Uschold v. NSMG Shared Services, LLC

• Court: District Court, N.D. California
• Decided: June 5, 2020
• Docket: 3:18-cv-01039
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 WILLIAM USCHOLD, et al., Case No. 18-cv-01039-JSC

8 Plaintiffs, ORDER RE: MOTION FOR FINAL 9 v. APPROVAL OF CLASS ACTION SETTLEMENT AND MOTION FOR 10 NSMG SHARED SERVICES, LLC, ATTORNEYS’ FEES, COSTS, AND CLASS REPRESENTATIVE 11 Defendants. INCENTIVE AWARDS 12 Re: Dkt. Nos. 56, 58

13 14 Jose Almendarez, Tyrone Dangerfield, Tiana Naples, and William Uschold filed this state 15 law wage-and-hour action on behalf of themselves and others similarly situated against their 16 employer, NSMG Shared Services, LLC (“NSMG” or “Defendant”). (Dkt. No. 55.)1 Plaintiffs 17 allege that NSMG violated California law in its operation of a commission payment system, 18 among other violations of the California Labor Code. Now before the Court is Plaintiffs’ 19 unopposed motion for attorneys’ fees, (Dkt. No. 56), and motion for final approval of the parties’ 20 class action settlement agreement, (Dkt. No. 58).2 After reviewing the proposed settlement and 21 with the benefit of the final approval hearing on March 5, 2020, the Court GRANTS the motion 22 for final approval and GRANTS IN PART the motion for attorneys’ fees and costs. 23 BACKGROUND 24 I. The Parties 25 Defendant NSMG is a limited liability corporation organized under Delaware law; the 26 1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 27 ECF-generated page numbers at the top of the documents. 1 company maintains its principal place of business in Houston Texas. (Dkt. No. 4 at ¶¶ 3-4.) 2 “NSMG employs individuals who provide funeral and burial related services throughout the Bay 3 Area.” (Dkt. No. 24 at 2.) Plaintiffs are former employees of NSMG. (Dkt. No. 55 at ¶¶ 19-22.) 4 II. Complaint Allegations 5 NSMG paid Plaintiffs using a “commission payment system.” (Id. at ¶ 2.) Commission- 6 earning employees were required to meet a weekly sales quota to earn the required number of 7 “points” under the system. (Id. at ¶ 3.) If an employee failed to earn enough points to meet the 8 quota in a given week, “the shortfall carried into the following week” and was added to the regular 9 weekly requirement. (Id. at ¶¶ 3-4.) Employees could not earn a commission until they had 10 satisfied the weekly quota and any shortfall from the previous week. (Id. at ¶ 5.) If an employee 11 “exceeded the quota, the excess commission points were neither paid nor accumulated to offset 12 further weeks.” (Id. at ¶ 6.) Plaintiffs did not know the terms of the commission payment system 13 or how it operated until several months into employment. (Id. at ¶ 7.) Further, NSMG “failed to 14 ever adequately explain the compensation system and obtain a written agreement from each 15 commission-earning employee reflecting all of the material terms and conditions of the 16 commission structure.” (Id.) 17 NSMG further violated the California Labor Code by requiring commission-earning 18 employees that earned hourly wages to work “‘off of the clock’ without compensation” for hours 19 spent “on call, responding to calls from clients and employees,” and client-related travel and 20 meetings. (Id. at ¶ 8.) Additionally, NSMG misclassified commission-earning employees “under 21 the outside sales overtime exemption, resulting in the failure to pay minimum wage and overtime 22 premium wages.” (Id. at ¶ 9.) NSMG also knew or required that its employees “use[ ] personal 23 property for work including personal vehicles for travel to meet with clients and prospective 24 clients and personal cell phones for business calls.” (Id. at ¶ 10.) However, NSMG did not 25 “reimburse all necessary and reasonable business expenses as required by California law.” (Id. at 26 ¶ 11.) NSMG also failed to provide “legally compliant meal and rest periods” and accurate wage 27 statements, and “misclassified outside sales employees as exempt.” (Id. at ¶¶ 40-43.) In addition 1 practices in violation of California Unfair Competition Laws” (“UCL”), California Business & 2 Professions Code § 17200. (Id. at ¶ 13.) 3 Plaintiffs “seek unpaid wages, reimbursement for necessary and reasonable business 4 expenses, statutory penalties, injunctive relief, attorneys’ fees and costs, prejudgment interest, and 5 other relief the court may deem appropriate,” as well as civil penalties under the Private Attorneys 6 General Act (“PAGA”), Cal. Lab. Code § 2698. (Id. at ¶¶ 14-15.) 7 III. The Settlement Agreement 8 A. The Class 9 The class consists of “all employees paid commissions by Defendant . . . at any time from 10 January 17, 2014” through October 8, 2019, the date of preliminary approval of the settlement. 11 (Dkt. No. 58-1, Ex. A at ¶ 10.) There are 449 class members. (Dkt. No. 63, Ex. B at ¶ 5.) As of 12 February 25, 2020, none of the class members have opted out, (id. at ¶ 11), and only one class 13 member has objected to the settlement, (Dkt. No. 61). 14 B. Payment Terms 15 Defendant agrees to pay $2.2 million (“Gross Settlement Amount”) to the Settlement 16 Administrator, who will deposit that amount in a qualified settlement fund. (Dkt. No. 58-1, Ex. A 17 at ¶¶ 37-40.) The following will be deducted from the Gross Settlement Amount: (1) payment of 18 $33,000 to the Labor Workforce Development Agency (“LWDA”) to settle the PAGA claim 19 asserted in the FAC; (2) the Settlement Administrator’s fees and costs, not exceeding $9,000.00; 20 (3) Plaintiffs’ attorneys’ fees (not exceeding $736,200.00 (representing one-third of the Gross 21 Settlement Amount)) and costs (not exceeding $20,000.00); (4) “Defendant’s estimated share of 22 applicable payroll taxes to be paid on the individual settlement payments”; and (5) “Service 23 Awards” of $2,000.00 to each of the four named Plaintiffs. (Id. at ¶¶ 41, 53, 54, 60, 68.) The 24 remainder following those deductions constitutes the “Net Settlement Amount” from which 25 individual class members will be paid (“Class Settlement Payments”). (Id. at ¶¶ 41-42.) 26 In support of final approval, Plaintiffs submit the declaration of Jarrod Salinas, Case 27 Manager for Settlement Administrator Simpluris, who attests that as of February 25, 2020, the Net 1 reflects the Gross Settlement Amount ($2,200,000) minus the following: (1) attorneys’ fees and 2 costs not to exceed $736,200 and $20,000, respectively; (2) $7,500 in Settlement Administrator 3 fees; (3) $8,000 in Service Awards; (4) $33,000 in PAGA penalties to the LWDA; and (5) 4 87,001.83 in “maximum employer payroll taxes.”3 (Id.) 5 1. Class Settlement Payments 6 The individual Class Settlement Payments for class members will be calculated as follows: 7 (a) Each Class Member’s “Total Individual Workweeks” will be determined on a pro-rata basis as determined by the number of 8 workweeks each Class Member worked in the state of California from January 17, 2014 through the date of preliminary approval of the 9 settlement.4 10 (b) The Total Individual Workweeks for each Class Member will be aggregated to determine the “Total Class Gross Workweeks.” 11 (c) The estimated Individual Settlement Payment for each Class 12 Member set forth in the Class Notice will be based on: (a) each Class Member’s Total Individual Workweeks; (b) divided by the aggregate 13 number of Total Class Gross Workweeks of all Class Members; (c) multiplied by the value of the Net Settlement Amount. 14 15 (Dkt. No. 58-1, Ex. A at ¶ 42(a)-(c).) In other words, each class member will receive a pro-rata 16 share of the Net Settlement Amount based on the number of weeks the individual worked 17 compared to the number of weeks worked by all class members. 18 One-third of each Class Settlement Payment is allocated to wages, which are “subject to all 19 applicable wage laws, including federal, state and local tax withholding and payroll taxes, and 20 shall be reported on Form W-2.” (Id. at ¶ 49; see also Dkt. No. 58-3, Ex. C at 18 (“IRS W2 Forms 21 will be issued to Class Members for the payments allocated to payment of wages.”).) The 22 Settlement Administrator will issue the wage payments and calculate and withhold “all required 23 federal, state and local taxes.” (Dkt. No. 58-1, Ex. A at ¶ 49.) The remaining portion of each 24 3 The Net Settlement Amount will increase, however, given that Class Counsel requests $186,200 25 less in attorneys’ fees than the $736,200 provided for under the Settlement Agreement. (See Dkt. No. 56 at 6 (requesting $550,000 in fees).) Similarly, Class Counsel requests $12,431.44 in 26 litigation costs, which is $7,568.56 less than the $20,000 provided for under the Settlement Agreement. (See id.) Thus, the actual Net Settlement Amount will exceed $1,500,000. 27 4 The Settlement Agreement provides that “[e]ach Class Member’s Total Individual Workweeks 1 Class Settlement Payment is divided evenly—one-third allocated to interest and one-third 2 allocated to penalties “and other non-wage damages sought in the Action.” (Id.) Those payments 3 “will not have withholdings deducted”; instead, “IRS 1099 Forms will be issued” to class 4 members. (Dkt. No. 58-3, Ex. C at 18.) Class members are ultimately “responsible for the 5 appropriate payment of any federal, state and/or local income or payroll taxes on the Class 6 Settlement Payments they receive and agree to indemnify and hold harmless Defendant for any tax 7 liability arising out of or relating to” a class member’s “failure to pay taxes on any amounts paid 8 pursuant to [the] Settlement Agreement.” (Dkt. No. 58-1, Ex. A at ¶ 50.) 9 Mr. Salinas attests that as of February 25, 2020, the highest individual settlement payment 10 to be distributed to the 449 class members “is approximately $9,236.48 and the average [payment] 11 is approximately $2,913.80.”5 (Dkt. No. 63, Ex. B at ¶ 13 (emphasis omitted).) The Settlement 12 Administrator will mail Class Settlement Payments by check to individual class members within 13 ten days of the “Effective Date.”6 (Dkt. No. 58-1, Ex. A at ¶ 43.) The face of each check will 14 state that it “must be cashed or deposited within” 180 days, and all payments will include a cover 15 letter stating the same. (Id.) If a class member does not cash or deposit his or her check within 16 120 days of mailing, the Settlement Administrator will notify the class member by letter or 17 postcard that the check will expire and become void if it is not “cashed or deposited within the 18 remaining two months.” (Id. at ¶ 44.) No later than 30 days after the 180-day period has passed, 19 Plaintiffs’ counsel “will report to the Court the total amount” paid to class members and any 20 amount remaining in the qualified settlement fund. (Id. at ¶ 63.) The Settlement Agreement 21 provides that the remaining amount will be distributed cy pres as follows: fifty percent to the 22 charitable organization “Foundation for Advocacy Inclusion and Resources”; twenty-five percent 23 to the California State Treasury “for deposit in the Trial Court Improvement and Modernization 24 5 As previously discussed, the average individual payment will increase given that Class Counsel 25 requests over $193,000 less than the fees and costs provided for under the Settlement Agreement. (See Dkt. No. 56 at 6.) 26 6 The Settlement Agreement defines “Effective Date” as the later of: “(i) March 31, 2019, (ii) sixty-five (65) calendar days after the entry of the Final Approval Order(s) if no appeal or motion 27 to set aside and vacate judgment is filed, or (iii) ten (10) business days after the final resolution of 1 Fund”; and twenty-five percent “to the State Treasury for deposit into the Equal Access Fund of 2 the Judicial Branch.” (Id.) Plaintiffs assert that neither they nor Class Counsel “have any known 3 relationships with any of the cy pres recipients.” (Dkt. No. 58 at 12.) However, Plaintiffs “now 4 contend that the State of California is the most appropriate recipient for unclaimed property,” and 5 Class Counsel “cannot present a strong argument in support of distributing unclaimed settlement 6 funds to any entity other [than] the State of California.” (Id.) No settlement funds will revert to 7 Defendant. (Dkt. No. 58-1, Ex. A at ¶ 37.) 8 C. Notice 9 Class Counsel Mr. Benjamin attests that following the Court’s October 2019 order granting 10 preliminary approval (“Preliminary Approval Order”), the Settlement Administrator, Simpluris, 11 “received the class data file from defense counsel, which contained the name, social security 12 number, last known mailing address, and other information sufficient to ensure adequate efforts 13 were made to notify each known class member.” (Dkt. No. 58-3 at ¶ 6.) Simpluris Case Manager 14 Mr. Salinas attests that Simpluris received the class list containing data for 449 class members on 15 November 8, 2019. (Dkt. No. 63, Ex. B at ¶ 5.) Simpluris “processed and updated” the Class List 16 using the National Change of Address Database maintained by the U.S. Postal Service (“USPS”) 17 and mailed the Notice to the 449 class members on November 15, 2019 via first class mail. (Id. at 18 ¶¶ 6-7.) 32 Notice packets were returned by the USPS with forwarding address information, and 19 Simpluris re-mailed those Notice packets to the forwarding address. (Dkt. No. 63, Ex. B at ¶ 9.) 20 29 Notice packets were “returned by the USPS as undeliverable and without a forwarding 21 address.” (Id. at ¶ 10.) “Simpluris performed an advanced address search (i.e. skip trace) on all of 22 these addresses by using Accurint,” which utilized the class member’s name, prior address, and 23 social security number. (Id.) Simpluris located 24 updated addresses using this method and 24 mailed the Notice to those addresses. (Id.) As of February 25, 2020, five Notices remain 25 “undeliverable because Simpluris was unable to locate a current address.” (Id.) 26 The Notice advised class members of the deadlines for opting out or objecting to the 27 settlement (January 14, 2020) and the original date of the final approval hearing (February 20, 1 No. 58-3, Ex. C.) The Notice also included a description of the lawsuit with an overview of the 2 allegations and claims; a summary of the settlement amount, its distribution, and the methodology 3 for calculating the individual Class Settlement Payments; and the release of claims. (Id. at 14-21.) 4 The Notice informed class members of their “Rights and Options”; specifically: (1) participate in 5 the settlement by doing nothing and automatically receiving a Class Settlement Payment; or (2) 6 opt-out by mailing a written and signed “Exclusion Request” to the Settlement Administrator 7 within 60 days of the mailing of the Notice; or (3) object to the settlement by mailing a “Notice of 8 Objection” to the Court within 60 days of the mailing of the Notice. (Id. at 20-21.) The Notice 9 also informed class members that they may attend the final approval hearing in person or through 10 an attorney but are not required to do so. (Id. at 21.) The Notice provided Class Counsel and the 11 Settlement Administrator’s contact information and the web address for the settlement website 12 created by Class Counsel. (Id. at 15, 17.) The website provides information regarding the lawsuit 13 and settlement, “upcoming court dates,” and makes available several filings, including the Notice, 14 Settlement Agreement, Plaintiffs’ motion for attorneys’ fees and costs, and the Preliminary 15 Approval Order. See https://northstarsettlement.com/settlement-documents. 16 Class Counsel attests that on January 15, 2020, after the deadline for opting out or 17 objecting, Simpluris confirmed “that none of the class members had opted out or objected to the . . 18 . settlement.” (Dkt. No. 58-3 at ¶ 8.) However, Class Counsel also “discovered on January 15, 19 2020 that the Court’s [Preliminary Approval] Order had not been strictly followed”; specifically, 20 the Notice did not include the following Court-ordered language: 21 Class counsel will apply in writing to the Court on or before November 4, 2019 for their requested attorneys’ fees and costs. Their 22 application will be available on the Settlement website: www.NorthstarSettlement.com within one day of its filing or upon 23 request to Class Counsel. You may object to the attorneys’ fees and costs sought no later than [60 days after Notice is mailed] in 24 accordance with Section 22 of this Notice. 25 (Id. at ¶¶ 9-10; see also Dkt. No. 54 at 20 (emphasis omitted).) Upon discovering this omission, 26 “Mr. Benjamin instructed Simpluris to mail an additional notice” (“Attorneys’ Fees Notice”) to 27 class members explaining that Plaintiffs’ motion for attorneys’ fees “was filed on November 4, 1 motion at a hearing scheduled for February 20, 2020.” (Dkt. No. 58-3 at ¶ 11.) The Attorneys’ 2 Fees Notice directs class members to the settlement website to review the motion and informs 3 class members that they should submit to the Court written objections to the motion at their 4 “earliest opportunity, or at the hearing scheduled for February 20, 2020.” (Dkt. No. 58-3, Ex. C at 5 13). 6 Simpluris mailed the Attorneys’ Fees Notice to class members on January 23, 2020. (Dkt. 7 No. 63, Ex. B at ¶ 8.) In accordance with the Court’s order on February 18, 2020, which 8 continued the final approval hearing to March 5, 2020, Class Counsel updated the settlement 9 website to include the actual Notice mailed to class members and provide notice that the final 10 approval hearing was rescheduled to March 5, 2020. (Dkt. No. 63 at ¶ 5.) As of February 25, 11 2020, Simpluris had “received no requests for exclusion from the Settlement” or objections.7 (Id. 12 at ¶¶ 11-12.) 13 D. Release 14 Class members agree to release Defendant from all claims, whether state or federal, arising 15 at any point during the “Settlement Period” (defined as January 17, 2014 through the date of 16 preliminary approval—October 8, 2019) that are asserted in the amended complaint or could have 17 been asserted based on the same nucleus of operative facts. (Dkt. No. 58-1, Ex. A at ¶¶ 13, 96- 18 100.) In addition, the named Plaintiffs agree to release all claims “that were or could have been 19 asserted by Plaintiffs which arise out of or relate in any way to their employment with NSMG,” 20 and a general release of all claims (“to the fullest extent they may be released under applicable 21 law”) that arise “prior to the last day of the Settlement Period.” (Id. at ¶¶ 101-02.) To effectuate 22 the general release, “Plaintiffs expressly waive and relinquish all rights and benefits [under] 23 California Civil Code section 1542.” (Id. at ¶ 103.) 24 III. Procedural History 25 Plaintiffs Tyrone Dangerfield and William Uschold initiated this action in the Superior 26 Court of California for the County of Alameda on January 17, 2018, asserting five claims for 27 1 relief: (1) unlawful collection of wages earned in violation of California Labor Code § 221; (2) 2 unauthorized deductions in violation of California Labor Code § 224; (3) failure to reimburse for 3 all necessary and reasonable business expenses in violation of California Labor Code § 2802; (4) 4 failure to pay wages in violation of California Labor Code § 510 et seq.; and (5) violation of 5 California Business & Professions Code § 17200. (Dkt. No. 1, Ex. A.) Defendant answered the 6 complaint on February 15, 2018 and removed the case to this District on February 16, 2018, 7 pursuant to the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1332(d), 1453. (Dkt. 8 No. 1 at 1.) 9 The parties participated in private mediation on October 24, 2018 and February 5, 2019 but 10 were unable to reach a settlement agreement. (Dkt. No. 56-1 at ¶¶ 3, 11.) The parties continued to 11 negotiate, however, and on March 8, 2019, Plaintiffs filed a Notice of Settlement. (Dkt. No. 36.) 12 The terms of the settlement agreement are memorialized in the parties’ Joint Stipulation of Class 13 Settlement and Release (the “Settlement Agreement”). (See Dkt. No. 58-1, Ex. A.) 14 On October 8, 2019, the undersigned granted the parties’ amended motion for preliminary 15 approval of the Settlement Agreement. (Dkt. No. 54.) The Preliminary Approval Order appointed 16 Na’il Benjamin and Allyssa Villanueva of Benjamin Law Group, P.C. as Class Counsel and 17 directed them to file a motion seeking approval of attorneys’ fees and costs by November 4, 2019. 18 (Id. at 22.) Class Counsel did so. (See Dkt. No. 56.) The Order further set the date for a final 19 approval hearing on February 20, 2020 and directed Class Counsel to file its motion for final 20 approval no later than 35 days before that date. (Dkt. No. 54 at 22-23.) 21 Pursuant to the Settlement Agreement, (see Dkt. No. 58-1, Ex. A at ¶ 19), Plaintiffs filed 22 an amended complaint on October 29, 2019 (“FAC”), adding Plaintiffs Jose Almendarez and 23 Tiana Naples, (see Dkt. No. 55). The FAC also adds new factual allegations and additional claims 24 that will be settled and released through the Settlement Agreement. (See id.; see also Dkt. No. 58- 25 1, Ex. A at ¶¶ 19, 33.) The FAC brings claims for: (1) Unlawful Collection of Wages Earned, Cal. 26 Lab. Code § 221; (2) Unauthorized Deduction, Cal. Lab. Code § 224; (3) Failure to Reimburse for 27 Necessary and Reasonable Business Expenditures, Cal. Lab. Code § 2802; (4) Failure to Pay 1 Misrepresentation; (7) Fraud – False Promise; (8) Failure to Pay Minimum Wages, Cal. Lab. Code 2 §§ 1194, 1197; (9) Failure to Provide Meal Periods, Cal. Lab. Code §§ 226.7, 512, 1198; (10) 3 Failure to Provide Rest Periods, Cal. Lab. Code §§ 226.7, 1198 and applicable Wage Orders; (11) 4 Failure to Provide Accurate Wage Statements, Cal. Lab. Code §§ 226, 226.3; (12) Failure to 5 Timely Pay Wages, Cal. Lab. Code § 204; (13) Failure to Timely Pay All Final Wages, Cal. Lab. 6 Code § 201-203; (14) violation of the UCL, Cal. Business & Professions Code § 17200; and (15) 7 violation of the PAGA, Cal. Lab. Code § 2698 et seq. (Dkt. No. 55 at 1-2.) The FAC tracks the 8 Settlement Agreement’s language as to the proposed class and proposes 11 subclasses covering 9 the additional claims set forth in the FAC. (Id. at ¶ 44 (“Plaintiffs believe that many or most Class 10 members are members of all subclasses.”).) Defendant answered the FAC and denies liability as 11 to each claim. (See generally Dkt. No. 57.) 12 Plaintiffs filed the instant motion for final approval on January 16, 2020, (Dkt. No. 58). 13 Upon review of Plaintiffs’ submissions, the Court determined that further information was needed 14 and issued an order vacating the hearing scheduled for February 20, 2020 and continuing it to 15 March 5, 2020, and directing Plaintiffs to file supplemental materials and update the settlement 16 website in accordance with the Court’s Order. (See Dkt. No. 62.) Plaintiffs filed the requested 17 materials on February 25, 2020 and the Court held the final approval hearing as scheduled on 18 March 5, 2020. 19 DISCUSSION 20 A class action settlement must be fair, adequate, and reasonable. Fed. R. Civ. P. 23(e)(2). 21 Where, as here, parties reach an agreement before class certification, “courts must peruse the 22 proposed compromise to ratify both the propriety of the certification and the fairness of the 23 settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). The approval of a class 24 action settlement takes place in two stages. In the first stage of the approval process, the Court 25 preliminarily approves the settlement pending a fairness hearing, temporarily certifies a settlement 26 class, and authorizes notice to the class. See Villegas v. J.P. Morgan Chase & Co., No. CV 09– 27 00261 SBA (EMC), 2012 WL 5878390, at *5 (N.D. Cal. Nov. 21, 2012). The Court has done so 1 At the second stage, “after notice is given to putative class members, the Court entertains 2 any of their objections to (1) the treatment of the litigation as a class action and/or (2) the terms of 3 the settlement.” Ontiveros v. Zamora, 303 F.R.D. 356, 363 (E.D. Cal. Oct. 8, 2014) (citing Diaz v. 4 Tr. Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989)). Here, the Court is in receipt 5 of one objection regarding Class Counsel’s attorneys’ fees and costs, (see Dkt. No. 61), and 6 addresses that objection below. Following the final fairness hearing, the Court must reach a final 7 determination as to whether the parties should be allowed to settle the class action pursuant to 8 their agreed upon terms. See Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 9 525 (C.D. Cal. 2004). 10 I. Motion for Final Approval 11 A. Final Certification of the Settlement Class 12 Class actions must meet the following requirements for certification: 13 (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the 14 class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the 15 representative parties will fairly and adequately protect the interests of the class. 16 17 Fed. R. Civ. P. 23(a). In addition to meeting the requirements of Rule 23(a), a putative class 18 action must also meet one of the conditions outlined in Rule 23(b)—as relevant here, the condition 19 that “questions of law or fact common to class members predominate over any questions affecting 20 only individual members, and that a class action is superior to other available methods for fairly 21 and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). Prior to certifying the 22 class, the Court must determine that Plaintiffs have satisfied their burden of demonstrating that the 23 proposed class satisfies each element of Rule 23. 24 1. Rule 23(a) Requirements 25 The Preliminary Approval Order found that the putative class satisfied the numerosity, 26 commonality, typicality, and adequacy of representation requirements under Rule 23(a). (Dkt. No. 27 54 at 9-10.) Since that time, the Court is unaware of any developments that would change its 1 Further, nothing in the amended complaint changes the Court’s previous analysis. Accordingly, 2 the Rule 23(a) requirements are met. 3 2. Rule 23(b) Requirements 4 The Preliminary Approval Order likewise found that the prerequisites of Rule 23(b)(3) 5 were satisfied. (Id. at 10-12.) The Court is unaware of any changes that would alter its analysis, 6 and there was no indication in Plaintiffs’ papers or at the fairness hearing that any such 7 developments had occurred. Further, the only objection the Court received concerns the award of 8 attorneys’ fees, (see Dkt. No. 61); there were no objections by individual class members who 9 claim to have an interest in controlling the prosecution of this action or related actions. Finally, 10 the additional Plaintiffs and claims in the amended complaint do not alter the Court’s previous 11 determination that there are no predominance or superiority concerns, because the challenged 12 employment practices are common to all class members based on the distinct subclasses set forth 13 in the FAC. (See Dkt. No. 55 at ¶ 44.) Accordingly, the Rule 23(b) requirements are met. 14 3. Rule 23(c)(2) Notice Requirements 15 If the Court certifies a class under Rule 23(b)(3), it “must direct to class members the best 16 notice that is practicable under the circumstances, including individual notice to all members who 17 can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). Rule 23(c)(2) governs 18 both the form and content of the notice. See Ravens v. Iftikar, 174 F.R.D. 651, 658 (N.D. Cal. 19 1997). Although the notice must be “reasonably certain to inform the absent members of the 20 plaintiff class,” Rule 23 does not require actual notice. Silber v. Mabon, 18 F.3d 1449, 1454 (9th 21 Cir. 1994) (internal quotation marks and citation omitted). 22 As noted in the Preliminary Approval Order, the notice requirements under Rule 23 23(c)(2)(B) are met here. The Notice describes the allegations and claims in plain language,8 24 defines a class member, includes contact information for Class Counsel and the Settlement 25 Administrator, and summarizes the settlement amount and its distribution. The Notice further 26 8 The Notice’s description of the allegations and claims itemizes nine allegations that roughly 27 encompass the 15 claims brought in the FAC, except for the PAGA and UCL claims, which are 1 describes the options available to class members, including instructions for opting out of the 2 settlement and filing an objection. It also informs class members that receiving a settlement award 3 will release certain claims against certain parties and defines both “Released Claims” and 4 “Released Parties.” The Notice informs class members that they may appear at the final fairness 5 hearing in person or through an attorney. (See generally Dkt. No. 53-8, Ex. C at 1-8.) Finally, it 6 directs class members to a website with more information, including the settlement documents, 7 motion for attorneys’ fees, and pleadings. And although the Notice does not include the language 8 set forth in the Preliminary Approval Order regarding how class members can review Class 9 Counsel’s request for attorneys’ fees and costs, (see Dkt. No. 54 at 20), Class Counsel corrected 10 that deficiency by directing the Settlement Administrator to mail to class members the Attorneys’ 11 Fees Notice, which Simpluris did on January 23, 2020, (see Dkt. No. 63 at ¶ 4). 12 The Court is satisfied that the content of the Notice was sufficient under Rule 23(c)(2)(B). 13 See Churchill Village, L.L.C. v. General Electric, 361 F.3d 566, 575 (9th Cir. 2004) (“Notice is 14 satisfactory if it generally describes the terms of the settlement in sufficient detail to alert those 15 with adverse viewpoints to investigate and to come forward and be heard.”) (internal quotation 16 marks and citation omitted). 17 *** 18 Because the settlement class satisfies Rules 23(a) and 23(b)(3), and notice was sufficient in 19 accordance with Rule 23(c), the Court grants final class certification. 20 B. Approval of the Settlement 21 Having certified the settlement class, the Court now addresses whether the terms of the 22 parties’ settlement are fair, adequate, and reasonable under Rule 23(e). In making this 23 determination, courts generally must consider the following factors: “(1) the strength of the 24 plaintiff’s case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the 25 risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; 26 (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and 27 views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class 1 different factors may predominate in different factual contexts.” Torrisi v. Tucson Elec. Power 2 Co., 8 F.3d 1370, 1376 (9th Cir. 1993). However, when “a settlement agreement is negotiated 3 prior to formal class certification, consideration of these eight . . . factors alone is [insufficient].” 4 In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011). In such cases, 5 courts must also ensure that the settlement did not result from collusion among the parties. Id. at 6 946-47. 7 As discussed below, a review of the fairness and Bluetooth factors indicates that the 8 settlement is fair, adequate, and reasonable. 9 1. The Fairness Factors 10 a. Strength of Plaintiffs’ Case and Risk, Expense, Complexity, and Likely Duration of Further Litigation 11 12 The Court first considers “the strength of the [P]laintiffs’ case on the merits balanced 13 against the amount offered in the settlement.” See DIRECTV, Inc., 221 F.R.D. at 526 (internal 14 quotation marks and citation omitted). Although this action reached settlement before the Court 15 had occasion to consider the merits of Plaintiffs’ claims, the Court need not reach an ultimate 16 conclusion about the merits of the dispute now, “for it is the very uncertainty of outcome in 17 litigation and avoidance of wasteful and expensive litigation that induce consensual settlements.” 18 Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 625 (9th 19 Cir. 1982). To that end, there is no “particular formula by which th[e] outcome must be tested.” 20 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009). Rather, the Court’s assessment 21 of the likelihood of success is “nothing more than an amalgam of delicate balancing, gross 22 approximations and rough justice.” Id. (internal quotation marks and citation omitted). “In 23 reality, parties, counsel, mediators, and district judges naturally arrive at a reasonable range for 24 settlement by considering the likelihood of a plaintiffs’ or defense verdict, the potential recovery, 25 and the chances of obtaining it, discounted to a present value.” Id. 26 Here, the FAC alleges multiple Labor Code violations, common law fraud and breach of 27 contract claims, and claims under the UCL and PAGA. (See generally Dkt. No. 55.) Although 1 discusses Defendant’s specific arguments and potential defenses regarding the meal claims, rest 2 claims, unpaid wage claims, reimbursement claims, and fraud claims. (See Dkt. No. 58-1 at ¶¶ 3 13(b)(i)-(v).) Defendant’s answer to the FAC likewise denies liability on every claim. (See Dkt. 4 No. 57 at 9-14.) Ms. Villanueva attests that during settlement negotiations Defendant presented 5 argument and evidence that “would present an uphill battle at class certification and at trial.” (Id. 6 at ¶ 13(b)(iii) (discussing defenses to unpaid wage claims for alleged misclassification; see also id. 7 at ¶¶ 13(b)(i),(ii),(iv) (discussing defenses on the merits and to class certification).) According to 8 Ms. Villanueva, Defendant also argued that even if Plaintiffs were to succeed on the merits as to 9 some claims, any exposure “would be minimal” or “must be significantly discounted.” (Id. at ¶¶ 10 13(i),(ii) (discussing meal and rest claims).) Class Counsel Mr. Benjamin attests to “significant 11 legal uncertainties associated with Plaintiffs’ meal period and off-the-clock claims as well as the 12 prayer for punitive damages for ‘willful” violations.” (Dkt. No. 56-2 at ¶ 25.) Mr. Benjamin 13 further attests that “[e]vidence proved that Defendant was compliant for at least certain time 14 periods within the Class period and with certain putative Class members,” thus “abridging the 15 scope and duration of some of Plaintiffs’ claims.” (Id.) 16 Given the risks and costs of continued litigation, the immediate reward to class members 17 through settlement is preferable. Class members will receive a pro-rata share of the Net 18 Settlement Amount based on the number of weeks the individual worked compared to the number 19 of weeks worked by all class members. (See Dkt. No. 58-1, Ex. A at ¶¶ 42(a)-(c).) The average 20 class member payout is $2,913.80 with the highest payment estimated at $9,236.48. (Dkt. No. 63, 21 Ex. B at ¶ 13 (emphasis omitted).) The benefit of receiving this money now rather than later at 22 some unidentified and uncertain time has its own value. 23 The challenges Plaintiffs would face should this case move forward instead of settling, in 24 contrast to the finality and speed of recovery under the parties’ agreement, weighs in favor of 25 approving the settlement. 26 b. Risk of Maintaining Class Action Status Throughout Trial 27 In considering the third factor, the Court looks to the risk of maintaining class certification 1 evidence opposing class certification and that Plaintiffs’ meal and rest break, unpaid wage claims 2 for alleged misclassification, and reimbursement claims will be difficult to prove on a class-wide 3 basis. (Dkt. No. 58-1 at ¶¶ 13(b)(i)-(iv).) In light of these difficulties in certifying the class, the 4 Court finds that this factor weighs in favor of approving the settlement. 5 c. Settlement Amount 6 The fourth fairness factor, the amount of recovery offered, also favors final approval of the 7 settlement. When considering the fairness and adequacy of the amount offered in settlement, “it is 8 the complete package taken as a whole, rather than the individual component parts, that must be 9 examined for overall fairness.” DIRECTV, Inc., 221 F.R.D. at 527. “[I]t is well-settled law that a 10 proposed settlement may be acceptable even though it amounts to only a fraction of the potential 11 recovery that might be available to the class members at trial.” Id. (collecting cases). 12 The Settlement Administrator estimates that the Net Settlement Amount is $1,308,298.17 13 after deducting attorneys’ fees and litigation costs, incentive awards, administration fees, payment 14 to LWDA, and payroll taxes from the Gross Settlement Amount of $2,200,000. (Dkt. No. 63, Ex. 15 B at ¶ 13.) The Settlement Administrator further estimates that the average individual settlement 16 payment “is approximately $2,913.80.” (Id.) Class Counsel attests that the parties agree that the 17 value of the claims “is between $9 Million and $11 Million.” (Dkt. No. 58-1 at ¶ 15.) Thus, the 18 Net Settlement Amount reflects a 12% recovery of the high-end estimate of potential damages. In 19 granting preliminary approval the Court concluded that the estimated payout to class members was 20 fair in relation to the risks of continued litigation, (see Dkt. No. 54 at 17-18), and there is nothing 21 in the final approval materials that changes the Court’s analysis on that score. Further, and as 22 previously discussed, the Net Settlement Amount will increase because Class Counsel is 23 requesting over $193,000.00 less than is provided for under Settlement Agreement for attorneys’ 24 fees and litigation costs. 25 Finally, no class member has opted out of the settlement. Although class members were 26 not required to submit a claim to recover, that “the overwhelming majority of the class willingly 27 approved the offer and stayed in the class presents at least some objective positive commentary as 1 other grounds by Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). The Court therefore 2 concludes that the amount offered in settlement also weighs in favor of final approval. 3 d. Extent of Discovery Completed and Stage of Proceedings 4 In the context of class action settlements, as long as the parties have sufficient information 5 to make an informed decision about settlement, “formal discovery is not a necessary ticket to the 6 bargaining table.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998). Rather, 7 a court’s focus is on whether “the parties carefully investigated the claims before reaching a 8 resolution.” Ontiveros, 303 F.R.D. at 371. Here, the parties exchanged discovery in advance of 9 private mediation with an experienced mediator in October 2018. (See Dkt. No. 58-1 at ¶ 3.) 10 After the first mediation was unsuccessful, the parties spent several months engaging in additional, 11 extensive discovery in preparation for another round of mediation in February 2019. (Id. at ¶¶ 4- 12 11.) NSMG provided Plaintiffs with discovery regarding the number of class members, its 13 policies and procedures, timekeeping data, and payroll data. (Id. at ¶ 7.) The parties thereafter 14 participated in another round of private mediation and continued to negotiate before reaching a 15 settlement agreement in March 2019. (Id. at ¶¶ 11-16.) Under these circumstances, the extent of 16 discovery in this case favors approval of the settlement. 17 e. Experience and Views of Counsel 18 The experience and views of counsel also weigh in favor of approving the settlement. 19 Class Counsel Mr. Benjamin attests that he has experience litigating class actions, including 20 “employment law class actions.” (See Dkt. No. 56-2 at ¶¶ 4-6.) He has also “tried close to a 21 dozen matters,” including employment matters, and has experience litigating and resolving wage- 22 and-hour claims under the California Labor Code. (Id. at ¶¶ 8-9.) Mr. Benjamin’s firm focuses on 23 “Labor and Employment matters” and it has “resolved more than 300 [p]laintiff’s-side 24 employment matters,” including “multi-plaintiff matters, representative actions, and matters that 25 had the potential to be class matters but . . . were resolved individually due to the individualized 26 nature of the clients’ claims.” (Id. at ¶ 10.) Class Counsel Ms. Villanueva has nearly four years of 27 experience litigating employment law matters in California. (See Dkt. No. 56-1 at ¶¶ 4-6.) 1 defended clients in more than 1,700 employment-related class and collective actions” in the past 2 five years. See https://www.littler.com/practice-areas/class-actions. 3 Class Counsel attests that they thoroughly investigated Plaintiffs’ claims, exchanged 4 extensive discovery with Defendant, and engaged in two rounds of private mediation before 5 reaching a settlement that is fair and reasonable to the Class given the legal uncertainties 6 underlying Plaintiffs’ claims and risks of continued litigation. (See generally Dkt. Nos. 56-2 & 7 58-1; see also Dkt. No. 58 at 18 (“In the face of Defendant[’s] competing arguments and the 8 potential uncertainties, Plaintiffs’ Counsel believes that the agreed-upon settlement fairly 9 compensates Class Members for wages and penalties allegedly owed.”).) Class Counsel’s 10 experience in California wage-and-hour litigation and their assertion that the settlement is fair, 11 adequate, and reasonable supports final approval of the settlement. See Hanlon, 150 F.3d at 1026; 12 see also DIRECTV, Inc., 221 F.R.D. at 528 (“Great weight is accorded to the recommendation of 13 counsel, who are most closely acquainted with the facts of the underlying litigation.”) (internal 14 quotation marks and citation omitted). 15 f. Presence of a Government Participant 16 No government entity is a party to this action; however, because Defendant removed this 17 case pursuant to CAFA, it was required to provide notice of the proposed settlement to the 18 relevant state and federal officials pursuant to 28 U.S.C. § 1715(b). See Chan Healthcare Grp., 19 PS v. Liberty Mut. Fire Ins. Co., 844 F.3d 1133, n.2 (“In addition to §§ 1332(d) and 1453, CAFA 20 also includes §§ 1711-1715, which relate to approval of settlements in class actions.”). Defendant 21 served the requisite notice on March 2, 2020. (See Dkt. No. 65.) As of the date of this Order, no 22 government entity has raised an objection to the proposed settlement. See 28 U.S.C. § 1715(d) 23 (providing that a court may not grant final approval of a class action settlement in a CAFA case 24 until 90 days after the parties give the notice required by section 1715(b)). 25 g. Reaction of Class Members 26 The Settlement Administrator attests that 449 class members were mailed notice of the 27 settlement, and notice was ultimately unsuccessful as to five class members. (See Dkt. No. 63, 1 the award of attorneys’ fees. (See Dkt. No. 61.) “Courts have repeatedly recognized that the 2 absence of a large number of objections to a proposed class action settlement raises a strong 3 presumption that the terms of a proposed class settlement action are favorable to the class 4 members.” Garner v. State Farm Mut. Auto. Ins. Co., No. CV 08 1365 CW (EMC), 2010 WL 5 1687832, at *14 (N.D. Cal. Apr. 22, 2010) (internal quotation marks and citation omitted). Thus, 6 the Court “may appropriately infer that a class action settlement is fair, adequate, and reasonable 7 when few class members object to it. Id. (internal quotation marks and citation omitted). 8 In sum, the fairness factors weigh in favor of granting Plaintiffs’ motion for final approval 9 of the class action settlement. 10 2. The Bluetooth Factors 11 Given that this settlement was reached prior to class certification, the Court must look 12 beyond the Churchill factors and examine the settlement for evidence of collusion with an even 13 higher level of scrutiny. See Bluetooth, 654 F.3d at 946. The question here is whether the 14 settlement was the result of good faith, arms-length negotiations or fraud and collusion. See id. In 15 determining whether the settlement is the result of collusion, courts “must be particularly vigilant 16 not only for explicit collusion, but also for more subtle signs that class counsel have allowed 17 pursuit of their own self-interest and that of certain class members to infect the negotiations.” Id. 18 at 947. The Ninth Circuit has identified three such signs: 19 (1) when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but 20 class counsel are amply rewarded; 21 (2) when the parties negotiate a “clear sailing” arrangement providing for the payment of attorneys’ fees separate and apart from class funds, 22 which carries the potential of enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an 23 unfair settlement on behalf of the class; and 24 (3) when the parties arrange for fees not awarded to revert to defendants rather than be added to the class fund. 25 26 Id. at 947 (internal quotation marks and citations omitted). 27 Here, one of the three warning signs that the Ninth Circuit identified is present—a “clear 1 Court finds no evidence of collusion, despite the existence of the clear sailing provision. See id. at 2 950 (noting that upon remand the district court may uphold the settlement notwithstanding the 3 presence of all three of the Bluetooth warning signs). 4 First, the Court compares the payout to the class—the Net Settlement Amount—to Class 5 Counsel’s unopposed fees under the Settlement Agreement. See Harris v. Vector Mktg. Corp., No 6 C-08-5198 EMC, 2011 WL 4831157, at *6 (N.D. Cal. Oct. 12, 2011) (examining “whether a 7 disproportionate part of the settlement is being awarded to class counsel” under the settlement 8 agreement). The Settlement Agreement provides for a maximum award of $736,200 in attorneys’ 9 fees (33% of the Gross Settlement Amount of $2,200,000). (Dkt. No. 58-1, Ex. A at ¶ 59.) 10 However, Plaintiffs’ motion for attorneys’ fees requests less than that amount—$550,000 (25% of 11 the Gross Settlement Amount). The Ninth Circuit has identified 25% of the total settlement as a 12 reasonable benchmark for attorneys’ fees, see Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 13 2000), and the Court concludes that the amount requested is not disproportionate to, and is indeed 14 less than, the actual Net Settlement Amount, which will exceed $1,500,000. Accordingly, the 15 amount of Class Counsel’s award relative to the payout to the class does not evince collusion. 16 The second warning sign—a clear sailing provision—is present: the Settlement Agreement 17 provides that Defendant will not oppose an award to Class Counsel of $736,200 in attorneys’ fees, 18 to be paid from the Gross Settlement Amount. (See Dkt. No. 58-1, Ex. A at ¶ 59.) “[T]he very 19 existence of a clear sailing provision increases the likelihood that class counsel will have 20 bargained away something of value to the class.” Bluetooth, 654 F.3d at 948 (alteration in 21 original) (internal quotation marks and citation omitted). Thus, the Court “has a heightened duty 22 to peer into the provision and scrutinize closely the relationship between attorneys’ fees and 23 benefit to the class, being careful to avoid unreasonably high fees simply because they are 24 uncontested.” Id. (internal quotation marks and citation omitted). The Court concludes that the 25 existence of the clear sailing provision on its own does not evince collusion, because the fees 26 awarded are not “unreasonably high,” but instead fail within the 25% benchmark established by 27 the Ninth Circuit. Further, the fees are not disproportionate to the class payout. 1 the class to revert to defendants rather than be added to the class fund, see Bluetooth, 654 F.3d at 2 948—is not present here. Instead, the non-reversionary Settlement Agreement provides that any 3 fees not awarded become part of the Net Settlement Amount to be distributed to class members. 4 (See Dkt. No. 58-1, Ex. A at ¶ 62 (“If the Court awards less than the amount requested for the 5 Class Counsel’s attorneys’ fees and expenses, the remainder will become part of the [Net 6 Settlement Amount].”).) 7 Notwithstanding the existence of the clear sailing provision, the Court finds that the 8 settlement did not result from, and was not influenced by, collusion. First, the Settlement 9 Agreement adequately satisfies the class members’ claims, which is reflected in part by the 10 existence of only one objection to the settlement. (See Dkt. No. 61 (objecting to “taking the 11 attorney’s fee from [the] settlement [amount],” and asserting that the fee should instead “be solely 12 . . . billed to [Defendant] alone”).) Second, the Court finds no evidence of explicit collusion here, 13 where the parties exchanged discovery and engaged in settlement discussions overseen by an 14 experienced neutral mediator before agreeing on this settlement. Class Counsel attests that “[a]t 15 all times, the Parties[ ] remained adverse, their negotiations were non-collusive, and at arm’s 16 length.” (Dkt. No. 58-1 at ¶ 17.) Based on the nature of the mediation process and the parties’ 17 conduct during this litigation, the Court is satisfied that the Settlement Agreement is the product of 18 serious, informed, non-collusive negotiations. 19 The eight fairness factors suggest that the settlement is fair, adequate and reasonable, and 20 the Court is satisfied that the settlement was not the result of collusion between the parties. As 21 discussed below, the lone objection to the proposed settlement does not change the Court’s 22 determination. (See Dkt. No. 61.) 23 3. Objection 24 Class member Maria Lara objects to paying the attorneys’ fees “from [her] settlement” and 25 asserts that Defendant should pay such fees on its own. (Id.) As previously discussed, the 26 Settlement Agreement’s attorneys’ fees provision states that such fees are paid from the Gross 27 Settlement Amount, not the Net Settlement Amount from which class members receive their 1 appropriate. See Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (“[A] litigant or a lawyer 2 who recovers a common fund for the benefit of persons other than himself or his client is entitled 3 to a reasonable attorney’s fee from the fund as a whole.”). 4 Accordingly, the Court concludes that final approval is appropriate. 5 II. Motion for Attorneys’ Fees, Costs, and Class Representative Incentive Awards 6 As previously discussed, the Settlement Agreement provides for a maximum of $736,200 7 (one-third of the Gross Settlement Amount), “in a specific amount to be determined by the Court,” 8 to cover Class Counsel’s attorneys’ fees. (Dkt. No. 58-1, Ex. A at ¶ 60.) The Settlement 9 Agreement further provides for reimbursement of Class Counsel’s litigation expenses, up to 10 $20,000. (Id.) Finally, the Settlement Agreement provides that the named Plaintiffs will each 11 receive a $2,000 “Service Award” for their time and effort in prosecuting this lawsuit. (Id. at ¶ 12 54.) The Court addresses in turn Plaintiffs’ motion for attorneys’ fees, litigation costs, and 13 incentive awards. 14 A. Attorneys’ Fees 15 “While attorneys’ fees and costs may be awarded in a certified class action where so 16 authorized by law or the parties’ agreement, Fed. R. Civ. Pro. 23(h), courts have an independent 17 obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have 18 already agreed to an amount.” Bluetooth, 654 F.3d at 941. In diversity actions such as this, state 19 law applies to determine the right to fees and the method for calculating them. See Mangold v. 20 California Pub. Utils. Comm’n, 67 F.3d 1470, 1478-79 (9th Cir. 1995). As Plaintiffs’ underlying 21 claims are state law claims, the Court must apply California law on attorneys’ fees. See Vizcaino 22 v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). 23 The California Supreme Court has held that courts have discretion to choose among two 24 different methods for calculating a reasonable attorney’s fee award. See Laffitte v. Robert Half 25 Int’l Inc., 1 Cal. 5th 480, 504 (2016). The first is the “percentage method,” where the fee is 26 calculated “as a percentage share of a recovered common fund or the monetary value of [the] 27 plaintiffs’ recovery.” Id. at 489. The second approach is “[t]he lodestar method, or more 1 calculated “by multiplying the number of hours reasonably expended by counsel by a reasonable 2 hourly rate,” then “increas[ing] or decreas[ing]” the lodestar figure based on “a variety of . . . 3 factors, including the quality of the representation, the novelty and complexity of the issues, the 4 results obtained, and the contingent risk presented.” Id. (citation omitted). “The choice of a fee 5 calculation method is generally one within the discretion of the trial court, the goal under either 6 the percentage or lodestar approach being the award of a reasonable fee to compensate counsel for 7 their efforts.” Id. at 504. This approach aligns with the Ninth Circuit. See Vizcaino, 290 F.3d at 8 1047 (“Under Ninth Circuit law, the district court has discretion in common fund cases to choose 9 either the percentage-of-the-fund or the lodestar method.”). 10 Both the California Supreme Court and the Ninth Circuit recommend that whether a court 11 uses the lodestar or percentage-of-recovery method, the court should perform a cross-check using 12 the other method to confirm the reasonableness of the fee (e.g., if the percentage-of-recovery 13 method is applied, a cross-check with the lodestar method will reveal if the amount requested is 14 unreasonable in light of the amount of work done). See, e.g., Bluetooth, 654 F.3d at 944-45; 15 Laffitte, 1 Cal. 5th at 504 (“A lodestar cross-check . . . provides a mechanism for bringing an 16 objective measure of the work performed into the calculation of a reasonable attorney fee.”). 17 1. Percentage-of-Recovery Method 18 Plaintiffs request $550,000 in fees, representing 25% of the $2.2 million Gross Settlement 19 Amount. Defendant does not oppose the request; nor has the Court received any objections from 20 class members regarding the amount requested in Plaintiffs’ motion for attorneys’ fees. The 25% 21 figure aligns with the “benchmark” established by the Ninth Circuit “for attorneys’ fees 22 calculations under the percentage-of-recovery approach.” Powers, 229 F.3d at 1256. However, 23 the Court cannot simply apply the benchmark rate but must instead consider “all of the 24 circumstances of the case” to determine whether it is appropriate. See Vizcaino, 290 F.3d at 1048 25 (“[C]ourts cannot rationally apply any particular percentage—whether 13.6 percent, 25 percent or 26 any other number—in the abstract, without reference to all the circumstances of the case.”) 27 (internal quotation marks and citation omitted). Relevant circumstances include “exceptional 1 burden in litigating the case (i.e., contingent fee agreement and time and expense). Id. at 1048-50. 2 Here, however, even if all of those factors arguably weigh in favor of Plaintiffs’ requested 3 award, the lodestar cross-check demonstrates that a 25% award is unreasonable in this case based 4 on the hours Class Counsel actually expended. See Bluetooth, 654 F.3d at 942-43 (noting that 5 where a 25% award “would yield windfall profits for class counsel in light of the hours spent on 6 the case, courts should adjust the benchmark percentage or employ the lodestar method instead”); 7 see also Laffitte, 1 Cal. 5th at 504 (“[T]he goal under either the percentage or lodestar approach 8 [is] the award of a reasonable fee to compensate counsel for their efforts.”). Thus, the Court in its 9 discretion will initially apply the lodestar method. 10 2. Lodestar Method 11 The lodestar figure consists of “the number of hours reasonably expended multiplied by 12 the reasonable hourly rate.” PLCM Grp. v. Drexler, 22 Cal. 4th 1084, 1095 (2000). A reasonable 13 hourly rate is defined as “that prevailing in the community for similar work.” Id. As to the 14 computation of hours, “trial courts must carefully review attorney documentation of hours 15 expended.” Ketchum v. Moses, 24 Cal. 4th 1122, 1132 (2001). 16 a. Reasonable Rate 17 To determine whether counsel’s hourly rates are reasonable, the Court looks to the “hourly 18 amount to which attorneys of like skill in the area would typically be entitled.” Ketchum, 24 Cal. 19 4th at 1133. “The fee applicant has the burden of producing satisfactory evidence, in addition to 20 the affidavits of its counsel, that the requested rates are in line with those prevailing in the 21 community for similar services of lawyers of reasonably comparable skill and reputation.” Jordan 22 v. Multnomah Cty., 815 F.2d 1258, 1263 (9th Cir.1987). In addition, Civil Local Rule 54-5(b)(3) 23 requires the party seeking fees to submit “[a] brief description of relevant qualifications and 24 experience and a statement of the customary hourly charges of each such person or of comparable 25 prevailing hourly rates or other indication of value of the services.” 26 Plaintiffs submit the declarations of Mr. Benjamin and Ms. Villanueva in support of their 27 request for fees. Ms. Villanueva is a litigation associate at Benjamin Law Group, P.C.; she holds a 1 Hastings College of the Law. (Dkt. No. 56-1 at ¶¶ 2, 6.) She has nearly four years of experience 2 litigating California employment law matters. (Id. at ¶¶ 4-6.) Her “standard litigation rate is 3 $375.00 per hour.” (Id. at ¶ 7.) Mr. Benjamin is “the Managing Partner of Benjamin Law Group, 4 P.C.” (Dkt. No. 56-2 at ¶ 2.) He earned his bachelor’s degree from UC Berkeley and his J.D. 5 from UC Hastings; he has nearly six years of experience litigating California employment law 6 matters. (Id. at ¶¶ 3-13.) His standard rate “is $475.00 per hour.” (Id. at ¶ 20.) 7 These billing rates are reasonable and in line with prevailing rates in this district for 8 lawyers of comparable experience, skill, and reputation. See, e.g., Roberts v. Marshalls of CA, 9 LLC, No. 13-cv-04731-MEJ, 2018 WL 510286, at *14-15 (N.D. Cal. Jan. 23, 2018) (approving 10 rates between $300 and $750 per hour); In re Magsafe Apple Power Adapter Litig., No. 5:09-CV- 11 01911-EJD, 2015 WL 428105, at *12 (N.D. Cal. Jan. 30, 2015) (“In the Bay Area, reasonable 12 hourly rates for partners range from $560 to $800, for associates from $285 to $510, and for 13 paralegals and litigation support staff from $150 to $240.”) (collecting cases). 14 b. Hours Expended 15 Ms. Villanueva attests that she “personally expended 35.53 hours on this case.” (Dkt. No. 16 56-1 at ¶ 9.) In support, she submits time entries for specific tasks between January 8, 2018 and 17 November 4, 2019. (See Dkt. No. 56-1, Ex. A.) Mr. Benjamin attests that Class Counsel 18 expended 159.75 total hours on this case through November 4, 2019, (Dkt. No. 56-2 at ¶ 22), and 19 submits invoices for specific tasks performed through November 4, 2019, (see Dkt. No. 56-2, Ex. 20 A). The invoices are sufficiently detailed and reflect hours Class Counsel reasonably expended on 21 behalf of Plaintiffs. 22 c. Lodestar Calculation 23 Class Counsel attests that its lodestar is $70,693.75, representing 159.75 hours of work on 24 this case through November 4, 2019. (Dkt. No. 56-2 at ¶ 22.) Mr. Benjamin attests that the 25 lodestar “does not reflect all of the time all four attorneys staffed on this matter, including 26 Attorneys Brian Hawes, Esq. and Dominique Thomas, Esq., have invested in this case because 27 counsel would need to reconstruct time for three attorneys that work primarily on contingency fee 1 capture and bill all time worked on this matter, so reconstructing that time would require a 2 substantial amount of time and resources by counsel, and require substantial time from the Court 3 for the Court’s review.” (Id.) 4 Courts retain discretion to apply a positive or negative enhancement, or “multiplier” where 5 appropriate. See Ketchum, 24 Cal. 4th at 1132 (noting that the lodestar may be adjusted based on 6 factors including “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in 7 presenting them, (3) the extent to which the nature of the litigation precluded other employment by 8 the attorneys, [and] (4) the contingent nature of the fee award”); see also Bluetooth, 654 F.3d at 9 942 (noting that a lodestar may be adjusted “upward or downward by an appropriate positive or 10 negative multiplier reflecting a host of reasonableness factors, including the quality of the 11 representation, the benefit obtained for the class, the complexity and novelty of the issues 12 presented, and the risk of nonpayment”) (internal quotation marks and citation omitted). 13 As to the first two factors noted in Ketchum, the California Supreme Court cautioned that 14 “the difficulty of a legal question and the quality of representation are already encompassed in the 15 lodestar.” See Ketchum, 24 Cal. 4th at 1138-39 (“A more difficult legal question typically requires 16 more attorney hours, and a more skillful and experienced attorney will command a higher hourly 17 rate.”). Here, there is no indication that the wage-and-hour issues were novel or that Class 18 Counsel exhibited “exceptional representation” by “exceed[ing] the quality of representation that 19 would have been provided by an attorney of comparable skill and experience billing at the hourly 20 rate used in the lodestar calculation.” See id. at 1139. However, “the extent to which the nature of 21 the litigation precluded other employment” by Class Counsel and “the contingent nature of the fee 22 award” warrant a positive multiplier. See id. at 1132. 23 First, Mr. Benjamin attests that: 24 This case has been litigated over a two-year period during which [he] paid at least three employee-attorneys whom were staffed on this 25 matter at various times during its pendency. Due to limited resources as a small law firm, my firm was unable to take other matters during 26 this time. 27 (Dkt. No. 56-2 at ¶ 21.) At the final approval hearing Mr. Benjamin clarified that this action has 1 Counsel undertook this litigation facing a risk of nonpayment because “Plaintiffs were represented 2 on a pure contingency basis.” (See Dkt. No. 56-1 at ¶ 8.) Third, Mr. Benjamin attests that the 3 hours expended for purposes of the lodestar calculation do not reflect the total time his firm spent 4 on this litigation. In sum, a positive multiplier is warranted. 5 That said, awarding the fees requested here—$550,000—would result in a multiplier of 6 7.8. Such an enhancement is not reasonable and is instead “far outside the normal range.” See 7 Laffitte, 1 Cal. 5th at 504. As the Laffitte court explained: 8 If a comparison between the percentage and lodestar calculations produces an imputed multiplier far outside the normal range, 9 indicating that the percentage fee will reward counsel for their services at an extraordinary rate even accounting for the factors 10 customarily used to enhance a lodestar fee, the trial court will have reason to reexamine its choice of a percentage. 11 12 Id. The Ninth Circuit has recognized that multipliers generally range from 1 to 4. See Vizcaino, 13 290 F.3d at 1051 n.6. 14 A multiplier of 4 is warranted here based on the contingent nature of the fee agreement and 15 Mr. Benjamin’s explanation at the final approval hearing that this action required the majority of 16 his firm’s resources and attention since January 2018. The high end multiplier is warranted 17 because it would result in a percentage of recovery of 12.9% of the Gross Settlement Amount, 18 which is below “the usual range” awarded in common fund cases. See Vizcaino, 290 F.3d at 1047 19 (noting that “20-30% [is] the usual range” in common fund cases). The Court recognizes that the 20 lodestar most likely undercounts the attorney time incurred in this matter given that some 21 attorneys did not contemporaneously record their time. That is a problem, however, of Class 22 Counsel’s own making. If Class Counsel wishes to receive credit for time expended representing 23 a class, then they—as most attorneys already do—must contemporaneously record their time. It is 24 unreasonable to expect a class to pay for time that counsel could not even bother to record. 25 Reconstructing time long after the fact is not appropriate, especially for counsel with a fiduciary 26 duty to the class. 27 Accordingly, the Court awards Class Counsel attorneys’ fees in the amount $282,775. 1 B. Litigation Costs 2 “There is no doubt that an attorney who has created a common fund for the benefit of the 3 class is entitled to reimbursement of reasonable litigation expenses from that fund.” Ontiveros, 4 303 F.R.D. at 375 (citations omitted). To that end, district courts in the Ninth Circuit regularly 5 award litigation costs and expenses in wage-and-hour class actions. See, e.g., Nwabueze v. AT&T 6 Inc., No. C 09-01529 SI, 2014 WL 324262, at *2 (N.D. Cal. Jan. 29, 2014); LaGarde v. 7 Support.com, Inc., No. C12-0609 JSC, 2013 WL 1283325, at *13 (N.D. Cal. Mar. 26, 2013). 8 Here, Plaintiffs request $12,431.44 in litigation costs representing litigation expenses through 9 November 4, 2019. (Dkt. No. 56 at 16-17.) Plaintiffs never submitted an updated request for 10 costs, so this final approval order can only approve what has been submitted. In support of their 11 request Plaintiffs submit the declaration of Ms. Villanueva, who attests to the amount, (Dkt. No. 12 56-1 at ¶ 11), and submits a summary of costs, (Dkt. No. 56-1, Ex. B at 10). The summary of 13 costs itemizes the costs incurred, including $10,000 for private mediation; all of the costs appear 14 reasonable. (See id.) The total amount reflected in the summary of costs is $12,428.44. (Id.) 15 That amount is also reflected in the invoice submitted as an exhibit to Mr. Benjamin’s declaration. 16 (See Dkt. No. 56-2, Ex. A at 11.) 17 Accordingly, the Court awards Plaintiffs $12,428.44 in costs. 18 C. Incentive Awards 19 “Incentive awards are fairly typical in class action cases.” Rodriguez v. W. Publ’g Corp., 20 563 F.3d 948, 958 (9th Cir. 2009) (distinguishing incentive awards from incentive agreements, the 21 latter of which are “entered into as part of the initial retention of counsel” and “put class counsel 22 and the contracting class representatives into a conflict position from day one”). However, the 23 decision to approve such an award is a matter within the Court’s discretion. In re Mego Fin. Corp. 24 Sec. Litig., 213 F.3d 454, 463 (9th Cir. 2000). Incentive awards “are intended to compensate class 25 representatives for work done on behalf of the class, to make up for financial or reputation risk 26 undertaken in bringing the action, and, sometimes to recognize their willingness to act as a private 27 attorney general.” Rodriguez, 563 F.3d at 958-59. Although incentive awards are viewed more 1 conflict with the class and present a considerable danger of individuals bringing cases as class 2 actions principally to increase their own leverage to attain a remunerative settlement for 3 themselves and then trading on that leverage in the course of negotiations.” Id. at 960 (internal 4 quotation marks and citation omitted). Thus, “district courts must be vigilant in scrutinizing all 5 incentive awards to determine whether they destroy the adequacy of the class representatives.” 6 Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). 7 In determining whether an incentive award is reasonable, courts generally consider: 8 (1) the risk to the class representative in commencing a suit, both financial and otherwise; (2) the notoriety and personal difficulties 9 encountered by the class representative; (3) the amount of time and effort spent by the class representative; (4) the duration of the 10 litigation; and (5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. 11 12 Covillo v. Specialtys Café, No. C–11–00594-DMR, 2014 WL 954516, at *8 (N.D. Cal. Mar. 6, 13 2014) (quoting Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995)). A 14 class representative must justify an incentive award through “evidence demonstrating the quality 15 of plaintiff’s representative service,” such as “substantial efforts taken as class representative to 16 justify the discrepancy between [his] award and those of the unnamed plaintiffs.” Alberto v. 17 GMRI, Inc., 252 F.R.D. 652, 669 (E.D. Cal. 2008). Further, district courts must evaluate each 18 incentive award individually. See Staton, 327 F.3d at 977. 19 In support of the requested incentive awards, Plaintiffs submit the declaration of Class 20 Counsel Mr. Benjamin, who attests that: 21 Plaintiffs assisted my office with investigation of the claims by, among other things, participating in multiple telephone conferences 22 to discuss Defendant’s policies and practices and their experiences. Each named Plaintiff also supervised other employees and provided 23 insight on potential class members, class discovery, and practices beyond their specific work locations. Each Plaintiff spent time 24 locating and producing documents relating to their time working for Defendant and participated in an informal interview before counsel 25 for both parties. Plaintiffs also risked being responsible for Defendant's costs if the case was lost and risk to their future 26 employment prospects damaged by the fact that they are a named plaintiff in a class action wage and hour lawsuit against a former 27 employer. 1 themselves attesting to their individual contributions to the case. Thus, the Court is unable to 2 assess the relevant factors on an individual basis to determine whether incentive awards are 3 justified for each Plaintiff. See Staton, 327 F.3d at 977. However, the requested amount ($8,000) 4 is reasonable on its face given the Gross Settlement Amount of $2,200,000 and a Net Settlement 5 Amount of over $1,500,000. See Lopez v. Bank of Am., N.A., No. 10-cv-01207-JST, 2015 WL 6 5064085, at *8 (N.D. Cal. Aug. 27, 2015) (noting that incentive awards of $5,000 are 7 presumptively reasonable in the Ninth Circuit) (citing Harris, 2012 WL 381202, at *7 (collecting 8 cases)). Further, and more importantly, the incentive awards of $2,000 each are not 9 disproportionate to the average class member’s recovery, which is over $3,000. See Lopez, 2015 10 WL 5064085, at *8 (“When determining if an incentive payment is reasonable, courts consider the 11 proportionality between the incentive payment and the range of class members’ settlement 12 awards.”) (collecting cases). Thus, there is no indication that incentive awards of $2,000 each will 13 “destroy the adequacy of the class representatives” by “creat[ing] an unacceptable disconnect 14 between the interests of [the class representatives] and class counsel, on the one hand, and 15 members of the class on the other,” because the individual incentive awards are less than the 16 average class member’s recovery. See Radcliffe, 715 F.3d at 1164. 17 Accordingly, the Court concludes that incentive awards of $2,000 to each named Plaintiff 18 are reasonable. 19 III. Settlement Administrator Costs 20 The Settlement Agreement provides that the Settlement Administrator will be paid a 21 maximum of $9,000 from the Gross Settlement Amount for its fees and costs. (Dkt. No. 58-1, Ex. 22 A at ¶ 68.) Plaintiffs’ motion for final approval requests $7,500 for “Simpluris’ total fees and 23 costs for services in connection with the administration” of the settlement. (Dkt. No. 58 at 21.) 24 The requested amount “includes fees and costs incurred to-date, as well as anticipated fees and 25 costs for completion of the settlement administration.” (Id.) In support, Plaintiffs submit the 26 declaration of Mr. Salinas, who attests to the amount requested and details the tasks Simpluris 27 completed as of February 25, 2020. (See Dkt. No. 63, Ex. B at ¶¶ 3-10, 14.) 1 CONCLUSION 2 For the reasons stated above, the Court GRANTS Plaintiffs’ motion for final approval of 3 the parties’ class action settlement. In addition, the Court GRANTS IN PART Plaintiffs’ motion 4 for attorneys’ fees and costs; specifically, the Court awards the following: $282,775 in attorneys’ 5 fees; $12,428.44 in litigation costs; $2,000 each as incentive awards to Plaintiffs Almendarez, 6 Dangerfield, Naples, and Uschold; and $7,500 to the Settlement Administrator. 7 In accordance with the Northern District’s Procedural Guidance for Class Action 8 Settlements, “[w]ithin 21 days after the distribution of the settlement funds and payment of 9 attorneys’ fees,” Class Counsel shall file “a Post-Distribution Accounting” that provides the 10 following: 11 The total settlement fund, the total number of class members, the total number of class members to whom notice was sent and not returned 12 as undeliverable, the number and percentage of claim forms submitted, the number and percentage of opt-outs, the number and 13 percentage of objections, the average and median recovery per claimant, the largest and smallest amounts paid to class members, the 14 method(s) of notice and the method(s) of payment to class members, the number and value of checks not cashed, the amounts distributed 15 to each cy pres recipient, the administrative costs, the attorneys’ fees and costs, the attorneys’ fees in terms of percentage of the settlement 16 fund, and the multiplier, if any. 17 https://www.cand.uscourts.gov/forms/procedural-guidance-for-class-action-settlements/. Class 18 Counsel shall “summarize this information in an easy-to-read chart that allows for quick 19 comparisons with other cases,” and “post the Post-Distribution Accounting, including the easy- 20 toread chart, on the settlement website.” See id. 21 IT IS SO ORDERED. 22 Dated: 23 24 JACQUELINE SCOTT CORLEY 25 United States Magistrate Judge 26 27