1 2
3 4 UNITED STATES DISTRICT COURT FOR THE 5 EASTERN DISTRICT OF CALIFORNIA 6
7 ARTURO GONZALEZ on behalf of Case No.: 1:18-cv-00948-AWI-SKO himself, all others similarly situated, and on 8 behalf of the general public,
9 Plaintiffs, ORDER GRANTING: 10 v. • MOTION FOR FINAL APPROVAL 11 OF CLASS ACTION NCI GROUP, INC., dba NCI BUILDING SETTLEMENT; AND SYSTEMS; and DOES 1-100, 12 Defendants. • MOTION FOR AWARD OF 13 ATTORNEYS’ FEES, COSTS AND 14 ENHANCEMENT PAYMENT 15
16 (Doc. Nos. 29 and 33) 17
18 19 Named Plaintiff Arturo Gonzalez brings a motion for attorneys’ fees, costs and an 20 enhancement payment, Doc. No. 29, and a motion for final approval of class action settlement. 21 Doc. No. 33. The motions are unopposed, see Doc. No. 30, and a final approval hearing was held 22 on January 23, 2023. Doc. Nos. 36 & 37. For the reasons that follow, both motions will be 23 granted. 24 BACKGROUND 25 A. Allegations & Claims 26 As set forth in the First Amended Complaint (“1AC”), Defendant NCI Group, Inc. (“NCI”) 27 manufactures and markets metal building systems and components for the nonresidential 1 action as a non-exempt, hourly shipping checker in California. Id. ¶ 26. Gonzalez filed this action 2 in Merced County Superior Court on June 6, 2018, on behalf of himself and others similarly 3 situated, including warehouse workers, industrial workers, shipping clerks and other categories of 4 non-exempt, hourly workers in NCI’s employ in California during the four-year period prior to 5 commencement of this action. Doc. No. 1 ¶¶ 2, 4. NCI answered the Complaint on July 11, 2018, 6 id., Ex. B, and removed the case to this Court on diversity grounds under the Class Action 7 Fairness Act (“CAFA”) on July 12, 2018. Id. The 1AC was filed on February 3, 2020, pursuant to 8 a stipulated order. Doc. Nos. 15-17. 9 The 1AC alleges eight causes of action under the California Labor Code, California’s 10 Unfair Competition Law and the Industrial Welfare Commission’s (“IWC”) California Wage 11 Orders based primarily on allegations that NCI had a policy and/or practice of failing to pay 12 nonexempt hourly employees for missed break time. Doc. No. 17. For example, Gonzalez 13 contends that NCI failed to provide proper compensation for time spent walking to and from break 14 areas and time spent doffing and donning protective gear prior to and following breaks, in addition 15 to failing to provide proper compensation for breaks that were missed completely. See Doc. No. 16 18 at 18:23- 28. 17 The 1AC proposes a class comprising “[a]ll persons who are employed or have been 18 employed by [NCI] in the State of California as hourly, Non-Exempt employees during the period 19 of the relevant statute of limitations,” in addition to alleging various subclasses that are not 20 relevant to the disposition of this motion. Doc. No. 17 ¶ 44. 21 B. Procedural History 22 1. August 6, 2020 Order on Plaintiff’s Motion for Preliminary Approval of Class 23 Action Settlement 24 Gonzalez and NCI reached a settlement agreement (“Settlement Agreement”) following 25 mediation that took place on November 19, 2019.1 Doc. No. 18 at 11:11-14. On February 3, 2020, 26 Gonzalez brought an unopposed motion for an order: (i) granting conditional certification of the 27 1 The Settlement Agreement is set forth in a joint filing captioned Stipulation re: Settlement of Class and 1 proposed class for settlement purposes; (ii) preliminarily approving the Settlement Agreement; 2 (iii) approving the proposed notice and distribution plan; (iv) appointing a settlement 3 administrator; and (v) setting a final approval hearing. Doc. No. 18 at 2. 4 The Court issued an order denying the motion without prejudice on August 6, 2020. Doc. 5 No. 21. In that order, the Court addressed in detail the requirements for class action certification 6 under Rules 23(a) and 23(b) of the Federal Rules of Civil Procedure, as well as the fairness, 7 reasonableness and adequacy of the proposed settlement under Rule 23(e)(2).2 Id. 8 As to the first issue, the Court found that Rule 23(a)’s numerosity, commonality and 9 typicality requirements had been satisfied, Doc. No. 21 at 8:4-10:8, but that Gonzalez had failed to 10 show that Rule 23(a)’s adequacy requirement had been met because: (i) the proposed settlement 11 did not take account of differences among members of the proposed class “with respect to wage 12 levels, shift lengths or the number of shifts worked per week”; and (ii) Gonzalez and his counsel 13 could have a conflict with the proposed class to the extent other members of the proposed class 14 “worked a larger number of longer shifts at higher wages” than Gonzalez. Id. at 10:15-24. 15 As to the second issue, Gonzalez sought certification under Rule 23(b)(3), which requires a 16 showing that: (1) questions of law or fact common to class members predominate over any 17 questions affecting only individual members; and (2) a class action is superior to other available 18 methods for fairly and efficiently adjudicating the controversy. See Fed.R.Civ.P. 23(b)(3); 19 Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 593 (1997); Doc. No. 21 at 11:20-24. The Court 20 found that Gonzalez had satisfied both requirements. See Doc. No. 21 at 12:3-12:25. 21 The Court summarized its findings under Rules 23(a) and 23(b)(3) as follows: 22 Certification of the Class for settlement purposes appears to be warranted in most respects, but the Court is not satisfied that Gonzalez and his counsel adequately 23 represent the interests of all Class Members because the subclasses alleged in the 1AC imply significant variability in Class Member work histories …. [T]his 24 concern is compounded by the fact that the Settlement Payment methodology applied in the Settlement Agreement appears to gloss over factors—including the 25 length of shifts worked, the number of shifts worked, wage levels, whether a Class Member’s employment with NCI was terminated during the Class Period, and 26 whether a Class Member was employed by NCI in the final year of the Class Period—that could have a significant impact on an individual Class Member’s 27 1 potential recovery at trial. 2 Doc. No. 21 at 13:27-14:8. Consequently, the Court declined to certify the proposed class for 3 settlement purposes. 4 As to Rule 23(e)(2), the Court conducted a range-of-reasonableness analysis and tested the 5 proposed settlement against factors identified by the Ninth Circuit in Hanlon v. Chrysler 6 Corporation, 150 F.3d 1011 (9th Cir. 1998). See Doc. No. 21 at 15:9-21:20; see also Hanlon, 150 7 F.3d at 1026 (calling for assessments of class action settlements to balance “ [i] the strength of the 8 plaintiffs’ case; [ii] the risk, expense, complexity, and likely duration of further litigation [and] the 9 risk of maintaining class action status throughout the trial; [iii] the amount offered in settlement; 10 [iv] the extent of discovery completed and the stage of the proceedings; [and] [v] the experience 11 and views of counsel ....”). In doing so, the Court found “reason to doubt that the Settlement 12 Payment methodology adequately reflect[ed] the rights and interests of all Class Members,” Doc. 13 No. 21 at 21:18-20, and stated as follows: 14 The Court cannot certify the Class for settlement purposes or grant preliminary approval of the settlement because the Court is not satisfied, based on the record 15 before it, that the interests of all Class Members have been adequately represented or taken into account in structuring the settlement. Specifically, it appears to the 16 Court that Class Members who worked a large number of long shifts at high straight wages—as well as Class Members whose employment with NCI was 17 terminated during the Class Period and/or who were employed with NCI in the year prior to the filing of this lawsuit—may get shorted in the calculation of Settlement 18 Payments. 19 Id. at 21:22-28. 20 Based on the foregoing the Court denied the motion without prejudice, stating that the 21 concerns in question “could potentially be addressed through additional facts showing uniformity 22 in the work histories of the putative Class Members, modifications to the Settlement Payment 23 calculation methodology or some other means.” Doc. No. 21 at 21:28-22:4. 24 2. August 8, 2022 Order Granting Plaintiff’s Renewed Motion for Preliminary 25 Approval of Class Action Settlement 26 On January 28, 2022, Gonzalez filed a renewed motion—which was also unopposed—for 27 an order: (i) provisionally granting class certification for settlement purposes; (ii) preliminarily 1 the proposed notice and distribution plan; (iv) appointing a settlement administrator; and (v) 2 scheduling a final approval hearing. Doc. No. 24 at 2. 3 Like the Settlement Agreement, the Amended Settlement Agreement—which is set forth in 4 a joint filing captioned Amended Stipulation re: Settlement of Class and Representative Action 5 (“Amended Stipulation”), Doc. No. 24-2 at 2-42—sought to settle this action on behalf of a single 6 class (“Class”) defined as: 7 [A]ll non-exempt current and former employees who worked for [NCI] as hourly warehouse workers, industrial workers, shipping checkers, distribution employees, 8 shipping clerks, packers, stackers, loaders, packaging clerks, machine operators, receiving clerks, production workers, and all other similarly situated employees in 9 California at any time during the Class Period. 10 Doc. No. 24-2, Part VI, §1.4. The Class Period was defined as the period from June 6, 2014 11 through February 24, 2020, id., Part VI, §1.8, and the proposed class was estimated to comprise 12 approximately 274 current and former NCI employees (“Class Members”). Id., Part VI, §1.4. 13 The Amended Settlement Agreement provides that NCI will pay a Maximum Settlement 14 Amount (“MSA”)— “the maximum total that can be paid by [NCI]”—of $600,000. Doc. No. 24- 15 2, Part VI, §1.24. The MSA will cover: (i) settlement payments to Class Members who do not opt 16 out of the settlement (“Settlement Class Members”); (ii) Class Counsel’s attorneys’ fees in an 17 amount not to exceed $150,000; (iii) Class Counsel’s litigation expenses in an amount not to 18 exceed $30,000; (iv) an “enhancement payment” to Gonzalez for services rendered and risk 19 assumed as the Named Plaintiff in an amount not to exceed $5,000; (v) administration fees and 20 expenses to the Settlement Administrator in an amount not to exceed $15,000; and (vi) a payment 21 to the California Labor and Workforce Development Agency (“LWDA”) and Settlement Class 22 Members under the Private Attorneys General Act (“PAGA”) of $60,000 ($45,000 to the LWDA 23 and $15,000 to Settlement Class Members) (“PAGA Payment”). Id. 24 Under the Amended Settlement Agreement, the Net Settlement Amount (“NSA”) is the 25 amount remaining for disbursement to Settlement Class Members after subtracting from the MSA 26 attorneys’ fees and litigation expenses, the enhancement payment, settlement administration costs, 27 and the LWDA portion of the PAGA payment. Doc. No. 24-2, Part VI, §1.27. At the time the 1 In the foregoing respects, the Amended Settlement Agreement is identical to the 2 Settlement Agreement. Compare Doc. No. 24-2 at 10:5-21 to Doc. No. 18-1 at 21:16-22:10. 3 Unlike the Settlement Agreement, however, the Amended Settlement Agreement divides the NSA 4 into three payout funds: (i) the Meal, Rest, and Unpaid Wages Payout Fund, which applies to all 5 Class Members; (ii) the Waiting Time Penalties Payout Fund, which applies to all Class Members 6 who worked for NCI at any time from June 6, 2015 through February 24, 2020 but who are no 7 longer employed by NCI; and (iii) the Wage Statement and PAGA Payout Fund, which applies to 8 all Class Members who worked for NCI from June 6, 2017 through February 24, 2020.3 Doc. No. 9 24-2, Part VI, §§1.27, 1.4. The total payment to a given Settlement Class Member (“Settlement 10 Payment”) is the sum of the amounts the Settlement Class Member is entitled to receive from the 11 three payout funds, id., Part VI, §1.41, which amounts are predicated on the Settlement Class 12 Member’s unique work history. Doc. No. 24 at 14:6-7. 13 This new protocol for calculating payments—and additional information showing that the 14 work histories of Class Members are fairly uniform—persuaded the Court that Gonzalez’s 15 interests were sufficiently aligned with those of other Class Members for him to serve as the 16 Named Plaintiff in this action and that the interests of Class Members had been “adequately 17 represented … in structuring the settlement.” See Doc. No. 21 at 21:22-25. Further, the Court 18 found that the Mara Law Firm—and in particular, David Mara and Jill Vecchi—were adequate 19 counsel for the Class, given their extensive experience litigating class actions and PAGA lawsuits, 20 No. 24-1 at 4:19-25, and that the scope of the proposed release was satisfactory since it did not 21 purport to release claims unrelated to the factual allegations in the 1AC. Doc. No. 24 at 17:2-18:15 22 (citing Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010)). Based on findings such as these, 23 the Court granted preliminary approval of the Amended Settlement Agreement as set forth in the 24 Amended Stipulation and conditional certification of the Class for settlement purposes. Doc. No. 25 26 3 The timeframes for the Waiting Time Penalties Subclass and the Wage Statement and PAGA Subclass reflect the statutes of limitation applicable to the alleged underlying violations, which differ from those applicable to violations 27 involving meal breaks, rest breaks and unpaid wages. See Doc. No. 24 at 10:24-11:1. Further, the Waiting Time Penalties Subclass is limited to members of the proposed class who are no longer employed by NCI, since termination of employment is a precondition for recovery of waiting time penalties. See id. 1 28 at 12:19-13:4. 2 Further, the Court ordered one slight modification to the proposed notice, approved the 3 proposed distribution plan, authorized retention of Rust Consulting, Inc. as the Settlement 4 Administrator; and ordered the parties to appear on January 23, 2023 for a final approval hearing. 5 Doc. No. 28 at 13:21-14:7. 6 PLAINTIFF’S MOTIONS 7 On October 10, 2022, Gonzalez brought an unopposed motion for attorneys’ fees, litigation 8 costs and an enhancement payment, Doc. No. 29, and on December 16, 2022, Gonzalez brought 9 an unopposed motion for final approval of class action settlement. Doc. No. 33. The Court will 10 first address the motion for final approval of class action settlement. 11 I. Motion for Final Approval of Class Settlement 12 Gonzalez has filed a declaration from a Settlement Administrator employee with relevant 13 personal knowledge showing that notice has been issued to the Class in the manner required under 14 the preliminary approval order issued by the Court on August 8, 2022. Doc. No. 33-2. Gonzalez 15 now seeks final approval of the Amended Settlement Agreement as set forth in the Amended 16 Stipulation, incorporating the actual litigation expenses for which Class Counsel is seeking 17 reimbursement, the Settlement Administrator’s current estimated expenses and the final count of 18 Settlement Class Members. Doc. No. 33. 19 Incorporating Class Counsel’s claimed litigation costs and the most recent estimate of the 20 Settlement Administrator’s costs and fees, the aggregate disbursement to Settlement Class 21 Members would be calculated by deducting the following from the $600,000 MSA: (1) a $5,000 22 enhancement payment to Gonzalez, as the Named Plaintiff; (2) $150,000 in attorneys’ fees for 23 Class Counsel; (3) $9,887.94 in litigation costs for Class Counsel; (4) $15,000 in costs and fees for 24 the Settlement Administrator; and (5) $45,000 to the LWDA for its 75% share of the $60,000 25 PAGA Payment. See Doc. No. 33 at 94-16. After making these deductions, the NSA will be 26 $375,112.06. Doc. No. 33 at 9:4-19; Doc. No. 33-2 ¶ 16. The amounts in each of the three payout 27 funds will be as follows:(i) $298,893.76 for the Meal, Rest, and Unpaid Wages Payout Fund; (ii) 1 Statement ($36,011.29) and PAGA ($15,000.00) Payout Fund. Doc. No. 33-2 ¶ 16. Funds 2 allocated to Settlement Class Members who do not cash or deposit checks issued under the 3 Amended Settlement Agreement will go to the cy pres beneficiary selected by the parties, Legal 4 Aid at Work (“Legal Aid”), which offers legal services and training regarding legal rights to 5 employees. Doc. No. 33 at 12:5-21. 6 It turns out the Class comprised 317 members. Doc. No. 33-2 ¶ 10. As of December 16, 7 2022, the Settlement Administrator had received one written request for exclusion and zero 8 objections to the Amended Settlement Agreement. Id. ¶¶ 13-15. The Court conducted a final 9 fairness hearing on January 23, 2023. See Doc. No. 37. No class member was present at the 10 hearing, and no additional requests for exclusion or objections have been received. Consequently, 11 there are 316 Settlement Class Members. Accordingly, the Amended Settlement is projected to 12 pay each Settlement Class Member an average of approximately $1,187.07. Doc. No. 33-2 ¶ 16. 13 The highest estimated settlement share is approximately $4,835.07. Id. 14 A. Legal Standard 15 “There is a strong judicial policy that favors settlements, particularly where complex class 16 action litigation is concerned.” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015) (citation and 17 internal quotation marks omitted). However, “[t]he claims, issues, or defenses of a certified class 18 may be settled … only with the court’s approval,” “after a hearing and on a finding that it is fair, 19 reasonable, and adequate.” Fed. Civ. P. 23(e). When a settlement is reached by the parties prior to 20 certification of a class, the court must confirm “the propriety of the [class] certification and the 21 fairness of the settlement” to protect the absent class members. Stanton v. Boeing Co., 327 F.3d 22 938, 952 (9th Cir. 2003); see In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th 23 Cir. 2011) (When settlements are reached prior to certification “an even higher level of scrutiny” 24 is required to determine the fairness of the agreement.); In re Mego Fin. Corp. Sec. Litig., 213 25 F.3d 454, 458 (9th Cir. 2000) (same). 26 Class settlement under Rule 23 generally proceeds in two phases. In the first phase, the 27 court conditionally certifies the class, conducts a preliminary determination of the fairness of the 1 F.R.D. 356, 363 (E.D. Cal. 2014). In the second phase, the court holds a fairness hearing where 2 class members may present objections to class certification or to the fairness of the settlement 3 agreement. Ontiveros, 303 F.R.D. at 363 (citing Diaz v. Trust Territory of Pac. Islands, 876 F.2d 4 1401, 1408 (9th Cir. 1989)). Following the fairness hearing, taking into account all of the 5 information before the court, the court must confirm that class certification is appropriate and the 6 settlement is fair, reasonable, and adequate such that the parties should be allowed to settle the 7 class action pursuant to the terms of the settlement agreement. See Valdez v. Neil Jones Food Co., 8 2015 WL 6697926, at *4 (E.D. Cal. Nov. 2, 2015); Miller v. CEVA Logistics USA, Inc., 2015 9 WL 4730176, *3 (E.D. Cal. Aug. 10, 2015). 10 B. Discussion 11 The Court conducted analyses as to conditional certification of the Class and the adequacy 12 of notice under Rule 23(a) and Rule 23(b)(3) in the August 6, 2020 order on Plaintiff’s motion for 13 preliminary approval of class action settlement and the August 8, 2022 order granting Plaintiff’s 14 renewed motion for preliminary approval of class action settlement, Doc. No. 21 at 7:17-14:8; 15 Doc. No. 28 at 9:18-11:24, in addition to conducting a range-of-reasonableness analysis and a 16 Hanlon analysis addressing settlement requirements under Rule 23(e). Doc. No. 21 at 14:10- 17 21:20. 18 As noted above, no members of the Class appeared at the January 23, 2023 final approval 19 hearing; no members of the Class have objected to the Amended Settlement; and only one member 20 of the Class has opted out of the Amended Settlement. Class Counsel is seeking less than a third of 21 the $30,000 in litigation costs for which the Court granted preliminary approval. The fees and 22 costs sought by the Settlement Administrator do not exceed the approved amount. And the record 23 shows that the Settlement Administrator executed the notice plan as approved by the Court. 24 Reviewing relevant facts for a third time, the Court again finds that Rule 23(a)’s 25 numerosity, commonality, and typicality requirements have been satisfied, because the Class 26 exceeds 300 Members; all claims are based on the allegation that NCI had company-wide policies 27 and practices in effect during the Class Period that unlawfully deprived Class Members of break 1 alleged in the 1AC. See Doc. No. 21 at 8:3-10:8. Further, the Court finds that Rule 23(a)’s 2 adequacy requirement is satisfied because Gonzalez has shown that his work history is consistent 3 with the fairly uniform work histories of other Class Members; Gonzalez has proposed a method 4 of calculating awards that adequately accounts for work history variations that do exist among 5 Class Members; and David Mara and Jill Vecchi of the Mara Firm have a long track record of 6 successfully litigating wage-and-hour class actions such as this. See Doc. No. 28 at 9:18-11:5. 7 In addition to the foregoing, the Court again finds under Rule 23(b)(3) that questions of 8 law and fact common to class members predominate, since all claims in the 1AC are predicated on 9 NCI’s company-wide policies and practices with respect to rest and meal breaks, and that the 10 superiority requirement is satisfied, given, in particular, the small amount of potential individual 11 recovery relative to the likely cost of individualized litigation. Doc. No. 21 at 11:18-13:25. 12 Similarly, the Court finds that distribution of the Class Notice conformed to the Court’s 13 August 8, 2022 order granting Gonzalez’s renewed motion for preliminary approval of class action 14 settlement; that it was the best notice practicable; that it satisfied due process; and that it provided 15 the Court with a sound basis to make an informed decision as to views of Class Members with 16 respect to the Amended Settlement. Doc. No. 33 at 14:19-15:9; see also Doc. No. 28 11:6-24 & 17 n.8. For example, the Settlement Administrator has provided a declaration showing that, in 18 addition to setting up a toll-free telephone number and website with comprehensive information 19 regarding this action and the Amended Settlement, it mailed the approved Class Notice to 317 20 Class Members by September 7, 2022; that only 8 Class Notices were undeliverable; and that no 21 objections and only one request for exclusion had been received as of December 16, 2022. Doc. 22 No. 33-2 ¶¶ 11-15. 23 The Court also finds that the payment of $45,000 (75% of $60,000) to the LWDA for its 24 share of the applicable penalties claimed under PAGA is reasonable under the circumstances, 25 since the record shows that the parties negotiated a good faith amount without compromising the 26 claims or recovery of Class Members and that Plaintiff did not receive a response or objection to 27 the settlement from the LWDA. See Doc. No. 33 at 26:3-9. 1 limited to claims arising from facts alleged in the 1AC and that the Amended Settlement is “fair, 2 reasonable and adequate” under Rule 23(e) for the reasons set forth in the Court’s August 6, 2020 3 order denying preliminary approval without prejudice and the Court’s August 8, 2022 order 4 granting the renewed motion for preliminary approval of class action settlement—noting, in 5 particular, that the revised methodology for calculating payments approved in the August 8, 2022 6 order adequately addresses potential disparities in the wages, work histories and employment 7 status of Class Members. See Doc. No. 28 at 4:25-6:5, 9:18-11:5; see also Doc. No. 21 at 14:10- 8 21:20 (addressing Hanlon factors and range-of-reasonableness analysis). 9 C. Conclusion as to Certification of Class for Settlement and Approval of 10 Settlement 11 For the foregoing reasons, the Court will certify the Class, as defined, for settlement 12 purposes and grant final approval the Amended Settlement. Further, the Court will approve the 13 requested Settlement Administration Fee and the PAGA payment. 14 II. Motion for Attorneys’ Fees, Litigation Costs and an Enhancement Award 15 Gonzalez brings a motion for attorneys’ fees in the amount of $150,000; litigation costs in 16 the amount of $9,887.94; and an enhancement payment in the amount of $5,000. Doc. No. 29 at 17 7:4-7. The motion will be granted for the reasons set forth below. 18 A. Attorneys’ Fees 19 Rule 23(h) permits the court to “award reasonable attorney’s fees and nontaxable costs” in 20 a class action when they “are authorized by law or by the parties’ agreement.” Fed.R.Civ.P. 23(h). 21 Even if the parties agree on the amount of a fee award, a district court has an obligation to 22 consider the fee award in the context of the settlement agreement to ensure that it is reasonable. 23 See In Re Bluetooth, 654 F.3d at 941. Where the settlement agreement creates a common fund, a 24 “district court ‘has the discretion to apply either the lodestar method or the percentage-of-the-fund 25 method in calculating the fee award.’ ” Stetson v. Grissom, 821 F.3d 1157, 1165 (9th Cir. May 11, 26 2016) (quoting Fischel v. Equitable Life Assurance Soc’y, 307 F.3d 997, 1006 (9th Cir. 2002)). 27 Despite the discretion afforded to the court, the Ninth Circuit has “encouraged courts to guard 1 lodestar method. In Re Bluetooth, 654 F.3d at 944–945. 2 Here, as noted above, the gross fund is $600,000 and the requested fees are $150,000. Doc. 3 No. 29 at 7:7:4-7. Thus, the requested fees comprise 25% of the gross fund, which is squarely in 4 line with the benchmark for the Ninth Circuit. See Stetson, 821 F.3d at 1165 (“the ‘benchmark’ 5 award is 25 percent of the fund”); In re Bluetooth, 654 F.3d at 944-45 (similar); Staton, 327 F. 3d 6 at 952 (“This circuit has established 25% of the common fund as a benchmark award for attorney 7 fees.”). 8 The lodestar, which the Court will apply as a cross-check to the percentage-of-the-fund 9 method, is calculated by multiplying the number of hours reasonably expended on litigation by a 10 reasonable hourly rate. Gonzales v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). The 11 district court must then determine to what extent, if any, a risk multiplier is warranted. See 12 Stetson, 821 F.3d at 1166. The Ninth Circuit has observed that “[r]isk multipliers incentivize 13 attorneys to represent class clients, who might otherwise be denied access to counsel, on a 14 contingency basis,” Stanger v. China Elec. Motor, Inc., 812 F.3d 734, 741 (9th Cir. 2016), and that 15 failure to apply a multiplier—or “risk enhancement”—to “risky” cases can be an abuse of 16 discretion. Stetson, 821 F.3d at 1166. 17 Class Counsel provides a billing report showing that, as of October 10, 2022, they had 18 worked 276 hours on this case (with work remaining to secure final settlement approval), which 19 comes to $192,800 in attorney time applying Class Counsel’s stated billing rates. Doc. No. 29, Ex. 20 1 ¶ 25. 21 This has not been an especially complex or protracted action, but it has involved the filing 22 of two pleadings, two motions for preliminary approval of class action settlement, a final approval 23 motion and the instant motion for approval of attorney fees, litigation costs and an enhancement 24 payment. Doc. Nos. 1, 17, 18, 24 & 29. Further, Class Counsel sets forth a declaration showing 25 that this action has involved a fair amount of other work, including pre-filing investigation and 26 legal research; drafting and reviewing documents relating to initial disclosures and other aspects of 27 discovery; preparing for and participating in mediation; and drafting a settlement agreement and 1 Class Counsel’s declaration—into consideration, the Court finds that 276 hours of work is 2 reasonable for these proceedings. 3 As to billing rates, David Mara, who has approximately 18 years of experience, billed 164 4 hours at a rate of $800 per hour and Jill Vecchi, who has approximately eight years of experience, 5 billed 112 hours at a rate of $550 per hour. Doc. No. 29-2 at 2. These rates are higher than 6 prevailing rates in the Fresno Division of the Eastern District of California and must, therefore be 7 adjusted for purposes of the lodestar calculation. See Avila v. Cold Spring Granite Co., 2018 WL 8 400315, at *10 (E.D. Cal. Jan. 12, 2018). In Avila v. Cold Spring Granite Company, for example, 9 this Court essentially allowed rates of $400 per hour for attorneys with 20 years or more of 10 experience; $350 per hour for an attorney with approximately 10 years of experience; and $250 11 per hour for an attorney with approximately five years of experience. 2018 WL 400315, at *10- 12 *11; see also Kutzman v. Derrel’s Mini Storage, Inc, 2020 WL 5909151, at *12 (E.D. Cal. Oct. 6, 13 2020) (applying Avila rates in calculating class action lodestar). 14 Allowing an hourly rate of $400 per hour for Mara and an hourly rate of $350 per hour for 15 Vecchi, the value of attorney time through October 10, 2022 would come to a lodestar of 16 $105,000, which implies a risk multiplier of approximately 1.43 to get to the requested $150,000 17 in fees. This case was taken on a contingency basis, so that risk multiplier is reasonable—and even 18 modest—in comparison to cases in this Circuit allowing lodestar multipliers in the 2-to-4 range to 19 compensate counsel for the risk of contingent class action litigation. See, e.g., Vizcaino v. 20 Microsoft Corp., 290 F.3d 1043, 1050-51 (9th Cir. 2002) (observing that multipliers range from 21 1.0-4.0 and a “bare majority” fall within the range of 1.5-3.0, and affirming district court’s 22 conclusion that fee award of 3.65 times lodestar amount was reasonable); see also In re Prudential 23 Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 341 (3d Cir. 1998) (“[M]ultiples 24 ranging from one to four are frequently awarded in common fund cases when the lodestar method 25 is applied.” (citation omitted)). Further, although there is no showing to this effect on the record, 26 hourly rates for attorneys in the Fresno Division have presumably increased somewhat in the five 27 years or so since Avila was decided. The lodestar analysis therefore validates the requested fees. 1 Circuit precedent and the lodestar implies a risk multiplier that is appropriate—and even 2 conservative—in a contingency case like this. The Court therefore finds that the requested 3 attorneys’ fees are reasonable. 4 B. Litigation Costs 5 “[A]n attorney who has created a common fund for the benefit of the class is entitled to 6 reimbursement of reasonable litigation expenses from that fund.” Norris v. Mazzola, 2017 WL 7 6493091, at *14 (N.D. Cal. Dec. 19, 2017) (citation and internal quotation marks omitted); accord 8 Smith v. Am. Greetings Corp., 2016 WL 2909429, at *9 (N.D. Cal. May 19, 2016) (“An attorney 9 is entitled to ‘recover as part of the award of attorney’s fees those out-of-pocket expenses that 10 would normally be charged to a fee paying client.’ ”) (quoting Harris v. Marhoefer, 24 F.3d 16, 19 11 (9th Cir. 1994)). Such expenses commonly include postage, investigation costs, copying costs, 12 hotel bills, meals, messenger services, court costs, electronic research, court reporter costs, 13 delivery fees, and mediation expenses. See, e.g., Ruiz v. XPO Last Mile, Inc., 2017 WL 6513962, 14 at *8 (S.D. Cal. Dec. 20, 2017); Leverage v. Traeger Pellet Grills, LLC, 2017 WL 6405619, at *7 15 (N.D. Cal. Dec. 15, 2017). 16 Class Counsel requests reimbursement in the sum of $9,887.94 and provides a cost 17 summary showing that, of that amount, $9,572.25 was for court fees and mediation. Doc. No. 29-2 18 at 2-7. Particularly given the Court’s interest in promoting settlement through mediation, it is 19 impossible to take issue with these modest expenses, which are less than a third of the amount for 20 which the Court granted preliminary approval. The request for $9,887.94 in litigation costs will 21 therefore be granted. 22 C. Enhancement Award 23 Representative service awards—also known as “enhancement awards”—are “fairly typical 24 in class action cases.” Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–959 (9th Cir. 2009); 25 Staton, 327 F.3d at 977. Granting a service award is discretionary and in doing so, the court should 26 consider the time and effort expended by a named plaintiff and the risk undertaken in serving as a 27 named plaintiff. Staton, 327 F.3d at 977; In re Mego, 213 F.3d at 463. Incentive awards are 1 “reputational risk” by bringing suit against a present or former employers. Rodriguez, 563 F.3d at 2 958–59. 3 Gonzalez seeks an enhancement award in the amount of $5,000 as the Named Plaintiff in 4 this case. Doc. No. 29 at 14:1-2. Courts routinely find rewards in the amount of $5,000 to be 5 reasonable. Doc. No. 36 at 21:28-23:4; see Richardson v. THD At-Home Servs., Inc., 2016 WL 6 1366952, at *13 (E.D. Cal. Apr. 6, 2016); see also, Harris v. Vector Marketing Corp., 2012 WL 7 381202, at *7 (N.D. Cal. Feb. 6, 2012) (stating that courts have indicated “as a general matter, 8 $5,000 is a reasonable amount”); Hopson v. Hanesbrands Inc., 2009 WL 928133, at *10 (N.D. 9 Cal. Apr. 3, 2009) (“In general, courts have found that $5,000 incentive payments are 10 reasonable.”). Gonzalez sets forth a declaration stating that since filing this lawsuit nearly five 11 years ago, he has engaged in regular communication with Class Counsel and assisted in crafting 12 discovery, responding to discovery and otherwise developing facts underlying the claims in this 13 case. Doc. No. 29-6 ¶¶ 4-6. Further, the Court notes that Gonzalez stands to receive only $204.08 14 in settlement (compared to an average settlement payment in excess of $1,000), Doc. No. 29 at 15 14:7-11, and that he is the sole named plaintiff in this action. See In re Online DVD-Rental 16 Antitrust Litig., 779 F.3d 934, 947 (9th Cir. 2015) (taking note of the number of named plaintiffs 17 in assessing service award). 18 The Court therefore finds that the requested enhancement award of $5,000 is reasonable. 19 See Richardson, 2016 WL 1366952 at *13. 20 D. Conclusion as to Attorneys’ Fees, Litigation Costs and Enhancement Award 21 For the foregoing reasons, the Court will grant Plaintiff’s motion for attorneys’ fees, 22 litigation costs and an enhancement award. Doc. No. 29. 23 ORDER 24 Accordingly, IT IS HEREBY ORDERED that: 25 1. Plaintiff Arturo Gonzalez’s motion for final approval of class settlement (Doc. No. 26 33) is GRANTED; 27 2. The Class meets the requirements for class certification for purposes of settlement 1 set forth in Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure; 2 3. The terms of the Amended Settlement Agreement are fair, reasonable and adequate 3 and comply with Rule 23(e) of the Federal Rules of Civil Procedure; 4 4. The notice provided to members of the Class, as well as the means by which it was 5 provided, constitutes the best notice practicable under the circumstances and is in 6 full compliance with the requirements of due process and Rule 23 of the Federal 7 Rules of Civil Procedure; 8 5. The PAGA payment of $45,000 (75% of $60,000) to the LWDA is approved, with 9 the remaining $15,000 to be distributed in accordance with the Amended 10 Settlement Agreement; 11 12 6. The Settlement Administrator, Rust Consulting, Inc., is awarded up to $15,000 for 13 settlement administration costs. 14 Further, IT IS ORDERED THAT: 15 1. Plaintiff’s motion for attorneys’ fees, costs and an enhancement award (Doc. No. 16 29) is GRANTED; 17 2. The Mara Firm is appointed as class counsel and awarded $150,000 in attorneys’ 18 fees and $9,887.94 in litigation costs; 19 20 3. Plaintiff Arturo Gonzalez is awarded an enhancement award for his service as the 21 sole Named Plaintiff in the amount of $5,000; 22 Further, IT IS ORDERED THAT: 23 1. The Court directs the parties to effectuate the Amended Settlement Agreement and 24 directs the Settlement Administrator to calculate and pay the claims of Class 25 Members in accordance with the terms set forth in the Amended Settlement 26 Agreement and incorporating the amounts awarded in this order for attorneys’ fees, 27 litigation costs, settlement administration costs and the enhancement award; 1 2. By means of this order, this Court enters final judgment in this action; 2 3. Each side shall bear its own costs and attorneys’ fees except as provided by the 3 Amended Settlement and this order; 4. The Clerk of Court shall CLOSE this case; and
6 5. The Court RETAINS jurisdiction to consider all further applications arising out of 4 or in connection with the settlement. 8 9 IT IS SO ORDERED. io | Dated: _January 24, 2023 _ 7 : 7 Cb Led — SENIOR DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28