1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 JAMES WILSON, an individual, and No. 2:12-CV-00568-KJM-DB JACK WHITE, an individual, on behalf of 12 themselves and all others similarly situated, 13 Plaintiffs, ORDER 14 v. 15 METALS USA, INC., a Delaware Corporation; and DOES 1-100, inclusive, 16 Defendants. 17
18 19 This matter is before the court on the unopposed motion by defendant Metals USA 20 Inc., and plaintiffs James Wilson and Jack White’s (collectively “Representative Plaintiffs”) for 21 final class action settlement approval. The court held a hearing on the matter on April 24, 2020, 22 at which Gene Stonebarger and Richard Lambert appeared for plaintiffs and Adrian Sawyer and 23 Cole Ramey appeared for defendant. As explained below, the court GRANTS plaintiffs’ motion 24 for attorney’s fees, costs and incentive awards and GRANTS final approval of the class action 25 settlement. 26 ///// 27 ///// 28 ///// 1 I. BACKGROUND 2 A. Procedural Background 3 This court previously set forth the detailed factual and procedural history of this 4 matter in its March 12, 2019 order on plaintiffs’ unopposed motion for preliminary approval of 5 the proposed class action settlement, and so the court does not repeat all of that information here. 6 Prelim. Approval Order at 2–4, ECF No. 149. 7 Plaintiffs James Wilson and Jack White allege defendant Metals USA, Inc. 8 (“Metals”) is liable as a successor-in-interest to Dura-Loc Roofing Systems Limited (“Dura-Loc”) 9 for the defective design and manufacture of roofing tiles following Metals’ purchase of Dura- 10 Loc’s assets in 2006. See Third Am. Compl. (“TAC”) ¶¶ 4, 65, 71, 95, 129, ECF No. 78. Metals 11 allegedly breached a duty to disclose the defective nature of the tiles. Id. ¶¶ 142, 149, 159. On 12 March 5, 2012, plaintiffs filed this class action suit for fraudulent concealment/non-disclosure and 13 breach of warranty alleging Metals violated various provisions of the California Civil, 14 Commercial and Business and Professions Codes. See generally TAC. In the more than eight 15 years this case has been pending, “there have been hundreds of written discovery requests and 16 more than twenty (20) depositions.” Mot. for Final Approval (“Mot.”) at 6, ECF No. 160; see 17 generally Richard Lambert Decl., ECF No. 160-2. 18 On August 31, 2018, plaintiffs filed an unopposed motion for preliminary approval 19 of the class action settlement. Mot. for Prelim. Approval, ECF No. 140-1. On October 11, 2018, 20 the court directed the parties to provide their mediation statements/briefs in camera for the court’s 21 review prior to preliminary approval. ECF No. 142. On October 19, 2018, the court held a 22 hearing on the motion for preliminary approval and took the matter under submission. On 23 March 12, 2019, the court issued an order raising several concerns and granting the motion for 24 preliminary approval of the settlement and of the proposed notice to the putative class. See 25 Prelim. Approval Order at 10–11 (“The court cautions that final approval will require more 26 information addressing [] concerns and is conditioned on the court’s careful review and 27 acceptance of the actual proposed distribution of funds based on claimants’ response to the notice 28 to be provided.”). 1 Plaintiffs now move the court for final approval of the unopposed motion for class 2 action settlement. Mot. at 6. Plaintiffs also move for attorney’s fees, costs and an enhancement 3 award for the named plaintiffs, as the parties stipulated in the settlement. Fees Mot. Mem. at 2, 4 ECF No. 150-1. 5 B. Settlement Agreement 6 The details of the proposed settlement agreement are laid out in the court’s 7 previous order on the motion for preliminary approval. See generally Prelim. Approval Order. 8 The settlement includes all the modifications the court encouraged and preliminarily approved. 9 Class counsel’s request for attorneys’ fees will not exceed 25 percent of the gross settlement 10 amount and will be subject to a lodestar cross-check, as opposed to the 69.6 percent previously 11 sought. Prelim. Approval Order at 9; Settlement, ECF No. 140-3. Also following preliminary 12 approval, the parties reduced their hourly rates to coincide with those previously approved by this 13 court in other cases. Fees Mot. Mem. at 17:26–28 (class counsel submitted a “lodestar of 14 $1,040,810 (to date), which applies the following hourly rates: (i) Mr. Stonebarger, $475.00; (ii) 15 Mr. Lambert, $400.00; (iii) Ms. Yan, $250.00; and (iv) paralegals, $100.00”). At the same time, 16 the parties have retained the reversionary provision permitting funds to revert to defendant 17 depending on the proportion of class members who opt out or in. Mot. at 21–28; Settlement § 2.1 18 (“The Settlement Payment is made available by MUSA on a reversionary basis.”), § 7.6 19 (calculating individual settlement amounts for each class member based on “number of affected 20 panels as identified by the eligible claimant . . . multiplied by $10, up to and not to exceed the 21 maximum settlement payment of $3,000”). The parties also maintain their requests for incentive 22 awards for the representative plaintiffs. Id. at § 1.9 (“James Wilson will request $25,000.00; . . . 23 Jack White will seek $14,000.00.”). 24 II. CLASS CERTIFICATION 25 Class certification in the settlement context is appropriate only if Rule 23’s 26 certification requirements are satisfied. See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 27 620 (1997) (court owes “undiluted, even heightened, attention” to class certification requirements 28 in settlement context); Fed. R. Civ. P. 23(c)(1) advisory committee’s note to 2003 amendment 1 (“A court that is not satisfied that the requirements of Rule 23 have been met should refuse 2 certification until they have been met.”). On July 5, 2016, the court certified the proposed class, 3 defined as “All individuals and entities that own homes or other structures located in the State of 4 California on which Dura-Loc Roofing Systems Limited’s Continental, Shadowline, or Wood 5 Shake stone coated steel roof shingles were installed during the period of time beginning July 1, 6 1996 through May 12, 2006.” Cert. Order at 25, ECF No. 93. The court concluded the class 7 satisfied the numerosity, commonality, typicality and adequacy of representation requirements of 8 Rule 23(a), id. at 12–23, as well as the predominance and superiority requirements of Rule 9 23(b)(3), id. at 24–25. 10 Nothing before the court suggests its prior certification was improper. The court 11 therefore certifies the class for purposes of final approval of the settlement agreement. 12 III. FINAL SETTLEMENT APPROVAL 13 As the court explained at the preliminary approval stage, under Rule 23(e), a class 14 action may be settled “only with the court’s approval,” and the court may provide such approval 15 “only after a hearing and only on finding that it is fair, reasonable, and adequate[.]” Fed. R. Civ. 16 P. 23(e). To determine whether a proposed class action settlement is fair, reasonable and 17 adequate, courts consider several factors, as relevant, including: 18 (1) [T]he strength of the plaintiff’s case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of 19 maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the 20 stage of the proceedings; (6) the experience and view of counsel; (7) the presence of a governmental participant; and (8) the reaction 21 of the class members to the proposed settlement. 22 In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 944 (9th Cir. 2015) (quoting In re 23 Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 946). These factors substantively track those 24 provided in the 2018 amendments to Rule 23(e)(2), which took effect December 1, 2018. Rule 25 23(e) now dictates that a court may approve a settlement only after considering whether: 26 (A) the class representatives and class counsel have adequately represented the class; 27 (B) the proposal was negotiated at arm’s length; 28 1 (C) the relief provided for the class is adequate, taking into account: 2 (i) the costs, risks, and delay of trial and appeal; 3 (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class- 4 member claims; 5 (iii) the terms of any proposed award of attorney’s fees, including timing of payment; and 6 (iv) any agreement required to be identified under Rule 7 23(e)(3); and 8 (D) the proposal treats class members equitably relative to each other. 9 10 Fed. R. Civ. P. 23(e)(2). The advisory note to the Rule 23(e)(2) amendment recognizes, “each 11 circuit has developed its own vocabulary for expressing these concerns” regarding whether a 12 proposed settlement is fair, reasonable and adequate. Fed. R. Civ. P. 23(e)(2) advisory 13 committee’s note to 2018 amendment. Accordingly, the newly codified factors are not intended 14 “to displace any factor, but rather to focus the court and the lawyers on the core concerns of 15 procedure and substance that should guide the decision whether to approve the proposal.” Id.; see 16 also 4 Newberg on Class Actions § 13:14 (5th ed. 2019) (noting Rule 23(e) “essentially codified 17 [federal courts’] prior practice”). Moreover, the Advisory Committee warned against allowing 18 “[t]he sheer number of factors [to] distract both the court and the parties from the central concerns 19 that bear on review under Rule 23(e)(2).” Fed. R. Civ. P. 23(e)(2) advisory committee’s note to 20 2018 amendment. Accordingly, the court draws on the Ninth Circuit’s longstanding guidance as 21 well as the Rule 23(e)(2) factors in determining whether the settlement is “fair, reasonable, and 22 adequate.” The court addresses the Rule 23(e) factors below. 23 A. Class Representatives and Class Counsel Have Adequately Represented Class 24 The court previously concluded the two named plaintiffs and their counsel were 25 “adequate representatives” when it granted plaintiffs’ motion for class certification of their claim 26 for breaches of express warranty under California Commercial Code section 2313. Cert. Order at 27 12, ECF No. 93. The record at this stage provides no reason to doubt that conclusion. See, e.g., 28 James Wilson Decl. ¶ 5, ECF No. 150-5 (noting his purchase of Dura-Loc Tiles and choice not to 1 settle his case to represent other individuals like him); Jack White Decl. ¶ 5, ECF No. 150-6 2 (same); Richard Lambert Decl. ¶¶ 3–5, ECF No. 160-2 (describing over eight years of 3 involvement as class counsel litigating every aspect of this case). 4 B. Proposal Negotiated at Arm’s Length 5 In its Preliminary Approval Order, the court considered whether the proposed 6 settlement “appear[ed] to be the product of serious, informed, non-collusive negotiations[.]” 7 Prelim. Approval Order at 5–6 (quoting Spann v. J.C. Penney Corp., 314 F.R.D. 312, 319 (C.D. 8 Cal. 2016)). The court was satisfied the settlement was the product of an arms-length negotiation, 9 especially given that the parties participated in private mediation with two experienced mediators. 10 Id. at 8 (citing In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) 11 (process leading to settlement’s terms ensures those terms are result of vigorous, arms-length 12 bargaining)). For these same reasons, the court finds this factor supports approving the settlement 13 at this stage. 14 C. Relief Provided for Class Is Adequate 15 In analyzing the adequacy of the relief at the preliminary approval stage, the court 16 expressed “strong and serious reservations” that the suggested relief might be inadequate, given 17 (1) the amount of incentive payments for named plaintiffs, (2) the reversionary nature of the 18 settlement, (3) the pro rata decrease to each class member’s payment if too many persons were to 19 file claims, and (4) the claims for attorney’s fees. Prelim. Approval Order at 11. 20 As noted, attorney’s fees are now capped at the Ninth Circuit’s presumptively 21 appropriate 25 percent benchmark, see In re Easysaver Rewards Litig., 906 F.3d 747, 754 (9th 22 Cir. 2018), so are not obviously disproportionate. 23 However, there remains a reversionary provision. See Settlement § 2.1 (“The 24 settlement payment is made by MUSA on a reversionary basis.”). As foreshadowed in its 25 previous order, the court made clear the parties needed to be prepared at this stage to provide 26 “clear information on the total amount of any windfall and any other information to place any 27 windfall in a context demonstrating its fairness or unfairness.” Prelim. Approval Order at 12 28 (citing La Parne v. Monex Deposit Co., No. SACV 08-0302 DOC (MLGx), 2010 WL 4916606, 1 at *4 (C.D. Cal. Nov. 29, 2010)). Plaintiffs’ counsel observes “reversion to the defendant may be 2 appropriate when deterrence is not a goal of the statute or is not required by the circumstances.” 3 Mot. at 21 (quoting Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1308 (9th Cir. 4 1990)). As the court in Six Mexican Workers explained, “The district court’s choice among 5 distribution options should be guided by the objectives of the underlying statute and the interests 6 of the silent class members.” 904 F.2d at 1307. Moreover, “the court’s alternatives include[]: 7 1) cy pres or fluid distribution, 2) escheat to the government, and 3) reversion to defendants.” Id. 8 Here, class counsel reports “[f]ollowing the Notice set forth in the Settlement, the Class has 9 claimed a total value of $544,329.25”out of the “$2,800,000 Maximum Settlement Fund.” 10 Richard Lambert Decl. ¶¶ 37, 38. Counsel have also provided information placing the amount of 11 reversion, nearly $2 million, in a context that demonstrates its fairness. See id. ¶¶ 20–36 (noting 12 robust notice program to potential class members, and that defendant “did not design, produce, 13 manufacture, or distribute the Tiles that are alleged to be defective in this Litigation.”); id. ¶¶ 27, 14 28. On this record, the court concludes the “reversion” provision is not a bar to final approval of 15 the settlement. 16 At the preliminary stage, the court was also “troubled by the proposed potential for 17 a pro rata decrease in individual settlement amounts if too many people file claims.” Prelim. 18 Approval Order at 13 (citing In re Bluetooth Headset Prods. Liab. Litig. (Bluetooth), 654 F.3d 19 935, 946 (9th Cir. 2011)); Settlement §§ 7.6, 7.9. In light of the number of persons filing claims 20 and the total value the Class has claimed, counsel asserts the “Court’s concern with regard to a 21 decrease or pro rata payment to the Class is non-existent.” Richard Lambert Decl. ¶ 37. The total 22 value of the claims made to date will not come close to the total settlement amount of $2,800,000, 23 and the value of each affected individual settlement will not be decreased on a pro rata basis. 24 Therefore, there is no pro rata decrease in settlement payments to act as a bar to final approval of 25 the settlement. 26 The court also noted its concern with the “wide discrepancy between the sum of 27 $9,400,000 plaintiffs sought going into mediation and the resulting maximum settlement sum of 28 $2,800,000.” Mot. at 10. In more fully explaining this discrepancy counsel states “[t]he 1 $2,800,000 Maximum Settlement Fund was the highest amount the Class Representatives and 2 Class Counsel were able to reach after four (4) arduous mediation sessions” and defendant 3 “expressly claimed it would go no higher.” Richard Lambert Decl. ¶ 38. Specifically, counsel 4 asserts “[$9,400,000] was for Tiles sold all over the world not just California – which is the scope 5 of the Settlement Class herein.” Id. (emphasis in original). In explaining how the parties reached 6 their settlement figure, plaintiffs’ counsel states, “Despite the decrease in the amount sought 7 versus the amount agreed upon, Class Representatives and Class Counsel aggressively negotiated 8 with [defendant] in an effort to achieve the maximum value for the Class.” Id. ¶ 40. Counsel 9 even offers that the private mediator “has made himself available to testify.” Id. Given the 10 additional detail provided now, the court does not need to hear from the mediator. The court 11 finds the settlement amount is within the range appropriate for approval. 12 Finally, at the preliminary stage, the court also expressed concern about the 13 settlement provisions that provide named plaintiffs Wilson and White incentive payments of up to 14 $25,000 and $14,000, respectively; specifically, the court noted these amounts appeared 15 disproportionate to the recovery of individual class members. Prelim. Approval Order at 11. The 16 court considers the parties’ more substantial justification for these proposed awards in discussing 17 plaintiffs’ motion for attorneys’ fees below, and ultimately determines the request is reasonable 18 given the facts of this case. Therefore, the incentive payments provision is not a bar to final 19 approval of the settlement. 20 D. Proposal Treats Class Members Equitably Relative to Each Other 21 The individual settlement amount for each class member is determined by “the 22 number of affected panels as identified by the eligible claimant . . . multiplied by $10, up to and 23 not to exceed the maximum settlement payment of $3,000 for any eligible claimant.” Settlement 24 § 7.6. “If the eligible claimant purchased their roof more than fifteen (15) years before the final 25 approval order, the settlement payment . . . shall be reduced based upon the proration schedule in 26 the eligible claimant warranty.” Id. § 7.6.2. The court finds this method of distribution treats 27 class members equitably relative to each other. 28 ///// 1 As previously noted, the settlement treats the named plaintiffs differently than the 2 other class members, by affording Wilson and White incentive payment of $25,000 and $14,000, 3 respectively. Fees Mot. Mem. at 31. The court analyzes these incentive payments separately 4 below. 5 E. Conclusion 6 For these reasons the court finds the settlement is “fair, reasonable, and adequate.” 7 Fed. R. Civ. P. 23(e). 8 IV. ATTORNEY’S FEES, COSTS AND INCENTIVE AWARDS 9 A. Request for Attorney’s Fees 10 Rule 23 permits a court to award “reasonable attorney’s fees . . . that are 11 authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Even when the parties 12 have agreed on an amount, the court must award only reasonable attorneys’ fees. Bluetooth, 13 654 F.3d at 941. 14 1. Ninth Circuit Benchmark 15 The Ninth Circuit has set a 25 percent benchmark for the award of attorneys’ fees, 16 and “courts may adjust this figure upwards or downwards if the record shows special 17 circumstances justifying a departure.” Ontiveros v. Zamora, 303 F.R.D. 356, 372 (E.D. Cal. 18 2014) (internal quotation marks omitted) (citing In re Bluetooth, 654 F.3d at 942). The Ninth 19 Circuit has also approved the use of lodestar cross-checks to determine the reasonableness of a 20 particular percentage recovery of a common fund. Seguin v. Cty. of Tulare, No. 21 116CV01262DADSAB, 2018 WL 1919823, at *6 (E.D. Cal. Apr. 24, 2018) (citing Vizcaino v. 22 Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002)). 23 The proposed settlement provides for attorney’s fees of $979,545.43, which is 34.9 24 percent of the Class Gross Settlement Amount of $2,800,000.1 Richard Lambert Decl. ¶ 42. A 25
26 1 Class counsel notes an alternative value of the Settlement is approximately $4,015,000 27 ($2,800,000 to the Class, $1,150,000 in fees, costs, and incentive awards, and $65,000 in administration costs). Under this calculation, Class counsel’s request for $983,228.20 in fees 28 which fall within the benchmark established by the Ninth Circuit as it constitutes approximately 1 slightly different figure for attorney’s fees, $983,228.20, which is 35.1 percent of the Class Gross 2 Settlement Amount, is calculated by the parties for a requested upward variance. Fees Mot. Mem. 3 at 22:3–5. Counsel notes defendant has not opposed or objected to a gross payment to class 4 counsel “in the amount of $1,111,000.00 . . . for fees and costs.” See Settlement § 6; id., Ex. B 5 (Notice of Class Settlement) at 47, EFC No. 140-3. And counsel submits, “Only in rare or 6 exceptional cases will an attorney’s reasonable expenditure of time on a case not be 7 commensurate with the fees to which he is entitled.” Velez v. Wynne, 220 F. App’x 512, 514 (9th 8 Cir. 2007) (emphasis in original) (quoting Cunningham v. Cty. of Los Angeles, 879 F.2d 481, 488 9 (9th Cir. 1988)). 10 Plaintiffs and class counsel argue Bluetooth does not apply to this case because the 11 settlement agreement was not “negotiated prior to formal class certification.” 654 F.3d at 946; 12 Fees Mot. Mem. at 16. 13 Given its prior strong reservations about “disproportional payment of attorney’s 14 fees and costs separate from payments to the class,” Prelim. Approval Order at 13, the court 15 conducts a lodestar cross-check to determine whether the attorneys’ fees request is reasonable. 16 Id. (citing Settlement §§ 2.3, 8.1). 17 2. Lodestar Cross-Check 18 Application of the lodestar method supports approval here. In calculating an 19 attorneys’ fees award using this method, a court “must start by determining how many hours were 20 reasonably expended on the litigation, and then multiply those hours by the prevailing local rate 21 for an attorney of the skill required to perform the litigation.” Moreno v. City of Sacramento, 22 534 F.3d 1106, 1111 (9th Cir. 2008) (citation omitted). This amount may be increased or 23 decreased by a multiplier that reflects any factors not subsumed within the calculation, such as 24 “the quality of representation, the benefit obtained for the class, the complexity and novelty of the 25
26 24.4 percent of the total value provided to the Class in the Settlement (i.e., $983,228.20 (fees)/$4,015,000 (total value) = 24.4%). See Lambert Fees Decl. ¶ 27, ECF No. 150-2. 27
28 1 issues presented, and the risk of nonpayment.” Bluetooth, 654 F.3d at 941–42 (quoting Hanlon v. 2 Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998)). “Foremost among these considerations, 3 however, is the benefit obtained for the class.” Id. at 942 (citing Hensley v. Eckerhart, 461 U.S. 4 424, 434–36 (1983); McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009)). 5 a. Lodestar Amount 6 As part of their separate motion for attorneys’ fees, class counsel have provided 7 the following breakdown of their time spent in this case and their regular rates per hour: 8 Attorney Hours Worked Rate Total Fees 9 Gene J. Stonebarger 118.8 $475.00 $56,430.00 10 Richard D. Lambert 1,926.8 $400.00 $770,720.00 11 Elaine W. Yan 271.4 $250.00 $67,850.00 12 Paralegals 1,458.1 $100.00 $145,810.00 13 Totals 3,777.7 $1,040,810.00 14 Lambert Fees Decl. ¶ 11; see generally Fees Mot. Mem. Counsel have also provided declarations 15 in support of their hourly rates, evidence their rates are in line with those in the relevant 16 community, see Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984), and itemized records to support 17 the number of hours they worked, see Hensley, 461 U.S. at 437. The court finds counsel has 18 provided adequate detail to conduct a lodestar cross-check here. See Barbosa v. Cargill Meat 19 Sols. Corp., 297 F.R.D. 431, 451 (E.D. Cal. 2013) (“Where the lodestar method is used as a cross- 20 check to the percentage method, it can be performed with a less exhaustive cataloguing and 21 review of counsel’s hours.” (citation omitted)); Bellinghausen v. Tractor Supply Co., 306 F.R.D. 22 245, 264 (N.D. Cal. 2015) (“[I]t is well established that ‘[t]he lodestar cross-check calculation 23 need entail neither mathematical precision nor bean counting . . . [courts] may rely on summaries 24 submitted by the attorneys and need not review actual billing records.’”) (citation omitted)). 25 Given the extent of motion practice in this case, including two motions to dismiss, ECF Nos. 22, 26 50, a contested motion to certify the class, ECF No. 81, a contested motion for summary 27 judgment, ECF No. 102, a motion for preliminary approval of the settlement, ECF No. 140, and 28 1 the instant motions for final approval of the settlement and for attorneys’ fees, ECF Nos. 150, 2 160, as well as the time required for mediation, the court finds 3,777.7 is a reasonable number of 3 total hours, as allocated across attorneys, to use for the lodestar cross-check. 4 Regarding the attorneys, Elaine W. Yan is an associate with roughly three years of 5 experience. Fees Mot. Mem. at 21. Courts in the Eastern District have previously accepted 6 hourly rates between $370 and $495 for associates, though lower rates are more commonly 7 approved and rates vary with experience. Milburn v. PetSmart, Inc., No. 118CV00535 DAD 8 SKO, 2019 WL 5566313, at *8 (E.D. Cal. Oct. 29, 2019) (citing, inter alia, Gong-Chun v. Aetna 9 Inc., No. 1:09-cv-01995-SKO, 2012 WL 2872788, at *22 (E.D. Cal. July 12, 2012) (awarding 10 $300 per hour for associates with less than four years’ experience)). The court finds the proposed 11 rate of $250 is a reasonable hourly rate for Ms. Yan. 12 Gene J. Stonebarger and Richard D. Lambert are both partners. The rates 13 proposed by plaintiffs, namely $475 and $400 for partners, are in line with those charged in this 14 district. As noted in the federal cases plaintiffs cite, “Courts in the Eastern District of California 15 have regularly approved hourly rates of $400 or more for partners or experienced attorneys” 16 Estrada v. iYogi, Inc., No. CV21301989WBSCKD, 2016 WL 310279, at *6 (E.D. Cal. Jan. 26, 17 2016); see also Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 460 (E.D. Cal. 2013) 18 (same); Turk v. Gale/Triangle, Inc., No. 2:16-CV-00783-MCE-DB, 2017 WL 4181088, at *4 19 (E.D. Cal. Sept. 21, 2017) ($400/hour range common, “with some courts noting a higher range for 20 partners, commensurate with experience”). 21 Mr. Stonebarger proposes a rate of $475 per hour for his time, given his 19 years 22 of experience as an attorney, primarily in civil litigation. Fees Mot., Ex. A (Stonebarger 23 Resume), ECF No. 150-3, at 2–4; Fees Mot. Mem. at 20. In light of other decisions awarding 24 similar rates to partners with as much as 19 years of experience, the court finds $400 per hour is a 25 reasonable rate for lodestar purposes. See, e.g., Estrada v. iYogi, Inc., 2016 WL 310279, at *6 26 (E.D. Cal. Jan. 26, 2016) (approving $400 requested rate for partners with as much as 19 years of 27 experience). Accordingly, the court applies a rate of $400 per hour for Mr. Stonebarger’s time, 28 which reduces his total fees for the lodestar calculation to $47,520. 1 Mr. Lambert has nearly 12 years of experience as an attorney and has served as co- 2 lead class counsel in seven cases. Fees Mot., Ex. A (Lambert Resume), ECF No. 150-3, at 5–11; 3 Fees Mot. Mem. at 21. In Z.F. v. Ripon Unified Sch. Dist., the court noted, “[p]revailing hourly 4 rates in the Eastern District of California are in the $350–$550/hour range for experienced 5 attorneys with over 15 years of experience in civil rights and class action litigation.” (citation 6 omitted)). Z.F. v. Ripon Unified Sch. Dist., No. 2:10-cv-00523-TLN-CKD, 2017 WL 1064679, at 7 *3 (E.D. Cal. Mar. 21, 2017). The court applies a rate of $300 per hour for Mr. Lambert’s time. 8 This reduces Mr. Lambert’s total fees for the lodestar calculation to $578, 040, and the total 9 lodestar amount, after reducing both Mr. Stonebarger’s and Mr. Lambert’s fees, to $839,220. 10 Class counsel avoided more protracted litigation by successfully negotiating a 11 settlement and has diligently pursued approval of that settlement by this court through multiple 12 rounds of motion practice. To reach plaintiffs’ counsel’s total requested fee of $983,228.20 13 requires applying a multiplier of roughly 1.2 to the lodestar amount of $839,220.00. A multiplier 14 of 1.2 is within the range of multipliers accepted by the Ninth Circuit. See, e.g., Vizcaino, 15 290 F.3d at 1050–51 & n.6 (reviewing approved fees from 24 cases and finding 20 of 24 fell 16 within 1.0–4.0 range, and 13 of twenty-four fell within 1.5–3.0 range) (citing In re Prudential Ins. 17 Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 341 (3d Cir. 1998) (“[M]ultiples 18 ranging from one to four are frequently awarded in common fund cases when the lodestar method 19 is applied.”)). The court evaluates additional factors discussed in Bluetooth to determine whether 20 a 1.2 lodestar multiplier is justified in this case. See Bluetooth, 654 F.3d at 941–42 (citing 21 relevant factors as “the quality of representation, the benefit obtained for the class, the complexity 22 and novelty of the issues presented, and the risk of nonpayment”).
23 b. Bluetooth Factors 24 Class counsel achieved a favorable result and generated a significant benefit for 25 the class in the form of a potential gross settlement amount of $2,800,000. Fees Mot. Mem. at 11; 26 see Bluetooth, 654 F.3d at 942 (“Foremost among these considerations, however, is the benefit 27 obtained for the class.”). The settlement provides for $2,800,000 to the Class. Lambert Fees 28 Decl. ¶ 26. As further evidence of a favorable result, counsel points to the fact attorneys’ fees, 1 costs and requested incentive awards are to be paid separate and apart from the class benefit. Id. 2 This factor strongly favors a positive multiplier. 3 As for the third factor, the record suggests the issues presented by plaintiffs’ 4 claims were novel and unique due to a lack of prior rulings on issues presented in this case and 5 particularly complex compared with other breach of warranty class actions. See Fees Mot. Mem. 6 at 25. This factor also favors a positive multiplier. 7 Finally, class counsel has represented the class on a contingency basis. Id. at 19– 8 20. Consequently, they have faced a substantial risk of nonpayment, especially in light of the 9 evolving legal landscape during contested motion practice on class certification and summary 10 judgment. Id. at 19 (citing Ketchum v. Moses, 24 Cal. 4th 1122 (2001) (holding Cal. Code Civ. 11 Proc. § 425.16 allows a trial court to include a fee enhancement to compensate the attorney who 12 undertakes representation on contingency at risk of nonpayment or delayed payment)). This 13 factor favors a positive multiplier. 14 All four factors favor a positive multiplier, and the multiplier of 1.2 is at the low 15 end of the acceptable range sanctioned by the Ninth Circuit. Accordingly, based on the lodestar 16 cross-check method, the court finds with minor reductions as described above the requested 17 award of fees is reasonable. 18 B. Request for Costs 19 The court also must determine an appropriate award of costs and expenses. 20 Fed. R. Civ. P. 23(h). “[I]n evaluating the reasonableness of costs, the judge has to step in and 21 play surrogate client.” In re Toys R Us-Delaware, Inc.–Fair & Accurate Credit Transactions Act 22 (FACTA) Litig., 295 F.R.D. 438, 468–69 (C.D. Cal. 2014) (internal quotation marks and citation 23 omitted). “In keeping with this role, the court must examine prevailing rates and practices in the 24 legal marketplace to assess the reasonableness of the costs sought.” Id. (citation omitted). 25 Here, counsel represents that combined unreimbursed costs total $127,771.80, and 26 include filing fees, postage charges, travel expenses, mediation fees, expert fees and claims 27 administrator fees. Fees Mot. Mem. at 28; Lambert Fees Decl. ¶ 29. The court finds these costs 28 are reasonable and are of the type routinely approved by courts for reimbursement. See Barbosa, 1 297 F.R.D. at 454 (costs associated with travel, photocopying and mediation fees “routinely 2 reimbursed”); Fontes v. Heritage Operating, L.P., No. 14-cv-1413-MMA (NLS), 2016 WL 3 1465158, at *6 (S.D. Cal. Apr. 14, 2016) (approving class counsel’s costs, which included “court 4 filing fees, research costs, mediation-related expenses, attorney services costs, and travel 5 expenses”); In re Toys R Us-Delaware, Inc.--Fair & Accurate Credit Transactions Act (FACTA) 6 Litig., 295 F.R.D. 438, 469 (C.D. Cal. 2014) (approving costs, which included “mailing costs; 7 expert fees; travel expenses; and mediation fees.”). 8 C. Incentive Award 9 The two named plaintiffs request $25,000 and $14,000, respectively, as incentive 10 awards. Fees Mot. Mem. at 12. Representative plaintiffs, as opposed to designated class 11 members, are eligible for reasonable incentive payments. Staton v. Boeing Co., 327 F.3d 938, 12 977 (9th Cir. 2003). Whether to authorize an incentive payment to a class representative is a 13 matter within the court’s discretion. See Adams v. City & Cty. of Honolulu, No. CV 12-00667 14 BMK, 2017 WL 3880651, at *1 (D. Haw. Sept. 5, 2017). In determining whether to approve an 15 enhancement payment, courts may consider the following factors: (1) “the risk to the class 16 representative in commencing suit, both financial and otherwise”; (2) “the notoriety and personal 17 difficulties encountered by the class representative;” (3) “the amount of time and effort spent by 18 the class representative;” (4) “the duration of the litigation”; and (5) “the personal benefit (or lack 19 thereof) enjoyed by the class representative as a result of the litigation.” Van Vranken v. Atl. 20 Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995) (citation omitted). Various courts in this 21 circuit, including this court, have adopted the Van Vranken factors. See, e.g., Zakskorn v. Am. 22 Honda Motor Co., Inc., 2:11-CV-02610-KJM, 2015 WL 3622990, at *17 (E.D. Cal. June 9, 23 2015). In determining the amount of time and effort spent by a class representative, the court will 24 examine “‘evidence demonstrating the quality of plaintiff’s representative service,’ such as 25 ‘substantial efforts taken as class representative to justify the discrepancy between [his] award 26 and those of the unnamed plaintiffs.’” Flores v. ADT LLC, No. 116CV00029 AWI JLT, 2018 27 WL 6981043, at *1 (E.D. Cal. Mar. 19, 2018) (quoting Reyes v. CVS Pharmacy, Inc., No. 1:14- 28 CV-00964-MJS, 2016 WL 3549260, *15 (E.D. Cal. June 29, 2016)). Courts will also consider 1 the “proportion of the [representative] payment[s] relative to the settlement amount, and the size 2 of each payment.” In re Online DVD-Rental Antitrust Litig., 779 F.3d at 947. 3 Here, plaintiffs James Wilson and Jack White have submitted two declarations in 4 which they each explain their participation in the case and estimate they spent 124 and 73 hours, 5 respectively, assisting counsel over the eight years this case has been active. James Wilson Decl. 6 ¶ 2, ECF No. 150-5; Jack White Decl. ¶ 2, ECF No. 150-6. They both spent time “researching 7 the allegations,” reviewed the relevant pleadings in this action, and engaged in numerous 8 discussions with the attorneys regarding the status of this action and its progress since becoming 9 class representatives. James Wilson Decl. ¶ 2; Jack White Decl. ¶ 2. 10 With respect to the first factor, plaintiffs contend that, by initiating this case, they 11 assumed the risk of a judgment against them and personal liability for an award of costs to 12 defendant in the event of an adverse outcome. James Wilson Decl. ¶ 8; Jack White Decl. ¶ 8. As 13 discussed at hearing, the requested incentive awards represent the specific amount each respective 14 plaintiff was offered by defendant seven years ago to resolve each respective claim. Fees Mot. 15 Mem. at 31. Both named plaintiffs rejected defendant’s initial settlement offer because “each 16 understood he was representing more than his own interests” and was committed to representing 17 the interests of the class. James Wilson Decl. ¶¶ 5–6; Jack White Decl. ¶¶ 5–6. Thus, the first 18 factor weighs in favor of granting an incentive award. 19 As for the second factor, nothing in the record suggests the litigation gained any 20 particular notoriety and plaintiffs do not suggest their participation caused any personal 21 difficulties, apart from costing them time. Therefore, the second factor does not necessarily 22 support an incentive award. 23 As for the third factor, as mentioned, plaintiffs estimate they spent 124 and 73 24 hours, respectively, assisting in the litigation. James Wilson Decl. ¶ 2; Jack White Decl. ¶ 2. 25 Because plaintiffs expended significant efforts and were personally involved in the litigation, this 26 factor weighs in favor of granting each an incentive award. 27 With respect to the fourth factor, plaintiffs initiated the case on March 5, 2012, 28 settled on August 24, 2018, and requested preliminary approval on August 31, 2018. The court 1 subsequently granted the motion for preliminary approval, roughly six years after the filing of the 2 complaint. Thus, the fourth factor weighs slightly in favor of granting an incentive award. Cf. 3 Van Vranken, 901 F. Supp. at 296, 299 (where the class representative’s “participation lasted 4 through [roughly thirteen] years of litigation,” a $50,000 incentive award was appropriate); see 5 also Ogbuehi, 2015 WL 3622999, at *14 (finding fourth factor neutral where litigation settled 6 after only roughly one year). 7 Finally, with respect to the fifth factor, the personal benefit enjoyed by a plaintiff, 8 neither named plaintiff appears to gain any other benefit beyond what he will gain as a class 9 member. See generally Settlement; see also In re Toys R Us-Del., Inc.–Fair & Accurate Credit 10 Transactions Act (FACTA) Litig., 295 F.R.D. at 472 (“An incentive award may be appropriate 11 when a class representative will not gain any benefit beyond that he would receive as an ordinary 12 class member.”). This factor weighs in favor of granting an incentive award. 13 On balance, the relevant factors favor granting an incentive award. The requested 14 incentive awards of $25,000 and $14,000 are on the high end of what is typically approved, even 15 considering the number of hours plaintiffs spent in this case. See, e.g., Bond, 2011 WL 2648879, 16 at *2, 15 (approving $11,250 incentive payment to each of two named plaintiffs as part of 17 $2,250,000 gross settlement); Emmons v. Quest Diagnostics Clinical Laboratories, Inc., 2017 18 WL 749018, *9 (E.D. Cal. Feb. 27, 2017) (awarding enhancement payment of $8,000 to each 19 plaintiff who conducted 30 to 40 hours of work); Rodriguez v. Kraft Foods Group, Inc., 2016 WL 20 5844378, *16 (awarding enhancement payment of $10,000 to plaintiff who conducted 40 hours of 21 work on case); Ross v. U.S. Bank Nat’l Ass’n, Civ. No. 3:07-2951 SI, 2010 WL 3833922, at *3 22 (N.D. Cal. Sept. 29, 2010) (approving award of $20,000 to each of four named plaintiffs where 23 settlement fund was $1,050,000, based on their contributions to litigation and risk that being a 24 class representative would harm their reputation). 25 Furthermore, the total combined incentive payments equal $39,000, representing 26 roughly 1.4 percent of the potential $2,800,000 gross settlement amount. Settlement § 7.6. As a 27 percentage of the potential gross settlement amount, the incentive award is on the high end of 28 what is commonly approved, and as compared to the average individual settlement amounts, the 1 ratio of individual to incentive award also is high. See, e.g., In re Online DVD-Rental Antitrust 2 Litig., 779 F.3d at 947 (awarding $5,000 enhancement payment to each of nine named plaintiffs, 3 which was roughly 417 times greater than average award but, in aggregate, only 0.17% of gross 4 settlement); Rodriguez, 2016 WL 5844378, at *16 (awarding enhancement payment of $10,000, 5 which was approximately 11 times average award and less than 0.5% of gross settlement); Spann 6 v. J.C. Penney Corp., 211 F. Supp. 3d 1244, 1265 (C.D. Cal. 2016) (awarding enhancement 7 payment of $10,000, approximately 50 times average award and less than 0.02% of gross 8 settlement). 9 All things considered, given the length of the case and the named plaintiffs’ 10 substantial involvement, the court finds the incentive awards are reasonable and grants the total 11 incentive payment. While plaintiffs did not risk harm to their reputation, Ross, 2010 WL 12 3833922, at *3, they consciously chose to sacrifice a lump sum of money early on to continue 13 with the case, facing an uncertain outcome and great personal exposure, because each felt 14 compelled to represent the class. Fees Mot. Mem. at 31. Given the uncertain outcome, they 15 accepted the risk of losing and being held responsible for the prevailing party’s costs. Id. 16 Accordingly, the court approves this element of the settlement. 17 V. CONCLUSION 18 In light of the foregoing analysis, plaintiffs’ motion for final approval of the class 19 settlement, ECF No. 160, and motion for attorneys’ fees, costs and enhancement awards, ECF 20 No. 150, are GRANTED. The distribution of settlement funds shall be as follows: 21 1. Total fees awarded to plaintiffs: $983,228.20; 22 2. Mr. James Wilson’s incentive award: $25,000; 23 3. Mr. Jack White’s incentive award: $14,000; 24 4. Mr. Stonebarger’s total fees award: $47,520; 25 5. Mr. Lambert’s total fees award: $578, 040; 26 6. Ms. Elaine W. Yan’s total fees award: $67, 850; 27 7. Paralegals’ total fees award: $145, 810; 28 8. Costs: $127,771.80. 1 All individual settlement payments shall be made within fourteen (14) days of the 2 filed date of this order, and all other distributions shall be made within thirty (30) days of the filed 3 date of this order. 4 The Clerk of Court is directed to CLOSE the case. 5 IT IS SO ORDERED. 6 DATED: February 11, 2021. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28