ORDER RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND MOTION FOR ATTORNEYS’ FEES, EXPENSES, AND INCENTIVE AWARD
Re: Dkt. Nos. 77, 80
In this pre-certification wage and hour class action dispute, Plaintiff Patrick Bellin-ghausen (“Plaintiff’) alleges that, among other things, Defendant Tractor Supply Company (“Defendant”) failed to implement legally compliant meal and rest period policies. On November 26, 2014, the Court issued an Order granting the parties’ joint Motion for Preliminary Approval of Class Action Settlement. (Dkt. No. 72.) Now pending before the Court are Plaintiffs motion for final approval of a class action settlement (Dkt. No. 80), and Plaintiffs unopposed motion for attorneys’ fees, costs, and collective incentive award (Dkt. No. 77). Defendant does not oppose the motions. The Court held a fair
BACKGROUND
Plaintiff, a California citizen, worked for Defendant, a Delaware corporation, in an hourly position as retail-store clerk from approximately April 2010 to January 2013. (Dkt. No. 46 ¶ 2.) Plaintiffs Third Amended Complaint (“TAC”) includes seven causes of action: 1) Failure to Provide Meal Periods (California Labor Code §§ 204, 223, 226.7, 512, and 1198); 2) Failure to Provide Rest Periods (California Labor Code §§ 204, 223, 226.7, and 1198); 3) Failure to Pay Hourly and Overtime Wages (California Labor Code §§ 223, 510,1194,1197, and 1198); 4) Failure to Provide Accurate Wage Statements (California Labor Code § 226); 5) Failure to Timely Pay Ml Final Wages (California Labor Code §§ 201-203); 6) Unfair Competition (California Business and Professions Code §§ 17200, et seq.); and 7) Civil Penalties (California Labor Code §§ 2698, et seq.). (Dkt. No. 46.)
Plaintiff filed his original complaint in Mameda County Superior Court on April 25, 2013. Defendant removed the ease to federal court approximately one month later, asserting jurisdiction under the Class Action Fairness Act. Plaintiff subsequently filed a First Amended Complaint, which this Court dismissed with leave to amend for failure to state a claim under Rule 12(b)(6). (Dkt. No. 32.) The Court then dismissed Plaintiffs Second Amended Complaint under Rule 12(b)(6). (Dkt. No. 44.) Defendant’s subsequent motion to dismiss Plaintiffs TAC was denied, and Defendant answered the TAC on February 18, 2014.
On November 20, 2014, the Court held a hearing on the parties’ joint motion for preliminary approval of their settlement agreement. (Dkt. No. 72.) At that hearing, the Court directed the parties to submit a revised notice of settlement, revised proposed order, and a stipulation regarding these revisions. The parties timely filed these materials, which all ensured that class members were notified that they could object not only to the settlement, but also—or only—to the request for attorneys’ fees, costs, and the enhancement award sought for the named plaintiff. (See Dkt. No. 73.) On November 26, 2014, the Court granted preliminary approval of the Settlement. (Dkt. No. 74.) In accordance with the order granting preliminary approval, Plaintiff filed his motion for attorneys’ fees, costs, and a representative incentive award on January 16, 2015. (Dkt. No. 77.) Having completed the notice process as set forth in the preliminary approval order, Plaintiff filed a motion for final approval on February 19, 2015. (Dkt. No. 80.) The Court held a hearing on the motions on March 19,2015.
SETTLEMENT PROPOSAL
On April 2, 2014, the parties participated in a full day of mediation with Susan Halde-man. “Both parties prepared detailed mediation briefs, and through the use of experts the parties developed models for estimating Defendant’s potential liability exposure in this action on a class-wide basis.” (Dkt. No. 69-1 ¶ 9.) Mso in anticipation of mediation, Defendant produced “hundreds of pages of documents.” (Id. ¶ 8.) “These documents included, among other things, policies relating to meal and rest periods, payroll, time keeping, vacation pay, and Plaintiffs personnel file. Defendant also produced more than one million lines of payroll data.” (Id.) In the weeks that followed the mediation, the parties—with the continued assistance of the mediator—continued engaging in their “arm’s length” negotiations and ultimately agreed to the settlement now before the Court. (Id. ¶ 10.)
The parties’ proposed settlement agreement as it existed prior to the final approval hearing provides a settlement fund of $1,000,000. Reduced from that fund are (1) attorneys’ fees up to 30 percent of the fund
DISCUSSION
Judicial policy strongly favors settlement of class actions. Class Plaintiffs v. City of Seattle,
I. Motion for Final Approval of Class Action Settlement
A. Final Class Certification of the Settlement Class
1. Rule 23(a) Requirements
Class actions must meet the following requirements prior to certification:
1) the class is so numerous that joinder of all members is impracticable; 2) there are questions of law or fact common to the class; 3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and 4) the representative parties will fairly and adequacy protect the interests of the class.
Fed.R.Civ.P. 23(a). These requirements are known as numerosity, commonality, typicality, and adequacy of representation, respectively. Leyva v. Medline Industries Inc.,
In the Court’s Order granting preliminary approval of the settlement, the Court found that the putative class satisfied the numerosity, commonality, typicality, and adequacy of representation requirements of Rule 23(a). The Court is unaware of any changes that would alter its analysis, and the parties did not indicate either in their papers or at the fairness hearing that any such developments had occurred. (See Dkt. No. 80-1 ¶ 11.) Thus, the Court concludes that all four of Rule 23(a)’s requirements have been met.
2. Rule 23(b) Requirements
In addition to meeting the requirements of Rule 23(a), a potential class must also meet one of the conditions outlined in Rule 23(b)— of relevance here, the condition that “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R.Civ.P. 23(b)(3). In evaluating the proposed class, “pertinent” matters include:
(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed.R.Civ.P. 23(b)(3). In its Order granting preliminary approval of the settlement, the Court found that both prerequisites of Rule 23(b)(3) were satisfied. (Dkt. No. 74 at 7-8.) The Court is unaware of any changes that would alter its analysis, and that parties did not indicate either in their papers or at the fgirness hearing that any such developments had occurred. (See Dkt. No. 80-1 ¶ 11.) There were no objections by individual class members who claim to have an interest in controlling the prosecution of this action or related actions.
3. Rule 23(c)(2) Notice Requirements
Finally, if the Court certifies a class under Rule 23(b)(3), it “must 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). Rule 23(c)(2) governs both the form and content of a proposed notice. See Ravens v. Iftikar,
As the settlement agreement provides, the settlement administrator, Rust Consulting, mailed notice of the settlement to the last known address of all 1,318 class members contained on the class list on December 17, 2014. (Dkt. No. 77-8 ¶ 11; see Dkt. No. 69-2 ¶¶ 1.2 (establishing Rust Consulting as settlement administrator), 5.1-5.11 (setting forth notice requirements and procedures).) Notice for 99 class members were returned as undeliverable, though 51 of those class members received notice by email. (Dkt. No. 80-2 ¶ 2.) In any event, the settlement administrator received updated addresses for three of the 99 undeliverable class notices and performed “skip traces” to determine updated addresses for the remaining 96. (Id.) The settlement administrator identified more current addresses for 83 of
Likewise, the notice itself clearly identifies the options available to putative class members—do nothing; object to the terms of the settlement, the scope of attorneys’ fees, and/or the amount of the enhancement incentive award for the named Plaintiff; or opt out—and also thoroughly explained the nature and mechanics of settlement. (See Dkt. No. 73-1.) The content of the notice is therefore sufficient to satisfy Rule 23(c)(2)(B). See Churchill Vill., L.L.C. v. Gen. Elec.,
Because the settlement class satisfies Rules 23(a) and 23(b)(3), and notice was sufficient in accordance with Rule 23(e), the Court will grant final class certification.
B. Approval of the Settlement
Having determined that class treatment is warranted, the Court now addresses whether the terms of the parties’ settlement appears fair, adequate, and reasonable under Rule 23(e). In making this determination, a court typically considers the following factors initially set forth in Churchill Village, L.L.C. v. General Electric,
But in Bluetooth, the Ninth Circuit explained that when “a settlement agreement is negotiated prior to formal class certification, consideration of these eight ... factors alone is” insufficient. Id. In these cases, courts must show not only a comprehensive analysis of the above factors, but also that the settlement did not result from collusion among the parties. Id. at 947. Because collusion “may not always be evident on the face of settlement, ... [courts] must be particularly vigilant not only for explicit collusion, but also for more subtle signs that class counsel have allowed pursuit of their own self-interest and that of certain class members to infect the negotiations.” Id. The court identified three such signs:
(1) when class counsel receives a disproportionate distribution of the settlement, or when the class receives no monetary distribution but counsel is amply awarded^]
(2) when the parties negotiate a “clear sailing” arrangement providing for the payment of attorneys’ fees separate and apart from class funds without objection by the defendant (which carries the potential of enabling a defendant to pay class counsel excessive fees and costs in exchange for-counsel accepting an unfair settlement on behalf of the class[;] and
(3) when the parties arrange for fees not awarded to revert to defendants rather than to be added to the class fund.
Id. (internal quotation marks and citations omitted). For the reasons stated below, on balance a review of these factors indicates that this Settlement is fair, adequate, and reasonable.
1. The Churchill Factors
a. Strength of Plaintiffs Case and the Risk, Expense, Complexity, and Likely Duration of Further Litigation
One important consideration is the strength of the plaintiffs ease on the merits
Here, the class action Third Amended Complaint (“TAC”) alleged that Defendant failed to pay the named Plaintiff and the entire class for vested vacation time, failed to provide them with meal or rest periods, failed to pay premium wages for unprovided meal and rest periods, failed to pay at least minimum wages for all hours worked, failed to pay overtime wages in part by failing to include all applicable remuneration in calculating the regular rate of pay, failed to provide accurate written wage statements, and failed to pay the total sum of final wages following separation from employment in violation of various California Labor Code provisions. (Dkt. No. 58 ¶1.) While Plaintiff believes his claims are meritorious, he concedes that recovery might be precluded based on successful affirmative defenses and the possibility that good faith disputes as to the viability of the claims could preclude penalty awards under California law. (Dkt. No. 80-1 ¶ 14 14.) Moreover, Plaintiff concedes that the class would face significant hurdles if this ease were to proceed to litigation of the merits, such as questions about the viability of affirmative defenses, the possible unavailability of penalty awards; and the risk of appeal further delaying Plaintiffs’ awards. (See Dkt. No. 80-1 ¶ 14.) And indeed, Defendant challenged both the propriety of maintaining this lawsuit as a class action and the sufficiency of each of seven causes of action, and also asserted no fewer than 29 affirmative defenses. (Dkt. No. 58 at 23-31.) This posture demonstrates a significant risk that litigation might result in a lesser recover for the class or no recovery at all.
In light of the risks and costs of continued litigation, the immediate rewards to class members are preferable. Specifically, each class member is offered a pro rata share of the net settlement consideration based on the number of hours he worked as set forth in Defendant’s payroll records. (Dkt. No. 69-2 ¶4.4.) The average amount of recovery is just north of $454.48. (See Dkt. No. 80 at 15.) The settlement administrator must make disbursements to the entire class within 20 days of the Court’s final approval order. (Id. ¶ 8.2.) Although Plaintiffs might have received more if they proceeded through litigation and prevailed on the merits of their case, as Plaintiff points out, a large portion of the potential recovery would be penalty payments only 25 percent of which would revert to the class; thus, the value of proceeding through litigation is not as high. Moreover, the benefit of receiving this money sooner rather than later has its own value.
Given the challenges Plaintiffs would face should this ease move forward instead of resolving, in contrast to the finality and speed of recovery under the parties’ agreement, this factor weighs in favor of approving the Settlement.
b. Risk of Maintaining Class Action Status Throughout Trial
In considering the third factor, the Court looks to the risk of maintaining class certification if the litigation were to proceed. Although the parties agree that certification for the purposes of this settlement is appropri
c. Amount Offered in Settlement
The fourth fairness factor, the amount of recovery offered, also favors final approval of the Settlement. When considering the fairness and adequacy of the amount offered in settlement, “it is the complete package taken as a whole, rather than the individual component parts, that must be examined for overall fairness.” DIRECTV,
Here, the parties have agreed that Defendant will establish a settlement fund in the amount of $1,000,000. (Dkt. No. 69-2 ¶ 4.1.) In the Order granting preliminary approval, the Court noted that the parties, their experts, and their private mediator estimated Defendant’s potential liability to be between $8,739,868 and $11,565,677 for all of the claims, and therefore the settlement fund equals between approximately 27 percent and nine percent of Defendant’s total potential liability exposure before deductions. While the Court determined that these percentages were potentially fair enough for preliminary approval, it expressed concern that they may be inaccurate for failure to include Plaintiffs’ potential award of statutory attorneys’ fees on certain claims. Thus, the Court directed the parties to include their estimation for the recovery of potential statutory fees and costs along with potential recovery of monetary damages. The parties have done so: including potential attorneys’ fees and costs as calculated in Plaintiffs motion for attorneys’ fees, Defendant’s potential liability increases to between $3,930,540 and $11,756,349. (See Dkt. No. 80-1 ¶ 13.) Thus, the agreed-upon $1,000,000 settlement fund represents between 25.4 percent and 8.5 percent of Defendant’s total potential liability exposure.
Notably, a substantial portion of Defendant’s total potential liability exposure would not translate into awards to class members at all. Between $50,000 and $3,000,000 of the estimated potential liability is comprised of PAGA penalties, but these large penalties do not necessarily translate into take-home awards for members of the class for two reasons. First, the penalties themselves, and their amount, are discretionary. See Cal. Lab.Code § 2699(e)(2). Moreover, even if the full amount were awarded, by law only 25 percent of such penalties can revert to class members, while the remaining 75 percent would be appropriated to the state Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights under state law. See Cal. Lab.Code § 2699®. Thus, between $37,500 and $2,250,000 of the estimated potential liability exposure would not revert to class members. Keeping these reductions in mind, the class would only stand to receive between $3,702,368 and $9,315,677.
This is particularly trae given that here, of the 1,315 class members who received notice of the settlement, no objector has stepped forward to contest the amount offered and just nine opted out of the settlement. (See Dkt. No. 80-2 ¶¶ 5, 7.) That “the overwhelming majority of the class willingly approved the offer and stayed in the class
d. Extent of Discovery Completed & the Stage of the Proceedings
In the context of class action settlements, as long as the parties have sufficient information to make an informed decision about settlement, “formal discovery is not a necessary ticket to the bargaining table.” Linney v. Cellular Alaska P’ship,
Here, the parties have litigated several motions to dismiss. In addition, the parties conducted substantial formal and informal discovery in connection with that litigation and to prepare for mediation. (Dkt. No. 80-1 ¶¶7-8.) This discovery involved the exchange of information and documents about the claims alleged and Defendant’s defenses. (Id. ¶ 7.) In particular, Defendant produced—and Plaintiff analyzed—hundreds of pages of documents, including “policies relating to meal and rest periods, payroll, time keeping, vacation pay, and Plaintiffs personnel file” along with more than one million lines of payroll data to develop models for estimating Defendant’s potential liability exposure. (Id.)
After having had the benefit of this discovery, both sides prepared detailed mediation briefs and—with the use of experts—developed models for estimating Defendant’s potential liability exposure. (Id. ¶ 8.) The parties participated in a full day mediation session in Los Angeles with Susan Halde-man, whom plaintiffs counsel explains is “a highly respected mediator with extensive experience in wage and hour class action matters[.]” (Id. ¶ 8.) Although the parties did not reach a resolution during that full-day session, they continued to negotiate with the mediator’s assistance for several weeks and eventually arrived at the settlement agreement before the Court with the benefit of a mediator’s proposal. In wage-and-hour cases where, as here, the parties have engaged in discovery, participated in mediation, and relied a mediator’s proposal in reaching a settlement, courts have found settlement appropriate. See, e.g., Ontiveros,
The Court therefore finds that the extent of discovery in this case favors approval of the Settlement.
e. Experience and Views of Counsel
The experience and views of counsel also weigh in favor of approving the settlement. Class counsel and counsel for Defendant have substantial experience in class action wage and hour litigation. In particular, Plaintiffs counsel has litigated numerous wage-and-hour class action cases—including in actions alleging failure to provide meal and/or rest periods, and failure to pay wages, provide accurate wage statements, or final wage payments, as here—and is experienced in the field. (Dkt. No. 77-1 ¶¶ 4-5; see also Dkt. No. 69-1 ¶¶ 19-20.) Class counsel believes the settlement properly balances the monetary exposure that the class stands to gain with the magnitude of risk of continued litigation—at bottom, that the settlement is fair, adequate and reasonable. (Dkt. No. 80-1 ¶ 14; see also Dkt. No. 80 at 15 (“Class Counsel is [ ] of the opinion that the Settlement represents an excellent bargain for the class, given the inherent risks, hazards, and expenses of carrying the ease through trial.”).) Given counsel’s experience in this field, his assertion that the settlement is fair, adequate, and reasonable support final approval of the settlement. See Hanlon,
Although no government entity is a party to this action, the United States Attorney General, as well as the Attorneys General for the relevant states, were notified of the settlement pursuant to the notice provision of the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1715. (See Dkt. No. 80-3 ¶2 & Exs. 1 & 2.) “Although CAFA does not create an affirmative duty for either state or federal officials to take any action in response to a class action settlement, CAFA presumes that, once put on notice, state or federal officials will raise any concerns that they may have during the normal course of the class action settlement procedures. Garner, 2010 WL 1687832, at *14. To date, no state or federal official has raised any objection or concern regarding the settlement.
g. Reaction of the Class Members
The settlement administrator identified 1,318 participating class members and ultimately reported only four of the notices as undeliverable because it was unable to find a new correct address. (Dkt. No. 80-2 ¶2.) As of this date, the Court is not aware of a single class member who has filed an objection to the settlement as a whole, to the award. (Id. ¶ 7.) Nine class members opted out (although one exclusion form was not signed). (Id. ¶ 5.) Eleven class members have already initiated the process set forth in the settlement agreement to dispute the parties’ determination of the number of compensable hours worked during the class period by submitting a settlement allocation form. (Id. ¶ 4; see also Dkt. No. 69-2 ¶ 5.7 (describing the procedure for disputes regarding compensable hours).) “Courts have repeatedly recognized that the absence of a large number of objections to a proposed class action settlement raises a strong presumption that the terms of the proposed class settlement action are favorable to the class members.” Garner,
2. The Bluetooth Factors
Given that this settlement was reached prior to class certification, the Court must look beyond the Churchill factors and examine the settlement for evidence of collusion with an even higher level of scrutiny. See Bluetooth,
First, the Court compares the payout to the class (actual and expected) to the unopposed claim of fees by class counsel. See Harris v. Vector Mktg. Corp., No. C-08-5198 EMC,
In addition, the second warning sign—a “clear sailing” provision—is present here: the settlement agreement includes a provision whereby Defendant will not object to Plaintiffs request for fees up to $300,000. (See Dkt. No. 69-2 ¶ 9.1.) “The very existence of a clear sailing provision increases the likelihood that class counsel will have bargained away something of value to the class.” Bluetooth,
The third warning sign—whether the parties have arranged for fees not awarded to the class to revert to defendants rather than be added to the class fund, see Bluetooth,
Notwithstanding the existence of two of the three warning signs, the Court finds that the settlement did not result from, nor was influenced by, collusion. First, the settlement adequately satisfies the class members’ claims, which is reflected at least in part by the complete absence of objections to the settlement. Moreover, the Court finds no evidence of explicit collusion here, where, after litigating several rounds of motions to dismiss, the parties engaged in settlement talks overseen by a neutral mediator for several weeks before agreeing on this settlement. Counsel has asserted that “[a]t all times, the [parties’ negotiations were adver-saria], non-collusive, and at arm’s length.” (Dkt. No. 80-1 ¶ 10.) Considering the scope of litigation and the nature of the negotiations process, the Court is satisfied that the settlement is the product of successful arms-length negotiations. See Bluetooth,
* * *
The eight fairness factors suggest that the settlement is fair, adequate and reasonable, the Court is satisfied that the settlement was not the result of collusion between the parties, and there are no objections to address. For each of these reasons, the settlement agreement passes muster under Rule 23(e) and final approval is appropriate.
II. Motion for Attorneys’ Fees, Reimbursement of Costs, and Enhancement Fee
Next, the Court must determine whether the requested attorneys’ fees and expenses, the settlement administrator cost, and the class representative’s incentive award and enhancement are fair and reasonable. For the reasons set forth below, the Court will award the full amount of attorneys’ fees, litigation costs, and administration costs sought, but will reduce the amount of incentive award that Plaintiff seeks.
A. Attorneys ’ Fee Award
When a negotiated class action settlement includes an award of attorneys’ fees, the fee award must be evaluated in the overall context of the settlement. Knisley v. Network Assocs.,
The Ninth Circuit has approved two methods of determining attorneys’ fees in cases where, as here, the amount of the attorneys’ fee award is taken from the com
Under the percentage of the fund method, the court may award class counsel a given percentage of the common fund recovered for the class. Id. “The percentage method is particularly appropriate in common fund eases[ ] where ‘the benefit to the class is easily quantified.’” Ontiveros,
In contrast to the benchmark method, determining the lodestar amount is “often more time-consuming[.]” Bluetooth,
Because this ease involves a common settlement fund with an easily quantifiable benefit to the class, the Court will primarily determine attorneys’ fees using the benchmark method but will incorporate a lodestar cross-check to ensure the reasonableness of the award. See Vizcaino,
1. Reasonableness of the Percentage
As stated above, the Ninth Circuit has consistently approved a “benchmark” award of 25 percent of the common fund. Bluetooth,
Class counsel argues that an award of 25 percent of the common fund is appropriate here given “the contingent nature of the litigation, the uncertainty surrounding many of the legal issues involved, the results achieved, the experience of Plaintiffs counsel, the parties’ agreement on the issue of attorneys’ fees, and the qualifications of opposing counsel.” (Dkt. No. 77 at 16.)
With respect to the contingent nature of litigation, courts tend to find above-market-value fee awards more appropriate in this context given the need to encourage counsel to take on contingency-fee cases for plaintiffs who otherwise could not afford to pay hourly fees. See, e.g., In re WPPSS Sec. Litig.,
The results obtained and amount of work counsel performed on this case also support a benchmark 25 percent award of attorneys’ fees. See Hensley v. Eckerhart,
Finally, “[t]he existence or absence of objectors to the requested attorneys’ fee is a factor in determining the appropriate fee award.” In re Heritage Bond. Litig.,
In short, all of the above factors indicate that class counsel’s request for an attorneys’ fee award in the amount of 25 percent of the common fund—ie., $250,000—is reasonable. Nevertheless, the Court will cross-check the requested fees against the lodestar.
2. Lodestar Cross-Check
The Court now compares the benchmark amount to the lodestar, as calculation of this amount, “which measures the lawyers investment of time in the litigation, provides a cheek on the reasonableness of the percentage award.” Vizcaino,
“In determining the reasonable hourly rate, the district court should be guided by the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Chalmers v. City of Los Angeles,
“Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative ‘multiplier’ to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented.” Thayer v. Wells Fargo Bank, N.A.,
The Court will first determine whether the hourly fee rate that led to that lodestar amount is reasonable, then will address the number of hours billed. Then the Court will compare the lodestar amount to the percentage-amount sought to determine whether it is reasonable in light of the lodestar,
a. Reasonable Rate
“The first step in the lodestar analysis requires the court to determine a reasonable hourly rate for the fee applicant’s services. This determination involves examining the prevailing market rates in the community charged for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Cotton v. City of Eureka,
Here, class counsel seeks reimbursement for three attorneys with ranging levels of experience, all of whom work for Shaun Seta-reh’s law firm, and practice almost exclusively in wage-and-hour class actions: Mr. Seta-reh himself, who acquired his J.D. in 1999, at a rate of $650 per hour; Tuvia Korobkin, who acquired his J.D. in 2009, at a rate of $425 per hour; and Neil Larsen, who acquired [his] J.D. in 2011, at a rate of $375 per hour. (Dkt. No. 77 at 19; see also Dkt. No. 77-1 ¶ 16.) All three attorneys have asserted that their requested rates are reasonable based on rates recently awarded in wage- and-hour actions in the Central District of California. (See Dkt. No. 77 at 20 (collecting cases).)
Class counsel next argues that the requested rates for two of the attorneys—Mr. Seta-reh and Mr. Korobkin—is reasonable based on fee rates that prior courts have awarded them. A judge in Los Angeles Superior Court recently awarded Mr. Setareh fees at an hourly rate of $650 (Dkt. No. 77-1 at Ex. D), which is evidence of the reasonableness of that rate. See Cotton,
Class counsel next contends that these requested rates are reasonable based on the Laffey matrix. (See also Dkt. No 77-1 ¶ 17; No. 77-6 ¶ 8; Dkt. No. 77-7 ¶ 7.) The Laffey matrix is a compilation of attorney and para
has been regularly prepared and updated by the Civil Division of the United States Attorney’s Office for the District of Columbia and use in fee shifting eases, among others. The Laffey matrix is especially useful when the work to be evaluated was performed by a mix of senior, junior and mid-level attorneys, as well as legal assistants!]]
Theme Promotions, Inc. v. News Am. Mktg. FSI, Inc.,
In any event, class counsel insists the Laffey matrix rates are reasonable when adjusted upward to meet the. cost of living standards in the Central District of California (see Dkt. No. 77 at 19), but the district where the case was litigated, the Northern District of California—not the District of Columbia or the Central District of California—is the “relevant community” for purposes of determining whether a reasonable hourly rate.
The Court has conducted its own review, and found that other courts in this District have determined that rates ranging from $250 to $700 are appropriate in wage- and-hour class actions for attorneys with similar length of experience. See, e.g., Greko v. Diesel U.S.A., Inc., No. 10-cv-02576 NC,
Based on the fees regularly awarded in comparable actions in this district, and the fact that the three attorneys practice almost exclusively in the field of wage-and-hour class actions, the Court concludes that Mr. Setareh’s $650 requested rate is reasonable, Mr. Korobkin should be awarded fees at a rate of $400 per hour, and Mr. Larsen’s requested rate of $375 per hour is reasonable.
b. Reasonable Hours
Over the one year and nine months of this litigation, class counsel has billed 303 hours. {See Dkt. No. 77 at 22.) Class counsel defended multiple motions to dismiss and amended the complaint accordingly. Moreover, to approach the bargaining table in a properly informed position, class counsel reviewed hundreds of pages of documents and worked with experts to reach a model for determining Defendant’s ultimate exposure to liability. These tasks, unsurprisingly, took time.
The majority of hours were billed by Mr. Setareh, who is lead class counsel and has the most experience in wage-and-hour class actions. (See Dkt. No. 77 at 2; Dkt. No. 77-1 ¶ 4.) In his declaration, Mr. Setareh provides a long list of tasks that he did in this ease from start to finish, including interviewing Plaintiff and investigating his claims to determine which claims to bring, drafting the initial complaint, opposing multiple motions to dismiss and drafting amended complaints, propounding discovery and reviewing Defendant’s discovery responses, retaining and working with an expert economist to create a damages model, traveling to San Francisco to represent Plaintiff at court appearances, drafting a mediation brief, supervising his associates, communicating with Plaintiff over the course of the litigation, and drafting the instant motions for approval of settlement and fees. (Dkt. No. 77-1 ¶ 15.) Mr. Korobkin billed 72 hours on this case, consisting primarily of reviewing the case file and discovery, communicating with Plaintiff and co-counsel, and drafting the motions for approval and for attorneys’ fees and associated documents. (Dkt. No. 77-6 ¶4.) Mr. Larsen, for his part, billed 43 hours in this matter, which he spent reviewing the case file and discovery, communicating with co-counsel, and assisting in drafting the motions for approval of settlement and for attorneys’ fees and costs and associated documents. (Dkt. No. 77-7 ¶ 5.) Class counsel did not submit billing records to substantiate their assertions about the hours worked; rather, they have submitted only their sworn, written descriptions detailing the projects and tasks each lawyer completed. {See Dkt. Nos. 77-1 ¶ 15, 776 ¶ 4, 77-7 ¶ 5.) However, it is well established that “[t]he lodestar crosscheck calculation need entail neither mathematical precision nor bean counting ... [courts] may rely on summaries submitted by the attorneys and need not review actual billing records.” Covillo,
Here, applying the reasonable hourly fees that class counsel is seeking to the number of hours reasonably billed, class counsel’s lodestar calculation is $167,125. (See Dkt. No. 77 at 19.) After determining the lodestar, the Court divides the total fees sought by the lodestar to arrive at the multiplier. See Hopkins v. Stryker Sales Corp., No. 11-CV-02786-LHK,
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the ease, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the “undesirability” of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar eases.
Id. (citations omitted). “Multipliers of 1 to 4 are commonly found to be appropriate in complex class action cases.” Hopkins,
Here, based on the lodestar amount of $168,925, if the Court were to grant class counsel’s request for a 25 percent award, the multiplier would be 1.49. In light of the results of this action, the contingent nature of class counsel’s fee arrangement, and the skill required in conducting this litigation properly and succeeding at settlement, the Court believes that the 1.49 multiplier—at the low end of the Ninth Circuit’s scale—is appropriate. See Vizcaino,
B. Litigation Costs
“There is no doubt that an attorney who has created a common fund for the benefit of the class is entitled to reimbursement of reasonable litigation expenses from that fund.” Ontiveros,
C. Administration Costs
Plaintiff also requests reimbursement of $16,500 for the cost of paying Rust Consulting, Inc. to serve as claims administrator. (Dkt. No. 77 at 24.) From Plaintiffs perspective, this payment is appropriate because “[without Rust’s work on this case, Class members would not have received notice of the Settlement, nor would they receive their share of the Settlement proceeds.” (Id.) In support of this request, Plaintiff submitted the declaration of Stacy Roe, Rust’s Senior Project Administrator, who provides detailed descriptions of the work that Rust did in this case. (Dkt. No. 77-8.) Rust’s work included printing the Notice of Settlement and associated documents; setting up an address, phone and fax numbers, and website to be included in the notice; sending out the notice by mail and e-mail; performing skip-traces to obtain updated addresses for notices returned as undeliverable; receiving and maintaining settlement allocation forms or exclusion forms; and monitoring objections to the settlement. (See generally id.) According to, the total cost for the administration of the settlement, including fees and costs, is estimated to be $16,500. (Id. ¶ 19.) Courts regularly award administrative costs associated with providing notice to the class. See, e.g., Odrick,
D. Incentive Award
Plaintiff also requests that the Court approve an incentive payment in the amount of $15,000 to be awarded to Bellinghausen as named plaintiff, along with a $5,000 payment for releasing all claims against Defendant, (Dkt. No. 77 at 24.)
“Incentive awards are fairly typical in class action cases.” Rodriguez v. West Publ’g Corp.,
(1) the risk to the class representative in commencing a 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.
Covillo v. Specialtys Café, No. C-11-00594 DMR,
A class representative must justify an incentive award through “evidence demonstrating the quality of plaintiffs representative service,” such as “substantial efforts taken as class representative to justify the discrepancy between [his] award and those of the unnamed plaintiffs.” Alberto v. GMRI, Inc., 252 F.R.D. 652, 669 (E.D.Cal. 2008). In this district, a $5,000 payment is presumptively reasonable. See, e.g., Burden v. SelectQuote Ins. Servs., No. C 10-5966 LB,
Here, Plaintiff requests a $20,000 award—that is, a $15,000 incentive award coupled with a $5,000 payment for releasing all claims against Defendant. (See Dkt. No. 77 at 24; see also Dkt. No. 69-2 ¶¶ 9.2, 9.4.) This award is nearly four times the amount that is deemed presumptively reasonable in this District. See, e.g., Burden,
In support of his argument that this $20,000 award is appropriate, Plaintiff has submitted a declaration that outlines the work he has done on this case. (Dkt.79.) Plaintiffs declaration has addressed the factors the Court must consider in determining the reasonableness and appropriateness of an incentive award. See Covillo,
Having reviewed Plaintiffs declaration, the Court finds that a substantial incentive award is appropriate here in light of the time and effort Plaintiff expended for the benefit of the class—at times, to his own personal detriment—and the risks associated with initiating the litigation and representing the class. At the same time, the total settlement amount, at $1,000,000, does not justify the $20,000 that Plaintiff seeks. Cf. Glass,
CONCLUSION
For the reasons described above, the Court GRANTS Plaintiffs motion for final approval of the parties’ Settlement. In addition, the Court GRANTS IN PART Plaintiffs motion for attorneys’ fees, costs, and incentive award. Specifically, the Court awards the following costs: $250,000 in attorneys’ fees; $21,747.28 in litigation costs; $16,500 to the settlement administrator, Rust Consulting; and $15,000 to Plaintiff as class representative.
The Clerk is directed to close this ease.
This Order disposes of Docket Numbers 77 and 80.
IT IS SO ORDERED.
Notes
. Class counsel is only seeking 25 percent of the total settlement fund in attorneys' fees. (See Dkt. No. 80 at 9 n.2.)
. Class counsel is only seeking $21,747.28 in costs. (Dkt. No. 77-3.)
. The settlement agreement defines "compensa-ble hours” as "the actual number of hours worked by the Settlement Class member as a nonexempt employee in California during the Class Period.” (Dkt. No. 69-2 V 4.4) This number will be determined from Defendant’s payroll records, and, as explained below, class members will be able to dispute their assigned compensa-ble hours number.
. The Notice of Settlement directed class members who wished to object to file their objection with the Court and serve a copy of their objection on the parties’ attorneys. The claims administrator indicated that as of February 19, 2015, it had not received any objections. (Dkt. No. 80-2 ¶ 7.) There were no objections voiced at the hearing.
. Calculated as the total amount of potential liability exposure included statutory awards of attorneys’ fees less the 75 percent that state appropriation of potential PAGA penalties.
. There is an exception to the local forum rule. "[R]ates outside the forum may be used if local counsel was unavailable, either because they are unwilling or unable to perform because they lack the degree of experience, expertise, or specialization required to handle properly the case.” Bar-jon v. Dalton,