1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 OTINA SENGVONG, on behalf of Case No. 3:19cv2231-MMA-JLB himself, and all others similarly situated, 12 ORDER RE: PLAINTIFF’S Plaintiff, UNOPPOSED MOTIONS FOR FINAL 13 APPROVAL OF CLASS vs. SETTLEMENT, ATTORNEYS’ FEES 14 AND COSTS, AND CLASS PROBUILD COMPANY LLC, et al., REPRESENTATIVE INCENTIVE 15 AWARD Defendants. 16 [Doc. Nos. 49, 52]
18 Otina Sengvong (“Plaintiff”) brings this putative wage and hour class action (the 19 “Action”) against Defendants Probuild Company, LLC, et al. (“Defendants”). Plaintiff 20 moves for final approval of a class settlement pursuant to Federal Rule of Civil Procedure 21 23(e) and for an award of attorneys’ fees and costs pursuant to Rule 23(h), as well as a 22 class representative incentive payment. See Doc. Nos. 49, 52. Defendants do not oppose 23 Plaintiff’s motions and the Court preliminarily approved the class settlement. See Doc. 24 No. 48. The Court held a final approval hearing on these matters pursuant to Federal 25 Rule of Civil Procedure 23(e)(2). See Doc. No. 55. For the reasons set forth below, the 26 Court GRANTS Plaintiff’s motion for final approval of the class settlement and 27 GRANTS in substantial part Plaintiff’s motion for attorneys’ fees, costs, and an incentive 28 award. 1 BACKGROUND 2 Defendants are suppliers of structural and related building products for new 3 residential construction, including lumber, windows, pre-hung doors, and other general 4 construction tools and supplies. In California, Defendants operate 15 retail locations. 5 Plaintiff resides in San Diego, California. Defendants first employed Plaintiff on or 6 about January 25, 2018 to work as a materials handler at their Dixieline Lumber & Home 7 Centers in San Diego, California. See Doc. No. 1-2 at 7.1 Plaintiff continuously worked 8 for Defendants from the time of his hire until approximately February 6, 2019, when his 9 employment ended. See id. 10 On August 5, 2019, Plaintiff on behalf of himself and other aggrieved employees, 11 sent a written notice by certified mail to the California Labor and Workforce 12 Development Agency (“LWDA”) and Defendants of the specific California Labor Code 13 provisions to have been allegedly violated by the Defendants. See id. at 28. On October 14 15, 2019, Plaintiff filed a putative class action complaint in the Superior Court of the 15 State of California for the County of San Diego against the Defendants alleging the 16 following causes of action: (1) Failure to provide meals periods; (2) Failure to provide 17 rest periods; (3) Failure to compensate for all hours worked; (4) Failure to Indemnify; (5) 18 Failure to provide accurate written wage statements; (6) Waiting time penalties; (7) 19 Unfair competition; and (7) Civil Penalties. See id. at 10-23. 20 On November 25, 2019, Defendants removed the action under relevant 21 provisions of the Class Action Fairness Act (“CAFA”) to this Court. See Doc. No. 1. On 22 September 3, 2020, the parties attended and participated in settlement discussions at a 23 mediation session with Marc Feder, Esq., an experienced professional mediator, and 24 reached agreement on the material terms of a proposed individual and class action 25 settlement that would fully resolve the dispute. See Doc. Nos. 27, 33. 26 OVERVIEW OF THE SETTLEMENT 27 The Settlement Class consists of all persons employed by Defendants in California 28 1 as non-exempt employees at any time during the Settlement Class Period (October 15, 2 2015 through October 3, 2020). See Doc. No. 49-2 at 35. There are 1894 Settlement 3 Class Members with two opt-outs. See Doc. No. 52-3 at 3-4. Defendant will pay a total 4 sum of $1.4 million (the “Gross Settlement Amount”) in full settlement of all claims. See 5 Doc. No. 49-2 at 32. The parties have agreed that no portion of the Gross Settlement 6 Amount will revert to Defendant. See id. at 38. 7 After deductions for: (a) Court-approved attorneys’ fees and costs to class counsel; 8 (b) a $30,000 PAGA payment to the California LWDA; (c) Court-approved fees and 9 costs of the Settlement Administrator; and (d) a Court-approved incentive award to 10 Plaintiff, the resulting “Net Settlement Amount” will be distributed to the Settlement 11 Class Members by way of individual settlement payments. See id. at 40-41. The 12 payments will be pro rata shares of the Net Settlement Amount, based on the number of 13 weeks a Settlement Class Member worked during the Class Period divided by the total 14 number of weeks worked by all Settlement Class Members during the Class Period. See 15 id. at 41. 16 The individual settlement payments are estimated to range from under a dollar to 17 more than $1000, with Plaintiff receiving an individual settlement payment in the middle 18 of that range. See Doc. No. 52-1 at 9-10. The Settlement Administrator’s costs are 19 approximately $14,000. See Doc. No. 52-3 at 5. Defendants joined Plaintiff’s previous 20 motion for preliminary approval of the Settlement and there are no objections to the 21 Settlement. See id. at 4. 22 FINAL APPROVAL OF CLASS SETTLEMENT 23 A. Legal Standard 24 [T]he court’s intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be limited to the extent 25 necessary to reach a reasoned judgment that the agreement is not the product 26 of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all 27 concerned. 28 1 Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 2 625 (9th Cir. 1982). 3 A court considers several factors in determining whether a Settlement Agreement 4 is “fair, reasonable, and adequate” under Rule 23(e). The Rule provides that a court 5 should consider whether: (1) “the class representatives and class counsel have adequately 6 represented the class”; (2) “the proposal was negotiated at arm’s length”; (3) “the relief 7 provided for the class is adequate,” taking into consideration the risks associated with 8 continued litigation, the effectiveness of distributing the proposed relief to the class, the 9 terms of any proposed attorneys’ fees, and the underlying settlement agreement; and (4) 10 “the proposal treats class members equitably relative to each other.” Fed. R. Civ. P. 11 23(e)(2). 12 Judicial policy favors settlement in class actions and other complex litigation 13 where substantial resources can be conserved by avoiding the time, cost, and rigors of 14 formal litigation. See Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 15 1992). To that end, the Ninth Circuit has identified additional factors to consider, 16 including: (1) the strength of the case; (2) “the risk, expense, complexity, and likely 17 duration of further litigation”; (3) “the risk of maintaining class action status throughout 18 the trial”; (4) the settlement amount; (5) the stage of the proceedings; (6) “the experience 19 and views of counsel”; (7) whether there is a “governmental participant”; and (8) “the 20 reaction of the class members to the proposed settlement.” Staton v. Boeing Co., 327 21 F.3d 938, 959 (9th Cir. 2003) (quoting Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 22 2003), overruled in part on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 23 571 (9th Cir. 2010)). 24 B. Discussion 25 The Court proceeds by addressing Rule 23(e)(2)’s “fair, reasonable, and adequate” 26 factors and the related factors noted by the Ninth Circuit.2 27
28 2 Because of the overlap between the Rule 23(e)(2)’s factors and the Ninth Circuit’s additional factors, 1 1. Adequate Representation 2 Rule 23(e)(2) requires the Court to consider whether “the class representatives and 3 class counsel have adequately represented the class.” Fed. R. Civ. P. 23(e)(2)(A). 4 Relatedly, the Court also considers the experience and views of counsel. See Staton, 327 5 F.3d at 959 (quoting Molski, 318 F.3d at 953). “‘Great weight’ is accorded to the 6 recommendation of counsel, who are most closely acquainted with the facts of the 7 underlying litigation. This is because ‘[p]arties represented by competent counsel are 8 better positioned than courts to produce a settlement that fairly reflects each party’s 9 expected outcome in the litigation.’” Nat’l Rural Telecommunications Coop. v. 10 DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004) (citation omitted) (first quoting In 11 re PaineWebber Ltd. Partnerships Litig., 171 F.R.D. 104, 125 (S.D.N.Y.); and then 12 quoting In re Pac. Enterprises Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995)). 13 Here, Class Counsel includes David Spivak, an experienced trial attorney who has 14 “been involved in the prosecution of numerous wage and hour class actions at various 15 stages of litigation.” Doc. No. 49-2 (“Spivak Decl.”) ¶ 10. Likewise, Walter Haines is 16 a “highly experienced class action counsel” who has been “practicing law for over 40 17 years” Doc. No. 49-3 (“Haines Decl.”) ¶ 2. Mr. Haines has “represented over 1,500 18 clients in wage and hour disputes of which more than 300 cases were class actions and/or 19 representative actions with settlements totaling over $400,000,000.” Id. 20 Plaintiff, as Class Representative, has claims that “are typical for the purposes of 21 certifying the Settlement Class. Plaintiff, like absent Settlement Class Members was 22 subject to the same relevant policies and procedures governing his compensation, 23 hours of work, meal and rest periods, and expense reimbursement.” Doc. No. 39-2 at 7. 24 According to Plaintiff, he has “fairly represented the interests of all Settlement Class 25 Members during the entire course of this case” and agreed “to settle the case in the best 26 interest of the Settlement Class.” Doc. No. 49-4 (“Sengvong Decl.”) ¶¶ 2, 6. 27 Based on their sworn declarations and the pertinent other portions of the record, 28 the Court finds that both the Class Representative and Class Counsel have adequately 1 represented the Settlement Class Members and therefore this factor favors approval of the 2 Settlement Agreement. 3 2. Arm’s Length Negotiation 4 Rule 23(e)(2) requires the Court to consider whether “the proposal was negotiated 5 at arm’s length.” Fed. R. Civ. P. 23(e)(2)(B). Courts must ensure settlements are not the 6 product of collusion or other conflicts of interest. See In re Bluetooth Headset Prod. 7 Liab. Litig., 654 F.3d at 947; Staton, 327 F.3d at 960. “A settlement following sufficient 8 discovery and genuine arms-length negotiation is presumed fair.” Nat’l Rural 9 Telecommunications Coop., 221 F.R.D. at 528. The Ninth Circuit has outlined several 10 circumstances that may indicate collusion: 11 (1) “when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but class counsel are amply 12 rewarded”; (2) “when the parties negotiate a ‘clear sailing’ arrangement 13 providing for the payment of attorneys’ fees separate and apart from class funds”; and (3) “when the parties arrange for fees not awarded to revert to 14 defendants rather than be added to the class fund.” 15 16 Ferrell v. Buckingham Prop. Mgmt., No. 1:19-cv-00332-LJO-SAB, 2020 WL 291042, at 17 *20 (E.D. Cal. Jan. 21, 2020), report and recommendation adopted, 2020 WL 4364647 18 (E.D. Cal. July 30, 2020) (quoting In re Bluetooth, 654 F.3d at 947); see also In re 19 Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 569 (9th Cir. 2019) (noting these same 20 “typical” collusive signs). 21 The parties reached this Settlement after engaging in significant informal 22 discovery, participating in a Rule 26(f) conference, attending an Early Neutral Evaluation 23 conference, participating in private mediation, and stipulating to settlement on terms 24 proposed by mediator. Subject to the Court’s ultimate disposition regarding the request 25 for attorneys’ fees, infra, Class Counsel will not recover an unreasonable portion of the 26 Gross Settlement Amount and no portion of that fund will revert to Defendant. See Doc. 27 No. 52-2 at 21. Accordingly, the Court finds that the arm’s length negotiations favor 28 approval of the Settlement Agreement. 1 3. Adequate Relief 2 Rule 23(e)(2) requires the Court to consider whether “the relief provided for the 3 class is adequate” after assessing several factors, such as the risks associated with 4 continued litigation, the effectiveness of proposed relief to the class, the terms of any 5 proposed attorneys’ fees, and the underlying settlement agreement. Fed. R. Civ. P. 6 23(e)(2)(C). To determine whether the relief is adequate and in assessing the other 7 underlying subfactors, “the Court must balance the continuing risks of litigation 8 (including the strengths and weaknesses of Plaintiffs’ case), with the benefits afforded to 9 members of the Class, and the immediacy and certainty of a substantial recovery.” Baker 10 v. SeaWorld Entm’t, Inc., No. 14-cv-02129-MMA-AGS, 2020 WL 4260712, at *6 (S.D. 11 Cal. July 24, 2020). In particular, 12 [t]he Court shall consider the vagaries of litigation and compare the significance of immediate recovery by way of the compromise to the mere 13 possibility of relief in the future, after protracted and expensive litigation. In 14 this respect, “[i]t has been held proper to take the bird in hand instead of a prospective flock in the bush.” 15
16 Nat’l Rural Telecommunications Coop., 221 F.R.D. at 526 (quoting Oppenlander 17 v. Standard Oil Co. (Indiana), 64 F.R.D. 597, 624 (D. Colo. 1974)). 18 i. Risks of Continued Litigation 19 “In determining whether to approve a Settlement Agreement, the Court should also 20 consider the expense, complexity and likely duration of further litigation or delay of trial 21 and appeal.” Baker, 2020 WL 4260712, at *7 (citing Fed. R. Civ. P 23(e)(2)(C)(i)). 22 “Generally, unless the settlement is clearly inadequate, its acceptance and approval are 23 preferable to lengthy and expensive litigation with uncertain results.” In re LinkedIn 24 User Privacy Litig., 309 F.R.D. 573, 587 (N.D. Cal. 2015) (quoting Ching v. Siemens 25 Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210, at *4 (N.D. Cal. June 27, 2014)). 26 Here, if the parties had not settled, Plaintiff would have had to spend considerable 27 time and effort litigating formal discovery, class certification, and summary judgment. 28 Accordingly, the Court finds that the strength of the case; the costs associated with trial 1 and appeal; the stage of the proceedings; and the risk of maintaining class action status 2 throughout the trial favor approval of the Settlement Agreement. 3 ii. Effectiveness of Proposed Relief Distribution 4 In determining the effectiveness of distributing the proposed relief to the class and 5 the processing of class claims, the Court should “scrutinize the method of claims 6 processing to ensure that it facilitates filing legitimate claims. A claims processing 7 method should deter or defeat unjustified claims, but the court should be alert to whether 8 the claims process is unduly demanding.” Fed. R. Civ. P. 23(e) advisory committee’s 9 note to 2018 amendment. 10 In this case, the Notice of Settlement of Class Action provided as follows: 11 How Do I Receive Money From This Settlement? Do nothing. If you do nothing, you will be entitled to your share of the 12 Settlement based on the number of workweeks you worked for Defendants 13 during the Settlement Class Period, and the number of pay periods you worked for Defendants during the PAGA Period, as stated below in Section 14 12. You also will be bound by the settlement, including the release of claims 15 stated herein.
17 Kruckenberg Decl., Ex. A. This method of distribution imposes no burden on the 18 Settlement Class Members. Accordingly, the effectiveness of the proposed method of 19 distributing relief to the Class favors approval of the Settlement Agreement. 20 iii. Terms of Proposed Attorneys’ Fees 21 In assessing whether the relief for a class is adequate, “[e]xamination of the 22 attorney-fee provisions may also be valuable in assessing the fairness of the proposed 23 settlement.” Fed. R. Civ. P. 23(e) advisory committee’s note to 2018 amendment. 24 “Ultimately, any award of attorney’s fees must be evaluated under Rule 23(h), and no 25 rigid limits exist for such awards. Nonetheless, the relief actually delivered to the class 26 can be a significant factor in determining the appropriate fee award.” Id. 27 This subfactor considers the “terms” of any proposed and agreed upon request for 28 attorneys’ fees. See Fed. R. Civ. P. 23(e)(C)(iii). Here, the Settlement Agreement 1 contains an attorneys’ fees provision which permits Class Counsel to apply for an 2 attorneys’ fees award, which would be paid from the Gross Settlement Amount. See 3 Doc. No. 52-2 at 20-21. Class Counsel’s entitlement to such award is ultimately 4 contingent upon the corresponding motion for attorneys’ fees and costs, which is 5 addressed in detail below. 6 The Court must be mindful when determining whether to approve a proposed 7 attorneys’ fee award in the class action settlement context that “settlement class actions 8 present unique due process concerns for absent class members.” Hanlon, 150 F.3d at 9 1026. Accordingly, “the district court has a fiduciary duty to look after the interests of 10 those absent class members.” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015). As 11 the Ninth Circuit recently explained 12 [C]ourts should scrutinize pre-class certification settlements because plaintiffs’ counsel may collude with the defendant to strike a quick settlement 13 without devoting substantial resources to the case. The potential for collusion 14 reaches its apex pre-class certification because, among other things, (1) the court has not yet approved class counsel, who would owe a fiduciary duty to 15 the class members; and (2) plaintiffs’ counsel has not yet devoted substantial 16 time and money to the case, and may be willing to cut a quick deal at the expense of class members’ interests. 17
18 In contrast, by the time a court has certified a class — the theory goes — the parties have vigorously litigated the dispute, reducing the chance that class 19 counsel will settle on the cheap for a quick buck. By devoting substantial time 20 and resources to the case, class counsel has skin in the game, guaranteeing his or her interest in maximizing the size of the settlement fund. Likewise, 21 because a district court has appointed class counsel who owes a fiduciary duty 22 to the class members, class counsel would be ethically forbidden from sacrificing the class members’ interests. 23
24 Briseño v. Henderson, 998 F.3d 1014, 1024-25 (9th Cir. 2021) (internal citations 25 omitted). 26 Here, the parties reached their settlement prior to class certification. This requires 27 the Court to take on the fiduciary role that would ordinarily fall to Class Counsel. See 28 Allen, 787 F.3d at 1223. Upon review, the Court does not find any evidence of collusion 1 but the Settlement Agreement in this case does contain a “clear sailing” provision. See 2 Doc. No. 52-2 at 21. However, the parties also agreed that if the Court approves a lesser 3 attorneys’ fee award, the difference will revert to the Net Settlement Amount and 4 therefore the Settlement Class, see id., thus ameliorating the collusive concerns addressed 5 in Briseño. 6 iv. Underlying Settlement Agreement 7 “It is well-settled law that a proposed settlement may be acceptable even though it 8 amounts to only a fraction of the potential recovery that might be available to the class 9 members at trial.” Rodriguez v. Bumble Bee Foods, LLC, No. 17-cv-2447-MMA 10 (WVG), 2018 WL 1920256, at *4 (S.D. Cal. Apr. 24, 2018) (brackets omitted) (quoting 11 Nat’l Rural Telecommunications Coop., 221 F.R.D. at 527). That is because a settlement 12 “embodies a compromise; in exchange for the saving of cost and elimination of risk, the 13 parties each give up something they might have won had they proceeded with litigation.” 14 Officers for Justice, 688 F.2d at 624 (quoting United States v. Armour & Co., 402 U.S. 15 673, 681 (1971)). Further, the Ninth Circuit has held that the number of class members 16 who object to a proposed settlement is a factor to be considered. See Mandujano v. Basic 17 Vegetable Prod., Inc., 541 F.2d 832, 837 (9th Cir. 1976) (first citing Bryan v. Pittsburgh 18 Plate Glass Co. (PPG Indus.), 494 F.2d 799, 803 (3d Cir. 1974); and then citing 19 Amalgamated Meat Cutters & Butcher Workmen of N. Am., Local 340 v. Safeway Stores, 20 Inc., No. W-3915, 1972 WL 141, at *1 (D. Kan. Feb. 4, 1972)). The absence of a large 21 number of objectors supports the fairness, reasonableness, and adequacy of the 22 settlement. See In re Austrian & German Bank Holocaust Litig., 80 F. Supp. 2d 164, 175 23 (S.D.N.Y. 2000); Boyd v. Bechtel Corp., 485 F. Supp. 610, 624 (N.D. Cal. 1979) (finding 24 “persuasive” that 84% of the class filed no opposition). 25 Here, the Settlement Agreement provides for a Gross Settlement Amount of $1.4 26 million for 1894 Settlement Class Members and, after deducting various fees and costs, 27 “the average Individual Settlement Payment to Settlement Class Members is estimated to 28 be approximately $457.10.” Doc. No. 52-1 at 9-10 (citing Kruckenberg Decl. ¶ 11). 1 Only two Settlement Class Members have opted out of the settlement and no objections 2 to the settlement terms have been received by either the attorneys, the Settlement 3 Administrator, or the Court. See Kruckenberg Decl. ¶¶ 8-9. Plaintiff cites a number of 4 cases which appear to support the conclusion that the Gross Settlement Amount in this 5 case is both reasonable and favorable to the Settlement Class Members. See Doc. No. 52- 6 1 at 9-10 (collecting cases). Accordingly, the Court finds that the underlying Settlement 7 Agreement favors approval of the Settlement. 8 v. Conclusion 9 Based on the foregoing, the Court finds that on balance the relief provided for the 10 class is adequate and favors approval of the Settlement Agreement. 11 4. Equitable Treatment of Class Members 12 Rule 23(e)(2) requires the Court to consider whether “the proposal treats class 13 members equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(D). “Matters of 14 concern could include whether the apportionment of relief among class members takes 15 appropriate account of differences among their claims, and whether the scope of the 16 release may affect class members in different ways that bear on the apportionment of 17 relief.” Fed. R. Civ. P. 23(e) advisory committee’s note to 2018 amendment. In 18 assessing this factor, courts determine whether the settlement unreasonably gives 19 preferential treatment to the class representatives or other class members. See Ferrell v. 20 Buckingham Prop. Mgmt., 2020 WL 291042, at *23 (quoting In re Tableware Antitrust 21 Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007)). 22 The Settlement Payments will be pro rata shares of the Net Settlement Amount, 23 based on the number of weeks a Settlement Class Member worked during the Class 24 Period divided by the total number of weeks worked by all Settlement Class Members 25 during the Class Period. See Doc. No. 52-2 at 24. This is fair, reasonable, and adequate 26 in light of the underlying harm and the lack of facts indicating certain Class Members 27 suffered a disproportionate injury compared to others. Although disproportionate, as 28 discussed below, the Court finds that Plaintiff’s Class Representative Incentive Award is 1 reasonable. Accordingly, the general equitable treatment of class members favors 2 approval of the Settlement Agreement. 3 C. Conclusion 4 Upon due consideration of the factors set forth above, the Court finds that the Class 5 Settlement is on balance “fair, reasonable, and adequate” under Rule 23(e)(2) and 6 GRANTS Plaintiff’s motion for final approval of the settlement. 7 ATTORNEYS’ FEES AND COSTS 8 Plaintiff seeks and award of attorneys’ fees and costs pursuant to California Labor 9 Code §§ 1194, 2699(g), 2802(c). See Doc. No. 1-2 at 23, 25-26. Plaintiff requests fees in 10 the aggregate amount of $466,666, which is 33.33% of the $1.4 million Gross Settlement 11 Amount. See Doc. No. 49-1 at 10. 12 A. Attorneys’ Fees 13 1. Legal Standard 14 Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified 15 class action, the court may award reasonable attorney’s fees and nontaxable costs that are 16 authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). And as 17 mentioned above, in addition to the reasonableness inquiry mandated under Rule 23(h), 18 “district courts must now consider ‘the terms of any proposed award of attorney’s fees’ 19 when determining whether ‘the relief provided for the class is adequate’” pursuant to 20 Rule 23(e). Briseño, 998 F.3d at 1024 (quoting Fed. R. Civ. P. 23(e)(2)(C)(iii)). 21 Importantly, “whether the attorneys’ fees come from a common fund or are otherwise 22 paid, the district court must exercise its inherent authority to assure that the amount and 23 mode of payment of attorneys’ fees are fair and proper.” Zucker v. Occidental Petroleum 24 Corp., 192 F.3d 1323, 1328 (9th Cir. 1999). 25 The Court has discretion in a common fund case such as this to choose either the 26 lodestar method or the percentage-of-the-fund method when calculating reasonable 27 attorneys’ fees. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). 28 Under the percentage-of-recovery method, 25% of a common fund is the benchmark for 1 fee awards. See, e.g., In re Bluetooth, 654 F.3d at 942 (“[C]ourts typically calculate 25% 2 of the fund as the ‘benchmark’ for a reasonable fee award, providing adequate 3 explanation in the record of any ‘special circumstances’ justifying a departure.”). Under 4 the lodestar method, a “lodestar figure is calculated by multiplying the number of hours 5 the prevailing party reasonably expended on the litigation (as supported by adequate 6 documentation) by a reasonable hourly rate for the region and for the experience of the 7 lawyer.” Id. at 941 (citing Staton, 327 F.3d at 965). 8 Whether the Court awards the benchmark amount or some other rate, the award 9 must be supported “by findings that take into account all of the circumstances of the 10 case.” Vizcaino, 290 F.3d at 1048. To guard against an unreasonable result, the Ninth 11 Circuit has encouraged district courts to cross-check any calculations done in one method 12 against those of another method. See id. at 1050-51. 13 2. Discussion 14 As noted above, Plaintiff on behalf of Class Counsel requests $466,666 in fees, or 15 one-third (33.33%) of the Gross Settlement Amount. This amount exceeds the 16 “benchmark” for a reasonable fee award under the percentage-of-recovery method. See, 17 e.g., Espinosa v. Ahearn (In re Hyundai & Kia Fuel Econ. Litig.), 926 F.3d 539, 570 (9th 18 Cir. 2019) (noting the 25% benchmark). As discussed below, it is also significantly more 19 than Class Counsel’s fees would be if calculated using the lodestar method and “[i]f the 20 lodestar amount exceeds the 25% benchmark for percentage-of-recovery awards, a 21 second look to evaluate the reasonableness of the lodestar calculation is appropriate.” 22 Johnson v. MGM Holdings, Inc., 943 F.3d 1239, 1242 (9th Cir. 2019). 23 a. Lodestar Calculation 24 In order to determine the lodestar figure, the Court calculates the number of hours 25 reasonably expended on the litigation and then multiplies that number by a reasonable 26 hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). 27 The Court first considers whether Class Counsel’s hourly rates are reasonable. 28 A reasonable hourly rate is typically based upon the prevailing market rate in the 1 community for “similar work performed by attorneys of comparable skill, experience, 2 and reputation.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986) 3 (citing Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)). 4 Here, Plaintiff requests hourly rates of $700 for Mr. Spivak and $675 for Mr. 5 Haines. In addition to the declarations of counsel, the Court relies on its own knowledge 6 and experience of customary rates concerning reasonable and proper fees, see Ingram v. 7 Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011), and considers the relevant Kerr factors. 8 See Davis v. City of San Francisco, 976 F.2d 1536, 1546 (9th Cir. 1992) (finding that 9 district courts may consider the Kerr factors in determining an appropriate market rate). 10 Recently, courts in this District have awarded hourly rates for work performed in civil 11 cases by attorneys with significant experience anywhere in range of $550 per hour to 12 more than $1000 per hour. See, e.g., Herring Networks, Inc. v. Maddow, No. 3:19-cv- 13 1713-BAS-AHG, 2021 U.S. Dist. LEXIS 23163, at *21 (S.D. Cal. Feb. 5, 2021) (finding 14 $1150-$1050 to be reasonable rates for partners with more than 30 years of experience 15 from a Top 100 law firm); Kries v. City of San Diego, No. 17-cv-1464-GPC-BGS, 2021 16 U.S. Dist. LEXIS 6826, at *26-27 (S.D. Cal. Jan. 13, 2021) (finding rates of $650 per 17 hour for attorneys with more than 30 years of experience to be reasonable); Sunbelt 18 Rentals, Inc. v. Dubiel, No. 20-cv-876-WQH-BGS, 2020 WL 6287462, at *2 (S.D. Cal. 19 Oct. 27, 2020) (finding $405 rate per hour to be a reasonable rate for a partner in a breach 20 of contract action); Kailikole v. Palomar Cmty. Coll. Dist., No. 18-cv-2877-AJB-MSB, 21 2020 WL 6203097, at *3 (S.D. Cal. Oct. 22, 2020) (finding $550 rate per hour to be a 22 reasonable rate for a partner in an employment action); Vasquez v. Kraft Heinz Foods 23 Co., No. 3:16-CV-2749-WQH-BLM, 2020 WL 1550234, at *1–2, 7 (S.D. Cal. Apr. 1, 24 2020) (approving of rates between $700 and $725 for attorneys with approximately 30 25 years of experience and rate of $550 for attorney with 12 years of experience); San Diego 26 Comic Convention v. Dan Farr Productions, No. 14cv1865-AJB-JMA, 2019 WL 27 1599188, at *13-*14 (S.D. Cal. Apr. 15, 2019) (finding reasonable the hourly rates of 28 $760 for partners from a Top 100 law firm with 28-29 years of experience), attorney fees 1 aff’d by 807 F. App’x 674 (9th Cir. Apr. 20, 2020); Kikkert v. Berryhill, No. 14cv1725- 2 MMA-JMA, 2018 WL 3617268, at *2 n.1 (S.D. Cal. July 30, 2018) (an unopposed fee 3 motion after a successful social security appeal, finding de facto hourly rate of $943 4 reasonable, citing other decisions in the district approving rates from $656 to $886). The 5 rates requested by Messrs. Spivak and Haines are on the high end of what this Court finds 6 reasonable but are nonetheless within the generally accepted range and reflective of the 7 extensive experience both attorneys brought to the case. 8 Plaintiff also requests hourly rates for various legal secretaries, paralegals, and 9 associates, all of whom performed work on this case. Those rates range from $450 per 10 hour for an associate with seven years of experience to $150 per hour for first-year legal 11 secretaries.3 See Doc. No. 53 at 3-4. Although the associate billing rates are likewise on 12 the high end of what this Court ordinarily finds reasonable, the requested rates are within 13 the range supported by relevant caselaw; additionally, the hourly rate requested for work 14 performed by paralegals and legal secretaries falls within the broad range of rates 15 awarded by courts in this Districts. See, e.g., Kries, 2021 U.S. Dist. LEXIS 6826, at *27 16 ($95); Aispuro v. Ford Motor Co., No. 18cv2045-DMS-KSC, 2020 U.S. Dist. LEXIS 17 142806, at *11 (S.D. Cal. Aug. 10, 2020) ($200); Puccio v. Love, No. 16cv2890-W-BGS, 18 2020 WL 434481, at *4 (S.D. Cal. Jan. 28, 2020) ($195); San Diego Comic Convention, 19 2019 WL 1599188, at *15 ($290). 20 The Court next considers whether Class Counsel’s expenditure of 375.54 hours on 21 this case is reasonable. “The fee applicant bears the burden of documenting the 22 appropriate hours expended in the litigation and must submit evidence in support of those 23 hours worked.” Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992) (citing 24 Hensley, 461 U.S. at 433, 437). A district court “should defer to the winning lawyer’s 25 professional judgment as to how much time he was required to spend on the case.” 26 Chaudhry, 751 F.3d at 1111 (citing Moreno, 534 F.3d at 1112). However, the Court 27
28 3 According to Mr. Spivak and as detailed in the billing records, the legal secretaries performed substantive duties similar to those performed by the paralegals thus rendering the titular difference 1 “should exclude from [the] initial fee calculation hours that were not ‘reasonably 2 expended.’” Hensley, 461 U.S. at 434. Hours are not “reasonably expended” if they are 3 “excessive, redundant, or otherwise unnecessary.” Id. 4 Class Counsel has provided detailed billing records which indicate that the hours 5 of work performed on this case were generally reasonable, necessary, and thus 6 compensable. See generally Spivak Decl., Ex. F. Of course, purely clerical work is not 7 compensable at attorney or paralegal rates, see Missouri v. Jenkins, 491 U.S. 274, 288 8 n.10 (1989), and there are a few billing entries that appear to fall into the clerical 9 category. See, e.g., Doc. No. 49-2 at 113 (billing entry of legal secretary indicating 10 “calendared the new status conference date”). Those entries are the exception, however, 11 and the Court finds a substantial majority of the billing entries reflective of compensable 12 time spent on this litigation. Moreover, “[t]he lodestar ‘cross-check’ need not be as 13 exhaustive as a pure lodestar calculation” because it only “serves as a point of 14 comparison by which to assess the reasonableness of a percentage award.” Fernandez v. 15 Victoria Secret Stores, LLC, No. CV 06-04149 MMM (SHx), 2008 U.S. Dist. LEXIS 16 123546, 2008 WL 8150856, at *14 (C.D. Cal. July 21, 2008). Accordingly, “the lodestar 17 can be approximate and still serve its purpose.” Id. 18 Accordingly, finding the hourly rates identified above and hours expended to be 19 reasonable, the Court agrees with Class Counsel’s calculation of the lodestar figure in this 20 case of $141,042.50. See Doc. No. 53 at 4. 21 b. Lodestar Crosscheck 22 This Court has previously acknowledged that “California courts routinely award 23 attorneys’ fees of one-third of the common fund.” Espinosa v. Cal. Coll. of San Diego, 24 Inc., No. 17cv744-MMA (BLM), 2018 U.S. Dist. LEXIS 60106, at *24 (S.D. Cal. Apr. 9, 25 2018) (quoting Beaver v. Tarsadia Hotels, No. 11-CV-01842-GPC-KSC, 2017 U.S. Dist. 26 LEXIS 160214, 2017 WL 4310707, at *9 (S.D. Cal. Sept. 28, 2017)) (collecting cases). 27 But “[r]egardless of whether the Court uses the percentage approach or the lodestar 28 method, the ultimate inquiry is whether the end result is reasonable.” Espinosa, 2018 1 U.S. Dist. LEXIS 60106, at *27-28 (emphasis added) (citing Powers v. Eichen, 229 F.3d 2 1249, 1258 (9th Cir. 2000)). “Calculation of the lodestar, which measures the lawyers’ 3 investment of time in the litigation, provides a check on the reasonableness of the 4 percentage award. Where such investment is minimal, as in the case of an early 5 settlement, the lodestar calculation may convince a court that a lower percentage is 6 reasonable.” Vizcaino, 290 F.3d at 1050. 7 “[A]n appropriate positive or negative multiplier reflect[s] . . . the quality of 8 representation, the benefit obtained for the class, the complexity and novelty of the issues 9 presented, and the risk of nonpayment.” In re Bluetooth, 654 F.3d at 941-42 (quoting 10 Hanlon, 150 F.3d at 1029). Likewise, a “percentage amount can . . . be adjusted upward 11 or downward to account for any unusual circumstances involved in this case.” Paul, 12 Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989). 13 The lodestar crosscheck does not support the requested fee award in this case. The 14 requested award of $466,666—33.33% of the Gross Settlement Amount—represents a 15 performance multiplier of approximately 3.3 over the lodestar figure. While “counsel are 16 entitled to a multiplier for risk” in contingent-fee cases, such as this one, the Court finds 17 that a multiplier of 3.3 is not warranted here and as such, a 33.33% fee award is not 18 reasonable. Vizcaino v. Microsoft Corp., 142 F. Supp. 2d 1299, 1306 (W.D. Wash. 19 2001). Rather, in a case where “class counsel achieved for the class a pre-certification 20 settlement after . . . engaging in significant discovery, and successfully negotiating a 21 seven-figure settlement for the class,” providing “an average award of $450 per class 22 member,” the 25% benchmark is more appropriate. Bellinghausen v. Tractor Supply Co., 23 306 F.R.D. 245, 261 (N.D. Cal. 2015) (awarding attorneys’ fees in the amount of 25% of 24 common fund). 25 Accordingly, the Court finds that an appropriate fee award in this case is 25% of 26 the Gross Settlement Amount, or a 2.5 performance multiplier of the lodestar figure, and 27 will award Class Counsel $350,000 in attorneys’ fees. 28 1 B. Costs 2 Plaintiff requests reimbursement for $8,581.33 in litigation costs expended by 3 Class Counsel. 4 1. Legal Standard 5 Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified 6 class action, the court may award reasonable attorney’s fees and nontaxable costs that are 7 authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Counsel is 8 entitled to reimbursement of the out-of-pocket costs they reasonably incurred 9 investigating and prosecuting the case. See In re Media Vision Tech. Sec. Litig., 913 F. 10 Supp. 1362, 1366 (N.D. Cal. 1996) (citing Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 11 391–92 (1970)); see also Staton, 327 F.3d at 974. 12 2. Discussion 13 Plaintiff seeks an award of costs totaling $8,581.33 expended by Class Counsel for 14 filing fees, service fees, photocopying costs, postage, and other litigation related 15 expenses. See Spivak Decl., Ex. G. The Court finds that upon review the requested 16 award is reasonable in light of the itemized costs. Costs for service of process are taxable 17 under 28 U.S.C. § 1920 as well as Civil Local Rule 54.1.b.1, which provides that “(c)osts 18 for service of subpoenas are taxable as well as service of summonses and complaints.” 19 Filing fees are recoverable under 28 U.S.C. §1920(1). Additionally, the Ninth Circuit has 20 held that an award to a prevailing party “can include reimbursement for out-of-pocket 21 expenses including . . . travel, courier and copying costs.” Grove v. Wells Fargo Fin. 22 Cal., Inc., 606 F.3d 577, 580 (9th Cir. 2010). Other recoverable expenses include 23 expenses related to discovery and expenses related to computerized research. See Harris 24 v. Marhoefer, 24 F.3d 16, 19-20 (9th Cir. 1994) (noting that “expenses related to 25 discovery” are recoverable); Trs. Of Constr. Indus. & Laborers’ Health & Welfare Trust 26 v. Redland Ins. Co., 460 F.3d 1253, 1258-59 (9th Cir. 2006) (holding that “reasonable 27 charges for computerized research may be recovered.”). 28 Accordingly, because Class Counsel’s out-of-pocket costs were reasonably 1 incurred in litigating this action and were advanced by counsel for the benefit of the 2 Class, the Court APPROVES reimbursement of litigation costs in the full amount 3 requested. See, e.g., Fontes v. Heritage Operating, L.P., No. 14-cv-1413-MMA (NLS), 4 2016 WL 1465158, at *6 (S.D. Cal. Apr. 14, 2016). 5 CLASS REPRESENTATIVE INCENTIVE AWARD 6 Finally, Plaintiff requests an incentive award of $15,000 for his service as the Class 7 Representative in this action. 8 A. Legal Standard 9 “Incentive awards are payments to class representatives for their service to the 10 class in bringing the lawsuit.” Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157, 1163 11 (9th Cir. 2013). “Such awards are discretionary.” Rodriguez v. W. Publ’g Corp. 12 (Rodriguez I), 563 F.3d 948, 958 (9th Cir. 2009). The Ninth Circuit has instructed 13 district courts to “to scrutinize carefully the awards so that they do not undermine the 14 adequacy of the class representatives.” See Radcliffe, 715 F.3d at 1163. Incentive 15 awards that are disproportionate to the class’s recovery risk a conflict of interest between 16 a class representative’s interests and the class’s interests. See id. (quoting Rodriguez I, 17 563 F.3d at 959). This is especially relevant where retainer agreements require class 18 counsel to request an incentive award or where the settlement agreement conditions the 19 award on the class representatives’ approval of the settlement. See id. at 1163–64. 20 “Where . . . the class representatives face significantly different financial incentives than 21 the rest of the class because of the conditional incentive awards that are built into the 22 structure of the settlement, we cannot say that the representatives are adequate.” Id. at 23 1165. 24 Additionally, in evaluating the reasonableness of incentive awards, 25 [t]he district court must evaluate their awards individually, using “relevant factors includ[ing] the actions the plaintiff has taken to protect the interests of 26 the class, the degree to which the class has benefitted from those actions, . . . 27 the amount of time and effort the plaintiff expended in pursuing the litigation . . . and reasonabl[e] fear[s of] workplace retaliation.” 28 1 Staton, 327 F.3d at 977 (quoting Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)). 2 Further, “class members can certainly be repaid from any cost allotment for their 3 substantiated litigation expenses.” Id. Taken together, courts examine the following 4 factors when scrutinizing incentive awards on an individual basis in class action 5 settlements: (1) conflicts of interest between the class representative and the class in 6 assessing the terms or disparity of an award, (2) actions taken by the class representative 7 to protect the class’s interest, (3) the benefit received by the class based on the class 8 representative’s actions, (4) the time and effort expended by the class representative, and 9 (5) the class representative’s reasonable fears of workplace retaliation. 10 B. Discussion 11 Pursuant to the Settlement Agreement 12 Subject to Court approval and in exchange for Sengvong’s release of all claims in the Personal Release, Sengvong’s covenant not to sue (as described 13 below), and in addition to his individual Settlement Award as a member of 14 the Settlement Class, fifteen thousand dollars ($15,000) will be set aside from the Gross Settlement Amount for Sengvong’s efforts in bringing and 15 prosecuting this matter. 16 17 Doc. No. 49-2 at 37. The $15,000 incentive award as requested by Plaintiff in this case is 18 at the high end of the range of such awards in this Circuit. However, after reviewing the 19 declarations of both Class Counsel and Plaintiff, the Court agrees that a substantial 20 incentive award is appropriate here in light of the time and effort Plaintiff expended on 21 this litigation, the benefit obtained for the class, and the risks associated with bringing a 22 class action lawsuit against a former employer. 23 Accordingly, the Court APPROVES Plaintiff’s request for a $15,000 incentive 24 award. 25 CONCLUSION 26 Based on the foregoing, the Court GRANTS Plaintiff’s motion for final approval 27 of the class settlement and GRANTS in substantial part Plaintiff’s motion for attorneys’ 28 fees, costs, and an incentive award. 1 The Court CERTIFIES the Settlement Class for the purposes of the Settlement. 2 Court APPROVES the Settlement as fair, reasonable, and adequate pursuant to 3 || Federal Rule of Civil Procedure 23(e). The Court ORDERS the parties to undertake the 4 || obligations set forth in the Settlement Agreement that arise out of this Order. 5 The Court AWARDS attorneys’ fees to Class Counsel in the amount of $350,000 6 costs in the amount of $8,581.33. 7 The Court further AWARDS to Plaintiff an incentive payment for work performed 8 || as the class representative in the amount of $15,000. 9 The Court DIRECTS the Clerk of Court to enter a separate judgment of dismissal 10 accordance herewith, see Fed. R. Civ. P. 58(a), and to close the case. 11 Without affecting the finality of this Order, the Court maintains jurisdiction over 12 matter for purpose of enforcing the Judgment. 13 IT IS SO ORDERED. 14 DATE: October 1, 2021 LMhik Lu- hipltr 15 HO ICHAEL M. ANELLO United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28