Taylor v. Populus Group, LLC

• Court: District Court, S.D. California
• Decided: January 9, 2023
• Docket: 3:20-cv-00473
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11

12 JEFFREY TAYLOR, Case No. 20-cv-0473-BAS-DEB 13

Plaintiff, 14 ORDER GRANTING v. PLAINTIFF’S MOTION FOR 15 ATTORNEYS’ FEES, COSTS, POPULUS GROUP, LLC, et al., 16 AND INCENTIVE AWARD (ECF Defendants. No. 59) 17

18 19 20 Plaintiff filed this putative class action on December 20, 2019, alleging 21 several wage and hour violations against Defendants. (Compl., Ex. A to Not. of 22 Removal, ECF No. 1-2.) Now before the Court is Plaintiff’s unopposed motion for 23 attorneys’ fees, costs, and incentive award. (Mem., ECF No. 59.) The Court held a 24 fairness hearing for the parties’ class action settlement on January 9, 2023. (ECF No. 25 61.) The Court notes that no attorneys attended the hearing. (Id.) Despite that 26 oversight, for the following reasons, the Court GRANTS Plaintiff’s motion. 27 // 1 // 2 I. BACKGROUND 3 This litigation has proceeded for nearly three years. On December 20, 2019, 4 Plaintiff Jeffrey Taylor filed a putative class action complaint in San Diego Superior 5 Court against Defendants Populus Group, LLC (“Populus”) and Neutron Holdings, 6 Inc., dba Lime (“Lime”). (Compl.) Populus removed the action to federal court. 7 (Not. of Removal, ECF No. 1.) The operative Complaint alleges: (1) failure to pay 8 minimum and regular wages for all “hours worked” in violation of California Labor 9 Code §§ 1194, 1194.2, and 1197.2; (2) failure to pay overtime wages in violation of 10 California Labor Code §§ 510 and 1194; (3) failure to provide accurate itemized 11 wage statements showing all “hours worked” in violation of California Labor Code 12 § 226; (4) failure to timely pay all wages owed at termination or separation from 13 employment in violation of California Labor Code § 203; (5) unfair competition in 14 violation of California Business and Professions Code § 17200, et seq.; (6) and 15 violations of the Private Attorneys General Act of 2004 (“PAGA”) pursuant to 16 California Labor Code § 2698, et seq. (Third Am. Compl. (“TAC”), ECF No. 27.) 17 Plaintiff Jeffrey Taylor is the Class Representative, and Davtyan Law Firm, Inc. and 18 Cohelan Khoury & Singer are Class Counsel. (“Settlement Agreement” or “SA” 19 ¶¶ 9, 35, Ex. A to Decl. of J. Jason Hill (“Hill Decl.”), ECF No. 54-2.) 20 Class Counsel summarizes, “Class Counsel and/or Plaintiff have conducted 21 substantial investigation, research, and analysis; drafted PAGA charges and four 22 iterations of the complaint; defeated a motion to strike; produced and received 23 formal and informal discovery; drafted briefs for and attended two ENEs; and, after 24 extensive negotiations, reached a settlement.” (Mem. at 7.) 25 To settle this action, Populus and Lime agree to deposit a gross settlement 26 amount of $175,000 into a non-reversionary, common fund. (SA ¶ 24; Hill Decl. 27 ¶ 30.) The amount will be distributed as follows: 1 be distributed to the Davtyan Law Firm, Inc. and two-thirds to Cohelan 2 Khoury & Singer; 3 (ii) a maximum of $4,000 for litigation costs; 4 (iii) $5,000 for Mr. Taylor’s Class Representative service payment; 5 (iv) a maximum of $4,000 for administration costs; 6 (v) $10,000 in civil PAGA penalties, of which 75% ($7,500) will be 7 distributed to the California Labor & Workforce Development Agency 8 (“LWDA”), and 25% ($2,500) will be distributed proportionately to 9 eligible PAGA Members based on the number of pay periods while 10 employed during the PAGA Period; 11 (vi) $3,383.75 for employer tax obligations; and 12 (vii) a net settlement amount of $90,282.92 to be distributed proportionately 13 to Class Members based on the number of weeks worked during the 14 Class Period. 15 (SA ¶¶ 24, 29, 41, 67; Hill Decl. ¶ 31.) Populus estimates a total of 4,245 weeks 16 worked by Class Members during the Class Period. (SA ¶ 42.) Accordingly, Class 17 Members may expect to receive an estimated $21.26 for each week worked during 18 the Class Period. (Mem. Prelim. Approval, ECF No. 54-1 at 16; Notice, Ex. A to 19 Simpluris Decl., ECF No. 60-3 at 10.) Eligible PAGA Members will also receive a 20 portion of the $2,500 PAGA Member payment based on the number of pay periods 21 while employed during the PAGA Period. (Mem. Prelim. Approval at 16; Notice at 22 10.) 23 II. LEGAL STANDARD 24 Courts have an independent obligation to ensure that, like the settlement, the 25 amounts requested for attorneys’ fees and any class representative service award are 26 reasonable. In re Bluetooth Headsets Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 27 2011). Where a settlement produces a common fund for the benefit of the entire 1 at 942. Typically, courts calculate 25% of the fund as a “benchmark” for a reasonable 2 fee award. Id. “The 25% benchmark rate, although a starting point for the analysis, 3 may be inappropriate in some cases.” Vizcaino v. Microsoft Corp., 290 F.3d 1043, 4 1048 (9th Cir. 2002). Thus, court are encouraged to cross-check this method by 5 employing the “lodestar method” as well. See In re Bluetooth, 654 F.3d at 944. 6 In the “lodestar method,” the court multiplies the number of hours the 7 prevailing party reasonably expended by a reasonable hourly rate for the work. Id. 8 at 941. The hourly rate may be adjusted for the experience of the attorney. Id. The 9 resulting amount is “presumptively reasonable.” Id. at 949. However, “the district 10 court . . . should exclude from the initial fee calculation hours that were not 11 ‘reasonable expended.’” Sorenson v. Mink, 239 F.3d 1140, 1146 (9th Cir. 2001) 12 (quoting Hensley v. Eckerhart, 461 U.S. 424, 433–34 (1983)). The court may then 13 adjust this presumptively reasonable amount upward or downward by an appropriate 14 positive or negative multiplier reflecting a whole host of reasonableness factors 15 including the quality of the representation, the complexity and novelty of the issues, 16 the risk of nonpayment, and, foremost in considerations, the benefit achieved for the 17 class. In re Bluetooth, 654 F.3d at 942. The court may find a fee request is excessive 18 but that there is no further evidence class counsel betrayed class interests for its own 19 benefit, and thus uphold the settlement agreement, while lowering the fee award. Id. 20 “[I]ncentive awards that are intended to compensate class representatives for 21 work undertaken on behalf of a class are fairly typical in class actions cases” and 22 “do not, by themselves, create an impermissible conflict between class members and 23 their representative[].” In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 943 24 (9th Cir. 2015). Nonetheless, the court has an obligation to ensure that the amount 25 requested is fair. In re Bluetooth, 654 F.3d at 941. 26 III. ANALYSIS 27 A. Attorneys’ Fees 1 ||concerns regarding the attorneys’ fee provision. The Court flagged two issues with 2 ||the proposed fees. First, the Settlement Agreement includes a clear sailing 3 || provision—where the defendant agrees to not object to fees up to a certain amount. 4 ||The Ninth Circuit has warned courts that clear sailing agreements can indicate 5 || possible collusion and admonished courts to scrutinize requests for attorneys’ fees 6 ||and costs appropriately. See Bluetooth, 654 F.3d at 947. 7 Second, Class Counsel requests 33.3% of the gross settlement amount in 8 || attorneys’ fees. (Mem. at 6; SA § 79.) In the Ninth Circuit, the benchmark award is 9 125%. In re Pac. Enters. Sec. Litig., 47 F.3d 373, 379 (1995) (citing Six (6) Mexican 10 || Workers y. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990)). Thus, the 11 |/requested attorneys’ fees well exceed the Circuit’s benchmark. That said, fees often 12 |/range between “20% to 33 1/3% of the total settlement value.” Vasquez v. Coast 13 || Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010). In order to analyze the 14 ||attorneys’ fees request, the Court required Class Counsel to submit their billing 15 ||records and use the lodestar method to cross-check the fee award at final approval. 16 || See Alberto v. GMRI, Inc., 252 F.R.D. 652, 668 (E.D. Cal. 2008). 17 1. Percentage of Recovery 18 Under the percentage-of-recovery method, the court has discretion “to award 19 |/attorneys a percentage of the common fund.” Jn re Bluetooth, 654 F.3d at 942. In 20 determining this percentage, courts consider a number of factors including (1) the 21 |/results achieved, (2) the risk of litigation, (3) the skill required and the quality of 22 || work, (4) the contingent nature of the fee, and (5) awards made in similar cases. See 23 || Vizcaino, 290 F.3d at 1048-50. The Court finds 33.3% is appropriate in this case. 24 (i) The Results Achieved 25 The most important factor is the “overall result and benefit to the class from 26 the litigation.” Jn re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1046 (N.D. Cal. 27 ||2008). Here, the projected recovery for each Participating Class Member is an 28 ||average of $747.05 with the estimated highest gross payment being $2,407.94. (ECF

1 ||No. 60 at 5.) Overall, the Court finds that the results achieved are good, which is 2 || highlighted by the fact that there was no objection to the settlement amount or to the 3 ||attorneys’ fees requested. (/d. at 6.) 4 (ii) The Risk of Litigation 5 When, as here, counsel takes a case on a contingency fee basis, there is always 6 |{an inherent risk. This litigation lasted nearly three years, during which Class Counsel 7 || were incurring costs and investing time in the case. Defendants tested Plaintiff's case 8 ||in a motion to strike (ECF No. 11), which Class Counsel defeated (ECF No. 14). 9 ||Further, Defendants disputed that Class Members were required to wait in security 10 || lines—the basis of Plaintiff's substantive claim. (ECF No. 59-1 at 11.) Class Counsel 11 ||had no guaranteed recovery and shouldered a significant risk in litigating this case. 12 ||“[W]here recovery is uncertain, an award of one-third of the common fund as 13 ||attorneys’ fees has been found to be appropriate.” Barbosa v. Cargill Meat Sols. 14 || Corp., 297 F.R.D. 431, 449 (E.D. Cal. 2013) (citing In re Mego Fin. Corp. Sec. 15 || Litig., 213 F.3d 454, 463 (9th Cir. 2000)). Thus, the risk of the litigation counsels 16 || toward approval. 17 (iii) The Skill Required and the Quality of the Work 18 Class Counsel are experienced litigators in the area of employment class 19 |/actions. (See Khoury Decl. {{ 9, 26, 27.) Plaintiff notes, “Class counsel faced a well- 20 ||funded Defendant with excellent and experienced counsel.” (Mem. at 11.) The 21 || quality of opposing counsel is relevant to evaluating the skill required and the quality 22 ||of Class Counsel’s work. See, e.g., In re Equity Funding Corp. Sec. Litig., 438 F. 23 ||Supp. 1303, 1337 (C.D. Cal. 1977). In defeating Defendants’ Motion to Strike and 24 |/negotiating a successful settlement, Class Counsel demonstrated the quality of the 25 || work. 26 (iv) The Contingent Nature of the Fee 27 As noted above, Class Counsel were retained on a contingency fee. Generally, 28 ||the risks associated with a contingency fee justify a higher rate than a non-

1 ||contingency pay agreement. See Fischel v. Equitable Life Assurance Soc’y of U.S., 2 |[307 F.3d 997, 1008 (9th Cir. 2002). Thus, this factor also supports Class Counsel’s 3 ||requested fee. 4 (v) Awards Made in Similar Cases 5 Finally, the one-third attorneys’ fees are commensurate with fees in other 6 ||similar cases. “Cases of under $10 Million will often result in result in fees above 7 ||25%.” Craft v. Cnty. of San Bernardino, 624 F. Supp. 2d 1113, 1127 (C.D. Cal. 8 2008) (citing Van Vranken vy. Atlantic Richfield Co., 901 F. Supp. 294, 297-98 (N.D. 9 ||Cal. 1995)). Further, wage and hour class action cases in California often depart 10 || from the 25% benchmark. Contreras v. Worldwide Flight Servs., Inc., No. CV 18- 11 |}6036 PSG (SSx), 2020 WL 2083017, at *6 (C.D. Cal. Apr. 1, 2020) (collecting 12 cases). Indeed, courts in this district have approved 33.3% attorneys’ fees in wage 13 ||and hour class action settlements. See Yanez v. HL Welding, Inc., No. 20-cv-1789- 14 ||MDD, 2022 WL 788703, at *12 (S.D. Cal. Mar. 15, 2022) (collecting cases 15 |/approving 33.3% attorneys’ fees for wage and hour settlements); Loreto v. Gen. 16 Dynamics Info. Tech., Inc., No. 3:19-cv-01366-GPC-MSB, 2021 WL 1839989, at 17 ||*10 (S.D. Cal. May 7, 2021) (approving a one-third contingency fee to the same 18 ||Class Counsel in a wage and hour settlement). 19 2. Lodestar Method 20 The Ninth Circuit encourages district courts to cross-check their conclusions 21 under the percentage-of-recovery method with the lodestar method, or vice versa. Jn 22 ||re Bluetooth, 654 F.3d at 944-45. Under the lodestar method, as outlined above, “‘the 23 ||district court must calculate the lodestar figure based on the number of hours 24 |/reasonably expended on the litigation, adjusting the figure to account for the degree 25 success class counsel attained, along with other factors.” Id. at 944. 26 Here, the requested award is $58,333.33. (Mem. at 6.) Class Counsel 27 calculates the lodestar figure to be approximately $149,603.50. (Khoury Decl. 16, 28 |/Ex. 1.) This figure assumes Class Counsel’s hourly rates are reasonable. But even

1 assuming without deciding that Class Counsel’s proposed rates are inflated,1 the 2 lodestar figure still validates the percentage-of-recovery method. Indeed, even if the 3 Court cut Class Counsel’s rates by 50%, the lodestar figure would far exceed the 4 percentage-of-recovery figure. Therefore, the lodestar method confirms the 5 conclusion that the requested fee award is reasonable. 6 B. Costs 7 Plaintiff also seeks reimbursement of litigation costs on Class Counsel’s 8 behalf. “Class Counsel are entitled to reimbursement of the out-of-pocket costs that 9 they reasonably incurred investigating and prosecuting [the] case.” Couser v. 10 Comenity Bank, 125 F. Supp. 3d 1034, 1049 (2015) (citing In re Media Vision Tech. 11 Sec. Litig., 913 F. Supp. 1362, 1366 (N.D. Cal. 1996)). Here, Class Counsel have 12 incurred $1,793.76 in costs. (Ex. 1 to Khoury Decl.) The Court finds these costs 13 ordinary and reasonable. Accordingly, the Court grants Plaintiff’s request for 14 $1,793.76 in costs. 15 C. Incentive Award 16 Last, Plaintiff requests approval of a $5,000 incentive award. (Mem. at 7; 17 Taylor Decl., ECF No. 59-4 ¶ 17.) In its Preliminary Settlement Approval Order, the 18 Court deferred judgment on the Class Representative payment. (ECF No. 56 at 16– 19 17.) The Court requested that Mr. Taylor further explain his role as Class 20 Representative to justify the incentive award. (Id. at 17) In response, Mr. Taylor 21 submitted a declaration estimating he spent thirty to forty hours prosecuting this 22 case. (Taylor Decl.) The time included searching for and interviewing attorneys, 23 collecting for documents, communicating with retained counsel, answering written 24 discovery, preparing for a scheduled deposition, speaking with class members, 25 attending two early neutral evaluations, and reviewing and discussing the settlement. 26 27 1 The Court notes that Class Counsel’s proposed rates far exceed the rates of the only San Diego- 1 ||Ud. §§ 7-10.) In addition, Plaintiff was informed that he might be liable for the 2 opposing parties’ costs if the litigation was unsuccessful. (/d. § 11.) In light of Mr. 3 || Taylor’s declaration, the Court is satisfied Mr. Taylor’s requested $5,000 Class 4 || Representative fee is fair and reasonable. 5 ||TV. CONCLUSION 6 For the reasons stated above, the Court grants Plaintiff's motion for attorneys’ 7 || fees, costs, and incentive award. (ECF No. 59). Accordingly, the Court ORDERS: 8 (1) The Court finds that Class Counsel, having expended efforts to secure a 9 benefit to the Class and having conferred a benefit on absent Class 10 Members, are entitled to a fee. The Court approves the application of Class 11 Counsel for an award of $58,333.33 for their attorneys’ fees. 12 (2) The Court awards Class Counsel reimbursement of their litigation costs of 13 $1,793.76. 14 (3) The Court approves a Class Representative Service Payment of $5,000 to 15 Plaintiff Jeffrey Taylor. 16 (4) The Court orders the Class Administrator to make these payments in 17 accordance with the Settlement Agreement. 18 IT IS SO ORDERED. 19 20 || DATED: January 9, 2023 ( pil A | ty hark United Mtates District Judge 22 23 24 25 26 27 28