1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ISAAC RODRIGUEZ, Case No. 14-cv-01508-BLF
8 Plaintiff, ORDER GRANTING MOTION FOR 9 v. FINAL APPROVAL; APPROVING ATTORNEYS’ FEES AND COSTS AND 10 NIKE RETAIL SERVICES, INC., SETTLEMENT ADMINISTRATOR COSTS; APPROVING IN PART 11 Defendant. ENHANCEMENT AWARD
12 [Re: ECF No. 159]
13 14 Before the Court is Plaintiff Isaac Rodriguez’s (“Rodriguez”) Motion for Final Approval of 15 the class action settlement with Defendant Nike Retail Services, Inc. (“Nike”) in this wage and hour 16 case under California law relating to Nike’s alleged failure to compensate its retail employees for 17 time spent in security inspections required upon leaving its retail stores. During the course of 18 litigation, the Court granted class certification for Rodriguez and entered judgment for Nike based 19 on the federal de minimis doctrine, only to be reversed on appeal to the Ninth Circuit based on the 20 finding of the California Supreme Court in the Troester case that the federal de minimis doctrine 21 does not apply to California wage and hour claims. See Troester v. Starbucks Corp., 5 Cal.5th 829 22 (2018). Since then, the parties have settled and the Court has granted preliminary approval of the 23 class action settlement. See Prelim. Approval Order, ECF No. 156. Rodriguez seeks (1) final 24 approval of the proposed class action settlement in the total amount of $8,250,000; (2) approval of 25 Class Counsel’s application for $2,750,000 in attorneys’ fees and reimbursement of $178,996.11 in 26 costs; (3) approval of Rodriguez’s request for an enhancement award of $15,000; and (4) approval 27 of $69,750 in costs for Phoenix Settlement Administrators (the “Settlement Administrator”). See 1 Based on the reasoning below, the Court (1) GRANTS final approval of the class action 2 settlement; (2) APPROVES the $2,750,000 in attorneys’ fees and $178,996.11 in costs for Class 3 Counsel; (3) APPROVES IN PART Rodriguez’s enhancement award request in the amount of 4 $7,500; and (4) APPROVES the $69,750 in the Settlement Administrator’s costs. Items (2), (3), 5 and (4) SHALL be deducted from the total settlement amount of $8,250,000. 6 I. BACKGROUND 7 Nike is an Oregon corporation with retail stores throughout California. See First Amended 8 Complaint (“FAC”), ECF No. 27 ¶ 8. Rodriguez was employed at one of Nike’s retail stores until 9 his termination around 2012. See id. ¶¶ 7, 23. 10 Rodriguez filed this action in the Superior Court of California for the County of Santa Clara 11 on February 25, 2014. See Notice of Removal, ECF No. 1 ¶ 1. Nike removed the case to the 12 Northern District of California on April 1, 2014, and it was reassigned to this Court on May 1, 2014. 13 See ECF Nos. 1, 14. Rodriguez filed an amended complaint on December 8, 2014. See FAC, 14 ECF No. 27. Rodriguez alleged that Nike required employees of its retail stores to go through a 15 security inspection when they left the store, but it failed to compensate the employees for the time 16 spent completing the inspection. See id. Rodriguez claimed that in doing so, Nike violated 17 (1) Cal. Labor Code §§ 1194 and 1997; (2) Cal. Labor Code §§ 510 and 1194; and 18 (3) Cal. Bus. & Prof. Code §§ 17200, et seq. See id. Rodriguez sought relief including waiting time 19 penalties. See id. Rodriguez brought his claims on behalf of a putative class consisting of “all 20 current and former non-exempt retail store employees of DEFENDANTS who worked in California 21 during the period from February 25, 2010 to the present.” Id. ¶ 16. 22 On August 19, 2016, the Court certified the class. See Order Granting Motion for Class 23 Certification, ECF No. 69. Nike moved for summary judgment on all of Rodriguez’s claims on 24 January 31, 2017. See Motion for Summary Judgment, ECF No. 84. The Court granted Nike’s 25 motion based on the finding that the 10-minute daily threshold of the federal de minimis doctrine 26 prevented Rodriguez from recovering given the amounts of time at issue in the security inspections. 27 See Order Granting Defendant’s Motion for Summary Judgment, ECF No. 100. Rodriguez appealed 1 and imposed $17,839.02 in costs against Rodriguez. See ECF Nos. 110–11. On June 28, 2019, the 2 Ninth Circuit reversed, finding in light of the decision by the California Supreme Court in Troester 3 that the federal de minimis doctrine applied by the Court did not apply to California wage and hour 4 claims. See ECF No. 113; Troester, 5 Cal.5th 829. The Ninth Circuit remanded the case for further 5 proceedings consistent with Troester. See ECF No. 113. 6 Following remand, the parties stipulated to amend the class certification order to cover the 7 time period from February 25, 2010 to November 15, 2019, because Nike had instated a policy 8 compensating employees for time spent in security inspections as of November 15, 2019. See Order 9 Granting Stipulation, ECF No. 136. On December 15, 2020, the parties notified the Court that they 10 had settled. See Joint Notice of Class Action Settlement, ECF No. 150. 11 Rodriguez moved for preliminary approval on April 23, 2021. See Prelim. Approval Motion, 12 ECF No. 153. The Court granted preliminary approval of the class action settlement on 13 September 30, 2021. See ECF No. 156. 14 Under the Settlement Agreement, the Settlement Class is “all current and former non- 15 exempt/hourly retail store employees of Defendant who worked in California at any time from 16 February 25, 2020 through and including November 15, 2019.” See Lee Decl., ECF No 153-1, 17 Ex. A, Class Action Settlement Agreement § 1.1. Any class member who does not opt-out from the 18 settlement will automatically receive his or her share of the proceeds, as determined by his or her 19 shifts worked as a fraction of the total shifts worked by the class between February 25, 2010 through 20 November 15, 2019. See id. §§ 2.31, 5.4. On average, each class member will receive a payment 21 of approximately $319.99, while the lowest individual settlement payment to be paid will be 22 approximately $11.36 and the highest will be approximately $2,280.74. See Kruckenberg Decl., 23 ECF No. 158-9 ¶ 11; Second Suppl. Lawrence Decl., ECF No. 163 ¶ 9. Remaining monies from 24 uncashed checks will be paid to the cy pres beneficiary, Legal Aid at Work. See Lee Decl., ECF 25 No 153-1, Ex. A, Class Action Settlement Agreement § 10.5. 26 Following preliminary approval, the Settlement Administrator provided notice by mail to 27 each of the 16,635 class members. See Second Suppl. Lawrence Decl., ECF No. 163 ¶ 3. After 1 packets to an address located by skip tracing, only 34 notice packets are considered undeliverable. 2 See id. ¶ 4. 3 Rodriguez moved for final approval on December 23, 2021. See ECF Nos. 158–59. Nike 4 filed a Statement of Non-Opposition to Rodriguez’s Motion on January 6, 2022. See ECF No. 160. 5 On January 18 and 21, 2022, Rodriguez filed supplemental declarations from the President of 6 Business Development at the Settlement Administrator explaining the implementation of the notice 7 plan approved by the Court during preliminary approval. See ECF Nos. 161, 163. 8 Rodriguez seeks (1) final approval of the proposed class action settlement; (2) approval of 9 Class Counsel’s application for $2,750,000 in attorneys’ fees and reimbursement of $178,996.11 in 10 costs; (3) approval of Rodriguez’s request for an enhancement award of $15,000; and (4) approval 11 of $69,750 in the Settlement Administrator’s costs. See Final Approval Motion, ECF No. 159. The 12 Court heard Rodriguez’s motion on January 27, 2022. 13 II. MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT 14 A. Rule 23 Certification Requirements 15 i. The Class Meets the Requirements for Certification Under Rule 23 16 The Court previously granted class certification in this case for a class that is materially the 17 same as the settlement class.
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ISAAC RODRIGUEZ, Case No. 14-cv-01508-BLF
8 Plaintiff, ORDER GRANTING MOTION FOR 9 v. FINAL APPROVAL; APPROVING ATTORNEYS’ FEES AND COSTS AND 10 NIKE RETAIL SERVICES, INC., SETTLEMENT ADMINISTRATOR COSTS; APPROVING IN PART 11 Defendant. ENHANCEMENT AWARD
12 [Re: ECF No. 159]
13 14 Before the Court is Plaintiff Isaac Rodriguez’s (“Rodriguez”) Motion for Final Approval of 15 the class action settlement with Defendant Nike Retail Services, Inc. (“Nike”) in this wage and hour 16 case under California law relating to Nike’s alleged failure to compensate its retail employees for 17 time spent in security inspections required upon leaving its retail stores. During the course of 18 litigation, the Court granted class certification for Rodriguez and entered judgment for Nike based 19 on the federal de minimis doctrine, only to be reversed on appeal to the Ninth Circuit based on the 20 finding of the California Supreme Court in the Troester case that the federal de minimis doctrine 21 does not apply to California wage and hour claims. See Troester v. Starbucks Corp., 5 Cal.5th 829 22 (2018). Since then, the parties have settled and the Court has granted preliminary approval of the 23 class action settlement. See Prelim. Approval Order, ECF No. 156. Rodriguez seeks (1) final 24 approval of the proposed class action settlement in the total amount of $8,250,000; (2) approval of 25 Class Counsel’s application for $2,750,000 in attorneys’ fees and reimbursement of $178,996.11 in 26 costs; (3) approval of Rodriguez’s request for an enhancement award of $15,000; and (4) approval 27 of $69,750 in costs for Phoenix Settlement Administrators (the “Settlement Administrator”). See 1 Based on the reasoning below, the Court (1) GRANTS final approval of the class action 2 settlement; (2) APPROVES the $2,750,000 in attorneys’ fees and $178,996.11 in costs for Class 3 Counsel; (3) APPROVES IN PART Rodriguez’s enhancement award request in the amount of 4 $7,500; and (4) APPROVES the $69,750 in the Settlement Administrator’s costs. Items (2), (3), 5 and (4) SHALL be deducted from the total settlement amount of $8,250,000. 6 I. BACKGROUND 7 Nike is an Oregon corporation with retail stores throughout California. See First Amended 8 Complaint (“FAC”), ECF No. 27 ¶ 8. Rodriguez was employed at one of Nike’s retail stores until 9 his termination around 2012. See id. ¶¶ 7, 23. 10 Rodriguez filed this action in the Superior Court of California for the County of Santa Clara 11 on February 25, 2014. See Notice of Removal, ECF No. 1 ¶ 1. Nike removed the case to the 12 Northern District of California on April 1, 2014, and it was reassigned to this Court on May 1, 2014. 13 See ECF Nos. 1, 14. Rodriguez filed an amended complaint on December 8, 2014. See FAC, 14 ECF No. 27. Rodriguez alleged that Nike required employees of its retail stores to go through a 15 security inspection when they left the store, but it failed to compensate the employees for the time 16 spent completing the inspection. See id. Rodriguez claimed that in doing so, Nike violated 17 (1) Cal. Labor Code §§ 1194 and 1997; (2) Cal. Labor Code §§ 510 and 1194; and 18 (3) Cal. Bus. & Prof. Code §§ 17200, et seq. See id. Rodriguez sought relief including waiting time 19 penalties. See id. Rodriguez brought his claims on behalf of a putative class consisting of “all 20 current and former non-exempt retail store employees of DEFENDANTS who worked in California 21 during the period from February 25, 2010 to the present.” Id. ¶ 16. 22 On August 19, 2016, the Court certified the class. See Order Granting Motion for Class 23 Certification, ECF No. 69. Nike moved for summary judgment on all of Rodriguez’s claims on 24 January 31, 2017. See Motion for Summary Judgment, ECF No. 84. The Court granted Nike’s 25 motion based on the finding that the 10-minute daily threshold of the federal de minimis doctrine 26 prevented Rodriguez from recovering given the amounts of time at issue in the security inspections. 27 See Order Granting Defendant’s Motion for Summary Judgment, ECF No. 100. Rodriguez appealed 1 and imposed $17,839.02 in costs against Rodriguez. See ECF Nos. 110–11. On June 28, 2019, the 2 Ninth Circuit reversed, finding in light of the decision by the California Supreme Court in Troester 3 that the federal de minimis doctrine applied by the Court did not apply to California wage and hour 4 claims. See ECF No. 113; Troester, 5 Cal.5th 829. The Ninth Circuit remanded the case for further 5 proceedings consistent with Troester. See ECF No. 113. 6 Following remand, the parties stipulated to amend the class certification order to cover the 7 time period from February 25, 2010 to November 15, 2019, because Nike had instated a policy 8 compensating employees for time spent in security inspections as of November 15, 2019. See Order 9 Granting Stipulation, ECF No. 136. On December 15, 2020, the parties notified the Court that they 10 had settled. See Joint Notice of Class Action Settlement, ECF No. 150. 11 Rodriguez moved for preliminary approval on April 23, 2021. See Prelim. Approval Motion, 12 ECF No. 153. The Court granted preliminary approval of the class action settlement on 13 September 30, 2021. See ECF No. 156. 14 Under the Settlement Agreement, the Settlement Class is “all current and former non- 15 exempt/hourly retail store employees of Defendant who worked in California at any time from 16 February 25, 2020 through and including November 15, 2019.” See Lee Decl., ECF No 153-1, 17 Ex. A, Class Action Settlement Agreement § 1.1. Any class member who does not opt-out from the 18 settlement will automatically receive his or her share of the proceeds, as determined by his or her 19 shifts worked as a fraction of the total shifts worked by the class between February 25, 2010 through 20 November 15, 2019. See id. §§ 2.31, 5.4. On average, each class member will receive a payment 21 of approximately $319.99, while the lowest individual settlement payment to be paid will be 22 approximately $11.36 and the highest will be approximately $2,280.74. See Kruckenberg Decl., 23 ECF No. 158-9 ¶ 11; Second Suppl. Lawrence Decl., ECF No. 163 ¶ 9. Remaining monies from 24 uncashed checks will be paid to the cy pres beneficiary, Legal Aid at Work. See Lee Decl., ECF 25 No 153-1, Ex. A, Class Action Settlement Agreement § 10.5. 26 Following preliminary approval, the Settlement Administrator provided notice by mail to 27 each of the 16,635 class members. See Second Suppl. Lawrence Decl., ECF No. 163 ¶ 3. After 1 packets to an address located by skip tracing, only 34 notice packets are considered undeliverable. 2 See id. ¶ 4. 3 Rodriguez moved for final approval on December 23, 2021. See ECF Nos. 158–59. Nike 4 filed a Statement of Non-Opposition to Rodriguez’s Motion on January 6, 2022. See ECF No. 160. 5 On January 18 and 21, 2022, Rodriguez filed supplemental declarations from the President of 6 Business Development at the Settlement Administrator explaining the implementation of the notice 7 plan approved by the Court during preliminary approval. See ECF Nos. 161, 163. 8 Rodriguez seeks (1) final approval of the proposed class action settlement; (2) approval of 9 Class Counsel’s application for $2,750,000 in attorneys’ fees and reimbursement of $178,996.11 in 10 costs; (3) approval of Rodriguez’s request for an enhancement award of $15,000; and (4) approval 11 of $69,750 in the Settlement Administrator’s costs. See Final Approval Motion, ECF No. 159. The 12 Court heard Rodriguez’s motion on January 27, 2022. 13 II. MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT 14 A. Rule 23 Certification Requirements 15 i. The Class Meets the Requirements for Certification Under Rule 23 16 The Court previously granted class certification in this case for a class that is materially the 17 same as the settlement class. See Order Granting Motion for Class Certification, ECF No. 69; see 18 also Preliminary Approval Order, ECF No. 156 ¶ 3. Since the Court granted class certification, the 19 parties stipulated to amend the class definition. See ECF No. 136. The Court certified the following 20 class: “All current and former non-exempt retail store employees of Defendant who worked in 21 California during the period from February 25, 2010 to the present.” See Order Granting Motion 22 for Class Certification, ECF No. 69. The parties stipulated to amend the class definition as follows: 23 “[A]ll current and former non-exempt retail store employees of Defendant who worked in California 24 during the period from February 25, 2010 to November 15, 2019.” See ECF No. 136 (emphasis 25 added). The amendment does not change the Court’s analysis in the class certification order—the 26 parties amended the class definition based on the fact that Nike changed its retail policies as of 27 November 15, 2019 to pay workers for the time they spent in security inspections. See Final 1 the Court’s conclusion in certifying the class. 2 Accordingly, the Court concludes that the requirements of Rule 23 are met and thus that 3 certification of the class for settlement purposes is appropriate. 4 ii. The Settlement is Fundamentally Fair, Adequate, and Reasonable 5 Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a 6 certified class . . . may be settled, voluntarily dismissed, or compromised only with the court’s 7 approval.” Fed. R. Civ. P. 23(e). “Adequate notice is critical to court approval of a class settlement 8 under Rule 23(e).” Hanlon, 150 F.3d at 1025. Moreover, “[a] district court’s approval of a class- 9 action settlement must be accompanied by a finding that the settlement is ‘fair, reasonable, and 10 adequate.’” Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012) (quoting Fed. R. Civ. P. 11 23(e)). “[A] district court’s only role in reviewing the substance of that settlement is to ensure that 12 it is fair, adequate, and free from collusion.” Id. at 819 (internal quotation marks and citation 13 omitted). In making that determination, the district court is guided by an eight-factor test articulated 14 by the Ninth Circuit in Hanlon. Those factors include:
15 the strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; 16 the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental 17 participant; and the reaction of the class members to the proposed settlement.
18 Hanlon, 150 F.3d at 1026–27; see also Lane, 696 F.3d at 819 (discussing Hanlon factors). “A 19 presumption of correctness is said to ‘attach to a class settlement reached in arm’s-length 20 negotiations between experienced capable counsel after meaningful discovery.’” In re Heritage 21 Bond Litig., No. 02–ML–1475 DT, 2005 WL 1594403, at *9 (C.D. Cal. June 10, 2005) (citations 22 omitted). 23 a. Notice Was Adequate 24 The Court previously approved Rodriguez’s plan for providing notice to the class when it 25 granted preliminary approval of the class action settlement. See Preliminary Approval Order, 26 ECF No. 156 ¶ 9. Prior to granting preliminary approval, the Court carefully examined the proposed 27 class notice and notice plan, and determined that they complied with Federal Rule of Civil 1 Procedure 23 and the constitutional requirements of Due Process. See id. Rodriguez now provides 2 a declaration from the President of Business Development at the Settlement Administrator 3 explaining the implementation of the plan. See Second Suppl. Lawrence Decl., ECF No. 163. Based 4 on that declaration, 16,365 Notice Packets were mailed, with 938 (approximately 6%) having been 5 returned undeliverable, and all but 34 of these having been mailed to updated addresses. See id. ¶¶ 6 4–5. Based on the implementation details of the notice plan, the Court is satisfied that the Settlement 7 Class has received the “best notice that is practicable under the circumstances.” 8 Fed. R. Civ. P. 23(c)(2)(B). 9 b. Hanlon Factors 10 The Court now turns to the Hanlon factors. Under the first and second factors, the court 11 considers (1) the strength of Rodriguez’s case, weighing the likelihood of success on the merits and 12 the range of possible recovery; and (2) the risk, expense, complexity, and duration of further 13 litigation. See Hanlon, 150 F.3d at 1026–27. While Rodriguez prevailed on appeal with the Ninth 14 Circuit finding that the federal de minimis doctrine did not apply, the Ninth Circuit in line with the 15 Troester decision left open the possibility that the security inspections at issue in this case could be 16 so irregular or brief that it would be unreasonable to require compensation. See ECF No. 113 17 at 16–17; Troester, 5 Cal.5th at 848. Further, as to Rodriguez’s PAGA claim, the Court has 18 discretion to decrease any applicable penalties that may have been assessed. Accordingly, 19 Rodriguez’s success in this case was not assured, and significant risk, expense, complexity, and time 20 likely lay ahead if the parties did not settle. Therefore, the Court finds that the first and second 21 Hanlon factors favor settlement. 22 Under the third factor—the risk of maintaining class action status throughout the trial—since 23 the Court granted class certification, there was little risk related to maintaining class action status 24 throughout the trial. See Hanlon, 150 F.3d at 1026–27. 25 Fourth, the settlement recovery for the class members is substantial given the circumstances 26 of the case. On average, each class member will receive a payment of approximately $319.99, with 27 the highest individual settlement payment to be approximately $2,280.74. See Final Approval 1 to be a significant payout, particularly considering the scale of the alleged harm and the fact that 2 class members are retail employees. 3 Under the fifth Hanlon factor, courts consider “the extent of discovery completed and the 4 stage of the proceedings.” Hanlon, 150 F.3d at 1026–27. In this case, settlement was reached after 5 years of litigation and substantial discovery, including depositions of Rule 30(b)(6) witnesses and 6 experts, interviews of class members, production of class data and time records, and extensive expert 7 discovery. The Court is satisfied that the parties were sufficiently familiar with the issues in this 8 case to have informed opinions regarding its strengths and weaknesses under factor five. 9 The sixth Hanlon factor—the experience and views of counsel—favors approving the 10 settlement. See Hanlon, 150 F.3d at 1026–27. Lead Counsel’s conclusion is that the Settlement is 11 fair and reasonable and in the best interest of the settlement class. See Lee Decl., ECF No. 158-1 12 ¶¶ 3-8; Hyun Decl., ECF No. 158-2 ¶¶ 7-9; Marder Decl., ECF No. 158-3 ¶¶ 12-13. Further, Lead 13 Counsel has demonstrated their thorough understanding of the strengths and weaknesses of this case 14 and their extensive experience litigating prior employment class actions cases. See In re Omnivision 15 Techs., Inc., 559 F.Supp.2d 1036, 1043 (N.D. Cal. 2007) (finding class counsel’s recommendation 16 in favor of settlement presumptively reasonable because counsel demonstrated knowledge about the 17 case and the type of litigation in general). 18 The seventh Hanlon factor is neutral, since there was no government participant in the case. 19 See Hanlon, 150 F.3d at 1026–27. 20 Under the eighth Hanlon factor, the Court considers the “reaction of the class members to 21 the proposed settlement.” See Hanlon, 150 F.3d at 1026–27. While over 16,000 notice packets 22 were sent out to class members with only 34 undeliverable, no objections have been filed and there 23 has only been one opt-out from the class. See Second Suppl. Lawrence Decl., ECF No. 163 ¶¶ 3–7. 24 “A court may appropriately infer that a class action settlement is fair, adequate, and reasonable when 25 few class members object to it.” Knapp v. Art, 283 F.Supp.3d 823, 833–34 (N.D. Cal. 2017). 26 Based on those factors, and after considering the record as a whole guided by the Hanlon 27 factors, the Court finds that notice of the proposed settlement was adequate, the settlement is not the 1 * * * 2 Rodriguez’s Motion for Final Approval of Class Action Settlement is GRANTED. 3 III. MOTION FOR ATTORNEYS’ FEES AND COSTS, PLAINTIFF’S ENHANCEMENT AWARD, AND ADMINISTRATOR’S COSTS 4 Class Counsel seeks an award of $2,750,000 in attorneys’ fees and $178,996.11 in costs. 5 See Final Approval Motion, ECF No. 159 at 9. Further, Rodriguez requests (1) an enhancement 6 award of $15,000 and (2) costs of $69,750.00 for the Settlement Administrator. See id. at 30. 7 8 A. Attorney’s Fees and Expenses 9 i. Legal Standard 10 “While attorneys’ fees and costs may be awarded in a certified class action where so 11 authorized by law or the parties’ agreement, Fed. R. Civ. P. 23(h), courts have an independent 12 obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have 13 already agreed to an amount.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 14 (9th Cir. 2011). “Where a settlement produces a common fund for the benefit of the entire class,” 15 as here, “courts have discretion to employ either the lodestar method or the percentage-of-recovery 16 method” to determine the reasonableness of attorneys’ fees. Id. at 942. 17 Under the percentage-of-recovery method, the attorneys are awarded fees in the amount of 18 a percentage of the common fund recovered for the class. Bluetooth, 654 F.3d at 942. Courts 19 applying this method “typically calculate 25% of the fund as the benchmark for a reasonable fee 20 award, providing adequate explanation in the record of any special circumstances justifying a 21 departure.” Id. (internal quotation marks omitted). However, “[t]he benchmark percentage should 22 be adjusted, or replaced by a lodestar calculation, when special circumstances indicate that the 23 percentage recovery would be either too small or too large in light of the hours devoted to the case 24 or other relevant factors.” Six (6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 25 1311 (9th Cir. 2011). Relevant factors to a determination of the percentage ultimately awarded 26 include: “(1) the results achieved; (2) the risk of litigation; (3) the skill required and quality of work; 27 (4) the contingent nature of the fee and the financial burden carried by the plaintiffs; and (5) awards 1 *4 (N.D. Cal. Nov. 3, 2009) (citations omitted). 2 Under the lodestar method, attorneys’ fees are “calculated by multiplying the number of 3 hours the prevailing party reasonably expended on the litigation (as supported by adequate 4 documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.” 5 Bluetooth, 654 F.3d at 941 (citations omitted). This amount may be increased or decreased by a 6 multiplier that reflects factors such as “the quality of representation, the benefit obtained for the 7 class, the complexity and novelty of the issues presented, and the risk of nonpayment.” Id. at 942 8 (citations omitted). 9 In common fund cases, a lodestar calculation may provide a cross-check on the 10 reasonableness of a percentage award. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 11 (9th Cir. 2002). Where the attorneys’ investment in the case “is minimal, as in the case of an early 12 settlement, the lodestar calculation may convince a court that a lower percentage is reasonable.” Id. 13 “Similarly, the lodestar calculation can be helpful in suggesting a higher percentage when litigation 14 has been protracted.” Id. Thus, even when the primary basis of the fee award is the percentage 15 method, “the lodestar may provide a useful perspective on the reasonableness of a given percentage 16 award.” Id. “The lodestar cross-check calculation need entail neither mathematical precision nor 17 bean counting. ... [courts] may rely on summaries submitted by the attorneys and need not review 18 actual billing records.” Covillo v. Specialtys Cafe, No. C–11–00594–DMR, 2014 WL 954516, at *6 19 (N.D. Cal. Mar. 6, 2014) (internal quotation marks and citation omitted). 20 An attorney is also entitled to “recover as part of the award of attorney’s fees those out-of- 21 pocket expenses that would normally be charged to a fee paying client.” Harris v. Marhoefer, 22 24 F.3d 16, 19 (9th Cir. 1994) (internal quotation marks and citation omitted). 23 ii. Discussion 24 Lead Counsel seeks an award of attorneys’ fees totaling $2,750,000, which is 33% of the 25 $8,250,000 gross Settlement Fund, in addition to $178,996.11 in costs. 26 The Court first approves the $178,996.11 in costs. The Court has reviewed Class Counsel’s 27 itemized lists of costs and finds that all of the expenses were necessary to the prosecution of this 1 No. 158-2 ¶ 13, Ex. B; Decl. of William Marder, ECF No. 158-3 ¶ 17, Ex. B. 2 The Court also finds the amount of attorneys’ fees to be reasonable. A lodestar cross-check 3 supports the reasonableness of the fees requested. Class Counsel states that the total lodestar from 4 inception of this case through settlement is $2,333,980.00. See Final Approval Motion, 5 ECF No. 159 at 26. The hourly rates charged by Class Counsel have been approved by multiple 6 courts across California and the Court finds the number of hours expended to be reasonable. See 7 Decl. of Larry W. Lee, ECF No. 158-1 ¶ 18; Decl. of Dennis S. Hyun, ECF No. 158-2 ¶ 12; Decl. 8 of William Marder, ECF No. 158-3 ¶ 16; Decl. of Kristen M. Agnew, ECF No. 158-4 ¶ 13; Decl. of 9 Mai Tulyathan, ECF No. 158-5 ¶ 15; Decl. of Max Gavron, ECF No. 158-6 ¶ 13; Decl. of Nick 10 Rosenthal, ECF No. 158-7 ¶ 4. Using $2,333,980.00 as the lodestar results in a positive multiplier 11 of approximately 1.17. See Final Approval Motion, ECF No. 159 at 27. The Court considers this 12 to be a reasonable multiplier, particularly in light of the significant effort Class Counsel expended 13 in litigating this case. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1051 n.6 (9th Cir. 2002) 14 (“[M]ultiples ranging from one to four are frequently awarded in common fund cases[.]”) (citation 15 omitted). Under the percentage-of-recovery method, the attorneys’ fees Class Counsel is requesting 16 are 33.3% of the $8,250,000 gross Settlement Fund, which is above the 25% “benchmark” in this 17 circuit. Bluetooth, 654 F.3d at 942. However, the Court finds the requested attorneys’ fees 18 reasonable, especially in light of the significant amount of work Class Counsel performed in this 19 case, including for the appeal to the Ninth Circuit, and the excellent results achieved during a time 20 when California law was unsettled. See In re Pac. Enters. Sec. Litig., 47 F.3d 373, 378–79 (9th Cir. 21 1995); Laffitte v. Robert Half Int’l, 1 Cal.5th 480, 506 (2016); In re Activision Sec. Litig., 22 723 F.Supp. 1373, 1378 (N.D. Cal. 1989) (collecting cases). Accordingly, the requested fee amount 23 is reasonable. 24 B. Enhancement Award 25 Rodriguez seeks an enhancement award of $15,000. See Final Approval Motion, ECF No. 26 159 at 28–30. Incentive awards “are discretionary . . . and are intended to compensate class 27 representatives for work done on behalf of the class, to make up for financial or reputational risk 1 attorney general.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958-59 (9th Cir. 2009) (internal 2 citation omitted). 3 “Incentive awards typically range from $2,000 to $10,000.” Bellinghausen v. Tractor Supply 4 Co., 306 F.R.D. 245, 267 (N.D. Cal. 2015). Rodriguez’s declaration describes the work he did for 5 this case, including meeting with his attorneys, providing his attorneys documents and information, 6 reviewing pleadings and documents for the case, and preparing for his deposition, which required 7 him to travel from Gilroy to San Jose. See Decl. of Isaac Rodriguez, ECF No. 158-8 ¶ 4. He 8 estimates that he spent approximately 50 hours in connection with this case. See id. The work 9 Rodriguez describes in connection with this case is typical for a named plaintiff, as are the risks of 10 payment of fees and costs if the case did not prevail, which Rodriguez also references. See id. 11 ¶¶ 9–10. Such efforts and risks do not justify an enhancement award of $15,000, which is toward 12 the higher end of enhancement awards for this district. See Bellinghausen, 306 F.R.D. at 267; Chu 13 v. Wells Fargo Investments, LLC, Nos. C 05-4526 MHP, C 06-7924 MHP, 2011 WL 672645, at *5 14 (N.D. Cal. Feb. 16, 2011) (finding $10,000 service awards excessive for $6.9 million settlement). 15 Such an award would represent a rate of $300 per hour that Rodriguez spent on this case. 16 The Court typically awards an enhancement award around $5,000. However, given the 17 significant amount of time during which this case has been pending and that Rodriguez has held 18 himself out publicly regarding this case, the Court will grant Rodriguez an amount higher than its 19 typical $5,000 award. Accordingly, the Court approves a $7,500 enhancement award for 20 Rodriguez—not the requested $15,000 award. 21 C. Settlement Administrator Fee 22 Finally, the Court finds that the $69,750 settlement administrator fee is reasonable in this 23 case, as it does not exceed the cap provided by the Settlement Agreement that the Court approved 24 at the preliminary approval stage. See Lee Decl., ECF No 153-1, Ex. A, Class Action Settlement 25 Agreement § 10.3. 26 / / / 27 / / / 1 IV. ORDER 2 For the foregoing reasons, IT IS HEREBY ORDERED that: 3 (1) Rodriguez’s Motion for Final Approval of Class Action Settlement in the total 4 amount of $8,250,000 is GRANTED; 5 (2) $2,750,000 in attorneys’ fees and $178,996.11 in costs for Class Counsel is 6 APPROVED; 7 (3) an enhancement award for Rodriguez is APPROVED IN PART in the amount of 8 $7,500; 9 (4) the Settlement Administrator’s costs of $69,750 are APPROVED; and 10 (5) the timely request for exclusion by Francisco A. Soto is APPROVED. 11 12 || Dated: January 27, 2022 hon fom fw oma United States District Judge
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