Case Information
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA AMADO HARO and ROCHELLE No. 1:21-cv-00239-KES-SKO ORTEGA, On Behalf of Themselves and
All Others Similarly Situated, ORDER GRANTING UNOPPOSED
MOTION FOR FINAL APPROVAL OF Plaintiff, CLASS ACTION SETTLEMENT v. ORDER GRANTING UNOPPOSED MOTION FOR ATTORNEY’S FEES AND WALMART, INC., COSTS AND FOR APPROVAL OF
SERVICE AWARD AND INDIVIDUAL Defendant. SETTLEMENT (Docs. 143, 149)
Pending before the Court is an unopposed motion for final approval of a class action settlement and unopposed motion for attorney’s fees and costs and for approval of service awards and individual settlements by Plaintiffs Amanda Haro and Rochelle Ortega. (Docs. 143, 149). For the reasons explained below, the Court grants final approval of the proposed class action settlement and grants in part the motion for attorney’s fees and costs and for approval of service award and individual settlement. [1]
I. BACKGROUND The Court previously summarized Plaintiff’s allegations in its March 18, 2024, order granting Plaintiffs’ motion for preliminary approval of a class action settlement and conditional class certification, (Doc. 135), and will not repeat the factual background in this order. Following the grant of preliminary approval in this action, Plaintiff filed a Motion for Attorney Fees, Litigation Costs, and Service Awards to the Named Plaintiffs (Doc. 143) on May 28, 2024. Plaintiff filed a Motion for Final Approval of Class Action Settlement (Doc. 149) on July 31, 2024. In support of the motions, Plaintiffs have submitted declarations from themselves, class counsel, and the settlement administrator in this action. (Docs. 149-2, 3, 4, 5). Defendant has not opposed either motion. ( See Docket).
Under the proposed settlement, Defendant will pay a total of $5,200,000 (the “Gross Settlement Amount” or “GSA”). (Doc. 149 at 10). Defendant will also pay the employer’s share of the applicable payroll taxes. ( Id. ). Assuming the parties’ proposed allocations are awarded in full, approximately $2,715,066.13 [2] (the “Net Settlement Amount” or “NSA”) will be available for distribution to Class Members to be divided based on their dates of employment and weeks worked. ( See Doc. 149 at 10).
II. FINAL CERTIFICATION OF SETTLEMENT CLASS
The Court examined the class action factors in the order granting preliminary approval of
the settlement and found the factors warranted certification. (Doc. 135 at 10–16). The Court’s
findings on these issues have not changed, and no objections to class certification were raised.
Accordingly, the Court will not repeat the analysis on these issues here.
See, e.g., Harris v. Vector
Marketing
, No. C–08–5198 EMC,
The Court hereby confirms its prior order and certifies three types of class members: (1) the California Class Members, (2) the FLSA Class Members, and (3) the Dual Class Members, who are a member of both the California Class and the FLSA Class. [3] ( See Doc. 127-1 at 12–13). In addition, for the reasons stated in the Court’s previous order, Plaintiffs Amanda Haro and Rochelle Ortega are confirmed as class representatives, Don Foty of Hodges & Foty, LLP is confirmed as class counsel; and Rust Consulting, Inc. (“Rust”), is confirmed as the settlement administrator.
III. FINAL APPROVAL OF CLASS ACTION SETTLEMENT Class actions require the district court’s approval prior to settlement. Fed R. Civ. P 23(e).
To approve a settlement, a district court must: (i) ensure notice is sent to all class members; (ii) hold a hearing and make a finding that the settlement is fair, reasonable, and adequate; (iii) confirm that the parties seeking approval file a statement identifying the settlement agreement; and (iv) be shown that class members were given an opportunity to object. Fed. R. Civ. P. 23(e)(1)–(5). The parties filed the settlement agreement on December 15, 2023, (Doc. 127-1), and Class Members were given an opportunity to object on or before June 20, 2024. (Doc. 135 at 25). Neither Rust nor the Court received any objections, timely or otherwise, to the settlement. ( See Docket; Doc. 149 at 27). The Court now turns to the adequacy of notice and its review of the settlement.
A. Notice
Adequate notice of the class settlement must be provided under Rule 23(e).
Hanlon v.
Chrysler Corp.
,
The Court previously reviewed the notice provided in this case at the preliminary approval stage and found it to be satisfactory. (Doc. 135 at 21–22). Following the grant of preliminary approval, class counsel engaged Rust to provide the necessary notification services to administer the settlement, including “a) preparing, printing and mailing of the Notice of Class Action and Fair Labor Standards Act Settlement (‘Notice’) and Opt-In Form (‘Opt-in Form’), (collectively known as the ‘Class Notice’); b) receiving and reviewing Opt-in Forms; c) tracking of exclusions and objections; d) drafting and mailing Settlement Award checks; e) arrang[ing] for the creation and maintenance of a publicly available website; and f) for such other tasks as the Parties mutually agree or the Court orders Rust to perform.” (Doc. 149-3 at 2-3).
To effectuate Defendant’s notice requirement, Rust obtained the website www.HaroWalmartSettlement.com. ( Id. ). The website included the Class Notice, the Order and Settlement Agreement, additional information about the Settlement, and the option to submit an Opt-in Form. (Doc. 149-3 at 2). The website went live on June 3, 2024. ( Id. ).
On June 3, 2024, Rust, on behalf of Defendant, sent Class Notices to 75,657 Class Members via First Class Mail. ( Id. ). The notice advised Class Members they could submit a claim for, exclusion or objection, postmarked by August 2, 2024. ( Id. ). That day, Rust also sent Class Notices via email to 145,735 Class Members whose email addresses were contained in the Class List. These notices also advised Class Members they could submit a claim for, exclusion or objection, postmarked by August 2, 2024. ( Id. ). Rust sent 221,393 Class Notices to Class Members. ( Id. ).
The Class Notice notified recipients that to opt-out of the settlement, they must affirmatively do so by submitting a timely and valid Request for Exclusion to the Settlement Administrator. (Doc. 149-1 at 38). The Class Noticed provided that :
The Request for Exclusion must: (i) set forth the Class Member’s name, mailing address, telephone number, email address, and Walmart identification number (WIN) or last four digits of the Class Member’s Social Security Number; (ii) be signed by the Class Member (if sent via a written request) and reference the Action by name, case number, or other information sufficient to unambiguously identify the Action; (iii) clearly state that the Class Member does not wish to be included in the California Class or FLSA Class; (iv) be returned to the Settlement Administrator; and (v) be received or postmarked on or before the deadline Id . With regard to objections, the notice provided that:
If you do not request exclusion from the Settlement but believe the proposed Settlement is unfair or inadequate in any respect, you may object to the Settlement. To object to the Settlement (“Objection”), a Class Member must sign and file a written Objection to the Settlement by either (a) sending it to the Court with a postmark on or before the deadline of [], or (b) filing it with the Court on or before the deadline of []. In order for the Objection to be valid, the Objection must: (a) include the objector’s full name, address, email address, and telephone number; (b) be signed by the Class Member; (c) reference the Action by name, case number, or other information sufficient to unambiguously identify the Action; (d) state all grounds for the Objection, including without limitation, demonstrating standing to object (i.e. membership in the Settlement Class); state whether the Class Member or their lawyer intends to appear at the Final Approval Hearing; and include any written material on which their objection is based or on which they intend to rely; (e) either be mailed to the Court with a postmark on or before the Response Deadline or filed with the Court on or before the Response Deadline; and (f) be sent to the Settlement Administrator with a postmark on or before the Response Deadline. The postmark or filing date of the Objection, whichever is earlier, will be deemed the exclusive means for determining that the Objection is timely. The Parties have the right to conduct reasonable discovery as to the basis of any Objection on an expedited basis. (Doc. 149-1 at 38-39).
Of the notices sent, 8,535 Class Notices were returned as undeliverable. ( Id. ). Rust performed “address traces” on these 8,535 addresses, which involves using the Class Member’s name, previous address, and Social Security number to locate a current address. ( Id. ). Rust re- mailed Class Notices to 7,056 of the Class Members who whose notices were returned as undeliverable. ( Id. ). Of the Class Notices re-sent after the address trace, 573 were returned as undeliverable. In total, 2,052 Class Notices were undeliverable. ( Id. ). Rust received 4,567 Opt-in Forms via its website, and another 3,550 forms via first class mail. ( Id. at 3). At the time of briefing, Rust had received 19 exclusions. ( Id. ).
In light of the foregoing, the Court accepts the reports of the settlement administrator and
finds that Defendant provided adequate notice, thereby satisfying Federal Rule of Civil Procedure
23(e)(1).
Silber
,
B. Final Fairness Determination
At the final approval stage, the primary inquiry is whether the proposed settlement “is
fundamentally fair, adequate, and reasonable.” Fed. R. Civ. P. 23(e)(2);
Lane v. Facebook, Inc.
,
In assessing the fairness of a class action settlement, courts balance the following factors: (1) the strength of the plaintiffs’ case; (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.
Churchill Vill.
,
Consideration of the
Churchill
factors alone is not sufficient to survive appellate review.
See Briseño v. Henderson
,
1. Strength of Plaintiff’s Case
When assessing the strength of a plaintiff’s case, the court does not reach “any ultimate
conclusions regarding the contested issues of fact and law that underlie the merits of th[e]
litigation.”
In re Wash. Pub. Power Supply Sys. Sec. Litig.
,
The parties also dispute whether the time spent between the screening and clocking in is
compensable under California law. Plaintiffs maintain this time is compensable based on the
“continuous workday rule.” (Doc. 149 at 22). Under this rule, promulgated in
IBP, Inc. v. Alvarez
,
The parties also “heavily dispute” the amount of time it took Class Members to undertake the screenings. Defendant’s expert Robert Crandall estimates Class Members spent 29.1 seconds waiting in line and undergoing the screenings. ( See Doc. 149 at 23). He also estimates employees spent 4.52 minutes walking to the time clocks, and the total amount of time (on average) spent undergoing the screenings is 5.01 minutes. Plaintiff’s model estimates the average screening took 0.94 minutes, and the average “walking time” was 4.52 minutes. Plaintiffs estimate “a conservative range of time spent off-the-clock as a result of the COVID screenings is between 5.18 minutes and 6.22 minutes.” Defendant previously paid Class Members for an additional five minutes of work per shift to account for the screenings. Plaintiffs admit that the parties have continued to “heavily dispute” these facts.
Considering the strengths and weaknesses of Plaintiff’s case, the Court finds that consideration of this factor weighs in favor of granting final approval of the parties’ settlement in this action.
2. Risk, Expense, Complexity, and Likely Duration of Further Litigation, and Risk of
Maintaining Class Action Status Throughout Trial
The second and third
Churchill
factors, the risk, expense, complexity, and likely duration
of further litigation, and the risk of maintaining class action status throughout trial, weigh in favor
of approval.
See
Fed. R. Civ. P. 23(e)(2)(C)(i). “[T]here is a strong judicial policy that favors
settlements, particularly where complex class action litigation is concerned.”
In re Syncor ERISA
Litig.
, 516 F.3d at 1101 (citing
Class Plaintiffs
, 955 F.2d at 1276). As a result, “[a]pproval of
settlement is preferable to lengthy and expensive litigation with uncertain results.”
Johnson v.
Shaffer
, No. 2:12-cv-1059-KJM-AC,
Because of the above-described risks, Plaintiff contends that additional litigation would increase risk and delay. (Doc. 149 at 23-24). As previously noted, Plaintiff is not guaranteed that the time Walmart employees spent undergoing the Covid-19 screenings is compensable. Further, to recover, Plaintiffs would have to incur additional expenses to conduct further discovery, to bring/defend dispositive motions, and to go to trial. Plaintiffs also note that regardless of the judgment, litigation would likely continue through the appeals process, which could take years and leave Plaintiffs with no recovery at all. Plaintiffs also note that Defendant heavily contests class certification, and Plaintiff faces significant risk their claims would not ultimately be certified. Accordingly, the Court finds that consideration of this factor weighs in favor of granting final approval.
3. Amount Offered in Settlement
To evaluate the fairness of the settlement award, the court should “compare the terms of the
compromise with the likely rewards of litigation.”
Protective Comm. for Indep. Stockholders of
TMT Trailer Ferry, Inc. v. Anderson
, 390 U.S. 414, 424-25 (1968);
see also
Fed. R. Civ. P.
23(e)(2)(C)-(D). “It is well-settled law that a cash settlement amounting to only a fraction of the
potential recovery does not
per se
render the settlement inadequate or unfair.”
In re Mego Fin.
Corp. Sec. Litig.
,
a. Gross settlement amount Here, the parties have agreed to a $5,200,000 GSA, allocated to Class Members after the following expenses are deducted from the GSA: (1) $37,500 in civil PAGA penalties payable to the to the California Labor and Workforce Development Agency (“LWDA”) [4] ; (2) $20,000 in incentive payments to be split between the two named plaintiffs; (3) $432,522 in costs to be paid to Rust for administering the settlement; (4) $1,733,160 of attorneys’ fees and (5) $261,751.87 in litigation expenses. (Doc. 149-1 at 37).
The NSA ($2,715,066.13) divided by the approximate number of Class Members who have
not opted out (221,374) brings the average settlement amount to $12.26. Plaintiffs estimate “a
conservative range of time spent off-the-clock as a result of the COVID screenings is between 5.18
minutes and 6.22 minutes” per screening. Defendant has already paid its employees for an
additional five minutes of work per shift. (Doc. 149 at 11). Plaintiffs estimate that the settlement
would allow Class Members to recover approximately 98 percentage of the unpaid wages owed to
Class Members. (Doc. 149-2 at 8). This settlement amount exceeds the range of the percentage
recoveries that California district courts—including this court—have found to be reasonable.
See,
e.g., Singh v. Roadrunner Intermodal Servs., LLC
, No. 1:15-cv-01497-DAD-BAM, 2018 WL
2412325, at *7 (E.D. Cal. May 29, 2018), modified, No. 1:15-cv-01497-DAD-BAM, 2018 WL
4382202 (E.D. Cal. Sept. 13, 2018) (approving a settlement of about 12% of the estimated
maximum damages);
Glass v. UBS Fin. Servs., Inc.
, No. 3:06-cv-04068-MMC,
As noted above, the Court has not received objections to the settlement, and only 19 Class
Members (out of more than 200,000) have opted out of the settlement. Finally, the Court
acknowledges that while “a larger award was theoretically possible, ‘the very essence of a
settlement is compromise, a yielding of absolutes and an abandoning of highest hopes’” (
See
Doc.
29 at 20 (quoting
Barbosa v. Cargill Meat Sols. Corp
.,
Based on the information before the Court, the Court concludes that the amount offered in settlement of this action provides adequate relief for the class.
b. PAGA penalties As described above, the settlement provides for $50,000 in civil PAGA penalties. (Doc. 149-1 at 14). Pursuant to the PAGA, 75% of the civil penalties, or $37,500, will go to the LWDA, and 25%, or $12,500, will remain in the Net Settlement Amount. [5] ( Id .) See Cal. Lab. Code § 2699(i).
Although there is no binding authority setting forth the proper standard of review for PAGA
settlements, California district courts “have applied a Rule 23-like standard, asking whether the
settlement of the PAGA claims is fundamentally fair, adequate, and reasonable in light of PAGA’s
policies and purposes.”
Haralson
,
It is thus important that when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the standards of being “fundamentally fair, reasonable, and adequate” with reference to the public policies underlying the PAGA.
O’Connor v. Uber Techs., Inc.
,
When a proposed settlement involves overlapping class action and PAGA claims, courts
may employ a “sliding scale” in determining if the proposed settlement is “fundamentally fair,
reasonable, and adequate with reference to the public policies underlying the PAGA.”
O’Connor
,
For example, if the settlement for the Rule 23 class is robust, the purposes of PAGA may be concurrently fulfilled. By providing fair compensation to the class members as employees and substantial monetary relief, a settlement not only vindicates the rights of the class members as employees, but may have a deterrent effect upon the defendant employer and other employers, an objective of PAGA. Likewise, if the settlement resolves the important question of the status of workers as employees entitled to the protection of the Labor Code or contained substantial injunctive relief, this would support PAGA’s interest in “augmenting the state’s enforcement capabilities, encouraging compliance with Labor Code provisions, and deterring noncompliance.”
Id . at 1134–1135 (quoting the LWDA’s guidance). At the same time, where “the compensation to the class amounts is relatively modest when compared to the verdict value, the non-monetary relief is of limited benefit to the class, and the settlement does nothing to clarify [aggrieved workers’ rights and obligations], the settlement of the non-PAGA claims does not substantially vindicate PAGA.” Id . at 1135. Finally, “where plaintiffs bring a PAGA representative claim, they take on a special responsibility to their fellow aggrieved workers who are effectively bound by any judgment.” Id . at 1134. Plaintiff’s special responsibility to other aggrieved workers is especially significant because the “PAGA does not require class action procedures, such as notice and opt-out rights.” Id . Thus,
[t]he Court must be cognizant of the risk that despite this responsibility, there may be a temptation to include a PAGA claim in a lawsuit to be used merely as a bargaining chip, wherein the rights of individuals who may not even be members of the class and the public may be waived for little additional consideration in order to induce the employer to agree to a settlement with the class.
Id .
The $50,000 civil penalty proposed by the settlement represents approximately 9.6% of the
$5,200,000 GSA. The amount proposed to settle the PAGA claims is consistent with, and in fact
exceeds, other PAGA settlements approved by this court.
See, e.g., Syed v. M-I, LLC
, No. 1:12-cv-
01718-DAD-MJS,
Plaintiffs submitted the settlement for review by the LWDA on October 9, 2024. [7] ( See Doc. 155.) As of January 7, 2025, the LWDA has not commented or indicated any objection to the settlement. ( Id .) Having reviewed the parties’ submission and the terms of the proposed settlement, the Court finds that the settlement amount related to Plaintiff’s PAGA claims is fair, reasonable, and adequate considering the PAGA’s public policy goals, and therefore, the amount offered in settlement of the PAGA claims weighs in favor of final approval of the settlement.
4. Extent of Discovery Completed and Stage of the Proceedings
“In the context of class action settlements, ‘formal discovery is not a necessary ticket to the
bargaining table’ where the parties have sufficient information to make an informed decision about
settlement.”
Linney v. Cellular Alaska P’ship
,
As detailed in the Court’s order granting preliminary approval, the Court is satisfied that the settlement was the result of “genuine, informed, and arm’s-length bargaining.” (Doc. 135 at 18). The parties engaged in a private mediation Antonio Piazza, a mediator, on September 11, 2023, after engaging in significant discovery and motion practice. (Doc. 149 at 14). Based on the parties’ discovery, the parties engaged in “rigorous” negotiations, where Mr. Piazza played an active role in settlement negotiations. ( Id. ). Mr. Piazza received briefs, dozens of exhibits (including statistical modeling and deposition excerpts), and he discussed the case with both parties and their counsel. This process culminated in Mr. Piazza making a neutral and informed mediator’s proposal, which both sides accepted. Accordingly, the Court concludes that consideration of this factor weighs in favor of granting final approval.
5. Experience and Views of Counsel
Class Counsel Don Foty submitted a declaration describing his experience in class and representative action litigation. (Doc. 149-2). Mr. Foty graduated from the University of Houston Law Center in 2003. ( Id. at 2). He is admitted to practice in several federal courts, and for the last fifteen years, he has regularly litigated wage and hour disputes. ( Id. at 2). He has served as class counsel in approximately 100 wage and hour class and collective actions. (Doc. 149-2 at 2). In his declaration, Mr. Foty represents that he believes the settlement if fair and reasonable, as the parties have continued to heavily dispute the amount of time Class Members spent waiting in line and completing Covid-19 screenings. ( Id. at 7). He highlights that the settlement provides for a recovery of nearly 98 percent of the unpaid wages Plaintiffs allege they are owed, and the settlement allows the Class Members to keep the additional pay Walmart previous provided. ( Id. ). The Court finds that class counsel’s experience and views weigh in favor of granting final approval.
6. Presence of a Governmental Participant
The Settlement Agreement contemplates payment of a total of $50,000 in civil PAGA
penalties, $35,000 of which is payable to the LWDA. (Doc. 149-1 at 14). Because LWDA is a
governmental participant in the settlement, this weighs in favor of approval of the settlement.
See
Adoma
,
7. Reaction of the Class Members
“It is established that the absence of a large number of objections to a proposed class action
settlement raises a strong presumption that the terms of a proposed class settlement action are
favorable to the class members.”
Nat’l Rural Telecomms. Coop.
,
No Class Members have filed an objection to the settlement pending final approval, and only 19 out of more than 200,000 Class Members have opted out of the settlement. (Doc. 149-1 at 38-39). Accordingly, consideration of this factor weighs in favor of granting final approval.
8. Subtle Signs of Collusion
The Court now turns to the
Bluetooth
factors to examine whether any “more subtle signs”
of collusion recognized by the Ninth Circuit are present here.
See Bluetooth
,
a. Whether there is disproportionate distribution to counsel
The Court finds that Class Counsel is not seeking a disproportionate distribution of the
settlement. Counsel is seeking one-third of the GSA in attorney’s fees. While on the higher end
of the spectrum, this is in line with what the Ninth Circuit has found to be appropriate in class action
suits.
See, e.g.
,
Morales
,
b. Existence of a “clear sailing” agreement
In general, a “clear sailing” provision is one in which the parties agree to the “payment of
attorneys’ fees separate and apart from class funds.”
Bluetooth
.,
c. Whether there is a reversion to the defendant Finally, the parties did not arrange for any unawarded fees to revert to Defendant. Instead, the GSA is “non-reversionary,” and fees shall be paid from the GSA. (Doc. 149-1 at 5). Because any unawarded fees return to the Settlement Amount for distribution to the class, this factor does not support a finding of collusion between the parties.
In light of the foregoing, the Court is satisfied that the more subtle signs of collusion noted in Bluetooth are not present here and finds that the settlement is fair, reasonable, and adequate. See Fed. R. Civ. P. 23(e). Therefore, the Court will grant Plaintiff’s motion for final approval of the parties’ class action settlement.
IV. ATTORNEY’S FEES, COSTS, SERVICE AWARD, AND ADMINISTRATION EXPENSES Plaintiff has also submitted a motion seeking attorney’s fees, class counsel’s litigation expenses, settlement administration expenses to Rush, and a service award for Plaintiffs. A. Attorney’s Fees
This Court has an “independent obligation to ensure that the award [of attorney’s fees], like
the settlement itself, is reasonable, even if the parties have already agreed to an amount.”
Bluetooth
,
The Ninth Circuit has approved two methods for determining attorney’s fees in cases where
the attorney’s fee award is taken from the common fund set aside for the entire settlement: the
“percentage of the fund” method and the “lodestar” method.
Vizcaino v. Microsoft Corp.
, 290 F.3d
1043, 1047 (9th Cir. 2002) (citation omitted). The district court retains discretion in common fund
cases to choose either method.
Id.
;
Vu v. Fashion Inst. of Design & Merch.
, No. 2:14-cv-08822-
SJO-EX, 2016 WL 6211308, at *5 (C.D. Cal. Mar. 22, 2016). Under either approach,
“[r]easonableness is the goal, and mechanical or formulaic application of method, where it yields
an unreasonable result, can be an abuse of discretion.”
Fischel v. Equitable Life Assurance Soc’y
of U.S.
,
Reasons to vary from the benchmark award may be found when counsel achieves
exceptional results for the class, undertakes “extremely risky” litigation, generates benefits for the
class beyond simply the cash settlement fund, or handles the case on a contingency basis.
Vizcaino
,
Here, the Settlement Agreement provides that Class Counsel will seek an award of 33.33% of the GSA, equivalent to $1,733,160. (Doc. 143). When the Court approved the preliminary settlement, it noted that an award for 33.33% of the GSA was at the higher end of what the Ninth Circuit has deemed appropriate. (Doc. 135 at 23) (citing Barbosa v. Cargill Meat Sols. Corp. , 297 F.R.D. 431, 448 (E.D. Cal. 2013) (“The typical range of acceptable attorneys' fees in the Ninth Circuit is 20 percent to 33.3 percent of the total settlement value, with 25 percent considered a benchmark percentage.”).
Upon final review, the Court finds that a fee award of 33.33% of the GSA is reasonable for
several reasons. First, the results obtained by class counsel in this case, which allows the Class
Members to recover 98 percent of their allegedly owed wages, weighs in favor of approval.
Working on a contingent fee basis and undertaking the financial burdens of prosecuting the action
supports that the reasonableness of the requested attorney’s fees.
See id
. (considering, in approving
fee award, the “considerable financial burdens that Class Counsel shouldered on a contingent
basis.”). For instance, class counsel has spent more than 1,600 hours working on this case thus far
without compensation. The Ninth Circuit has recognized that counsel retained on a contingency
fee basis is entitled to a premium above their hourly rate to compensate for both the risks and the
delay in payment.
See Stanger v. China Elec. Motor, Inc.
,
An award of 33.33% is also in line with what other Courts have awarded in similar
situations.
See, e.g., Vandervort v. Balboa Capital Corp.
,
The Court next turns to the lodestar method to cross-check the reasonableness of the
requested attorney’s fee award. Where a lodestar is merely being used as a cross-check, the court
“may use a ‘rough calculation of the lodestar.’”
Bond v. Ferguson Enters., Inc.
, No. 1:09-cv-1662-
OWW-MJS,
The lodestar cross-check supports the requested award of $1,733,160 in attorneys’ fees. Class Counsel expended 1,680 hours on this litigation, not accounting for any time spent on the case after Plaintiffs submitted the Motion for Attorneys Fees (which includes preparing the Motion for Final Approval and overseeing administration of the settlement). Based on the reasonable hourly rates used by the Court in Boone v. Amazon.com Services , LLC, 1:21-CV-241-KES-BAM (E.D. Cal. May 22, 2024) (Dkt. 105), the lodestar total is $458,240. To reach the total fees requested ($1,733,160) would require a multiplier of 3.78.
First, some of the hourly rates used in
Boone
were on the lower end of what has been
accepted elsewhere in the district. For instance, in
Boone
, the Court allotted for a rate of $325 per
hour for Mr. Foty, who has been in practice since 2006. Other courts have found higher rates to be
fair and reasonable for someone with Mr. Foty’s experience.
See Mathien v. Pier 1 Imports (U.S.),
Inc.
, No: 1:16-cv-00087-DAD-SAB, 2018 WL 1993727, at *11 (E.D. Cal. Apr. 27, 2018)
(accepting hourly rates of $675 and $750 for senior counsel and partners);
Emmons v. Quest
Diagnostics Clinical Labs., Inc.
, 1:13-cv-00474-DAD-BAM, at *8 (E.D. Cal. Feb. 27, 2017)
(accepting hourly rates between $500 and $720 for partners). Even using these rates, the lodestar
total requires a reasonable multiplier of 3.78 to reach the total attorneys’ fees requested.
“Multipliers in the 3–4 range are common in lodestar awards for lengthy and complex class action
litigation.”
Van Vranken v. Atlantic Richfield Co.
,
The Court finds a 3.78 lodestar multiplier to be reasonable here for purposes of a cross- check. Accordingly, the Court concludes that the lodestar cross-check supports the requested award of $1,733,160 in attorney’s fees, an amount equal to one-third of the GSA in this case.
B. Costs and Expenses of Class Counsel
Class Counsel also seeks to recover the costs and expenses advanced while prosecuting this
litigation. Such awards “should be limited to typical out-of-pocket expenses that are charged to a
fee-paying client and should be reasonable and necessary.”
In re Immune Response Secs. Litig
¸
Here, Class Counsel requests reimbursement for $261,751.87 of charges. (Doc. 143 at 27). These costs include: (1) $47,168.19 in deposition charges, (2) $168,110.59 for expert testimony, (3) $20,000 for mediation fees, (4) $5,969.30 for flights, (5) $7,586.06 for conference rooms for depositions and hotel rooms; (6) $824.96 in meals, (7) $6,468.03 for filing charges and charges for service of summons and subpoenas, (8) $2,424.94 for copies/prints/FedEx charges, (9) $1,699.12 in parking and transportation; and (9) $1,500.68 in “miscellaneous” costs. (Doc. 143 at 27).
Of note is the $168,110.59 Class Counsel expended on expert testimony. Expert testimony, however, is the type of expense considered to be “a reasonable and necessary” expense charged to a fee-paying client, and the “appropriate analysis is whether the particular costs are of the type typically billed by attorneys to paying clients in the marketplace.” See, e.g. , In re Stable Road Acquisition Corp ., Case No. 2:21-CV-5744-JFW(SHKx), 2024 WL 3643393, at *15 (C.D. Cal. April 23, 2014) (“The vast majority of expenses ($98,336.35, or approximately 97.25%) were for the retention of a experts ($41,261.00), the mediator ($33,618.75), and a private investigation firm ($10,564.20), as well as online research ($12,892.40).
These expenses, like the other categories of expenses for which counsel seek reimbursement, are the types of expenses routinely charged to clients who pay hourly. Accordingly, the Court has reviewed class counsel’s declaration and finds all the charges incurred to be reasonable, and the Court will approve the reimbursement of costs and expenses in the amount of $261,751.87.
C. Service Award
Courts frequently approve “service” or “incentive” awards in class action cases.
West
Publ’g Corp.
,
Courts typically find an award of $5,000 to be presumptively reasonable.
See, e.g.
,
In re
Mego Fin. Corp. Sec. Litig.
, 213 F.3d 454, 457, 463 (9th Cir. 2000) (endorsing $5,000 service
awards to named representatives);
Bellinghausen v. Tractor Supply Co.
,
Plaintiffs each seek a service award of $10,000 for their services in this action. Plaintiffs contend this amount is fair and reasonable compensation because they each expended between 70 and 75 hours toward the prosecution of this case. (Docs. 143-2, 3). Their efforts included “providing information about their work experience to Plaintiffs’ Counsel, (2) discussing the complaint with Plaintiffs’ Counsel and the claims that were alleged; (3) responding to requests for production issued by Walmart; (4) answering interrogatories issued by Walmart; (5) reviewing their pay and work records; (6) appearing for a deposition; (7) providing statements of factual details to Plaintiffs’ Counsel; (8) engaging in discussions with Plaintiffs’ Counsel during the initial investigation and after the case was filed; (9) consulting with Plaintiffs’ Counsel regarding the status of the case during the lawsuit; (10) discussing mediation with Plaintiffs’ Counsel and potential resolution of this action, and (11) reviewing the settlement agreement with Plaintiffs’ Counsel.” ( Id. .). Plaintiffs’ awards will each amount to approximately 0.19% of the GSA. Plaintiffs also contend the awards are appropriate, as they have signed a general employment release, and they have incurred substantial risk by filing this lawsuit, including the risk of damage to their reputations, as Defendant is “one of the largest and richest corporations in the county with substantial resources.” (Doc. 143 at 11).
Although the service award sought is much higher than other Class Members could expect
to receive from the proposed settlement, the Court finds the service award is appropriate in this
instance. First, it is less than or equal to the amount awarded in similar circumstances.
See, e.g.
,
Castro
,
Considering Plaintiff’s supporting declaration detailing their assistance with this case, the Court finds that the requested service payment of $10,000 to each named Plaintiff is fair and reasonable. Accordingly, the Court will award the service payment as requested.
D. Settlement Administration Expenses
The Court previously approved the appointment of Rust as the settlement administrator for
this action. (Doc. 135 at 24). According to the declaration of Sara Schwermer-Sween, the
settlement administrator, the total cost for administration of this settlement, including fees incurred
and future costs for completion, is $432,522.00. (Doc. 149-3 at 3). No objections have been made
to these expenses. While this amount is higher than what is typically administered
[9]
it is not higher
than the amount agreed to in the settlement agreement (Doc. 149-1 at 14-15), and it is appropriate
considering the sheer number of class notices sent in this case.
See Harris v. Vector Marketing
Corp
,
V. CONCLUSION AND ORDER Based on the foregoing,
1. The proposed class identified in the Settlement Agreement (Doc. 149-1) is certified for settlement purposes;
2. Plaintiff’s motion for final approval of a class action settlement (Doc. 149) is GRANTED, and the Court approves the settlement as fair, reasonable, and adequate; 3. Named Plaintiffs Amado Haro and Rochelle Ortega are confirmed as class representatives; Plaintiff’s counsel Don Foty of Hodges & Foty, LLP is appointed as counsel for the Class; and Rust Consulting, Inc. is confirmed as the settlement administrator;
4. Plaintiff’s motion for attorney’s fees, costs, service award, and administrative expenses (Doc. 143) is GRANTED;
5. The Court awards the following sums:
a. Class counsel shall receive $1,733,160 in attorney’s fees and $261,751.87. in expenses. Class counsel shall not seek or obtain any other compensation or reimbursement from Defendant, Plaintiffs, or Class Members; b. Plaintiffs shall receive $10,000 as a service award each; c. Rust Consulting, Inc., shall receive $432,522.00 for settlement administration;
d. The parties shall direct payment of 75 percent of the settlement allocated to the PAGA payment, or $37,500, to the California Labor and Workforce Development Agency as required by California law, and the remainder of the PAGA payment, or $12,500, shall be distributed per the Settlement Agreement;
6. The parties are directed to effectuate all terms of the Settlement Agreement (Doc. 149) and any deadlines or procedures for distribution set forth therein; 7. In light of the parties’ consent to magistrate judge jurisdiction for the purposes of handling the present motion and the Court’s order thereon, (Docs. 129–130), this action is dismissed with prejudice, with the Court specifically retaining jurisdiction over this action for the purpose of enforcing the parties’ settlement agreement; and 8. The Clerk of Court is directed to close this case.
IT IS SO ORDERED. /s/ Sheila K. Oberto .
Dated: January 8, 2025 UNITED STATES MAGISTRATE JUDGE
Notes
[1] The parties stipulated to the jurisdiction of the U.S. Magistrate Judge for purposes of handling the present motion; Judge Mueller granted the stipulation and submitted the motion for decision on January 10, 2024. ( See Docs. 129– 30.)
[2] The NSA is the GSA ($5,200,000) less the PAGA penalties payable to the to the California Labor and Workforce 27 Development Agency (“LWDA”) ($37,500); incentive awards ($20,000); costs to be paid a third-party administrator for administering the settlement ($432,522); attorneys’ fees ($1,733,160) (one-third of the GSA); and litigation 28 expenses ($261,751.87). (Docs. 143, 149).
[3] In Plaintiffs’ Motion for Class Certification under Rule 23 (Doc. 43), Plaintiffs define the class as “all hourly paid employees of Walmart who worked in a Walmart retail store in California at any time since April 10, 2020.” Proposed subclasses include (1) the April 10 Class (all hourly Walmart employees who worked in a California Walmart retail store on April 10, 2020); (2) April 11 Class (all hourly Walmart employees who worked in a California Walmart retail store since April 11, 2020; (3) the Wage Statement Class (all hourly Walmart employees who worked in a California Walmart retail store at any time from April 10, 2020, to the present and received at least one wage statement from Walmart; and (4) the Final Paycheck Class (all hourly Walmart Employees who worked in a California Walmart retail store at any time from April 10, 2020, to the present and are no longer employed by Walmart). (Doc. 43 at 2).
[4] The settlement has set aside $50,000 to be allocated to PAGA relief. Pursuant to the PAGA, 75% of the civil PAGA penalties, or $37,500, will go to the LWDA, and 25%, or $12,500, will be allocated to the net settlement amount (“Net Settlement Amount” or “NSA”). (Doc. 149-1 at 14). See Cal. Lab. Code § 2699(i).
[5] Under the PAGA, an “aggrieved employee” may bring an action for civil penalties for labor code violations on behalf of herself and other current or former employees. Cal. Lab. Code § 2699(a). An “aggrieved employee” is defined as 26 “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” Id . § 2699(c). 27
[6] The LWDA has also stated that it “is not aware of any existing case law establishing a specific benchmark for PAGA settlements, either on their own terms or in relation to the recovery on other claims in the action.” O’Connor v. Uber 28 Techs., Inc. , No. 3:13-cv-03826-EMC (N.D. Cal. Jul. 29, 2016) (Doc. 736 at 2–3).
[7] Although the PAGA requires that the proposed settlement be submitted to the LWDA at the same time that it is
submitted to the court,
see
Cal. Lab. Code § 2699(l)(2), the Court finds that that the late notice does not defeat the
settlement because the requirement “does not appear to be jurisdictional” and the LWDA had “ample opportunity to
voice its views before final approval.”
Urena v. Cent. California Almond Growers Assn
., No. 1:18-cv-00517-NONE-
EPG,
[8] Class counsel’s request for attorneys’ fees is further discussed below.
[9]
See, e.g.
,
Castro
,