Cifuentes v. Ceva Logistics U.S., Inc.
3:16-cv-01957
S.D. Cal.
Oct 23, 2017

Background

  • Plaintiff William Cifuentes filed a putative class action alleging CEVA misclassified delivery drivers as independent contractors and violated California wage-and-hour laws (meal/rest breaks, unpaid wages/overtime, inaccurate wage statements, unreimbursed expenses) and the UCL.
  • Parties reached a settlement after mediation; court granted preliminary approval and authorized notice to a settlement class of individuals who made one or more deliveries for CEVA in California from August 3, 2012 to February 14, 2017. 65 unique class members were identified and notice was mailed (English/Spanish); no objections or opt-outs were received.
  • Settlement: CEVA to fund $1,750,000 common fund (plus employer payroll taxes). After deductions (administration, PAGA payment $87,500 with 75% to LWDA, 2% reserve, service award, attorneys’ fees/expenses), class members receive pro rata payments by weeks worked; no claims filing required; no reversion to defendant; remainder of reserve to cy pres (Legal Aid at Work).
  • Plaintiff sought $583,333 (33%) in attorneys’ fees, $9,996.90 in costs, and $7,500 service/incentive award for the class representative. Class counsel’s lodestar cross-check yielded roughly $195,000 (implying ~3x multiplier).
  • At final fairness hearing, no class member objected; court evaluated Rule 23 and Ninth Circuit settlement factors and found settlement fair, reasonable, and adequate.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether to certify the proposed settlement class under Rule 23(a) and (b)(3) Class is sufficiently numerous, has common questions (misclassification), typicality and adequacy satisfied; class action is superior and predominance met Not separately argued in detail in order; parties agreed to certification for settlement Court certified the settlement class (all who delivered for CEVA as ICs between Aug 3, 2012 and Feb 14, 2017)
Whether settlement is fair, reasonable, adequate under Rule 23(e) and Staton factors Settlement provides substantial, immediate recovery, avoids litigation risk/cost, negotiated at arm's-length after discovery/mediation CEVA supported settlement (avoids exposure and litigation costs) Court approved final settlement after weighing strength of case, risks, amount, discovery, counsel views, class reaction, and lack of collusion
Whether attorneys’ fees requested (33% of fund) are reasonable 33% is appropriate given results, contingency risk, and comparable awards; lodestar cross-check supports multiplier Implicit defense interest in reasonableness but accepted settlement fee cap Court approved $583,333 (33%), finding it reasonable and within accepted multiplier range after lodestar cross-check
Whether incentive award and costs are reasonable $7,500 incentive and ~$9,996.90 costs reasonable given representative’s participation and counsel’s expenses No objections; defendant did not contest Court approved $7,500 incentive and $9,996.90 in costs; ordered payments from settlement fund

Key Cases Cited

  • Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147 (1979) (typicality and commonality principles for class certification)
  • Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standards for class settlement approval and predominance)
  • Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (factors for evaluating fairness and adequacy of settlements)
  • Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (percentage-of-recovery and lodestar cross-check; multipliers discussion)
  • In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (encourages lodestar cross-check of percentage fee awards)
  • In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454 (9th Cir. 2000) (collusion inquiry in class settlements)
  • Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992) (judicial policy favoring settlements)
  • Linney v. Cellular Alaska P’ship, 151 F.3d 1234 (9th Cir. 1998) (early settlement can be appropriate where parties had enough information)
  • Valentino v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir. 1996) (class action superiority and efficiency rationale)
  • Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (when to adjust percentage benchmark; lodestar guidance)
  • Stanger v. China Elec. Motor, Inc., 812 F.3d 734 (9th Cir. 2016) (25% benchmark for common fund fee awards)
  • In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953 (9th Cir. 2009) (common proof supports predominance)
  • Gomez v. Rossi Concrete, Inc., 270 F.R.D. 579 (S.D. Cal. 2010) (numerosity guidance)
  • Norris-Wilson v. Delta-T Grp., Inc., 270 F.R.D. 596 (S.D. Cal. 2010) (misclassification commonality analysis)
  • Bee, Denning, Inc. v. Capital Alliance Grp., 310 F.R.D. 614 (S.D. Cal. 2015) (numerosity)
  • Abdeljalil v. Gen. Elec. Capital Corp., 306 F.R.D. 303 (S.D. Cal. 2015) (numerosity)
  • In re Infospace, Inc., 330 F. Supp. 2d 1203 (W.D. Wash. 2004) (lodestar multiplier ranges)
  • Vandervort v. Balboa Capital Corp., 8 F. Supp. 3d 1200 (C.D. Cal. 2014) (upholding 33% fee award as reasonable)
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