settlement Required Substantial Time and Labor.
Prosecuting and settling the claims in this action demanded considerable time and labor, making this fee request reasonable. Id. at *11-12,
Class Counsel expended significant resources researching and developing the legal theories and claims presented in the Complaint, the successful opposition to Defendant's motion to transfer venue to Utah, the fully briefed motion for conditional certification which resulted in stipulation to notice, and arguments pressed at mediation and in the negotiations that continued thereafter. Head Decl. ¶ 32. Once the Court denied Defendant's motion to transfer venue and Plaintiffs successfully resolved disputes about pre-certification discovery resulting in the Joint Preliminary Report, Class Counsel served Defendant with the fully briefed motion for conditional certification and eventually reached agreement to stipulated notice and pursuit of potential early resolution by mediation. Class Counsel then prepared a comprehensive mediation agreement specifying thorough and extensive production of full payroll records, bonus-related and other policy and employment documents, identification of potential state law class members, and all other information and records necessary to fully assess the regular rate violation claims at issue in Defendant's possession. Id. at ¶ 32. The process *1377of developing and negotiating such discovery requests for pre-mediation exchange - always with an eye toward class certification/decertification, summary judgment, and trial - required considerable effort. Id. Defendant ultimately produced over 2,000 pages of .pdf documents and over 20,000 lines of spreadsheet data in response to Class Counsel's pre-mediation discovery requests. Id. at ¶ 32. Class Counsel's review and analysis of the documents enabled Plaintiffs to gain an understanding of the evidence and potential damages related to the central questions in the case. Id. Class Counsel also devoted significant time and effort to preparing Plaintiffs' comprehensive mediation statement and damages analysis, including a screen presentation for Defendant's counsel at mediation. Id.
After an agreement in principle was reached at mediation resulting in a signed term sheet, additional negotiations and discussions ensued. The negotiations of settlement agreement terms and Notice documents were lengthy, continuing for more than a year after the initial mediation, and involving additional negotiation of non-monetary terms and carve-out agreements reached as to any possible adverse effects on or from (i) a potentially superseding settlement in a California state court action of the California class claims settled here, (ii) a pending FCRA class action filed by an opt-in Plaintiff in this case, among other claims; and (iii) severance payments made to opt-ins and putative class members for executing severance and release agreements upon separating from employment with Defendant. This post-mediation work consumed a significant amount of time. Head Decl. ¶ 33. Class Counsel's work paid dividends for the Settlement Class, both monetarily and non-monetarily by resolving potential adverse consequences. Id. Each of the above-described efforts was essential to achieving the Settlement before the Court. Id.
In sum, the time and resources Class Counsel devoted to prosecuting and settling this action readily justify the requested fee. See Head Decl. ¶ 34.
b. The Issues Involved Were Novel and Difficult, and Required the Skill of Highly Talented Attorneys.
Class Counsel have conferred a significant benefit on the Settlement Class on complex and highly technical alleged regular rate violations. See Barrentine v. Ark.-Best Freight Sys. ,
This result required the acquisition and analysis of large amounts of payroll data - and the efforts of a highly skilled wage and hour attorney with expertise in technical regular rate violation issues. Head Decl. ¶¶ 3-9, 30. Litigation of a case like this also requires counsel highly trained in FLSA collective action and Rule 23 class action law and procedure as well as the specialized issues these cases present. Id. at ¶ 30. Class Counsel possess these attributes, and their contributions *1378added value to the representation of this Settlement Class consisting of over 600 employees. Id.
The novelty and difficulty of the issues involved created significant risk for Class Counsel. The risks were not merely one, but several. The first risk involved summary judgment denying liability on many of the regular rate claims asserted. Additional risks included potential FLSA collective action decertification or denial of Rule 23 class certification and class relief, potential defenses that the FLSA preempted certain state law class claims, potential finding by the jury that the alleged violations were not "willful" or by the judge that the Defendant satisfied the "good faith" defense to liquidated damages, denial of state law penalties and interest including notice pay or payday law penalties, potential for proving damages that (due to the low amounts owed for regular rate underpayment claims, since Defendant already paid all hourly overtime based on overtime hours actually recorded and paid) would be entirely negated by Defendant's setoff defense, and similar litigation risks.
Plaintiffs were represented in this action by competent, experienced counsel with extensive experience in wage and hour class and collective action litigation. Head Decl., ¶¶ 3-9, 30. Class Counsel's experience and expertise weighs in favor of approval.
In evaluating the quality of representation by Class Counsel, the Court should also consider the quality of opposing counsel. Lunsford ,
c. Class Counsel Achieved an Excellent Result.
Given the net recovery of full overtime backpay for the maximum available statutory limitations periods and close to full damages on potential penalties, liquidated damages and interest, in the face of significant litigation risks faced by the Settlement Class here, the Settlement represents an extraordinary result. Head Decl. ¶ 25; see also Creed v. Benco Dental Supply Co. , No. 3:12-CV-01571,
Although the monetary benefit of the Settlement Fund alone justifies Class Counsel's attorney's fees, the Court also considers the value of the non-monetary relief that Plaintiffs achieved for the Class Members by prosecuting this action and achieving settlement through Class Counsel's efforts. See generally Ingram ,
Courts may consider the non-monetary relief provided to the Class as "part of the settlement pie." Poertner v. Gillette Co. ,
d. The Claims Presented Serious Risk.
The Settlement here is exceptional in light of the combined litigation risks summarized above in Section III(B)(2)(b). Consideration of the "litigation risks" factor under Camden I recognizes that counsel should be rewarded for taking on a case from which other law firms shrunk. Lunsford ,
Further, "[t]he point at which plaintiffs settle with defendants ... is simply not relevant to determining the risks incurred by their counsel in agreeing to represent them."
Prosecuting the action carried risks from the outset. It was questionable whether the bulk of the regular rate claims would ultimately be upheld against attack as summarized in Section III(B)(2)(b) above, and it was uncertain whether a large, multistate class would be certified and successfully withstand appellate review. Head Decl. ¶ 23. Defendant mounted vigorous defenses to these claims, denying any and all liability, and denying the potential for liquidated damages and additional recovery for willfulness.
Given these risks, the $ 925,000 cash recovery obtained through the Settlement, in addition to the non-cash benefits of this action and its Settlement, constitutes an exceptional result.
e. Class Counsel Assumed Considerable Risk to Pursue This Action on a Pure Contingency Basis, and Were Precluded From Other Employment as a Result.
In undertaking to prosecute this complex case entirely on a contingent fee basis, Class Counsel assumed a significant risk of nonpayment or underpayment. Head Decl. ¶ 28. That risk warrants an appropriate fee. Indeed, a "contingency fee arrangement often justifies an increase in the award of attorney's fees." Lunsford ,
Public policy concerns also support the requested fee. First, Class Counsel's prosecution of this action vindicates not only the participating Settlement Class Member's individual rights, but the broader policy concerns embodied in the FLSA and state law overtime pay statutes:
Thus, when an employee succeeds on a claim under the FLSA to recover unpaid overtime wages, that employee vindicates not only his own personal interests, but also, the larger policy concerns embodied in the FLSA. Consequently, when determining degree of success in an FLSA case, the Court must look not only to the award recovered by the plaintiff, but must also factor in the vindication of public policy achieved by a verdict in favor of the plaintiff, regardless of the amount. See Villano [v. City of Boynton Beach ], 254 F.3d [1302] at 1305-06 [ (11th Cir. 2001) ] (discussing fee award in civil rights case context). In other words, "a court must be careful not to place 'undue emphasis on the modest money damages that were found by the jury' because successful civil rights actions vindicate a public interest." Id. at 1306 (quoting Williams v. Thomas ,692 F.2d 1032 , 1038 (5th Cir. 1982) ). In FLSA cases, the damages may well be relatively small. That fact, however, does not necessarily require a finding that attorney's fees expended in furtherance of enforcing rights under the FLSA must be correspondingly small. Indeed, if that were the case, FLSA clients might be expected to have difficulty finding representation, and congressional intent to ensure the enforcement of the provisions of the FLSA would be frustrated.
Bozeman v. Port-O-Tech Corp. , No. 07-60569-CIV-ROSENBAUM,
In addition, ensuring the continued availability of experienced and capable counsel to represent classes of plaintiffs holding valid but small individual claims supports the requested fee. Head Decl. ¶ 35. As this Court recognized:
Generally, the contingency retainment must be promoted to assure representation when a person could not otherwise afford the services of a lawyer.... A contingency fee arrangement often justifies an increase in the award of attorney's fees. This rule helps assure that the contingency fee arrangement endures. If this "bonus" methodology did not exist, very few lawyers could take on the representation of a class client given the investment of substantial time, effort, and money, especially in light of the risks of recovering nothing.
Lunsford ,
The progress of the Action shows the inherent risk faced by Class Counsel in accepting these cases on a contingency-fee basis. Despite Class Counsel's effort in litigating this action for over three years, they remain completely uncompensated for the time invested in the action, in addition to the expenses advanced. Head Decl. ¶ 28. There can be no dispute that this case entailed substantial risk of nonpayment for Class Counsel.
Finally, Plaintiffs' engagement agreement with Class Counsel provided for a 40% contingency fee, but Class Counsel agreed to accept 33% of the Settlement *1382Fund as its attorney's fee for the action plus payment of its advanced expenses. See McLendon v. PSC Recovery Sys. , No. 1:06-CV-1770-CAP,
f. The Requested Fee Comports With Fees Awarded in Similar Cases.
The fee sought here is in line with fees typically awarded in similar cases. Courts within this Circuit have awarded attorney's fees of approximately one-third of a common fund in FLSA and wage and hour cases. See, e.g., Duque v. 130 NW 40th St, LLC ,
Plaintiffs request for approval of Class Counsel's 33% fee falls within the range of the private marketplace, where contingency-fee arrangements are often between 30 and 40 percent of any recovery. Head Decl. ¶ 36; see also Reyes v. AT & T Mobility Servs., Ltd. Liab. Co. , No. 10-20837-Civ,
g. The Remaining Camden I Factors Also Favor Approving the Requested Fee.
The remaining Camden I factors likewise support granting approval of Class Counsel's fees. As demonstrated above, Class Counsel's experience in complex and sophisticated class action litigation was *1383likely essential in reaching the result achieved here, and in light of litigation obstacles and with the case defended by experienced and competent counsel at a large international law firm, it is doubtful Class Counsel could have achieved the results obtained in this case. That Class Counsel was able to achieve substantial results in the most efficient manner possible without requiring protracted and extended litigation further supports the 33% fee in this case under the Camden I analysis. See McLendon ,
While the Court awards Class Counsel attorneys' fees in the amount of thirty-three percent (33%) of the $ 925,000 Settlement Fund secured through their efforts, the Court notes that under the Settlement Agreement and this Court's orders, Class Counsel's work on this case will not conclude with the requested final approval order. Class members will likely continue to contact Class Counsel with questions or to resolve issues regarding the settlement, and uncashed check amounts from claimed funds after all reasonable skip tracing attempts at contact will be returned from the Qualified Settlement Fund to the Settlement Administrator for deposit with any applicable state unclaimed property office in order to ensure maximum potential for recovery by Settlement Class Members.
3. The Expense Request Is Appropriate.
The Court finds that Plaintiffs' request for approval of reimbursement from the Settlement Fund of $ 20,020.23 in litigation costs and expenses advanced by Class Counsel is reasonable and justified. Lunsford ,
4. The Settlement Administration Fees Are Approved.
Finally, the Court approves payment of the Settlement Administrator's $ 4,871.87 settlement calculation fee for preliminary allocation and CAFA notices, and its subsequent $ 30,469 nationwide and multi-state class action settlement administration fee, from the Settlement Fund. Head Decl. ¶ 41.
CONCLUSION
For the foregoing reasons, the Court: (1) grants Final Approval to the Settlement; (2) certifies for settlement purposes the Settlement Class pursuant to Federal Rules of Civil Procedure 23(a), 23(b)(3), and 23(e); (3) appoints the named Plaintiffs as Class Representatives; (4) appoints as Class Counsel the law firm and attorneys serving as Plaintiffs' counsel of record in this action; (5) approves the requested service payments for the named Plaintiffs; (6) awards Class Counsel attorneys' fees and expenses in the amount requested; (7) directs Class Counsel, Plaintiffs, Defendant, *1384and the Settlement Administrator to implement and consummate the Settlement pursuant to its terms and conditions; (8) retains continuing jurisdiction over Plaintiffs, the Settlement Class, and Defendant to implement, administer, consummate, and enforce the Settlement and this Final Approval Order; and (9) will separately enter stipulated Final Judgment incorporating the Agreement under Lynn's Food Stores, Inc. v. United States ,
DONE AND ORDERED this 20th day of March, 2019.
Related
Cite This Page — Counsel Stack
369 F. Supp. 3d 1356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/george-v-acad-mortg-corp-gand-2019.