1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 ANTHONY MARC MOSTAJO, et al., No. 2:17-cv-00350-DAD-AC 12 Plaintiffs, 13 v. ORDER GRANTING MOTIONS FOR FINAL APPROVAL OF CLASS ACTION 14 NATIONWIDE MUTUAL INSURANCE SETTLEMENT AND GRANTING MOTION COMPANY, FOR ATTORNEYS’ FEES, COSTS, AND 15 INCENTIVE AWARD Defendant. 16 (Doc. Nos. 144, 145)
18 19 This matter came before the court on January 6, 2023, for a hearing on plaintiffs Anthony 20 Marc Mostajo’s and Elaine Quedens’s unopposed motions for final approval of a class action 21 settlement and for an award of attorneys’ fees, costs, and incentive awards for plaintiffs. (Doc. 22 Nos. 144, 145.) Attorney Robin G. Workman of the Workman Law Firm, PC appeared by video 23 on behalf of plaintiffs and the class. Attorneys John Battenfeld and Anahi Cruz of Morgan, 24 Lewis & Bockius LLP appeared by video on behalf of defendant Nationwide Mutual Insurance 25 Company (“Nationwide”). For the reasons set forth below, the court will grant final approval of 26 ///// 27 ///// 28 ///// 1 the class action settlement and will grant the motion for attorneys’ fees, costs, and incentive 2 awards to plaintiffs.1 3 BACKGROUND 4 The court previously summarized plaintiffs’ allegations in its August 5, 2022 order 5 granting plaintiffs’ motion for preliminary approval of a class action settlement. (Doc. No. 141.) 6 The court will not repeat that factual background in this order. Following the grant of preliminary 7 approval in this action, this case was reassigned from Chief Judge Kimberly J. Mueller to the 8 undersigned. (Doc. No. 142.) 9 1 During the final approval hearing, the court questioned defendant’s counsel regarding whether 10 defendant sent notice of the proposed settlement to the appropriate federal and state officials, as is 11 required by the Class Action Fairness Act (“CAFA”) pursuant to 28 U.S.C. § 1715(b). Under § 1715(b), each defendant participating in the proposed settlement must serve notice of that 12 settlement upon certain state and federal officials within ten days of the proposed settlement being filed in court, which in this case, would have been June 12, 2022. (See Doc. No. 138.) On 13 January 11, 2023, following the final approval hearing, defendant’s counsel filed a declaration informing the court that defendant did not send its CAFA notice to the appropriate federal and 14 state officials under § 1715(b) until January 9, 2023. (Doc. No. 153 at 2.) In addition to 15 requiring notice, CAFA also requires that “[a]n order giving final approval of a proposed settlement may not be issued earlier than 90 days after” the appropriate federal and state officials 16 are served with notice. 28 U.S.C. § 1715(d). Although the court may hold a final approval hearing before the 90-day period under 28 U.S.C. § 1715(d) concludes, the court cannot grant 17 final approval of a class action settlement until the ninety-day period concludes. See Wilcox v. Swapp, No. 2:17-cv-275-RMP, 2020 WL 2110411, at *1–2 (E.D. Wash. Apr. 22, 2020) (finding 18 that the court may hold a final approval hearing within 90 days of the defendants providing notice 19 under § 1715(d) because “as long as the relevant government officials are allowed ninety days to object to the settlement, the notice requirement has served its purpose”). Moreover, although 20 defendant failed to timely comply with the notice requirements under CAFA, “late mailing of notices to state and federal officials under CAFA is not fatal to approval of settlements.” Adoma 21 v. University of Phoenix, Inc., 913 F. Supp. 2d 964, 973 (E.D. Cal. 2012). Instead, the critical question is whether “state and federal government officials are allowed ninety days to object to 22 the settlement or request to be heard.” Wilcox, 2020 WL 21104111, at *2. On April 11, 2023, 23 following the ninety-day CAFA notice period, defendant’s counsel filed a declaration informing the court that defendant had not received any objections from any government officials in 24 response to its CAFA notice. (Doc. No. 155.) Because the ninety-day notice period pursuant to § 1715(d) has now passed and defendant has not received any objections in response to its CAFA 25 notice, the court now proceeds to issuing this order granting final approval of the proposed settlement. See In re Processed Egg Products Antitrust Litigation, 284 F.R.D. 249, 258 n.12 26 (E.D. Pa. 2012) (finding that although defendant’s CAFA notice was untimely, “the substance of 27 the [CAFA notice] requirements have been satisfied insofar as giving federal and state officials sufficient notice and opportunity to be heard” because such officials had ninety days after 28 defendant’s notice to request a hearing or object to the settlement). 1 On October 11, 2022, plaintiffs filed the pending unopposed motion for attorneys’ fees, 2 costs, and incentive awards for plaintiffs, and on November 1, 2022, plaintiffs filed the pending 3 unopposed motion for final approval of the parties’ class action settlement. (Doc. Nos. 144, 145.) 4 As of the date of the hearing on January 6, 2023, no objections to the settlement had been 5 received or filed with the court, and no class members have opted out of the settlement. (See 6 Doc. No. 145-1 at 13.) 7 As summarized by the court in its order granting preliminary approval of the parties’ 8 settlement, the settlement agreement provides for a settlement payment made by defendant in the 9 amount of $3,800,000 (the “gross settlement fund”). (See Doc. No. 141 at 4.) Assuming the 10 parties’ proposed allocations are awarded in full, approximately $2,105,000 (the “net settlement 11 amount”) will be available for distribution to participating class members. (See Doc. No. 145-1 at 12 11.) 13 FINAL CERTIFICATION OF SETTLEMENT CLASS 14 On February 26, 2020, the court granted plaintiffs’ motion for class certification. (Doc. 15 No. 96.) Specifically, the court certified the following two subclasses: 2 (1) Subclass A, which is 16 defined as the “class of persons employed by Nationwide as commercial lines claims adjusters in 17 California” from January 9, 2013 through the date of preliminary approval; and (2) Subclass B, 18 which is defined as “all former California employees employed by Nationwide” from January 9, 19 2013 through the date of preliminary approval “who accrued vacation time for which Nationwide 20 ///// 21 2 The court’s February 26, 2020 order specifies that the subclasses include individuals employed 22 by defendant beginning “the four years preceding the original [January 9, 2017] date of filing this 23 lawsuit to the present,” i.e., January 9, 2013 through February 26, 2020. (Doc. No. 96 at 2; see also Doc. No. 1 at 1). The parties’ settlement agreement and the court’s order granting 24 preliminary approval defines the relevant period of employment for the subclasses as extending through the date of preliminary approval, which was August 5, 2022. (See Doc. Nos. 141 at 2; 25 138-2 at 38–39). Although January 9, 2013 through August 5, 2022 is the relevant time period for determining an individual’s membership in Subclasses A and B, the settlement agreement 26 defines the class period as spanning “from January 9, 2013 through . . . January 31, 2022.” (See 27 Doc. No. 138-2 at 32, 38–39.) At the final approval hearing, class counsel and defense counsel clarified that the difference between the dates underlying subclass membership and the dates 28 comprising the class period was intentional on behalf of the parties. 1 did not pay them.”3 (Doc. No. 96 at 2–3; see also Doc. No. 141 at 2.) The court also appointed 2 plaintiffs Anthony Marc Mostajo and Elaine Quedens as class representatives, the Workman Law 3 Firm, PC as class counsel, and RG/2 Claims Administration, LLC (“RG/2”) as claims 4 administrator. Because no additional substantive issues concerning the certification have been 5 raised, the court does not repeat its prior analysis here, and the court’s prior appointments are 6 confirmed for settlement purposes. 7 FINAL APPROVAL OF CLASS ACTION SETTLEMENT 8 Class actions require the approval of the district court prior to settlement. Fed. R. Civ. 9 P. 23(e). To approve a settlement, a district court must: (i) ensure notice is sent to all class 10 members; (ii) hold a hearing and make a finding that the settlement is fair, reasonable, and 11 adequate; (iii) confirm that the parties seeking approval file a statement identifying the settlement 12 agreement; and (iv) be shown that class members were given an opportunity to object. Fed. R. 13 Civ. P. 23(e)(1)–(5). The settlement agreement in this action was previously filed on the court’s 14 docket (see Doc. No. 138-2), and class members have been given an opportunity to object. The 15 court now turns to the adequacy of notice and its review of the settlement following the final 16 fairness hearing. 17 A. Notice 18 Adequate notice of the class settlement must be provided under Rule 23(e). Hanlon v. 19 Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998); see also Silber v. Mabon, 18 F.3d 1449, 20 1453–54 (9th Cir. 1994) (noting that the court need not ensure all class members receive actual 21 notice, only that “best practicable notice” is given); Winans v. Emeritus Corp., No. 4:13-cv- 22 03962-HSG, 2016 WL 107574, at *3 (N.D. Cal. Jan. 11, 2016) (“While Rule 23 requires that 23 ‘reasonable effort’ be made to reach all class members, it does not require that each individual 24 actually receive notice.”). “Notice is satisfactory if it ‘generally describes the terms of the 25 settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come 26 forward and be heard.’” Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) 27 3 The parties estimate that there are approximately 121 members of Subclass A and 1,150 28 members of Subclass B, for a total of approximately 1,271 class members. (Doc. No. 144-1 at 8.) 1 (quoting Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)). Any notice 2 of the settlement sent to the class should alert class members of “the opportunity to opt-out and 3 individually pursue any state law remedies that might provide a better opportunity for recovery.” 4 Hanlon, 150 F.3d at 1025. 5 The court previously reviewed the notice provided in this case at the preliminary approval 6 stage and found it to be satisfactory, apart from the following two deficiencies that the court 7 stated “must be remedied before any final approval.” (Doc. No. 141 at 16.) First, the proposed 8 notice to class members must be modified to “clarify class members’ ability to appear at the final 9 approval hearing without an attorney by adding ‘with or without a lawyer’ after ‘attend the 10 hearing’ in the second sentence of this section title.” (Id.) (internal quotation marks omitted). 11 Second, “[t]he notice to new class members must be remedied to require only the minimum 12 information from [new class members seeking exclusion from the class], before the notice is 13 distributed.” (Id.) Plaintiffs submitted the class notices sent to Subclasses A and B with their 14 pending motion for final approval, and those revised notices reflect that these revisions were 15 implemented. (See Doc. No. 145-3 at 19, 30, 32.) 16 Following the grant of preliminary approval, the settlement administrator RG/2 conducted 17 a National Change of Address search to update the list of class members with current addresses 18 and then mailed the court-approved notice to the 1,271 class members. (Doc. No. 145-1 at 12.) 19 After successfully remailing 88 notice packets that were initially returned as undeliverable, only 20 two notice packets were ultimately undeliverable. (Id. at 13.) Thus, of the 1,271 total class 21 members, 1,269 are estimated to have received actual notice of the settlement. 22 Given the above, the court accepts the reports of the settlement administrator and finds 23 adequate notice has been provided, thereby satisfying Federal Rule of Civil Procedure 23(e)(1). 24 Silber, 18 F.3d at 1453–54; Winans, 2016 WL 107574, at *3. 25 B. Final Fairness Determination 26 On January 6, 2023, the court held a final fairness hearing, at which class counsel and 27 defense counsel appeared by video. The court now must determine whether the settlement is fair, 28 adequate, and reasonable. See Fed. R. Civ. P. 23(e)(2). At the final approval stage, the primary 1 inquiry is whether the proposed settlement is fundamentally “fair, adequate, and reasonable.” 2 Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012) (quoting Fed. R. Civ. P. 23(e)); 3 Hanlon, 150 F.3d at 1026. “It is the settlement taken as a whole, rather than the individual 4 component parts, that must be examined for overall fairness.” Hanlon, 150 F.3d at 1026 (citing 5 Officers for Justice v. Civil Serv. Comm’n of S.F., 688 F.2d 615, 628 (9th Cir. 1982)); see also 6 Lane, 696 F.3d at 818–19. Having already completed a preliminary examination of the 7 agreement, the court reviews it again, mindful that the law favors the compromise and settlement 8 of class action suits. See, e.g., In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008); 9 Churchill Vill., 361 F.3d at 576; Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 10 1992); Officers for Justice, 688 F.2d at 625. Ultimately, “the decision to approve or reject a 11 settlement is committed to the sound discretion of the trial judge because he [or she] is exposed to 12 the litigants, and their strategies, positions and proof.” Staton v. Boeing Co., 327 F.3d 938, 953 13 (9th Cir. 2003) (quoting Hanlon, 150 F.3d at 1026). 14 In assessing the fairness of a class action settlement, courts balance the following factors: 15 (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of 16 maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the 17 stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction 18 of the class members to the proposed settlement. 19 Churchill Vill., 361 F.3d at 575; see also In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 20 944 (9th Cir. 2015); Rodriguez v. West Publ’g Corp., 563 F.3d 948, 964–67 (9th Cir. 2009). 21 ///// 22 ///// 23 ///// 24 ///// 25 ///// 26 ///// 27 ///// 28 ///// 1 These settlement factors are non-exclusive, and each need not be discussed if they are irrelevant 2 to a particular case. Churchill Vill., 361 F.3d at 576 n.7.4 3 However, the Ninth Circuit has found that consideration of the Churchill factors alone is 4 not sufficient to survive appellate review. See Briseño v. Henderson, 998 F.3d 1014, 1022–26 5 (9th Cir. 2021) (holding that the revised Rule 23(e) requires district courts “to go beyond our 6 precedent” and mandates consideration of “the Bluetooth factors” to all class action settlements, 7 regardless of whether settlement was achieved before or after class certification); see also Fed. R. 8 Civ. P. 23(e)(2)(C)–(D). Under the revised Rule 23(e), “district courts must apply 9 the Bluetooth factors to scrutinize fee arrangements . . . to determine if collusion may have led to 10 class members being shortchanged.” Briseño, 998 F.3d at 1026. The so-called Bluetooth 11 4 As part of the 2018 amendments to the Federal Rules of Civil Procedure, subsection (e)(2) was 12 added to Rule 23, providing guidance to district courts in determining whether a class action settlement is “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). In so determining, the 13 court must consider whether:
14 (A) the class representatives and class counsel have adequately 15 represented the class; (B) the proposal was negotiated at arm’s length; 16 (C) the relief provided for the class is adequate, taking into account: (i) the costs, risks, and delay of trial and appeal; 17 (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class- 18 member claims; 19 (iii) the terms of any proposed award of attorney’s fees, including timing of payment; and 20 (iv) any agreement required to be identified under Rule 23(e)(3); and 21 (D) the proposal treats class members equitably relative to each other. 22
23 Fed. R. Civ. Pro. 23(e)(2). The purpose of the 2018 amendment was “not to displace any factor” previously generated by courts, “but rather to focus the court and the lawyers on the core 24 concerns of procedure and substance that should guide the decision whether to approve the propos[ed settlement].” Fed. R. Civ. P. 23, Advisory Comm. Notes; see Kang v. Wells Fargo 25 Bank, N.A., No. 5:17-cv-06220-BLF, 2021 WL 5826230, at *14 (N.D. Cal. Dec. 8, 2021) (“Consideration of Churchill factors is not precluded by the 2018 amendment to Rule 23.”); 26 Stoddart v. Express Servs., No. 2:12-cv-01054-KJM-CKD, 2021 WL 5761083, at *2 (E.D. Cal. 27 Dec. 3, 2021) (“Before these provisions were incorporated into Rule 23(e), the Ninth Circuit and other courts used similar factors to decide whether settlement agreements in class actions were 28 ‘fair, reasonable, and adequate.’”). 1 factors—also referred to as “subtle signs” of collusion—include: (i) “when counsel receive a 2 disproportionate distribution of the settlement, or when the class receives no monetary 3 distribution but class counsel are amply rewarded”; (ii) the existence of a “clear sailing” 4 arrangement, which provides “for the payment of attorneys’ fees separate and apart from class 5 funds,” or a provision under which defendant agrees not to object to the attorneys’ fees sought; 6 and (iii) “when the parties arrange for fees not awarded to revert to defendants rather than be 7 added to the class fund.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 8 2011) (internal quotations and citations omitted). “The presence of these three signs is not a 9 death knell—but when they exist, ‘they require[ ] the district court to examine them, . . . develop 10 the record to support its final approval decision,’ and thereby ‘assure itself that the fees awarded 11 in the agreement were not unreasonably high.’” Kim v. Allison, 8 F.4th 1170, 1180 (9th Cir. 12 2021) (quoting Allen v. Bedolla, 787 F.3d 1218, 1224 (9th Cir. 2015)). Thus, while this court has 13 wide latitude in determining whether a settlement is substantively fair, it is held to a higher 14 procedural standard, and in order “[t]o survive appellate review . . . [it] must show it has explored 15 comprehensively all factors, and must give a reasoned response to all non-frivolous objections.” 16 McKinney-Drobnis v. Oreshack, 16 F.4th 594, 606 (9th Cir. 2021) (quoting Allen, 787 F.3d at 17 1223–24). 18 1. Strength of Plaintiffs’ Case 19 When assessing the strength of a plaintiff’s case, the court does not reach “any ultimate 20 conclusions regarding the contested issues of fact and law that underlie the merits of th[e] 21 litigation.” In re Wash. Pub. Power Supply Sys. Sec. Litig., 720 F. Supp. 1379, 1388 (D. Ariz. 22 1989). The court cannot reach such a conclusion because evidence has not been fully presented. 23 Id. Instead, the court “evaluate[s] objectively the strengths and weaknesses inherent in the 24 litigation and the impact of those considerations on the parties’ decisions to reach these 25 agreements.” Id. 26 Plaintiffs assert that in continuing to litigate this action, they would have faced many 27 challenges, despite their confidence in the strength of their claims. (See Doc. No. 145-1 at 16.) 28 Defendant “denies all of the claims and contentions alleged by Plaintiffs and asserted multiple 1 defenses to liability and damages.” (Id.) In addition, defendant “made it clear that it intended to 2 file a decertification motion with respect to Subclass A, and intended to appeal the summary 3 adjudication ruling regarding Subclass B’s claim.” (Id.) According to plaintiffs, these challenges 4 contributed to plaintiffs’ and class counsel’s determination that the settlement reached was in the 5 best interests of the class. 6 Accordingly, the court finds that consideration of this factor weighs in favor of granting 7 final approval of the parties’ settlement in this action. 8 2. Risk, Expense, Complexity, and Likely Duration of Further Litigation 9 When considering whether the relief for the class is “adequate,” the court must take into 10 account “the costs, risks, and delay of trial and appeal.” Fed. R. Civ. P. 23(e)(2)(C)(i). “[T]here 11 is a strong judicial policy that favors settlements, particularly where complex class action 12 litigation is concerned.” In re Syncor ERISA Litig., 516 F.3d at 1101 (citing Class Plaintiffs, 955 13 F.2d at 1276). As a result, “[a]pproval of settlement is preferable to lengthy and expensive 14 litigation with uncertain results.” Johnson v. Shaffer, No. 2:12-cv-1059-KJM-AC, 2016 WL 15 3027744, at *4 (E.D. Cal. May 27, 2016) (citing Morales v. Stevco, Inc., No. 1:09-cv-00704- 16 AWI-JLT, 2011 WL 5511767, at *10 (E.D. Cal. Nov. 10, 2011)). 17 Because of the aforementioned challenges, plaintiffs believe that “continued litigation 18 would likely result in common litigation issues such as increased expense, duration, and potential 19 appellate issues.” (Doc. No. 145-1 at 16.) In addition, plaintiffs contend that “[e]mployment law 20 class actions are, by their nature, time-consuming and expensive to litigate.” (Id.) (citing Aguilar 21 v Wawona Frozen Foods, No. 1:15-cv-00093-DAD-EPG, 2017 WL 2214936, at *3 (E.D. Cal. 22 May 19, 2017). Plaintiffs also note defendant’s belief that the settlement would “avoid the 23 expense, inconvenience, and burden of further legal proceedings, and the uncertainties of trial and 24 appeals.” (Id.) Because the information before the court suggests that there would be risk and 25 expense in seeking to prove plaintiffs’ case at trial, consideration of this factor also weighs in 26 favor of granting final approval. 27 ///// 28 ///// 1 3. Risk of Maintaining Class Action Status Throughout Trial 2 As noted above, plaintiffs represent that defendant “made it clear that it intended to file a 3 decertification motion with respect to Subclass A, and intended to appeal the summary 4 adjudication ruling regarding Subclass B’s claim. (Doc. No. 145-1 at 16.) Although plaintiffs do 5 not elaborate further on defendant’s specific arguments with respect to these challenges, the court 6 is satisfied that defendant’s challenges would have presented at least some risk that plaintiffs 7 would not be able to maintain a class action through trial. Thus, consideration of this factor also 8 weighs in favor of granting final approval. 9 4. Amount Offered in Settlement 10 To evaluate the fairness of the settlement award, the court should “compare the terms of 11 the compromise with the likely rewards of litigation.” Protective Comm. for Indep. Stockholders 12 of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424–25 (1968); see also Fed. R. Civ. P 13 23(e)(2)(C)–(D). “It is well-settled law that a cash settlement amounting to only a fraction of the 14 potential recovery does not per se render the settlement inadequate or unfair.” In re Mego Fin. 15 Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000). To determine whether a settlement “falls 16 within the range of possible approval” a court must focus on “substantive fairness and adequacy,” 17 and “consider plaintiffs’ expected recovery balanced against the value of the settlement offer.” In 18 re Tableware Antitrust Litig., 484 F. Supp. 2d 1078–80 (N.D. Cal. 2007) (citations omitted). In 19 addition, the court must consider whether “the proposal treats class members equitably relative to 20 each other” and whether “the relief provided for the class is adequate.” Fed. R. Civ. P. 21 23(e)(2)(C)–(D). 22 Here, the parties have agreed to a $3,800,000 gross settlement, allocated as follows: (1) 23 up to $950,000 for attorneys’ fees and up to $630,000 for class counsel’s documented litigation 24 costs and expenses; (2) $25,000 incentive awards for both plaintiffs; (3) $50,000 in civil penalties 25 under the Private Attorneys General Act, California Labor Code § 2698, et seq. (“PAGA”), with 26 $37,500 of the penalties payable to the California Labor and Workforce Development Agency 27 ///// 28 ///// 1 (“LWDA”) 5; (4) up to $15,000 for settlement administration costs; and (5) the remainder of the 2 funds being allocated to the net settlement fund. (Doc. No. 138-2 at 44.) Defendant is 3 responsible for paying employer payroll taxes, which are not included in the gross settlement 4 fund. (Id. at 34.) Through the use of retained experts Jon Krosnick, PhD and Dwight Steward, 5 PhD, class counsel estimates that the maximum potential damages plaintiffs could recover in this 6 action totals $5,942,158.36, making the gross settlement fund an approximately 64% recovery of 7 plaintiffs’ maximum potential damages. (Doc. No. 145-1 at 16–17.) 8 Of the $2,105,000 net settlement fund, $750,000 will be allocated to the Subclass A net 9 settlement fund, with the remainder to be allocated to the Subclass B net settlement fund. (Doc. 10 No. 138-2 at 38–39.) These net settlement funds will be distributed to participating subclass 11 members on a pro rata basis based on the number of eligible workweeks worked by subclass 12 members. (Id.) Based on plaintiffs’ current estimates of the net settlement funds, the average 13 amount Subclass A members are expected to recover is $6,198.35, and the average Subclass B 14 members are expected to recover is $1,111.57, with the largest payment to any class member 15 estimated to be $22,746.83. (Doc. No. 145-1 at 18.) The settlement is non-reversionary, and the 16 amount of any uncashed checks will be transmitted to the California State Controller’s Unclaimed 17 Property Fund. (See Doc. Nos. 138-2 at 54; 145-1 at 11–12.) 18 The proposed settlement amount is well within the general range of percentage recoveries 19 that California courts—including this one—have found to be reasonable. See, e.g., Singh v. 20 Roadrunner Intermodal Servs, LLC, No. 1:15-cv-01497-DAD-BAM, 2018 WL 2412325, at *7 21 (E.D. Cal. May 29, 2018), modified, 2018 WL 4382202 (E.D. Cal. Sept. 13, 2018) (approving a 22 settlement of about 12% of the estimated maximum damages); Glass v. UBS Fin. Servs., Inc., No. 23 3:06-cv-04068-MMC, 2007 WL 221862, at *4 (N.D. Cal. Jan. 26, 2007) (approving a settlement 24 of about 25–35% of the estimated maximum). As noted above, the court has received no 25 objections to the settlement, and no class members have sought to opt out of the settlement. (See 26
27 5 Pursuant to the PAGA, 75% of the civil PAGA penalties, or $37,500, will go to the LWDA, and 25%, or $12,500, will be allocated to the net settlement fund. (See Doc. No. 145-3 at 25); see 28 Cal. Lab. Code § 2699(i). 1 Doc. No. 145-1 at 12.) Overall, based on the information presented to the court, the court 2 concludes that the amount offered in settlement of this action does not appear to be unreasonable. 3 a. PAGA Penalties Amount Offered in Settlement 4 As described above, the settlement also provides for $50,000 in civil PAGA penalties. 5 (Doc. No. 138-2 at 44.) Under PAGA, 75% of the civil penalties, or $37,500, will go to the 6 LWDA, and 25%, or $12,500, will be included in the net settlement amount. (See Doc. No. 145- 7 3 at 14); see Cal. Lab. Code § 2699(i). 8 Although there is no binding authority setting forth the proper standard of review for 9 PAGA settlements, California district courts “have applied a Rule 23-like standard, asking 10 whether the settlement of the PAGA claims is ‘fundamentally fair, adequate, and reasonable in 11 light of PAGA’s policies and purposes.’” Haralson v. U.S. Aviation Servs. Corp., 383 F. Supp. 12 3d 959, 972 (N.D. Cal. 2019). This standard is derived from the LWDA. In commenting on a 13 proposed settlement including both class action and PAGA claims, the LWDA has offered the 14 following guidance:6 15 It is thus important that when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, 16 consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate 17 whether the settlement meets the standards of being “fundamentally fair, reasonable, and adequate” with reference to the public policies 18 underlying the PAGA. 19 O’Connor v. Uber Techs., Inc., 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016) (citing the LWDA’s 20 guidance with approval). Recognizing the distinct issues presented by class actions, this court is 21 persuaded by the LWDA’s reasoning in O’Connor and therefore adopts its proposed standard in 22 evaluating the PAGA portion of the settlement now before the court. See id.; see, e.g., Castro v. 23 Paragon Indus., Inc., No. 1:19-cv-00755-DAD-SKO, 2020 WL 1984240, at *6 (E.D. Cal. Apr. 24 27, 2020); Patel v. Nike Retail Servs., Inc., No. 3:14-cv-04781-RS, 2019 WL 2029061, at *2 25 (N.D. Cal. May 8, 2019). 26 6 The LWDA has also stated that it “is not aware of any existing case law establishing a specific 27 benchmark for PAGA settlements, either on their own terms or in relation to the recovery on other claims in the action.” O’Connor v. Uber Techs., Inc., No. 3:13-cv-03826-EMC (N.D. Cal. 28 Jul. 29, 2016) (Doc. No. 736 at 2–3). 1 The proposed $50,000 penalty payment in this case represents 1.3% of the estimated 2 $3,800,000 gross settlement amount. The amount proposed to settle plaintiffs’ PAGA claims is 3 consistent with other PAGA settlements approved by this court.7 See, e.g., Castro, 2020 WL 4 1984240, at *15 (approving PAGA penalties representing 2% of the gross settlement fund); Syed 5 v. M-I, LLC, No. 1:12-cv-01718-DAD-MJS, 2017 WL 714367, at *13 (E.D. Cal. Feb. 22, 2017) 6 (approving PAGA penalties representing 1.4% of the gross settlement fund); Garcia v. Gordon 7 Trucking, Inc., No. 1:10-cv-0324-AWI-SKO, 2012 WL 5364575, at *7 (E.D. Cal. Oct. 31, 2012) 8 (approving PAGA penalties representing 0.27% of the gross settlement fund). Moreover, class 9 counsel has declared that the proposed settlement was submitted to the LWDA in accordance 10 with PAGA, California Labor Code § 2699(l)(2), and attached supporting documentation for this 11 submission. (Doc. No. 138-2 at 14, 91.) 12 At the final approval hearing, class counsel confirmed that the LWDA did not provide any 13 response to their submission. Having reviewed the parties’ submission and the terms of the 14 proposed settlement, the court finds that the settlement amount related to plaintiffs’ PAGA claims 15 is fair, reasonable, and adequate in light of PAGA’s public policy goals. 16 Thus, the court finds that the amount offered in settlement of the PAGA claims here 17 weighs in favor of granting final approval of the settlement. 18 5. Extent of Discovery Completed and Stage of the Proceedings 19 “In the context of class action settlements, ‘formal discovery is not a necessary ticket to 20 the bargaining table’ where the parties have sufficient information to make an informed decision 21 about settlement.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998) 22
23 7 In the court’s order granting preliminary approval, the court noted that plaintiff’s expert provided an estimate of the value of Subclass A’s PAGA claims, but not an estimate of the value 24 of Subclass B’s PAGA claims. (Doc. No. 141 at 13.) The court stated that “[w]ithout additional information about the estimated value of the PAGA claims for Subclass B, the court cannot 25 evaluate whether the $50,000 allocated to the PAGA penalty is fundamentally fair, adequate, and reasonable.” (Id. at 13–14.) At the final approval hearing, defense counsel clarified that the 26 PAGA claims for Subclass B were dismissed earlier in the litigation of this action, which explains 27 why plaintiffs’ expert only estimated the value of Subclass A’s PAGA claims. The court is satisfied with this explanation and thus need not analyze whether the proposed $50,000 penalty 28 payment is fundamentally fair, reasonable, and adequate with respect to Subclass B in particular. 1 (quoting In re Chicken Antitrust Litig., 669 F.2d 228, 241 (5th Cir. 1982)). Approval of a class 2 action settlement thus “is proper as long as discovery allowed the parties to form a clear view of 3 the strengths and weaknesses of their cases.” Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 4 443, 454 (E.D. Cal. 2013). A settlement is presumed fair if it “follow[s] sufficient discovery and 5 genuine arms-length negotiation.” Adoma v. Univ. of Phx., Inc., 913 F. Supp. 2d 964, 977 (E.D. 6 Cal. 2012) (quoting Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. 7 Cal. 2004)). The court must consider whether the process by which the parties arrived at their 8 settlement is truly the product of arm’s length bargaining, rather than collusion or fraud. Millan 9 v. Cascade Water Servs., Inc., 310 F.R.D. 593, 613 (E.D. Cal. 2015). These concerns are also 10 reflected in Rule 23(e)(2)’s focus on procedural fairness—whether “the class representatives and 11 class counsel have adequately represented the class” and whether “the proposal was negotiated at 12 arm’s length.” Fed. R. Civ. P. 23(e)(2)(A)–(B). 13 As detailed in the court’s order granting preliminary approval, the court is satisfied that 14 the parties’ negotiations constituted genuine and informed arm’s length bargaining. (Doc. No. 15 141 at 10.) The parties entered into private mediation with “an experienced wage and hour 16 mediator” after “years of discovery and motion practice, retaining experts, and securing 17 certification of the Subclasses.” (Doc. No. 138-1 at 20.) Moreover, in advance of mediation, 18 defendant produced over 45,000 documents, the parties “conducted tomes of written discovery 19 and took many depositions,” and the parties “retained experts to assist counsel in evaluating the 20 potential value of the claims alleged.”8 (Doc. No. 145-1 at 19.) 21 Accordingly, the court concludes that consideration of this factor weighs in favor of 22 granting final approval. 23 6. Experience and Views of Counsel 24 Class counsel has submitted a declaration by attorney Workman describing her experience 25 in wage and hour class action litigation. (See Doc. No. 138-2 at 10–14; see also Doc. No. 145-3 26
27 8 In the court’s order granting preliminary approval, the court directed the parties to file their mediation briefs in camera at the final approval stage. (Doc. No. 141 at 10.) The parties 28 complied with this directive, and the court has reviewed these briefs. 1 at 7–9.) Attorney Workman submits that she graduated from Texas Tech School of Law in 1989 2 and that her legal practice has focused on “prosecuting wage and hour class action litigation.” 3 (Id. at 10.) In addition, she states that she “routinely” represents clients with respect to issues 4 involving California employment law and has provided a sample list of such cases she and/or her 5 firm have worked on during her career. (Id. at 10–14.) 6 The court finds that the view of class counsel that the proposed settlement is fair and 7 reasonable weighs in favor of granting final approval. 8 7. Presence of a Governmental Participant 9 The settlement agreement contemplates payment of $37,500 of the settlement amount to 10 the LWDA under PAGA. (Doc. No. 41-1 at 21–22.) This too weighs in favor of approval of the 11 settlement. See Adoma, 913 F. Supp. 2d at 977 (factoring civil PAGA penalties in favor of 12 settlement approval); Zamora v. Ryder Integrated Logistics, Inc., No. 3:13-cv-02679-CAB-BGS, 13 2014 WL 9872803, at *10 (S.D. Cal. Dec. 23, 2014) (same). 14 8. Reaction of the Class Members 15 “It is established that the absence of a large number of objections to a proposed class 16 action settlement raises a strong presumption that the terms of a proposed class settlement action 17 are favorable to the class members.” Nat’l Rural Telecomms. Coop., 221 F.R.D. at 529 (citing 18 cases). The presumption that a settlement is fair, reasonable, and adequate is particularly strong 19 when there is an absence of a single objection to a proposed class action settlement. See id.; 20 Barcia v. Contain-A-Way, Inc., No. 3:07-cv-00938-IEG-JMA, 2009 WL 587844, at *4 (S.D. Cal. 21 Mar. 6, 2009). “A court may appropriately infer that a class action settlement is fair, adequate, 22 and reasonable when few class members object to it.” Cruz v. Sky Chefs, Inc., No. 4:12-cv- 23 02705-DMR, 2014 WL 7247065, at *5 (N.D. Cal. Dec. 19, 2014) (citing Churchill Vill., 361 F.3d 24 at 577). 25 According to plaintiffs, no member of the class has filed an objection to the settlement 26 pending before the court for final approval, and no class member has requested exclusion from 27 ///// 28 ///// 1 the settlement.9 (Doc. No. 145-1 at 13.) Moreover, no class members raised any objections to the 2 settlement at the final fairness hearing. Accordingly, consideration of this factor weighs 3 significantly in favor of granting final approval. 4 9. Subtle Signs of Collusion 5 The court now turns to a review of whether any of the “more subtle signs” of collusion 6 recognized by the Ninth Circuit are present here. See Bluetooth, 654 F.3d at 947. 7 First, the court does not find that class counsel is seeking a disproportionate distribution of 8 the settlement, particularly in light of the fact that the award of attorneys’ fees sought here—25% 9 of the gross settlement fund—is the benchmark rate in the Ninth Circuit. (See Doc. No. 138-2 at 10 44); see, e.g., Morales, 2011 WL 5511767, at *12 (“The typical range of acceptable attorneys’ 11 fees in the Ninth Circuit is 20% to 33 1/3% of the total settlement value, with 25% considered the 12 benchmark.”) (quoting Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 2000)); Castro v. 13 Paragon Indus., Inc., No. 1:19-cv-00755-DAD-SKO, 2021 WL 20242333, at *5, *12 (E.D. Cal. 14 May 21, 2021) (granting final approval of a class and collective action settlement with an average 15 individual class member recovery of $1,070.62 and an award of $1,031,250.00 in attorneys’ fees). 16 Second, the settlement here includes a version of a “clear sailing” arrangement, in which 17 defendant agreed not to oppose plaintiffs’ request for a maximum award of 25% of the gross 18 settlement fund. (Doc. No. 138-2 at 44.) Although the “very existence of a clear sailing 19 provision increases the likelihood that class counsel will have bargained away something of value 20 to the class,” Bluetooth, 654 F.3d at 948 (citation omitted), the existence of a clear sailing 21 provision is not necessarily fatal to final approval. Rather, “when confronted with a clear sailing 22 provision, the district court has a heightened duty to peer into the provision and scrutinize closely 23 the relationship between attorneys’ fees and benefit to the class.” Id. (citing Staton, 327 F.3d at 24 954). Although plaintiffs do not squarely address the “clear sailing” in their pending motion, they 25 contend that awarding one-fourth of the gross settlement fund is well-supported by case law and 26 9 In 2020, following the certification of the class, 21 individuals requested exclusion from the 27 class in response to a “2020 Notice of Pendency of Class Action Lawsuit.” (See Doc. No. 145-4 at 3, 6.) These requests for exclusion were made approximately two years prior to the filing of 28 the motion for preliminary approval in this action. (See generally Doc. No. 138.) 1 warranted based on the recovery achieved in this case in light of the risks taken. (See Doc. No. 2 144-1 at 18.) Plaintiffs argue that class counsel “prosecuted this case on a contingency basis, 3 having no guarantee of ever getting paid” and “carried the financial burden of prosecuting this 4 case for more than five years.” (Id.) The court further notes again that none of the class members 5 have objected to this settlement or requested to be excluded from it. 6 Third, the parties did not arrange for an unawarded amount of fees to revert to 7 defendants. Rather, settlement checks that are not cashed before their expiration will be cancelled 8 with those funds to be transmitted to the California State Controller’s Unclaimed Property Fund. 9 (Doc. No. 138-2 at 54.) 10 Based upon its consideration of all of these factors, the court is satisfied that the subtle 11 signs of collusion that the Ninth Circuit has warned of are not sufficiently present here to warrant 12 rejecting the parties’ proposed settlement. 13 In sum, after considering all of the relevant factors, the court finds on balance that the 14 settlement is fair, reasonable, and adequate. See Fed. R. Civ. P. 23(e). Accordingly, the court 15 will grant plaintiff’s motion for final approval of the parties’ class action settlement. 16 ATTORNEYS’ FEES, COSTS, AND INCENTIVE PAYMENTS 17 As noted above, plaintiffs have also submitted a motion seeking awards of attorneys’ fees, 18 class counsel’s litigation expenses, settlement administrator costs to RG/2, and incentive awards 19 for plaintiffs Mostajo and Quedens. (Doc. No. 144.) 20 A. Attorney’s Fees 21 This court has an “independent obligation to ensure that the award [of attorneys’ fees], 22 like the settlement itself, is reasonable, even if the parties have already agreed to an amount.” 23 Bluetooth, 654 F.3d at 941. This is because, when fees are to be paid from a common fund, the 24 relationship between the class members and class counsel “turns adversarial.” In re Mercury 25 Interactive Corp. Secs. Litig., 618 F.3d 988, 994 (9th Cir. 2010); In re Wash. Pub. Power Supply 26 Sys. Secs. Litig., 19 F.3d 1291, 1302 (9th Cir. 1994). As such, the district court assumes a 27 fiduciary role for the class members in evaluating a request for an award of attorneys’ fees from 28 ///// 1 the common fund. In re Mercury, 618 F.3d at 994; see also Rodriguez v. Disner, 688 F.3d 645, 2 655 (9th Cir. 2012); West Publ’g Corp., 563 F.3d at 968. 3 The Ninth Circuit has approved two methods for determining attorneys’ fees in such cases 4 where the attorneys’ fee award is taken from the common fund set aside for the entire settlement: 5 the “percentage of the fund” method and the “lodestar” method. Vizcaino v. Microsoft Corp., 290 6 F.3d 1043, 1047 (9th Cir. 2002) (citation omitted). The district court retains discretion in 7 common fund cases to choose either method. Id.; Vu v. Fashion Inst. of Design & Merch., No. 8 2:14-cv-08822-SJO-EX, 2016 WL 6211308, at *5 (C.D. Cal. Mar. 22, 2016). Under either 9 approach, “[r]easonableness is the goal, and mechanical or formulaic application of either 10 method, where it yields an unreasonable result, can be an abuse of discretion.” Fischel v. 11 Equitable Life Assurance Soc’y of U.S., 307 F.3d 997, 1007 (9th Cir. 2002). As noted above, the 12 Ninth Circuit has generally set a 25% benchmark for the award of attorneys’ fees in common 13 fund cases. Id. at 1047–48; see also Bluetooth, 654 F.3d at 942 (“[C]ourts typically calculate 14 25% of the fund as the ‘benchmark’ for a reasonable fee award, providing adequate explanation 15 in the record of any ‘special circumstances’ justifying a departure.”). 16 Reasons to vary the benchmark award may be found when counsel achieves exceptional 17 results for the class, undertakes “extremely risky” litigation, generates benefits for the class 18 beyond simply the cash settlement fund, or handles the case on a contingency basis. Vizcaino, 19 290 F.3d at 1048–50; see also In re Online DVD-Rental, 779 F.3d at 954–55. Ultimately, 20 however, “[s]election of the benchmark or any other rate must be supported by findings that take 21 into account all of the circumstances of the case.” Vizcaino, 290 F.3d at 1048. The Ninth Circuit 22 has approved the use of lodestar cross-checks as a way of determining the reasonableness of a 23 particular percentage recovery of a common fund. Id. at 1050 (“Where such investment is 24 minimal, as in the case of an early settlement, the lodestar calculation may convince a court that a 25 lower percentage is reasonable. Similarly, the lodestar calculation can be helpful in suggesting a 26 higher percentage when litigation has been protracted.”); see also In re Online DVD-Rental, 779 27 F.3d at 955. 28 ///// 1 Here, the parties’ settlement provides that class counsel will seek an award of 25% of the 2 settlement, equivalent to $950,000. (Doc. No. 138-2 at 44.) No class member has objected to any 3 part of the settlement, including the amount of attorneys’ fees sought. (See Doc. No. 145-1 at 4 12.) The court approved plaintiffs’ request for attorneys’ fees on a preliminary basis, finding that 5 the requested fee amount of $950,000 appeared “perfectly reasonable and well within the Ninth 6 Circuit’s norms,” but previewed that the court would conduct a cross-check of the proposed fee 7 award against the lodestar amount. (Doc. No. 141 at 11.) 8 The court next turns to the lodestar calculation in order to cross-check the reasonableness 9 of the requested attorneys’ fee award. Where a lodestar is merely being used as a cross-check, the 10 court “may use a ‘rough calculation of the lodestar.’” Bond v. Ferguson Enters., Inc., No. 1:09- 11 cv-1662-OWW-MJS, 2011 WL 2648879, at *12 (E.D. Cal. June 30, 2011) (quoting Fernandez v. 12 Victoria Secret Stores, LLC, No. 2:06-cv-04149-MMM-SH, 2008 WL 8150856 (C.D. Cal. July 13 21, 2008)). Moreover, beyond simply the multiplication of a reasonable hourly rate by the 14 number of hours worked, a lodestar multiplier can be applied. “Multipliers in the 3–4 range are 15 common in lodestar awards for lengthy and complex class action litigation.” Van Vranken v. Atl. 16 Richfield Co., 901 F. Supp. 294, 298 (N.D. Cal. 1995) (citing Behrens v. Wometco Enters., Inc., 17 118 F.R.D. 534, 549 (S.D. Fla. 1988)); see also 4 Newberg on Class Actions § 14.7 (stating 18 courts typically approve percentage awards based on lodestar cross-checks of 1.9 to 5.1 or even 19 higher, and “the multiplier of 1.9 is comparable to multipliers used by the courts”); In re 20 Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 341 (3d Cir. 1998) 21 (“[M]ultiples ranging from one to four are frequently awarded in common fund cases when the 22 lodestar method is applied.”) (quoting 4 Newberg on Class Actions § 14.7). 23 Here, class counsel asserts that the total lodestar amount without any multiplier is 24 $1,359,348.50. (Doc. Nos. 144-1 at 19; 144-2 at 7.) Under this calculation, class counsel’s 25 lodestar exceeds the requested one-fourth of the gross settlement amount by $409,348.50. In 26 support of this lodestar calculation, class counsel has submitted an accounting of the hours billed 27 by various firm employees, tasks completed by those employees, and applicable billing rates. 28 (See Doc. No. 144-2 at 7, 21–110.) The Workman Law Firm, PC employees who worked on this 1 matter include: a paralegal with an hourly rate of $200; a law clerk with an hourly rate of $200; a 2 third-year attorney with an hourly rate of $375; and three attorneys with over thirty years of 3 experience with hourly rates ranging from $650 through $750. (See id. at 7.) The court finds that 4 these rates are fair and reasonable in this case. See Singh v. Roadrunner Intermodal Servs., LLC, 5 No. 1:15-cv-01497-DAD-BAM, 2019 WL 316814, at *10 (E.D. Cal. Jan. 24, 2019) (accepting 6 hourly rates of between $370 and $495 for associates, and $545 and $695 for senior counsel and 7 partners); Sanchez v. Frito-Lay, Inc., No. 1:14-cv-00797-DAD-BAM, 2021 WL 1813190, at *9– 8 10 (E.D. Cal. May 6, 2021) (accepting hourly rate of $200 for paralegals); Mathein v. Pier 1 9 Imports (U.S.), Inc., No. 1:16-cv-00087-DAD-SAB, 2018 WL 1993727, at *11 (E.D. Cal. Apr. 10 27, 2018) (accepting hourly rates of between $475 and $575 for associates, and $675 and $750 11 for senior counsel and partners); Emmons v. Quest Diagnostics Clinical Labs., Inc., 1:13-cv- 12 00474-DAD-BAM, at *8 (E.D. Cal. Feb. 27, 2017) (accepting hourly rates of between $330 and 13 $550 for associates, and $500 and $720 for partners). For the reasons set forth above, the court 14 concludes that the lodestar cross-check supports the requested award of $950,000 in attorneys’ 15 fees, an amount equal to 25% of the gross settlement fund in this case. Therefore, the court will 16 approve an award of $950,000 in attorneys’ fees. 17 B. Costs and Expenses of Class Counsel 18 Additionally, class counsel seeks to recover the costs and expenses advanced while 19 prosecuting this litigation. Such awards “should be limited to typical out-of-pocket expenses that 20 are charged to a fee paying client and should be reasonable and necessary.” In re Immune 21 Response Secs. Litig., 497 F. Supp. 2d 1166, 1177 (S.D. Cal. 2007). These can include 22 reimbursements for: “1) meals, hotels, and transportation; 2) photocopies; 3) postage, telephone, 23 and fax; 4) filing fees; 5) messenger and overnight delivery; 6) online legal research; 7) class 24 action notices; 8) experts, consultants, and investigators; and 9) mediation fees.” Id. 25 Here, class counsel requests reimbursement in the amount of $629,222.04. (Doc. No. 26 144-1 at 23.) In the court’s order granting preliminary approval, the court noted that: 27 Combined with the [attorneys’] fees, this amount could bring the total fees and expenses to $1,580,000, or 41.5 percent of the [gross 28 settlement fund]. If class counsel were awarded the maximum fees 1 plus expenses, the total dollar figure would exceed 75 percent of the $2,105,000 that the parties have agreed to allocate to Subclasses A 2 and B. 3 (Doc. No. 141 at 11.) For this reason, the court cautioned that unless counsel provided additional 4 authority in support of the requested costs, “the court offers no assurance that the proposed [cost 5 award] . . . will be approved.” (Doc. No. 141 at 11–13.) 6 Plaintiffs submit that the costs class counsel incurred include administrative costs, court 7 and filing costs, photocopying charges, deposition and hearing transcript fees, expert and 8 consultant fees, delivery fees, Belaire notice-mailing fees,10 research fees, conference call 9 charges, and document repository fees.11 (Doc. No. 144-1 at 23.) The vast majority of the 10 requested cost award—$562,283.67—is comprised of expert and consultant fees. (See id.) At the 11 final approval hearing, class counsel explained that these sizeable fees were incurred due to the 12 stage of litigation to which this action proceeded prior to settlement. Class counsel asserted that 13 because the parties reached a settlement after expert disclosures were provided, class counsel had 14 engaged in and completed significant work to effectively prosecute this action in preparation for 15 an eventual trial. Specifically, plaintiffs allege that class members were required to work “off- 16 the-clock,” but because this work was allegedly performed while employees were “off-the-clock,” 17 there are no (or limited) records documenting this work. Accordingly, class counsel asserted that 18 in order to prepare to prove damages at trial, it was necessary for class counsel to retain three 19 different types of experts: one to design a survey to collect information about off-the-clock work, 20 one to manage the collection of responses to that survey, and one to perform the mathematical 21
22 10 More specifically, class counsel incurred $8,998.97 in fees from RG/2 described as “Belaire 23 Notice mailing fees.” (See Doc. Nos. 144-1 at 23; 144-2 at 110.) At the final approval hearing, class counsel clarified that this expense pertains to work RG/2 completed in connection with 24 discovery in this action, prior to the parties reaching the proposed settlement agreement. Because this expense was incurred in connection with discovery, rather than pursuant to settlement 25 administration, this $8,998.97 fee is not accounted for in the $15,000 allocated to settlement administration costs pursuant to the proposed settlement. The $8,998.97 fee may thus be properly 26 awarded as part of class counsel’s costs and expenses in litigating this action. 27 11 Plaintiffs represent that the requested $629,222.04 in costs does not include “expenses incurred 28 to file and serve the approval motions and to participate in the hearings.” (Doc. No. 144-1 at 23.) 1 calculations using the information collected in that survey. Class counsel further stated it is her 2 experience that the expert costs for such surveys total at least in the range of $250,000 to 3 $500,000. In addition, class counsel acknowledged the unfortunate nature of such substantial 4 expert and consultant fees—which ultimately reduce the amount class members are able to 5 recover in a settlement—and expressed that she does explore options with respect to engaging 6 more affordable experts. However, class counsel also explained that it is of paramount 7 importance to select reputable experts whose qualifications and work can withstand the myriad 8 challenges a defendant may bring to attack the credibility of an expert or the substance of that 9 expert’s survey. Indeed, class counsel represented that her decision to retain experts in this action 10 who she deemed to be potentially more costly, but well-qualified, was reasonable, because 11 defendant Nationwide eventually filed a motion to strike one of class counsel’s expert reports in 12 this action, and class counsel characterized that motion as containing strong arguments. (Doc. 13 No. 80). 14 In light of class counsel’s detailed explanation regarding the appropriateness of engaging 15 experts and consultants in this action, the court finds that the specific circumstances of this case 16 rendered the retention of plaintiffs’ experts and consultants reasonable. The court’s finding in 17 this regard is further strengthened by class counsel’s representation at the final approval hearing 18 that class counsel sought attorneys’ fees in the amount of 25% of the gross settlement fund, rather 19 than 33% of the gross settlement fund, in part due to the class counsel’s acknowledgement of the 20 significant expert/consultancy fees incurred in prosecuting this action and the desire to maximize 21 the amount remaining in the settlement fund available for distribution to participating class 22 members. Accordingly, having reviewed the costs and expenses submitted to the court and 23 finding all the charges incurred to be reasonable, the court will approve the reimbursement of 24 costs and expenses in the amount requested. 25 C. Incentive Award 26 Courts frequently approve “service” or “incentive” awards in class action cases. West 27 Publ’g Corp., 563 F.3d at 958–59. Generally speaking, incentive awards are meant to recognize 28 the effort of class representatives “for work done on behalf of the class, to make up for financial 1 or reputational risk undertaken in bringing the action, and, sometimes, to recognize their 2 willingness to act as a private attorney general.” Id. The district court evaluates each award 3 individually, using “relevant factors includ[ing] the actions the plaintiff has taken to protect the 4 interests of the class, the degree to which the class has benefitted from those actions, . . . the 5 amount of time and effort the plaintiff expended in pursuing the litigation . . . and reasonabl[e] 6 fear[s of] workplace retaliation.” Staton, 327 F.3d at 977 (quoting Cook v. Niedert, 142 F.3d 7 1004, 1016 (7th Cir. 1998)). 8 The courts of the Ninth Circuit typically find incentive awards of $5,000 to be 9 “presumptively reasonable.” See, e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 457, 463 10 (9th Cir. 2000) (endorsing $5,000 service awards to named representatives); Bellinghausen v. 11 Tractor Supply Co., 306 F.R.D. 245, 246 (N.D. Cal. 2015) (collecting cases); In re Toys R Us- 12 Del., Inc. FACTA Litig., 295 F.R.D. 438, 470–72 (C.D. Cal. 2014) (awarding plaintiffs $5,000 13 each “consistent with the amount courts typically award as incentive payments”). Higher 14 amounts can be appropriate, such as in employment actions, where a plaintiff risks retaliation or 15 blacklisting by as a result of suing her employer. See, e.g., Buccellato v. AT&T Operations, Inc., 16 No. 5:10-cv-00463-LHK, 2011 WL 4526673, at *4 (N.D. Cal. June 30, 2011). 17 Here, plaintiffs Mostajo and Quedens seek incentive awards of $25,000 each for their 18 service in this action. (Doc. No. 144-1 at 7.) In the court’s order granting preliminary approval, 19 the court noted that “the proposed $25,000 incentive award for each class representative appears 20 to be on the high end of such awards” and cautioned that “[b]efore final approval, plaintiffs must 21 provide additional information to allow the court’s full consideration of whether the proposed 22 incentive fees here are warranted under all the circumstances.” (Doc. No. 141 at 11–12.) 23 Plaintiffs contend that the requested amount is fair and reasonable compensation for the 24 risks and efforts they have undertaken as representative plaintiffs in this action. (Doc. No 144-1 25 at 13.) They submit that they have spent “hundreds of hours” assisting in the prosecution of this 26 case, including through obtaining and providing documents, providing information regarding 27 defendant’s policies and procedures, submitting to multiple depositions, attending the deposition 28 of a manager at one time employed by defendant, responding to discovery requests, and 1 participating in mediation. (Id.; Doc. Nos. 138-5 at 8; 138-4 at 10.) Plaintiff Mostajo declares 2 that he spent at least 150 hours on the case, and plaintiff Quedens declares that she spent at least 3 130 hours on the case. (Doc. Nos. 138-5 at 8; 138-4 at 10.) Plaintiffs also assert that they “put 4 their future employment prospects at risk by becoming class representatives” because 5 “[e]mployers routinely screen employee candidates to determine whether they have ever filed a 6 suit against other employers, allowing them to screen out litigious candidates.” (Doc. No. 144-1 7 at 14.) 8 The incentive awards sought here—a combined $50,000 or 1.3 % of the gross settlement 9 fund—is noticeably higher than the typical enhancement award in this district. See, e.g., Taylor v. 10 FedEx Freight, Inc., No. 1:13-cv-01137-DAD-BAM, 2016 WL 6038949, at *9 (E.D. Cal. Oct. 11 13, 2016) (describing the requested $25,000 incentive award as “indeed more than the typical 12 enhancement award in this circuit, where $5,000 is presumptively reasonable”). Nonetheless, the 13 court acknowledges that the estimated 150 hours and 130 hours of time expended by the 14 representative plaintiffs in prosecuting this case also appears to be higher than the hours expended 15 by named plaintiffs in many other class action settlements in which this court has granted 16 incentive awards. Castro, 2021 WL 2042333, at *13 (granting $10,000 award for 70 hours of 17 work over three years); Acosta v. Evergreen Moneysource Mortg. Co., No. 2:17-cv-00466-KJM- 18 DB, 2019 WL 6051117, at *18 (E.D. Cal. Nov. 15, 2019) (granting $10,000 award for 40 hours 19 of work). In addition, the court finds persuasive class counsel’s assertions at the final approval 20 hearing regarding the representative plaintiffs’ extensive efforts in this action, which include: 21 attending multiple depositions; engaging in lengthy commutes between Stockton and San 22 Francisco in order to attend such depositions, rendering significant assistance to class counsel in 23 the over-five years of litigation of this action prior to the parties reaching a settlement, and 24 providing assistance with the in-depth discovery in this action. At the final approval hearing, 25 class counsel also noted that excluding the amount received in incentive awards, plaintiff 26 Mostajo’s estimated settlement payment is $5,827.34 and plaintiff Quedens’s is $8,773.28. (See 27 Doc. No. 145-4 at 4.) In light of class counsel’s estimate that the largest settlement award in this 28 action will be $22,746.83, class counsel contends that the requested $25,000 incentive awards 1 would not result in a disproportionate recovery for the named plaintiffs in comparison with the 2 recovery of other class members. (See id.) The court considers the estimated average recovery 3 amount for class members—as opposed to the largest estimated recovery amount for any class 4 member—to be a more useful heuristic for determining whether the requested incentive award 5 would result in a disproportionate recovery for the named plaintiffs in comparison to class 6 members. (See Doc. No. 145-1 at 18.); see also Newell v. Ensign United States Drilling (Calif.) 7 Inc., No. 1:19-cv-01314-NONE-JLT, 2021 WL 6000227, at *18 (E.D. Cal. Dec. 20, 2021) 8 (comparing the amounts of the requested incentive awards to the estimated average settlement 9 award for class members in order to assess whether the requested incentive awards were 10 “disproportionate”). Nonetheless, considering the named plaintiffs significant work on behalf of 11 the class, the duration of this litigation, and the estimated average settlement award in this 12 action—$6,198.35 for Subclass A and $1,111.57 for Subclass B—the court agrees with class 13 counsel that an award of $25,000 to each of the named plaintiffs is not disproportionate here and 14 would fairly compensate plaintiffs Mostajo and Quedens for their considerable efforts in assisting 15 with the prosecution of this action. See West Publ’g Corp., 563 F.3d at 958–59. 16 Accordingly, the court finds that incentive awards of $25,000 to each of the named 17 plaintiffs would be fair and reasonable and would not destroy the adequacy of class representation 18 in light of the unique circumstances of this case. See Newell, 2021 WL 6000227, at *16–18 19 (granting preliminary approval of proposed $35,000 and $25,000 incentive awards where the 20 median settlement payment was $3,948, one of the named plaintiffs spent in excess of 275 hours 21 assisting with case, and one of the named plaintiffs was laid off during the pendency of the case, 22 potentially due in part to him being named as a plaintiff in the case); c.f. Taylor, 2016 WL 23 6038949, at *8 (reducing incentive award from $25,000 amount requested to $15,000); Dyer v. 24 Wells Fargo Bank, N.A., 303 F.R.D. 326, 335 (N.D. Cal. 2014) (granting a $10,000 incentive 25 award to a plaintiff who spent more than 200 hours assisting with case and faced professional 26 risks as a result of serving as a representative plaintiff). 27 Accordingly, the court will award $25,000 to plaintiff Mostajo and $25,000 to plaintiff 28 Quedens. 1 D. Settlement Administrator Costs 2 As noted above, the court has approved the appointment of RG/2 as the settlement 3 administrator in this action. According to the declaration of Tina M. Chiango, a director of 4 claims administration for RG/2, the total cost for administration of this settlement is anticipated to 5 be $15,000. (Doc. No. 145-4 at 1, 4.) The court finds these administration costs reasonable and 6 will direct payment in the requested amount. 7 CONCLUSION 8 For the reasons stated above: 9 1. Plaintiff’s motion for final approval of the class action settlement (Doc. No. 145) 10 is granted, and the court approves the settlement as fair, reasonable, and adequate; 11 2. Plaintiff’s motion for an award of attorneys’ fees and costs, incentive award, and 12 settlement administrator costs (Doc. No. 144) is granted; 13 3. The court awards the following sums: 14 a. Class counsel shall receive $950,000 in attorneys’ fees and $629,222.04 in 15 expenses; 16 b. Plaintiff Mostajo shall receive $25,000 as an incentive payment; 17 c. Plaintiff Queden shall receive $25,000 as an incentive payment; 18 d. RG/2 shall receive $15,000 in settlement administration costs; and 19 e. The parties shall direct payment of 75% of the settlement allocated to the 20 PAGA payment, or $37,500, to the LWDA as required by California law, 21 and the remainder of the PAGA payment, $12,500, shall be included in the 22 net settlement fund; 23 4. The parties are directed to effectuate all terms of the settlement agreement and any 24 deadlines or procedures for distribution set forth therein; 25 ///// 26 ///// 27 ///// 28 ///// 1 5. This action is dismissed with prejudice in accordance with the terms of the parties’ 2 amended settlement agreement, with the court specifically retaining jurisdiction 3 over this action for the purpose of enforcing the parties’ settlement agreement; and 4 6. The Clerk of the Court is directed to close this case. 5 IT IS SO ORDERED. ° | Dated: _ April 12, 2023 Da A. 2, pel 7 UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27