1 2 3 6 7 DENSON M. SALES, et al., Case No. 19-cv-08404-JST
8 Plaintiffs, ORDER GRANTING MOTION FOR 9 v. FINAL APPROVAL OF SETTLEMENT AND GRANTING MOTION FOR 10 UNITED ROAD SERVICES, INC., et al., ATTORNEY’S FEES 11 Defendants. Re: ECF Nos. 122, 143
12 13 Before the Court are Named Plaintiffs Robert Bejar’s and Martin Chavez’s unopposed 14 motion for final approval of a class action settlement, ECF No. 143, and unopposed motion for 15 attorney’s fees and costs, ECF No. 122. The Court will grant the motions. 17 A. Factual Background 18 Named Plaintiffs bring this class action against Defendant United Road Services, Inc. 19 (“URS”) alleging violations of California’s labor code and unfair competition law. ECF No. 90. 20 They represent a class of “[a]ll individuals who signed Independent Contractor Service 21 Agreements with URS, who were assigned to a business unit in California, and who drove in 22 California at any time from November 18, 2015 to [March 29, 2022].” ECF No. 53 at 14–15. 23 Drivers for URS must sign a contract titled the Independent Contractor Service Agreement, 24 which classifies them as independent contractors. See id. at 1. Plaintiffs contend that the drivers 25 actually act as URS’s employees, not as independent contractors, and that drivers are entitled to 26 the benefits and protections extended to employees under California law. ECF No. 90 ¶¶ 1–12. 27 B. Procedural Background 1 on behalf of himself and other truck drivers who contract with URS as independent contractors to 2 haul vehicles for customers throughout Canada and the United States.1 ECF No. 1-1. URS 3 removed the action to this Court one month later. ECF No. 1. 4 The Court granted URS’s motion to dismiss Plaintiffs’ meal-and-rest-break claims on July 5 17, 2020. ECF No. 32. On April 29, 2021, Plaintiffs moved for class certification. ECF No. 41. 6 On March 29, 2022, this Court certified the proposed class to pursue the following claims: (1) 7 failure to reimburse business expenses, in violation of California Labor Code § 2802; (2) failure to 8 pay all straight time wages at the statutory minimum wage; (3) failure to properly itemize wage 9 statements, in violation of California Labor Code § 226; (4) failure to pay all wages due at 10 termination, in violation of California Labor Code § 203; and (5) violation of California’s unfair 11 competition law, Bus. & Prof. Code § 17200. ECF No. 53. The Court appointed Denson M. Sales 12 and Andre Clemons as co-class representatives, id. at 4, and approved Mara Law Firm and Hunter 13 Pyle Law as co-class counsel, id. at 14. Discovery began in fall 2022. 14 On May 18, 2023, Plaintiffs filed a Second Amended Complaint adding Robert Bejar and 15 Martin Chavez as named plaintiffs and class representatives. ECF No. 90. Defendants answered 16 the amended complaint on June 9, 2023. ECF No. 92. 17 The parties attended a formal mediation with retired judge Jeffrey Ross on November 4, 18 2021, and reached a settlement in principle. ECF No. 143 at 11. Negotiations continued thereafter 19 until the parties executed a written settlement agreement on June 21, 2023. ECF No. 93 at 3. The 20 parties filed a notice of settlement on June 28, 2023. ECF No. 93. 21 Bejar and Chavez filed a motion for preliminary approval of the proposed settlement on 22 August 31, 2023, ECF No. 95, which the Court granted on September 26, 2023, ECF No. 98. The 23 Court received twenty-nine objections to the proposed settlement from class members, five of 24 whom have since withdrawn their objections, leaving twenty-four.2 Named Plaintiffs Sales and 25 1 In April 2020, the Court related this action with Andre Clemons v. URS Midwest, Inc., Case No. 26 20-CV-02274. See ECF No. 19. The Court then granted a stipulation by the parties that had the “practical effect” of consolidating the two cases. ECF No. 22. 27 2 See ECF Nos. 100, 101, 102, 103, 104, 105, 107, 109, 110, 111, 112, 113, 117, 118, 119, 120, 1 Clemons were among the objectors. ECF Nos. 101, 102. The Court held a final approval hearing 2 on March 7, 2024. On April 9, 2024, the Court granted Plaintiffs’ Counsel’s motion to withdraw 3 from representing Clemons and Sales.3 ECF No. 151. 4 C. Terms of Settlement 5 The Joint Stipulation of Settlement and Release of Class Action Claims (“Joint 6 Stipulation”), ECF No. 143-1, resolves the claims between URS and the class, defined as: 7 All individuals who signed Independent Contractor Service Agreements with URS, who were assigned to a business unit in 8 California, and who drove in California at any time from November 18, 2015 to March 29, 2022. If the individual executing the 9 Independent Contractor Service Agreement did so on behalf of a corporation or LLC, then the individual or individuals who were 10 principals or owners of the corporation or LLC. 11 ECF No. 143-1 at 27 ¶ 5. 12 The Joint Stipulation provides that Plaintiffs will release the following class claims: 13 All claims that were plead in the Second Amended Complaint, including claims for unpaid minimum wages under Cal. Lab. Code 14 §§ 558, 1182.1-1182.3, 1194, 1194.2, 1197, and 1198; unpaid meal and rest breaks under Cal. Lab. Code §§ 558, 226.7, and 512, Cal. 15 Code Regs., tit. 8 § 11090, and IWC Wage Order No. 9-2011; failure to reimburse/illegal deductions under Cal. Lab. Code §§ 221 16 and 2802, and Cal. Regs., tit. 8 § 11090; related claims under California Labor Code §§ 201-3, 226, 204, 210; and claims for 17 unlawful business practices under the California Business and Professions Code §§ 17200, et seq., as alleged in the Second 18 Amended Complaint.
19 Id. at 31 ¶ 34. 20 In addition, the Joint Stipulation provides for the release of the following PAGA claims: 21 All claims asserted in the Operative PAGA letter and/or the Second 22
23 objection withdrew it in advance of the final approval hearing, ECF No. 140 (withdrawing objection at ECF No. 125). Four additional class members withdrew their objections after the 24 final approval hearing. See ECF Nos. 148 (withdrawing objection at ECF No. 128), 149 (withdrawing objection at ECF No. 114); 150 (withdrawing objection at ECF No. 115), 152 25 (withdrawing objection at ECF No. 116). 3 Because Sales and Clemons lacked other counsel, the withdrawal rendered them inadequate as 26 class representatives. See Russell v. United States, 308 F.2d 78, 79 (9th Cir. 1962) (holding that “a litigant appearing in propria persona has no authority to represent anyone other than himself”); 27 Cevallos v. City of Los Angeles, 914 F. Supp. 379 (C.D. Cal. 1996) (“It is well established that a Amended Complaint, including claims for unpaid minimum wages 1 under Cal. Lab. Code §§ 558, 1182.1-1182.3, 1194, 1194.2, 1197, and 1198; failure to pay wages due for missed meal and rest breaks 2 under Cal. Lab. Code §§ 226.7, and 512; failure to reimburse/illegal deductions under Cal. Lab. Code § 2802; and related claims under 3 California Labor Code §§ 201-203, 204, 210, and 226, 226.3, and 226.8. The Released PAGA Claims shall be for the PAGA Period. 4 Id. at 31 ¶ 35. 5 In exchange, URS agrees to pay $7,500,000 (“Gross Settlement Amount”). Id. at 36 ¶ 1. 6 In addition to funding the class’s recover, the Gross Settlement Amount (“GSA”) will be used to 7 pay: (a) any attorney’s fees awarded by the Court; (b) any litigation expenses awarded by the 8 court; (c) notice and administration costs; and (d) the 75% portion of the PAGA Payment due to 9 the California Labor and Workforce Development Agency (“LWDA”). Id. Plaintiffs request 10 $1,875,000 in attorney’s fees, which constitutes 25% of the GSA. Id. at 36 ¶ 2; see ECF No. 122 11 at 8. They also seek $27,320.60 for reimbursement of litigation costs and $11,000 in 12 administration costs for Phoenix Settlement Administrators (“Phoenix”). ECF No. 143 at 11–12. 13 The LWDA’s 75% share of the $126,325 PAGA Payment amounts to $94,743.75. Id. at 12. 14 Accordingly, after Plaintiffs’ proposed deductions, the Net Settlement Amount (“NSA”) would 15 stand at $5,460,354.40. The NSA will then be disbursed to the class according to the plan of 16 allocation. 17 Under the proposed plan of allocation, class members who do not request to opt out of the 18 settlement (“Class Participants”) will receive a payment drawn from the NSA on a pro rata basis 19 based on the number of weeks they worked for URS during the relevant timeframe as well as the 20 total number and value of other Class Participants’ shares. ECF No. 143-1 at 36 ¶ 1(b). 21 Payments to PAGA Aggrieved Individuals4 are calculated in the same manner. The Joint 22 Stipulation allocates $126,325 of the GSA to “civil penalties recoverable under PAGA, of which 23 75%, or $94,743.75, will be paid to the LWDA; and 25%, or $31,581.25, will be distributed 24 among PAGA Aggrieved Individuals.” Id. at 37 ¶ 4. Each PAGA Aggrieved Individual will 25 receive a pro rata share of the $31,581.25 PAGA Payment based on the number of weeks they 26 27 1 worked for URS during the relevant timeframe, as well as the total number and value of other 2 individuals’ shares. Id. at 39 ¶ 1(b). 3 URS previously remitted $10,000 from the GSA to the Settlement Administrator as a 4 partial payment for its services. See id. at 38 ¶ 7. URS will transfer the balance of the GSA to the 5 Settlement Administrator within thirty days after the Settlement’s Effective Date. See id. at 6 38 ¶¶ 7–8. The Effective Date occurs after all the following events:
7 (a) the Joint Stipulation has been fully executed; (b) the Court has given preliminary approval to the settlement; (c) notice has been 8 given to the Class Members providing them with an opportunity to opt-out of the settlement; (d) if more than 10% of the Class 9 Members opt-out, URS has elected not to exercise its rights to void the settlement; (e) the Court has held a Final Approval and Fairness 10 Hearing and entered a final order and judgment approving the Joint Stipulation; and (f) the later of the following dates: (i) when the 11 period for filing any appeal, writ, or other appellate proceeding having been filed; or (ii) any appeal, writ, or other appellate 12 proceeding opposing the settlement has been dismissed finally and conclusively with no right to pursue further remedies or relief; or 13 (iii) any appeal, writ, or other appellate proceeding has upheld the Court’s final order with no right to pursue further remedies or relief. 14 In this regard, it is the intention of the Parties that the settlement shall not become effective until the Court’s order approving the 15 settlement is completely final and there is no further recourse by an appellant or objector who seeks to contest the settlement. 16 Id. at 28 ¶ 15. 17 Funds from uncashed checks will be sent to the California State Controller’s Unclaimed 18 Property Division with information about the Class Participant to whom the funds belong. Id. at 19 41 ¶ 5. Class Participants who did not cash their settlement checks may then collect their shares 20 from the California State Controller. Id. 21 II. LEGAL STANDARD 22 “The claims, issues, or defenses of a certified class . . . may be settled, voluntarily 23 dismissed, or compromised only with the court’s approval.” Fed. R. Civ. P. 23(e). “Adequate 24 notice is critical to court approval of a class settlement under Rule 23(e).” Hanlon v. Chrysler 25 Corp., 150 F.3d 1011, 1025 (9th Cir. 1998), overruled on other grounds by Wal-Mart Stores, 26 Inc. v. Dukes, 564 U.S. 338 (2011). In addition, Rule 23(e) “requires the district court to 27 determine whether a proposed settlement is fundamentally fair, adequate, and reasonable.” Id. at 1 1026. “The proposed settlement need not be ideal, but it must be fair and free of collusion, 2 consistent with counsel’s fiduciary obligations to the class.” Becker v. LISI, LLC, 2022 WL 3 19975411 (N.D. Cal. Sept. 1, 2022) (citing Hanlon, 150 F.3d at 1027). In making that 4 determination, the district court must balance several factors:
5 (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of 6 maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the 7 stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction 8 of the class members to the proposed settlement.5 9 Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (citing Hanlon, 150 F.3d at 10 1026). 11 Furthermore, Rule 23 requires district courts to consider a similar list of factors, including 12 the adequacy of representation by class representatives and class counsel, whether the proposal 13 was negotiated at arm’s length, and the adequacy of the relief and equitable treatment of class 14 members. Fed. R. Civ. P. 23(e)(2). These factors were “not designed ‘to displace any factor 15 [developed under existing circuits’ precedent], but rather to focus the court and the lawyers on the 16 core concerns of procedure and substance that should guide the decision whether to approve the 17 proposal.’” Hefler v. Wells Fargo & Co., 2018 WL 6619983, at *4 (N.D. Cal. Dec. 18, 2018), 18 aff’d sub nom. Hefler v. Pekoc, 802 F. App’x 285 (9th Cir. 2020) (quoting Fed. R. Civ. P. 23(e)(2) 19 advisory committee’s note to 2018 amendment). 20 A. CAFA Compliance 21 This action is subject to the requirements of the Class Action Fairness Act of 2005 22 (“CAFA”), which requires that, within ten days of the filing of a proposed settlement, each 23 defendant serve a notice containing certain required information upon the appropriate state and 24 federal officials. 28 U.S.C § 1715(b). CAFA also prohibits a court from granting final approval 25 until 90 days have elapsed since notice was served under Section 1715(b). Id. § 1715(d). 26 Defendants mailed the CAFA notices over 90 days ago. See ECF No. 96. 27 2 A. Final Approval of Settlement 3 For the reasons that follow, the Court will grant final approval of the settlement. 4 1. Adequacy of Notice 5 A “court must direct notice [of a proposed class settlement] in a reasonable manner to all 6 class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1)(B). The parties 7 must provide class members with “the best notice that is practicable under the circumstances, 8 including individual notice to all members who can be identified through reasonable effort.” Fed. 9 R. Civ. P. 23(c)(2)(B). “[T]he class must be notified of a proposed settlement in a manner that 10 does not systematically leave any group without notice.” Officers for Just. v. Civ. Serv. Comm’n 11 of City & Cnty. of S.F., 688 F.2d 615, 624 (9th Cir. 1982). 12 The Court approved the parties’ proposed notice plan with certain modifications when it 13 granted preliminary approval. ECF No. 98 at 2, 4. Under the approved notice plan, Plaintiffs 14 retained Phoenix as the settlement administrator. Id. at 4. URS sent a list of class members and 15 their contact information to Phoenix, which obtained current mailing addresses for as many class 16 members as possible. ECF No. 143-2 ¶¶ 3–4. On November 3, 2023, the Notice of Class Action 17 Settlement (“Class Notice”) was mailed and e-mailed to class members in English and Spanish. 18 Id. ¶ 5. Nineteen class notices were returned to Phoenix as undeliverable with no forwarding 19 address. Using skip tracing, Phoenix found updated addresses for fifteen of these notices and 20 remailed them. Id. ¶ 6. Four notices remained undeliverable because skip tracing did not produce 21 an updated address. Id. ¶ 7. The deadline for class members to object to or opt out of the 22 settlement was January 5, 2024. Id. ¶ 8–9. Thirty-four individuals objected, twenty-four of whom 23 are class members who have not since withdrawn their objections. See ECF No. 143 at 9–10. No 24 class members opted out of the settlement. ECF No. 143-2 ¶ 8. 25 In light of the above procedures, which adhere to the previously approved notice plan, the 26 Court finds that the parties have sufficiently provided notice to the settlement class members. See 27 Perkins v. LinkedIn Corp., 2016 WL 613255, at *7 (N.D. Cal. Feb. 16, 2016) (finding class notice 1 was “consistent with the requirements of Rule 23 and due process.”). 2 2. Fairness, Adequacy, and Reasonableness 3 a. Adequate Representation of the Class 4 The Ninth Circuit has explained that “adequacy of representation . . . requires that two 5 questions be addressed: (a) do the named plaintiffs and their counsel have any conflicts of interest 6 with other class members and (b) will the named plaintiffs and their counsel prosecute the action 7 vigorously on behalf of the class?” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 8 2000), as amended (June 19, 2000) (citing Hanlon, 150 F.3d at 1020). 9 Here, the Court already certified a class under Rule 23(b)(3). ECF No. 53. “Thus, ‘the 10 only information ordinarily necessary is whether the proposed settlement calls for any change in 11 the class certified, or of the claims, defenses, or issues regarding which certification was granted.’” 12 Foster v. Adams & Assocs., Inc., 2022 WL 425559, at *3 (N.D. Cal. Feb. 11, 2022) (quoting Fed. 13 R. Civ. P. 23 Advisory Committee’s Note to 2018 Amendment). Because the class representatives 14 have changed since certification, the Court considers whether new representatives Bejar and 15 Chavez are adequate representatives. See Fed. R. Civ. P. 23(a)(4). 16 Class representatives Bejar and Chavez were added to the complaint after class 17 certification. ECF No. 90. At that time, the Court approved the parties’ stipulation that Chavez 18 and Bejar “[we]re adequate class representatives pursuant to FRCP No. 23(a) in that they signed 19 Independent Contractor Service Agreements with [URS], were assigned to a business unit in 20 California, and drove in California between November 18, 2015, and March 29, 2022; understand 21 their duties to the Class Members; and have no conflict with the Class Member[s].” ECF No. 89 22 at 3. Several objecting class members submitted identical form letters stating that Bejar and 23 Chavez were added “without the support of the initial class representatives or [a] majority [of] 24 class members,” and complained that Bejar and Chavez supported a settlement the objectors 25 disagree with, but the objectors did not argue that Bejar and Chavez are inadequate 26 representatives. See, e.g., ECF No. 101. 27 The Court finds that Bejar and Chavez are adequate representatives, that the Court’s prior 1 favor of approval. 2 b. Strength of Plaintiff’s Case and Risks of Litigation 3 Approval of a class settlement is appropriate when “there are significant barriers plaintiffs 4 must overcome in making their case.” Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 5 851 (N.D. Cal. 2010). Difficulties and risks in litigating weigh in favor of approving a class 6 settlement. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009). 7 Plaintiffs here acknowledge that they face significant obstacles if the case were to proceed 8 toward trial. ECF No. 143 at 19–31. Defendants continue to dispute the existence of an employee 9 relationship and to contend that class members received enhanced compensation to cover expenses 10 incurred in the course of their duties. Id. at 19–28. Developments in caselaw since the 11 commencement of this action have also cast doubt on whether Plaintiffs’ interpretation of the law 12 would prevail. Id. at 28. The Court finds that these acknowledged weaknesses weigh in favor of 13 approving the settlement. See Moore v. Verizon Commc’ns Inc., 2013 WL 4610764, at *6 (N.D. 14 Cal. Aug. 28, 2013) (finding that the strength of plaintiff’s case favored settlement because 15 plaintiff admitted that it would face hurdles in establishing class certification, liability, and 16 damages). Additionally, “[i]nevitable appeals would likely prolong the litigation, and any 17 recovery by class members, for years.” Rodriguez, 563 F.3d at 966.
18 3. Effectiveness of Distribution Method, Terms of Attorney’s Fees, and Supplemental Agreements 19 The Court must consider “the effectiveness of [the] proposed method of distributing relief 20 to the class.” Fed. R. Civ. P. 23(e)(2)(C)(ii). The Net Settlement Amount will be allocated to 21 Class Participants and PAGA Aggrieved Individuals on a pro rata basis based on an estimate of 22 each class member’s injury. ECF No. 143-1 at 36 ¶ 1(b), 39 ¶ 1(b). Each class member received 23 notice regarding how the shares of the settlement are calculated. ECF No. 143-2 at 9. 24 The Court has also evaluated in detail “the terms of [the] proposed award of attorney’s 25 fees,” Fed. R. Civ. P. 23(e)(2)(C)(iii), in connection with Class Counsel’s motion for fees and 26 costs. Class Counsel requests an attorney’s fee that is 25% of the NSA, which is the prevailing 27 benchmark for percentage fee awards in the Ninth Circuit. ECF No. 122 at 8; see In re Online 1 DVD-Rental Antitrust Litig., 779 F.3d 934, 949 (9th Cir. 2015). This amount is presumptively 2 reasonable and, as set forth below, will be approved. 3 Accordingly, the Court finds that this factor weighs in favor of approval. 4 4. Equitable Treatment of Class Members 5 Because Rule 23 instructs courts to consider whether “the proposal treats class members 6 equitably relative to each other,” Fed. R. Civ. P. 23(e)(2)(D), the Court examines whether the 7 settlement “improperly grant[s] preferential treatment to class representatives or segments of the 8 class.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007). 9 The calculation of Class Participants’ payments depends on the number of weeks worked 10 between November 18, 2015, and March 29, 2022, proportionate to the number and week counts 11 of other Class Participants. ECF No. 143-1 at 36 ¶ 1(b). The Court finds that this approach treats 12 class members equitably and that this factor supports approval. See Hefler, 2018 WL 6619983, at 13 *8; see also In re Extreme Networks, Inc. Sec. Litig., No. 15-cv-04883-BLF, 2019 WL 3290770, at 14 *8 (N.D. Cal. Jul. 22, 2019) (finding equitable to class members an allocation based on pro rata 15 distribution). 16 5. Settlement Amount 17 Although not articulated as a separate factor in Rule 23(e), “[t]he relief that the settlement 18 is expected to provide to class members is a central concern.” Fed. R. Civ. P. 23(e)(2)(C)–(D) 19 Advisory Committee’s Note to 2018 Amendment. The Court therefore examines “the amount 20 offered in settlement.” Hanlon, 150 F.3d at 1026. 21 To evaluate the adequacy of the settlement amount, “courts primarily consider plaintiffs’ 22 expected recovery balanced against the value of the settlement offer.” In re Tableware, 484 F. 23 Supp. 2d at 1080. But “a cash settlement amounting to only a fraction of the potential recovery 24 will not per se render the settlement inadequate or unfair.” In re Omnivision Techs., Inc., 559 25 F.Supp.2d 1036, 1042 (N.D. Cal. 2008) (quoting Officers for Just., 688 F.2d at 628). 26 Here, the $7,500,000 settlement fund achieves a reasonable result for the class. The 27 settlement amount represents 8% of Class Counsel’s estimated $92,667,754 maximum total 1 end of recoveries the Court would deem reasonable, counsel identified risks of continued litigation 2 at the final approval hearing that, in combination with the usual risks of prosecuting a case of this 3 kind, make the recovery fair. 4 6. Extent of Discovery 5 “[I]n the context of class action settlements, formal discovery is not a necessary ticket to 6 the bargaining table where the parties have sufficient information to make an informed decision 7 about settlement.” In re Mego, 213 F.3d at 459 (quotation marks and citation omitted). A greater 8 amount of completed discovery, however, supports approval of a proposed settlement, especially 9 when litigation has “proceeded to a point at which both plaintiffs and defendants ha[ve] a clear 10 view of the strengths and weaknesses of their cases.” Chun-Hoon, 716 F. Supp. 2d at 852. 11 Here, the parties conducted sufficient discovery to make an informed decision about the adequacy 12 of the settlement. ECF No. 143 at 38–39 (describing discovery efforts including reviewing 13 document productions, deposing witnesses, and briefing motions); see also In re Omnivision 14 Techs., Inc., 559 F. Supp. 2d at 1042 (finding that parties who had engaged in discovery, taken 15 depositions, briefed motions, and participated in mediation were sufficiently informed about the 16 case prior to settlement). This factor weighs in favor of approval. 17 7. Counsel’s Experience 18 The Court also considers “the experience and views of counsel.” Hanlon, 150 F.3d at 19 1026. That counsel advocate in favor of this Settlement weighs in favor of its approval.6 20 8. Reaction of the Class 21 Finally, the Court considers the class’s reaction to the settlement. “[T]he absence of a 22 large number of objections to a proposed class action settlement raises a strong presumption that 23 the terms of a proposed class settlement action are favorable to the class members.” In re 24 Omnivision, 559 F. Supp. 2d at 1043 (quotation marks and citation omitted). Nonetheless, “[a] 25 settlement is not unfair simply because a large number or a certain percentage of class members 26
27 6 The Court places little weight on this factor because “the lawyers who negotiated the settlement 1 oppose it, as long as it is otherwise fair, adequate, and reasonable.” Boyd v. Bechtel Corp., 485 F. 2 Supp. 610, 624 (N.D. Cal. 1979). “Nor should a settlement be rejected merely because class 3 plaintiffs oppose it.” Id. 4 Twenty-four class members, or approximately 8% of the class, objected to the settlement. 5 See ECF No. 143 at 16–17. No class members opted out of the settlement, however, making the 6 class participation rate 100%. Id. at 16. 7 The objections were substantively identical; each objecting class member signed a copy of 8 the same form letter expressing concern about various aspects of the settlement. First, the 9 objectors argued that “[t]he gross settlement amount offered does not represent the minimum 10 wages owed to approximately 309 plaintiffs in accordance [with] defendant’s uniform payment 11 policy of paying approximately 309 plaintiffs 80% of the revenue defendant receives for hauling a 12 load; plus, additional expenses such as insurance, fuel, damages, truck maintenance, pain and 13 suffering.” E.g., ECF No. 101. That the settlement does not achieve 100% of the expected 14 outcome at trial is not a reason to disapprove it. When evaluating a settlement’s fairness, the 15 Court must account for the risk that the class would recover less or nothing at all if litigation 16 continued. See Officers for Justice v. Civil Serv. Com., 688 F.2d at 624 (“[T]he very essence of a 17 settlement is compromise . . . . Naturally, the agreement reached normally embodies a 18 compromise; in exchange for the saving of cost and elimination of risk, the parties each give up 19 something they might have won had they proceeded with litigation . . . .”) (internal quotation 20 marks and citations omitted); Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 21 1998) (explaining that a proposed settlement may be fair, adequate, and reasonable even though a 22 greater recovery might have been possible at trial). 23 The Objectors’ second argument is that “[t]he defendant or class counsel failed to disclose 24 the revenue information (OVISS information) that the defendant received for hauling a load to 25 substantiate the amount owed to approximately 309 plaintiffs in accordance to the uniform 26 payment policy, which does not substantiate the gross settlement amount.” E.g., ECF No. 101. 27 Class Counsel counter that this information is not relevant to the claims being settled in this case. 1 would be necessary to achieve a fair and adequate settlement. 2 Third, the objectors argue that the motion for preliminary approval did not explain how the 3 parties reached the settlement. The motion for preliminary approval adequately explains the 4 procedural history of the case, including the settlement negotiations. ECF No. 95 at 10–12. 5 The objectors next ask the Court to reject the settlement because “Class Counsel failed to 6 provide all of the documentation in the Joint Stipulation of settlement; specifically, Exhibit I[,] 7 which is not in the best interest of the class.” E.g., ECF No. 101. The Court finds that Class 8 Counsel has submitted all necessary documentation to allow the Court and the class to examine 9 the fairness of the proposed settlement. 10 Next, objectors contend that the settlement is not in the best interests of the class because 11 neither the original named plaintiffs nor a majority of the class agreed to the amendment of the 12 complaint to add Robert Bejar and Martin Chavez as class representatives. Class Counsel was not 13 required to obtain approval from class representatives or from a majority of the class before 14 adding class representatives. Rather, “[n]umerous courts have held that class counsel has a duty to 15 do what is in the best interests of the class, even if some class representatives disagree.” White v. 16 Experian Info. Sols., Inc., 2009 WL 10670553, at *12 (C.D. Cal. May 7, 2009) (collecting cases).7 17 Although they comprise 8% of the class, the objections received in this case do not cast 18 doubt on the fairness, adequacy, or reasonableness of the settlement. “[T]he important aspect is 19 not the number of objectors, but the content of their objections.” Id. (citation omitted). The Court 20 overrules the objections and finds that the balance of the factors outlined in Churchill Village 21 weighs in favor of final approval. 22 B. Attorney’s Fees and Costs 23 1. Attorney’s Fees 24 “While attorneys’ fees and costs may be awarded in a certified class action where so 25 authorized by law or the parties’ argument, . . . courts have an independent obligation to ensure 26
27 7 Objectors’ last two grounds for objection echo the fifth: they assert that the settlement is not in 1 that the award, like the settlement itself, is reasonable, even if the parties have already agreed to an 2 amount.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011) (internal 3 citation omitted). “Where a settlement produces a common fund for the benefit of the entire 4 class,” as here, “courts have discretion to employ either the lodestar method or the percentage-of- 5 recovery method” to assess the reasonableness of the requested attorney’s fee award. Id. at 942. 6 “Because the benefit to the class is easily quantified in common-fund settlements,” the Ninth 7 Circuit permits district courts “to award attorneys a percentage of the common fund in lieu of the 8 often more time-consuming task of calculating the lodestar.” Id. 9 The Ninth Circuit maintains a “benchmark for an attorneys’ fee award in a successful class 10 action [of] twenty-five percent of the entire common fund.” Williams v. MGM-Pathe Commc’ns 11 Co., 129 F.3d 1026, 1027 (9th Cir. 1997). Courts in the Ninth Circuit generally start with the 25% 12 benchmark and adjust upward or downward depending on counsel’s performance and the risks 13 attendant to the litigation. See In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 954–55 14 (9th Cir. 2015). Additionally, courts often crosscheck the amount of fees against the lodestar. 15 “Calculation of the lodestar, which measures the lawyers’ investment of time in the litigation, 16 provides a check on the reasonableness of the percentage award.” Vizcaino v. Microsoft Corp., 17 290 F.3d 1043, 1050 (9th Cir. 2002). “The lodestar figure is calculated by multiplying the number 18 of hours the prevailing party reasonably expended on the litigation (as supported by adequate 19 documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.” 20 In re Bluetooth, 654 F.3d at 941. Regardless of the method of calculation, the main inquiry is 21 whether the fee award is “reasonable in relation to what the plaintiffs recovered.” Powers v. 22 Eichen, 229 F.3d 1249, 1258 (9th Cir. 2000). 23 a. Percentage of Recovery 24 Class Counsel requests that the Court award them 25% of the $7,500,000 settlement, i.e., 25 the sum of $1,875,000. The request is presumptively reasonable, and no facts of which the Court 26 is aware require an upward or downward adjustment. 27 b. Lodestar Cross-Check 1 “Calculation of the lodestar, which measures the lawyers’ investment of time in the litigation, 2 provides a check on the reasonableness of the percentage award.” Vizcaino, 290 F.3d at 1050. 3 When conducting a lodestar cross-check, a court takes “the number of hours reasonably expended 4 on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckhart, 461 U.S. 424, 433 5 (1983). “[T]he determination of fees ‘should not result in a second major litigation’” and “trial 6 courts need not, and indeed should not, become green-eyeshade accountants.” Fox v. Vice, 563 7 U.S. 826, 838 (2011) (quoting Hensley, 461 U.S. at 437). Rather, the courts seek “to do rough 8 justice, not to achieve auditing perfection.” Id. 9 A district court must “exclude from this initial fee calculation hours that were not 10 ‘reasonably expended.’” Hensley, 461 U.S. at 434 (citation omitted). Additionally, the reasonable 11 hourly rate must be based on the “experience, skill, and reputation of the attorney requesting fees” 12 as well as “the rate prevailing in the community for similar work performed by attorneys of 13 comparable skill, experience, and reputation.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 14 1210-11 (9th Cir. 1986), amended on other grounds, 808 F.2d 1373 (9th Cir. 1987). “[T]he 15 burden is on the fee applicant to produce satisfactory evidence . . . that the requested rates are in 16 line with those prevailing in the community . . . .” Blum v. Stenson, 465 U.S. 886, 895 n.11 17 (1984). 18 Class Counsel states that their hourly rates range from $450 to $900. ECF No. 122 at 15. 19 Those rates are reasonable in this district. See, e.g., In re High-Tech Employee Antitrust Litig., 20 2015 WL 5158730, at *9 (N.D. Cal. Sept. 2, 2015) (awarding attorney’s fees that ranged from 21 $310 to $800 for associates and partners rates from $480 to $975); Banas v. Volcano Corp., 2014 22 WL 7051682, at *5 (N.D. Cal. 2014) (finding rates ranging from $355 to $1,095 per hour for 23 associates and partners within the range of prevailing rates). Counsel expended 1,925.8 hours on 24 this matter, ECF No. 122 at 16, which is reasonable for a case of this complexity and duration: the 25 case was filed in November 2019 and included a motion to dismiss, class certification, mediation, 26 and settlement. Counsel incurred $1,349,250 in fees, which results in a lodestar multiplier of 1.4. 27 See ECF No. 122 at 13. “[M]ultiples ranging from one to four are frequently awarded in common 1 1051 n.6 (9th Cir. 2002) (quoting In re Prudential Ins. Co. Am. Sales Prac. Litig. Agent Actions, 2 148 F.3d 283, 341 (3d Cir. 1998)). The 1.4 multiplier is reasonable in this case. 3 2. Reimbursement of Costs 4 An attorney is entitled to “recover as part of the award of attorney’s fees those out-of- 5 pocket expenses that would normally be charged to a fee paying client.” Harris v. Marhoefer, 24 6 F.3d 16, 19 (9th Cir. 1994) (citation omitted). At the time of preliminary approval, the Court 7 conditionally approved up to $50,000 in costs. ECF No. 98 ¶ 14. Class counsel seeks $27,320.60 8 in costs. ECF No. 122 at 18. After reviewing documentation of the costs incurred during this 9 litigation, the Court finds the charged costs reasonable. See ECF Nos. 122-1 at 10, 122-2 at 8. 10 The Court therefore holds that class counsel is entitled to reimbursement of $27,320.60. 11 3. Settlement Administrator Award 12 The Court finds that the maximum settlement fund administrator costs of $11,000 set forth 13 in the Joint Stipulation are reasonable. According to the settlement administrator, the fees and 14 costs incurred stand at $11,000. ECF No. 143-2 ¶ 15. The Court approves reimbursement in the 15 amount of $11,000. 17 For the reasons stated above, the Court grants Plaintiffs’ motion for final approval of the 18 class action settlement. ECF No. 143. The Court also grants Plaintiffs’ motion for attorney’s 19 fees, litigation costs, and settlement administrator award. ECF No. 122. Class Counsel is entitled 20 to $1,875,000 in attorney’s fees and $27,320.60 in litigation costs. The settlement administrator is 21 entitled to $11,000. The parties and settlement administrator are directed to implement this order 22 and the Joint Stipulation in accordance with their terms. 23 Class counsel shall file a post-distribution accounting within 21 days after the distribution 24 of settlement funds. In addition to the information contained in the Northern District of 25 California’s Procedural Guidance for Class Action Settlements, available at 26 https://cand.uscourts.gov/forms/procedural-guidance-for-class-action-settlements, the post- 27 distribution accounting shall discuss any significant or recurring concerns communicated by class 1 settlement administration since final approval, and how any concerns or issues were resolved. The 2 || Court will withhold 10% of the attorney’s fees granted in this order until the post-distribution 3 accounting has been filed. Class counsel shall file a proposed order releasing the remainder of the 4 || fees when they file their post-distribution accounting. 5 This matter is set for a further case management conference on January 14, 2025, at 2:00 6 || p.m. An updated joint case management statement is due by January 7, 2025. The parties may 7 request that the case management conference be continued if additional time is needed to complete 8 || the distribution. The conference will be vacated if the post-distribution accounting has been filed 9 || and the Court has released the remaining attorney’s fees. The parties shall submit a stipulated 10 || proposed form of judgment within 14 days of this order. 12 |] Dated: September 11, 2024 . Oper tee JON S. TIGA 14 nited States District Judge
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