Grice v. Pepsi Beverages Co.

363 F. Supp. 3d 401
CourtDistrict Court, S.D. Illinois
DecidedJanuary 28, 2019
Docket17-CV-8853 (JPO)
StatusPublished
Cited by5 cases

This text of 363 F. Supp. 3d 401 (Grice v. Pepsi Beverages Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grice v. Pepsi Beverages Co., 363 F. Supp. 3d 401 (S.D. Ill. 2019).

Opinion

J. PAUL OETKEN, District Judge:

*405Plaintiff Altareek Grice, on behalf of himself and others similarly situated, brought this action against Defendant Bottling Group, LLC s/h/a Pepsi Beverages Company ("PBC") on the basis of PBC's alleged violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681b(b)(2). On November 8, 2018, the same date on which Plaintiff moved for a final approval of a class action settlement of up to $ 1,192,275 (Dkt. No. 54), Plaintiff separately moved for an award of attorney's fees and costs, to be paid out of the settlement fund to Class Counsel (Dkt. No. 56). After a fairness hearing on November 15, 2018, the Court certified the proposed class and approved the settlement as fair and adequate under Federal Rule of Civil Procedure 23(e), but reserved judgment on Plaintiff's motion for fees and costs. For the following reasons, the attorney's fees motion is granted in part and denied in part.

I. Background

On June 19, 2017, Plaintiff filed this action in the California Superior Court for the County of San Diego, alleging that PBC has violated the FCRA by procuring consumer reports of Plaintiff and class members for employment purposes without making the required disclosure in a stand-alone document. (Dkt. No. 1-2 ¶ 1.) PBC then removed this action to the United States District Court for the Southern District of California (Dkt. No. 1), and the case was transferred to this Court on November 14, 2017 (Dkt. No. 12). On January 31, 2018, following a private mediation held before the parties had engaged in any extensive discovery, the parties notified the Court that they had settled. (Dkt. Nos. 20, 21.)

Under the parties' proposed settlement terms, PBC agrees to pay $ 1,192,275 to a common fund. (Dkt. No. 39 (the "Settlement Agreement") ¶ 23.) The common fund is intended to cover all payments owed under the settlement, including class member payouts, attorney's fees and costs, the cost of settlement administration, and a service award for Plaintiff Grice. (Settlement Agreement ¶ 24.) After deducting all fees, costs and the service award from the common fund, the rest of the fund (the "Net Settlement Fund")-$ 710,850-will be distributed to class members submitting valid claims forms.

However, although the putative class consists of 23,133 members, only 1,879 members have submitted valid claims forms ("participating class members"), representing approximately 8.1% of the entire class. (Dkt. No. 52 ¶ 10.) The low participation rate here triggers a reversionary term under the Settlement Agreement which allows PBC to claw back 40% of the Net Settlement Fund-$ 284,340-with the remaining 60%-$ 426,510-to be distributed equally among participating class members. (Settlement Agreement ¶ 26.)

Class Counsel now move for an attorney's fees award of $ 397,387, costs reimbursement totaling $ 74,507.79, and a service award for Grice of $ 5,000. (Dkt. No. 56.) The $ 397,387 attorney's fees figure represents one-third of the original $ 1,192,275 common fund created by the terms of the parties' settlement. (Dkt. No. 57 at 2.) In support of this figure, Class Counsel represent that over 450 hours were spent on this matter by attorneys working at hourly rates ranging from $ 500 to $ 875, resulting in a lodestar figure of $ 331,281.25. (Dkt. No. 57 at 5, *40613.) Per the terms of the Settlement Agreement, PBC agreed not to oppose the attorney's fees award (Dkt. No. 55 at 10), and no class member has objected to the instant motion (Dkt. No. 52 ¶ 14).

II. Legal Standard

In Rule 23 class actions, the "attorneys whose efforts created the fund are entitled to a reasonable fee-set by the court-to be taken from the fund." Goldberger v. Integrated Res., Inc. , 209 F.3d 43, 47 (2d Cir. 2000). Courts in this Circuit consider six nonexclusive factors (hereinafter, the " Goldberger factors") in evaluating the reasonableness of a fee: "(1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation ...; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations." Id. at 50 (omission in original) (quoting In re Union Carbide Corp. Consumer Prods. Bus. Sec. Litig. , 724 F.Supp. 160, 163 (S.D.N.Y. 1989) ).

The Second Circuit has approved the use of two methods to calculate attorney's fees: the lodestar method and the percentage of the fund method. See id. at 47. Under the lodestar method, the district court multiplies the reasonable hours billed by a reasonable hourly rate to create a presumptively reasonable fee. Id. Under the percentage of the fund method, class counsel is awarded a reasonable percentage of the total value of the settlement fund created for the class. Id. Courts in this Circuit tend to apply the percentage method, which, unlike the lodestar method, "directly aligns the interests of the class and its counsel and provides a powerful incentive for the efficient prosecution and early resolution of litigation." Wal-Mart Stores Inc. v. Visa U.S.A. Inc. , 396 F.3d 96, 121 (2d Cir. 2005) (quoting In re Lloyd's Am. Tr. Fund Litig. , No. 96 Civ. 1262, 2002 WL 31663577, at *25 (S.D.N.Y. Nov. 26, 2002) ). But even when the percentage of the fund method is used, the Second Circuit "encourage[s] the practice of requiring documentation of hours as a cross check on the reasonableness of the requested percentage." Goldberger , 209 F.3d at 50 (internal quotation marks omitted).

III. Discussion

A. Attorneys' Fees

Following the approach set forth by Judge Schofield in McGreevy v. Life Alert Emergency Response, Inc. , 258 F.Supp.3d 380 (S.D.N.Y. 2017), this Court "applies the percentage of the fund method and considers the Goldberger factors in three steps." Id. at 384-85.

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Bluebook (online)
363 F. Supp. 3d 401, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grice-v-pepsi-beverages-co-ilsd-2019.