Opinion
Case No. EDCV 14-00063-VAP (SPx)
05-01-2015
DIANA BARBOSA, AN INDIVIDUAL, Plaintiff, v. MEDICREDIT, INC., AND DOES 1-25, Defendants.
ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT (DOC. NO. 32) AND GRANTING MOTION FOR ATTORNEYS' FEES, LITIGATION EXPENSES AND CLASS REPRESENTATIVE ENHANCEMENT
(DOC. NO. 33)
[Motions filed on March 23, 2015]
On March 23, 2015, Plaintiff Diana Barbosa ("Barbosa") filed a "Motion for Final Approval of Class/Collective/Representative Action Settlement" ("Approval Mot.") (Doc. No. 32) and a "Motion for Award of Attorneys' Fees, Litigation Expenses and Class Representative Enhancement" ("Fee Mot.") (Doc. No. 33). Barbosa seeks final judicial approval of an agreement to settle employment claims against her former employer, Defendant MediCredit, Inc. ("MediCredit"). The matter came before the Court for a hearing on April 20, 2015. After consideration of the papers filed in support of the motions, the Court GRANTS the motions, and enters final approval of the settlement between Barbosa and MediCredit, and approves Class Counsel's request for attorneys' fees and other associated litigation costs.
I. BACKGROUND
A. Facts
Barbosa is a former employee of MediCredit, which is in the debt collecting business. (Order Granting Preliminary Approval ("Approval Order")(Doc. No. 31) at 2.) Barbosa alleges MediCredit discharged her on August 9, 2013 because she was pregnant. (First Amended Complaint ("FAC")(Doc. No. 28) ¶ 13; Approval Order at 2.) The FAC asserts two individual claims related to the allegedly unlawful termination; one under California Government Code § 12940(a) ("FEHA"), and one for "Wrongful Termination in Violation of Public Policy." (FAC ¶¶ 13, 20.)
The Court allowed Barbosa to file an amended pleading in connection with her previous motion for preliminary approval of the class action settlement so the Court could better understand the factual allegations underlying her claims. (See Approval Order at 2 n.1.)
In addition to her individual claims, Barbosa sets forth a collection of class claims asserting California wage and hour law violations. The FAC, on behalf of "all persons employed by Defendant in any non-exempt position in the State of California between December 9, 2009 and present," alleges the following class claims: (1) failure to pay overtime wages; (2) failure to provide itemized statement to employee; (3) failure to pay terminated or quitting employee; (4) unfair business practices; (5) failure to provide meal and rest periods; (6) recovery of civil penalties under the California Private Attorneys General Act ("PAGA"); and (7) violation of the federal Fair Labor Standards Act (collectively, "Class Claims"). The parties seek final approval of a settlement agreement related to the FAC's class claims; Barbosa's individual claims against MediCredit have settled separately. (Approval Order at 2-3; Declaration of Michael A. Gould in Support of Motion for Preliminary Approval of Class Action Settlement (Doc. No. 27-2) Ex. 1 ("Settlement Agreement").)
Those claims are brought under: Cal. Lab. Code §§ 1194, 510(a), Cal. Code of Regulations § 11040; Cal. Lab. Code § 226; Cal. Lab. Code §§ 201, 202, 203; Cal. Bus. & Prof. Code § 17200 et seq.; Cal. Lab. Code §§ 218.5, 226.7, 512; Cal. Lab. Code § 2699 et seq.; and 29 U.S.C. 201 et seq.
Specifically, the Class Claims allege MediCredit pays its non-exempt workers commissions and performance bonuses, but those payments are not reflected in their base pay rates so the workers are automatically underpaid for any overtime worked. (Approval Order at 3; FAC ¶¶ 24-26.) Under the California Labor Code, a work week consists of forty hours, and all additional hours are considered overtime. See Cal. Lab. Code § 510. Overtime hours are typically paid at 150 percent of a worker's base pay rate, see id., but Barbosa alleges that the base pay rate did not include the bonuses and commissions as a matter of MediCredit's policy, so the overtime rate necessarily fell short of the required time-and-a-half rate for all workers. (Approval Order at 3.)
California law adopts federal law's definition of a worker's "base pay rate," as used by the Fair Labor Standards Act, 29 U.S.C. § 207(e). Alonzo v. Maximus, Inc., 832 F. Supp. 2d 1122, 1129 (C.D. Cal. 2011). Under the FLSA, bonuses and commissions count toward a worker's base pay rate when they are awarded as a matter of course pursuant to contract or agreement (as opposed to a bonus awarded at a supervisor's discretion). See id.; 29 U.S.C. § 207(e)(3).
B. Procedural History
Barbosa filed a state court Complaint on December 9, 2013, and MediCredit removed the case to federal court on January 10, 2014. (Not. of Removal.) Following removal, the parties met with a private mediator and settled both Barbosa's individual wrongful termination claims and any potential class or representative claims. (Approval Order at 4.)
All subsequent references to the Settlement Agreement refer to the proposed settlement of the class claim only, not the settlement of Barbosa's individual claims.
Before meeting with the mediator, the parties conducted limited discovery, including Rule 26(a) initial disclosures, requests for production, and interrogatories. (Id. at 4.) Based on the information provided by MediCredit, Barbosa "determined that she was allegedly owed $40.28 for Defendant's miscalculation of overtime pay." (Id.) MediCredit also told Barbosa, "for mediation purposes," that class members' (past and current MediCredit employees) average rate of pay was $15 per hour, but Barbosa earned $19.02 per hour because she was a supervisor. (Id.) Finally, MediCredit gave Barbosa a "random sampling of payroll records showing the timekeeping data for Class Members," which allowed Barbosa to "estimate Class Damages" of about $20,000. (Id.)
Barbosa filed a motion seeking provisional certification of the proposed class and preliminary approval of the Settlement Agreement, as well as provisional certification of the collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., on October 29, 2014; the Court granted the motion on December 9, 2014. (See Doc. Nos. 29, 32.) On March 23, 2015, Barbosa filed the instant motions, seeking final approval of the settlement and the apportionment of attorneys' fees, costs, and class representative enhancements.
C. The Proposed Settlement Agreement
1. Gross and Net Settlement Amounts
The parties agreed to settle the case, pending approval of the Court, for a maximum sum of $200,000; this is the limit of MediCredit's liability under the Settlement Agreement and all claims, fees, and costs will be subtracted from the $200,000 amount ("Gross Settlement Amount"). (Settlement Agreement § IV ¶ B.) Barbosa's lawyers proposed to take a maximum of $60,000 from the Gross Settlement Amount for their fees, and up to $2,500 for their costs. (Id. § IV ¶ C.2.) Additionally, the parties submit Barbosa should receive a $5,000 "incentive payment" for her time and energy spent as the named plaintiff. (Id. § IV ¶ C.1.) The Settlement Administrator, Class Action Claims Administration, Inc. ("Settlement Administrator"), will receive up to $5,500 for its efforts (Id. ¶ C.3.) Finally, $5,000 will be "allocated to penalties pursuant to PAGA" and paid to the California Labor and Workforce Development Agency ("LWDA"). (Id. § IV ¶ C.4.) In sum, fixed costs to be paid out of the Gross Settlement Amount will total $78,500, leaving $121,500 for the Class Members ("Net Settlement Amount").
2. The Class Period and Release of Future Claims
Pursuant to the Court's Preliminary Approval Order, the Court conditionally certified a class for settlement purposes, comprising: "[a]ll persons employed by Defendant in any non-exempt position in the State of California between December 9, 2009 and the date the Court enters an order granting preliminary approval of the Settlement." (Approval Order at 10.) The parties estimate that there are approximately 480 past and current MediCredit employees who are members of this class. (Id.) In exchange for payment from the settlement fund, the Class Members will be precluded by a "narrowly tailored" release ("Release") from pursuing future wage and hour claims against MediCredit. (Approval Order at 7.) The scope of the proposed Release is broad -- it states, in relevant part:
Class Members fully and finally release [MediCredit] . . . from any and all known and unknown claims arising from or related to the matters alleged in the Action . . . to include but not limited to, failure to pay minimum wage, straight time compensation, overtime compensation, and interest; payment for all hours worked; wage statements; failure to provide meal periods; failure to authorize and permit rest periods, failure to keep accurate records; unfair business practices; wage payments; penalties,
including, but not limited to, recordkeeping penalties; pay-stub penalties, minimum-wage penalties, and waiting-time penalties.(Settlement Agreement § IV ¶ H.) Also, the Release explains that any Class Members "who do not opt out provide their written consent to participate in the FLSA component" of the case, and release MediCredit from future FLSA claims by "submitting a valid Claim Form" or cashing a settlement check. (Id.) In other words, a Class Member's failure to opt out of this action counts as an opt-in to the proposed FLSA collective action.
The Release also specifies: "The Released Claims include all such claims arising under the California Labor Code," (including, but not limited to §§ 201-204, 210, 218.5, 218.6, 225.5, 226, 226(a), 226(b), 226(e), 226.2, 226.7, 510, 510(a), 511, 512, 558, 1174, 1174.5, 1194, 1197, 1198, 2698 et seq.); the California Code of Regulations §§ 110400 et seq.; the Wage orders of the California Industrial Welfare Commission; the California PAGA; California UCL; California common law of contract, the FLSA, and federal common law. (Settlement Agreement § IV ¶ H.)
3. Claims Administration
In order to receive payment from the settlement fund, the Settlement Agreement calls for "personal notice . . . by mail" because the parties state that is "the method best calculated to provide notice." (Approval Order at 5.) The Settlement Administrator will be responsible for mailing notice ("Notice") and issuing the checks to Class Members who submit claims. (Settlement Agreement § IV ¶ D.) The Settlement Administrator will mail the Notice to the last known address of a Class Member, as provided by MediCredit, and if the Notice is returned as undeliverable the administrator will "search for a more current address" and re-mail the Notice. (Id. § IV ¶ D.)
Class Members who submit "valid and timely" Claim Forms ("timely" means 45 days after the Settlement Administrator mails the Notice) will receive their pro-rated share of the Net Settlement Amount, based on the proposed distribution formula. (Settlement Agreement § IV ¶ C.6.a.) That formula bases a Class Member's payout on "(1) the individual class member's total shifts worked during the class period; (2) divided by the total number of shifts of all class members during the class period; (3) multiplied by the net settlement amount." (Id.) Any unclaimed portion of the settlement will be distributed pro rata to class members who submit claims (up to twice the claimant's original share), with the remainder distributed as cy pres relief to the Family-Sustaining Employment Foundation of the United Way, which according to Class Counsel, is a program that "provides education and training to workers and connects workers with sustainable employment opportunities." (Declaration of Michael A. Gould ("Gould Decl.") (Doc. No. 32-5) ¶ 28; see also Approval Mot. at 6.)
The Court previously approved of a cy pres award, but noted that it could not finally approve the award until it was known how much of the Net Settlement Amount remained. (Approval Order at 6 n.7.) Moreover, the Court also noted that a cy pres award should be "guided by (1) the objectives of the underlying statute(s) and (2) the interests of the silent class members." See Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012). For this reason, the parties appear to have agreed to change the cy pres award party from the Los Angeles Chapter of the Special Olympics to the United Way.
4. The Notice and Claim Form
The parties' proposed Notice (Doc. No. 27-3), provides Class Members with a "brief description of the lawsuit," informs Class Members of "the proposed settlement terms," and advises Class Members of their "legal rights." (Id. at 2.)
Class Counsel previously only submitted a proposed Notice and Claim form in English (see Approval Order at 6 n.8), but have submitted examples of a proposed Notice and Claim forms in both English and Spanish along with the motions. (See Declaration of Caroline Lowman ("Lowman Decl.") (Doc. No. 32-3) Exs. A-D.)
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The Notice explains the substantive allegations of the FAC to Class Members. The Notice accurately describes the Gross Settlement Amount, and the deductions that will be made from it, then goes on to state unambiguously that the recipient of the Notice is entitled to recover money from the settlement, and how the amount of a claim will be calculated. (Id. at 3-4.)
The Notice further explains that to submit a claim, a Class Member must sign and return the Claim Form (enclosed with the Notice) to the Settlement Administrator by a date certain. (Id. at 4.) Class Members are also apprised of their right to do nothing; opt out of the settlement; or object to the settlement. (Id. at 5.) The consequences of those decisions are clearly stated. (Id.)
The Claim Form is simple, and only requires the Class Member to fill in some personal information and mail the signed form back via U.S. Mail by the date indicated. (Id. at 9-11.)
II. LEGAL STANDARD
Under Rule 23(e) of the Federal Rules of Civil Procedure, "claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval." Fed. R. Civ. P. 23(e). A court must engage in a two-step process to approve a proposed class action settlement. First, the court must determine whether the proposed settlement deserves preliminary approval. Nat'l Rural Telecomms. Coop. v. DirecTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004). Second, after notice is given to class members, the Court must determine whether final approval is warranted. Id. A court should approve a settlement pursuant to Rule 23(e) only if the settlement "is fundamentally fair, adequate and reasonable." Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993) (internal quotation marks omitted); accord In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000) (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)).
Circuit law teaches that the court must balance the following factors to determine whether a class action settlement is fair, adequate, and reasonable:
(1) the strength of the plaintiff's case;Torrisi, 8 F.3d at 1375; accord Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 1998); Hanlon, 150 F.3d at 1026. "In addition, the settlement may not be the product of collusion among the negotiating parties." In re Mego Fin. Corp. Sec. Litig., 213 F.3d at 458. These factors are not exclusive, and one factor may deserve more weight than the others depending on the circumstances. Torrisi, 8 F.3d at 1376. In some instances, "one factor alone may prove determinative in finding sufficient grounds for court approval." Nat'l Rural Telecomms. Coop., 221 F.R.D. at 525-26 (citing Torrisi, 8 F.3d at 1376). In addition, "[t]he involvement of experienced class action counsel and the fact that the settlement agreement was reached in arm's length negotiations, after relevant discovery had taken place create a presumption that the agreement is fair." Linney v. Cellular Alaska Partnership, 1997 WL 450064, *5 (N.D. Cal. July 18, 1997), aff'd, 151 F.3d at 1234.
(2) the risk, expense, complexity, and likely duration of further litigation;
(3) the risk of maintaining class action status throughout the trial;
(4) the amount offered in settlement;
(5) the extent of discovery completed and the stage of the proceedings;
(6) the experience and views of counsel;
(7) the presence of a governmental participant; and
(8) the reaction of the class members to the proposed settlement.
III. DISCUSSION
A. Final Approval of the Settlement
1. Approval of the Settlement Terms
As discussed below, after balancing the Torrisi factors, the Court finds that final approval of the Settlement Agreement should be granted.
a. The Strength of the Plaintiffs' Case
As noted in the Court's Preliminary Approval Order, the gravamen of Barbosa's Class Claims related to overtime-rate violations pursuant to California Labor Code § 510(a), arise from MediCredit's alleged systemic failure to include employees' bonuses in employees' base pay rates. (Approval Order at 4.) The Court previously found that Plaintiffs' case under § 510(a) appeared strong because the class claims could easily be proven by reference to MediCredit's personnel and payroll records. (Id.) Moreover, according to Class Counsel, because this case involved a relatively low amount in damages, settlement outweighs the risk of further litigation. (Approval Mot. at 6.) Accordingly, this factor weighs in favor of approval.
b. The Risk, Expense, and Complexity of Further Litigation
This litigation is not complex. The theory of liability alleges a mechanical policy on the part of MediCredit that could be easily proved or disproved through minimal discovery of MediCredit's payroll records. Further, it is likely this case would not even reach trial; whether MediCredit systemically underpaid its workers could be resolved at summary judgment. Still, as Class Counsel points out, "[i]f this case had not settled, a motion for class certification, a possible appeal, post-certification merits discovery, and trial preparation would have exacted a significant toll on the Parties and the Court." (Approval Mot. at 7-8.) Accordingly, this factor weighs slightly in favor of approval.
c. The Risk of Maintaining Class Action Status Through Trial
The Court previously found the Class Members' risk of losing class action status in the future was low, because MediCredit's employees were all subject to the same alleged policy that resulted in underpayment of overtime wages. (Approval Order at 17.) Moreover, although MediCredit only conditionally stipulated to the facts necessary for class certification (see Settlement Agreement § III ¶ B), the risk of decertification before trial seems slight appeared slight based on Barbosa's allegations. As the parties have not identified any particular facts or circumstances in this case which would tend to show that decertification was probable, this factor is at best neutral.
d. The Settlement Amount
The amount of the Net Settlement Agreement, about $120,000, greatly exceeds the damages to the class as estimated by Class Counsel. (Approval Order at 4.) The Settlement Agreement offers class members compensation well in excess of what they would individually be entitled to if they brought their own claims -- the Net Settlement Amount totals over $125,000 but Class Counsel estimate that class-wide damages for the § 510(a) violation would only amount to about $20,000. (Id. at 16-18; Approval Mot. at 8-9.) For that reason, this factor favors settlement because it will further both the workers' interest in receiving the correct amount of pay for their overtime and the State of California's interest in enforcing its Labor Code. (Approval Order at 18.)
e. The Extent of Discovery Taken in the Case
In the Preliminary Approval Order, the Court noted that only limited discovery had been undertaken in this case, and while the parties had completed initial disclosures, requests for production, and interrogatories, the record did not clarify exactly what has been requested or produced. (Approval Order at 18.) The Court further observed that it was not clear what the focus of the discovery was, beyond the § 510(a) violation and whether meal and rest breaks complied with the relevant statutes. (Id.) As the scope of discovery appeared to be narrow and the investigation of potential class claims seemed less than exhaustive, especially when compared to the breadth of the Release of claims in the Settlement Agreement, the Court found that this factor cut against settlement. (Id.) The Approval Mot. does not address these concerns. Accordingly, the Court still finds that this factor cuts against settlement.
f. The Experience and Views of Counsel
The Court accepts Class Counsel's representation that all attorneys representing the class "primarily prosecute wage and hour class actions," and that each attorney "working on this matter [has] been appointed class counsel through certification and settlement of numerous wage and hour class actions." (Approval Mot. at 10.) Based on this extensive experience, Class Counsel believe that the settlement "is fair, adequate, and reasonable in protecting and vindicating the rights of Class Members." (Id.) Consequently, this factor favors approval of the settlement.
g. Presence of a Government Participant
The Court previous noted that because one of the Class Claims was made pursuant to PAGA, the members of the Class were "aggrieved employees bringing . . . suit[] . . . as the State's agents . . . ." (See Approval Order at 19 (citing Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 378-89 (2014)). Where class members stand as a proxy for the state, this factor does not weigh against approval. See Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 490 (E.D. Cal. 2010).
h. Reaction of the Class Members to the Settlement
Class Counsel states that approximately 197 valid claims -- 41.1% of the total expected class -- were submitted by the optout deadline of February 23, 2015. (Approval Mot. at 10.) Of the total amount allocated to pay class claims, approximately 52% of those funds have been expended to pay claims. (Id.) Five class members have submitted forms to opt-out of the settlement; no objections have been filed. (Approval Mot. at 10.) Where "the overwhelming majority of the class willingly approved the offer and stayed in the class," there is "at least some objective positive commentary as to its fairness." Hanlon, 150 F.3d at 1027. The Court finds that the overall positive reaction to the settlement weighs in favor of approval.
i. Whether the Settlement Appears Non-collusive
As the Court noted in the Preliminary Approval Order, this settlement was reached with the help of a neutral mediator, after an arm's-length mediation session. (Approval Order at 16.) Settlements reached with the help of a mediator are likely non-collusive. Satchell v. Fed. Express Corp., 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) ("The assistance of an experienced mediator in the settlement process confirms that the settlement is non-collusive."). The parties have presented no reason for the Court to reconsider its previous finding that this settlement was the product of arm's-length negotiations, and accordingly, the Court finds this factor weighs in favor of approval.
When the Torrisi factors are balanced here, the majority of the relevant factors favor settlement, or are neutral at worst. Consequently, the Court finds the Settlement Agreement to be fair, reasonable, and adequate.
2. Approval of the Notice Procedures
Rule 23 requires the court to direct to Class Members "the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." Fed. R. Civ. P. 23(c)(2)(B). In addition, Rule 23(e)(1) requires the court to "direct notice in a reasonable manner to all class members who would be bound by the proposal." The notice must explain in easily understood language the nature of the action, definition of the class, class claims, issues and defenses, ability to appear through individual counsel, procedure to request exclusion, and binding nature of a class judgment. Fed. R. Civ. P. 23(c)(2)(B). Plaintiff must provide notice to potential opt-in class members that is "timely, accurate, and informative." See Hoffmann-La Rouche Inc. v. Sperling, 493 U.S. 165, 172 (1989). Likewise, claim forms must be informative and accurate. Id. at 172; Churchill Village, L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (notice is satisfactory if it "generally describes the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard").
The Court previously accepted the proposed Notice and Claim form, finding that "[t]he Notice explains in plain language what the case is about, what the recipient is entitled to, and what the Class Member must do next in order to make a claim," and "the Claim Form is similarly simple." (Approval Order at 21.) The Court now evaluates whether the parties executed class notice in accordance with the Court's Preliminary Approval Order.
According to Caroline Lowman, an employee of the Settlement Administrator, the Notice was disseminated in conformity with the Court's Preliminary Approval Order. (See Lowman Decl. ¶¶ 3-16.)
Given the representations made by the Settlement Administrator that the Notice was disseminated in accordance with the Court's previous order and the number of Class Members who have responded to the Notice, the Court finds that the Notice was reasonable as to its content and the method of communication.
As the terms of the Settlement Agreement were fair, reasonable, and adequate, and because the procedures for dissemination of the Class Notice were reasonable, the Court finds that the Settlement Agreement should be approved. B. Attorneys' Fees, Costs, Settlement Administration Costs, and Incentive Payments
The Preliminary Approval Order approved allocation of settlement funds for attorneys' fees, costs, incentive award payments, and settlement administrative expenses. As noted above, Class Counsel filed a separate motion (the Fee Mot.) requesting final approval of these expenditures. The Court addresses each in turn. Staton v. Boeing Co., 327 F.3d 938, 963 (9th Cir. 2003) ("[T]o avoid abdicating its responsibility to review the agreement for the protection of the class, a district court must carefully assess the reasonableness of a fee amount spelled out in a class action settlement agreement.").
1. Attorneys' Fees
Notwithstanding an explicit agreement to shift attorney's fees in a certified class action, "courts have an independent obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have already agreed to an amount." In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011).
The Settlement Agreement sets aside 30% of the Gross Settlement Amount ($60,000 of the $200,000 total fund); the Court previously stated that "such an award is within the range of the possible, but will require more 'justification' than is currently evident from the record before final approval . . . ." (Approval Order at 19.) The Court also stated that Class Counsel should submit "billing records in support of the proposed fee award, in the event the Court assesses the fee award under the lodestar method." (Id. at 20 n.10.)
Where the Court exercises its diversity jurisdiction, "state law governs both the right to recover attorney's fees and the computation of their amount." Collado v. Toyota Motor Sales, U.S.A., Inc., 550 F. App'x 368, 368 70 (9th Cir. 2013) (citing Mangold v. California Public Utilities Com'n, 67 F.3d 1470, 1478 (9th Cir. 1995)). Under California law, the lower courts have the discretion to determine what constitutes reasonable attorneys' fees. PLCM Grp. v. Drexler, 22 Cal.4th 1084, 1096 (2000) (internal citation omitted). "[T]he fee setting inquiry in California ordinarily begins with the "lodestar," i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate." Ctr. For Biological Diversity v. Cnty. of San Bernardino, 188 Cal. App. 4th 603, 616 (2010). "California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award." Id. (internal citation omitted).
Class Counsel has submitted detailed billing records along with the Fee Mot. Two attorneys, Aarin A. Zeif and Michael A. Gould, have expended 216.2 hours and 37.3 hours, respectively, prosecuting this action, for a total of 253.5 hours. (Gould Decl. ¶ 20; Declaration of Aarin A. Zeif ("Zeif Decl.") (Doc. No. 32-1) ¶ 8.) Ms. Zeif seeks an hourly rate of $450.00 per hour; in two previous actions, she has been approved for billing at that rate. (Zeif Decl. ¶ 7; Gould Decl. ¶ 21.) Mr. Gould seeks an hourly rate of $650.00 per hour; he has previously been approved for billing at $450.00 per hour along with Ms. Zeif, and has more than double Ms. Zeif's experience as an attorney. (Gould Decl. ¶ 21.)
Assuming Ms. Zeif and Mr. Gould billed their time at their requested rates, the lodestar total for their fees would be $121,535.00, calculated as (216.2 x $450.00) + (37.3 x $650.00). This is more than double the requested attorneys' fee award in this case.
The Court has reviewed the billing records submitted by Ms. Zeif and Mr. Gould (see Zeif Decl. Ex. 1; Gould Decl. Ex. 1), and though the Court would not be inclined to approve the hourly rate that Ms. Zeif and Mr. Gould request, given the amount of time they have expended in prosecuting this action, the Court finds that the amount of attorneys' fees requested in this case is reasonable.
2. Costs
The Court previously approved a reimbursement of up to $1,500.00 in litigation costs for Class Counsel. (Approval Order at 4; Fee Mot. at 4.) Costs are provided under the California Labor Code for reasonable fees and costs. (Fee Mot. at 7 (citing California Labor Code § 1194(a)).) Class Counsel only request reimbursement of $750.47, for which they have submitted an accounting. (Fee Mot. at 1, 15; Gould Decl. Ex. 2.) The Court finds these costs to be reasonable.
3. Incentive Award
Class Counsel previously requested, and the Court preliminarily approved, an incentive award of $5,000 for Barbosa as a named Plaintiff. (Approval Order at 20.) "[N]amed plaintiffs, as opposed to designated class members who are not named plaintiffs, are eligible for reasonable incentive payments." Staton, 327 F.3d at 977. California courts also have noted that "[i]ncentive awards are fairly typical in class action cases," and "are discretionary . . . and are intended to compensate class representatives for work done on behalf of the class, to make up for financial or reputational risk undertaken in bringing the action, and, sometimes, to recognize their willingness to act as a private attorney general." In re Cellphone Fee Termination Cases, 186 Cal. App. 4th 1380, 1393-94 (2010), as modified (July 27, 2010) (internal citations and citation omitted). "An incentive award is appropriate "if it is necessary to induce an individual to participate in the suit." Id. at 1394 (some quotation marks and citation omitted).
In determining whether a proposed incentive award is appropriate, courts may consider
1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack
thereof) enjoyed by the class representative as a result of the litigation.Id. (quoting Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995) (internal citation omitted)). "Courts have generally found that $5,000 incentive payments are reasonable." Alberto v. GMRI, Inc., 252 F.R.D. 652, 669 (E.D. Cal. 2008); see also Munoz v. BCI Coca Cola Bottling Co. of Los Angeles, 186 Cal. App. 4th 399, 412 (2010) (approving $5,000 incentive payment); Clark v. Am. Residential Servs. LLC, 175 Cal. App. 4th 785, 806 (2009) (citing with approval the allocation of a $5,000 incentive award to the plaintiff in In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454 at 456-57)).
Along with the Approval Mot., Barbosa submitted a declaration explaining the work she has done in this case from its inception to the parties' assent to the Settlement Agreement. (See Declaration of Diana Barbosa (Doc. No. 32-4).) After reviewing this declaration, the Court agrees that a $5,000 incentive payment payable to Barbosa is reasonable.
4. Settlement Administration Costs
The Court previously approved of the appointment of Class Action Claims Administration, Inc., to serve as the Settlement Administrator. (Approval Order at 21.) The Court also approved of a settlement administration fee of $5,500. (Id. at 5.) An employee for the Settlement Administrator explained in her declaration exactly how its costs were accrued, e.g., labor, printing, mailing costs, and tax expertise. (Lowman Decl. ¶ 8.) As the Court previously approved of $5,500 in administration costs and those costs have not changed, the Court approves of those costs as part of the final approval of the Settlement Agreement.
As all the fees and costs as noted in the Approval Mot. and the Fee Mot. are fair, reasonable, and supported by the supplied evidence, the Court GRANTS the Fee Mot.
IV. CONCLUSION
For the reasons stated above, the COURT APPROVES the settlement terms and GRANTS the Motion for Final Approval of Class Action Settlement, with the change agreed to by the parties that the Family-Sustaining Employment Foundation of the United Way shall be entitled to any cy pres award. Moreover, the Court GRANTS the Motion for Attorney Fees, Costs, Incentive Awards, and Settlement Administration Costs. Dated: May 1, 2015
/s/_________
VIRGINIA A. PHILLIPS
United States District Judge