Blount v. Host Healthcare, Inc.

[6] 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA [9] 10 SARAH BLOUNT, as an individual and Case No. 21-cv-310-MMA (WVG) on behalf of all others similarly situated, [11] ORDER GRANTING MOTION FOR Plaintiff, 12 FINAL APPROVAL OF CLASS v. ACTION SETTLEMENT; AND [13] HOST HEALTHCARE, INC., 14 [Doc. No. 26] Defendant. [15] GRANTING MOTION FOR 16 ATTORNEY’S FEES, COSTS, AND CLASS REPRESENTATIVE [17] SERVICE AWARD [18] [Doc. No. 27] [20] 21 Sarah Blount (“Plaintiff”) brings this putative wage and hour class action against 22 Defendant Host Healthcare, Inc. (“Defendant”). Plaintiff moves for final approval of a 23 class settlement pursuant to Federal Rule of Civil Procedure 23(e) and for an award of 24 attorneys’ fees and costs pursuant to Rule 23(h), as well as a class representative service 25 award. See Doc. Nos. 26, 27. Defendants do not oppose Plaintiff’s motions, and the 26 Court preliminarily approved the class settlement. See Doc. Nos. 23, 32. On April 11, 27 2022, the Court held a final approval hearing on these matters pursuant to Federal Rule of 28 Civil Procedure 23(e)(2). See Doc. No. 33. For the reasons set forth below, the Court 1 GRANTS Plaintiff’s motion for final approval of the class settlement and GRANTS 2 Plaintiff’s motion for attorneys’ fees, costs, and a class representative award. 3 BACKGROUND 4 Defendant Host Healthcare, Inc. is a healthcare staffing company. Doc. No. 1-3 at 5 27.1 From November 2019 to September 2020, Plaintiff worked for Defendant as a non6 exempt Account Coordinator. Id. She was paid on an hourly basis, plus bonuses and 7 commissions. Id. 8 On October 22, 2020, Plaintiff filed a Notice of Labor Code Violations with the 9 California Labor and Workforce Development Agency (“LWDA”). Doc. No. 1-3 at 26– 10 35. On November 16, 2020, Plaintiff, on behalf of herself and other aggrieved 11 employees, filed a putative class action complaint in the San Diego Superior Court 12 alleging the following: (1) failure to pay all regular and minimum wages; (2) failure to 13 pay overtime wages; (3) meal period violations; (4) rest period violations; (5) untimely 14 payment of wages; (6) wage statement violations; (7) wage statement penalties; 15 (8) failure to reimburse business expenses; and (9) violations of the Unfair Competition 16 Law, Cal. Bus. & Prof. Code § 17200 et seq. (“UCL”). 17 On January 4, 2021—after the 65-day period following the Private Attorneys 18 General Act, Cal. Labor Code § 2698 et seq. (“PAGA”) notice expired—Plaintiff filed a 19 First Amended Complaint (“FAC”), adding claims for civil penalties under PAGA. On 20 February 18, 2021, Defendant filed an answer to the FAC. The following day, on 21 February 19, 2021, Defendant removed the action under relevant provisions of the Class 22 Action Fairness Act, 28 U.S.C. § 1711 et seq., to this Court. 23 On April 9, 2021, Magistrate Judge William V. Gallo held a telephonic status 24 conference. Doc. No. 11. Judge Gallo then held an Early Neutral Evaluation conference 25 (“ENE”) on April 14, 2021. Doc. No. 12. The ENE was continued to May 18, 2021, [28] 1 during which time Judge Gallo assisted the parties in resolving the case on a class-wide 2 basis via oral stipulation. Doc. No. 18. The parties fully and finally executed a 3 settlement agreement on July 9, 2021. Doc. No. 20-2 at 21–42 (the “Settlement” or 4 “Settlement Agreement”). 5 THE SETTLEMENT AGREEMENT 6 The Settlement class (“Class”) consists of all individuals employed by Defendant 7 in California as an hourly worker and/or non-exempt employee, including those 8 employed in California as a corporate employee and travel nurse, during the Class Period 9 (November 16, 2016 through July 30, 2021). Doc. No. 26-1 at 5. Some Class Members 10 also fall into a sub-category of PAGA class members—individuals who worked during 11 the PAGA Period (October 22, 2019 through July 30, 2021) (“PAGA Class”). Id. at 6 . 12 There are 1,097 total Class Members, and thirteen individuals submitted a valid and 13 timely request to exclude themselves from the Settlement. Id. at 6 . Thus, there are 1,084 14 participating Class Members. Id. at 20 . 15 Defendant will pay a total sum of $1,550,000 (the “Gross Settlement Amount”) in 16 full settlement of all claims. Id. at 6 . The parties have allocated $50,000 of the Gross 17 Settlement Amount as penalties under PAGA (“PAGA Penalty”). This represents just 18 over 3% of the Gross Settlement Amount. Id. at 7 . 19 As to deductions, the parties agreed to the following: (1) attorney’s fees in the 20 amount of $465,000; (2) actual litigation costs of $6,421.50; (3) a service award to 21 Plaintiff of $10,000; (4) $37,500, or 75%, of the PAGA Penalty to the LWDA; and 22 (5) settlement administration costs of $15,000. Id. at 6–7. After deductions, the current 23 estimated net settlement amount is $1,016,078.50 (the “Net Settlement Amount”). The 24 parties have agreed that no portion of the Gross Settlement Amount will revert to 25 Defendant. Doc. No. 20-2 at 23. 26 The Net Settlement Amount will be distributed pro rata to the Class based on a 27 share that is equal to the number of weeks the Class Member worked during the Class 28 Period divided by the total number of weeks worked by all participating members. Id. at 1 27. The remaining 25% of the PAGA Penalty will be distributed to the PAGA Class 2 based on the same pro rata method. Id. at 24 . Settlement payments are allocated 20 3 percent to wages and 80 percent to interest, penalties, and reimbursements. Id. at 28 . 4 Individual settlement payments are estimated to average $925.81, with the highest 5 totalling $7,713.06. Doc. No. 26-1 at 5. 6 Defendant filed a statement of non-opposition to the motion. Doc. No. 21. The 7 Court has received no objections to the Settlement. 8 FINAL APPROVAL OF CLASS SETTLEMENT 9 A. Legal Standard [10] 11 [T]he court’s intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be limited to the extent [12] necessary to reach a reasoned judgment that the agreement is not the product 13 of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all [14] concerned. [15] 16 Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615 , 17 625 (9th Cir. 1982). 18 A court considers several factors in determining whether a Settlement Agreement 19 is “fair, reasonable, and adequate” under Rule 23(e). The Rule provides that a court 20 should consider whether: (1) “the class representatives and class counsel have adequately 21 represented the class”; (2) “the proposal was negotiated at arm’s length”; (3) “the relief 22 provided for the class is adequate,” taking into consideration the risks associated with 23 continued litigation, the effectiveness of distributing the proposed relief to the class, the 24 terms of any proposed attorneys’ fees, and the underlying settlement agreement; and 25 (4) “the proposal treats class members equitably relative to each other.” Fed. R. Civ. P. 26 23(e)(2). 27 Judicial policy favors settlement in class actions and other complex litigation 28 where substantial resources can be conserved by avoiding the time, cost, and rigors of 1 formal litigation. See Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 2 1992). To that end, the Ninth Circuit has identified additional factors to consider, 3 including: (1) the strength of the case; (2) “the risk, expense, complexity, and likely 4 duration of further litigation”; (3) “the risk of maintaining class action status throughout 5 the trial”; (4) the settlement amount; (5) the stage of the proceedings; (6) “the experience 6 and views of counsel”; (7) whether there is a “governmental participant”; and (8) “the 7 reaction of the class members to the proposed settlement.” Staton v. Boeing Co., 327 8 F.3d 938, 959 (9th Cir. 2003) (quoting Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 9 2003), overruled in part on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 10 571 (9th Cir. 2010)). 11 B. Discussion 12 The Court proceeds by addressing Rule 23(e)(2)’s “fair, reasonable, and adequate” 13 factors and the related factors noted by the Ninth Circuit.2 14 1. Adequate Representation 15 Rule 23(e)(2) requires the Court to consider whether “the class representatives and 16 class counsel have adequately represented the class.” Fed. R. Civ. P. 23(e)(2)(A). 17 Relatedly, the Court also considers the experience and views of counsel. See Staton, 327 18 F.3d at 959 (quoting Molski, 318 F.3d at 953 ). “‘Great weight’ is accorded to the 19 recommendation of counsel, who are most closely acquainted with the facts of the 20 underlying litigation. This is because ‘[p]arties represented by competent counsel are 21 better positioned than courts to produce a settlement that fairly reflects each party’s 22 expected outcome in the litigation.’” Nat’l Rural Telecomm. Coop. v. DIRECTV, Inc., [23] 221 F.R.D. 523, 528 (C.D. Cal. 2004) (citation omitted) (first quoting In re PaineWebber 24 Ltd. Partnerships Litig., 171 F.R.D. 104, 125 (S.D.N.Y.); and then quoting In re Pac. 25 Enterprises Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995)). [27] 2 Because of the overlap between the Rule 23(e)(2)’s factors and the Ninth Circuit’s additional factors, [28] 1 Here, Class Counsel includes Nicholas J. Ferraro and Lauren N. Vega, both 2 experienced trial attorneys who have been extensive experience litigating wage and hour 3 class actions. Doc. No.27-2 (“Ferraro Decl.”) ¶ 22. Further, Plaintiff, as Class 4 Representative, has been “instrumental in representing her former coworkers,” and 5 “assisted in realizing a comprehensive and significant resolution for the Class.” Doc. 6 No. 26-1 at 13. 7 Based upon their sworn declarations and the pertinent other portions of the record, 8 the Court finds that both Plaintiff and Class Counsel have adequately represented the 9 Settlement Class Members and therefore this factor favors approval of the Settlement 10 Agreement. 11 2. Arm’s Length Negotiation 12 Rule 23(e)(2) requires the Court to consider whether “the proposal was negotiated 13 at arm’s length.” Fed. R. Civ. P. 23(e)(2)(B). Courts must ensure settlements are not the 14 product of collusion or other conflicts of interest. See In re Bluetooth Headset Prod. 15 Liab. Litig., 654 F.3d at 947; Staton, 327 F.3d at 960. “A settlement following sufficient 16 discovery and genuine arms-length negotiation is presumed fair.” Nat’l Rural Telecomm. 17 Coop., 221 F.R.D. at 528 . The Ninth Circuit has outlined several circumstances that may 18 indicate collusion: [19] 20 (1) “when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but class counsel are amply [21] rewarded”; (2) “when the parties negotiate a ‘clear sailing’ arrangement 22 providing for the payment of attorneys’ fees separate and apart from class funds”; and (3) “when the parties arrange for fees not awarded to revert to [23] defendants rather than be added to the class fund.” [24] 25 Ferrell v. Buckingham Prop. Mgmt., No. 1:19-cv-00332-LJO-SAB, 2020 WL 291042 , at 26 *20 (E.D. Cal. Jan. 21, 2020), report and recommendation adopted, 2020 WL 4364647 27 (E.D. Cal. July 30, 2020) (quoting In re Bluetooth, 654 F.3d at 947); see also In re 28 Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 569 (9th Cir. 2019). 1 The parties reached this Settlement after engaging in significant informal discovery 2 and attending several ENE and settlement conferences with Judge Gallo. Class Counsel 3 will not recover an unreasonable portion of the Gross Settlement Amount and no portion 4 of that fund will revert to Defendant. See Doc. No. 20-2 at 23. Accordingly, the Court 5 finds that the arm’s length negotiations favor approval of the Settlement Agreement. 6 3. Adequate Relief 7 Rule 23(e)(2) requires the Court to consider whether “the relief provided for the 8 class is adequate” after assessing several factors, such as the risks associated with 9 continued litigation, the effectiveness of proposed relief to the class, the terms of any 10 proposed attorneys’ fees, and the underlying settlement agreement. Fed. R. Civ. P. 11 23(e)(2)(C). To determine whether the relief is adequate and in assessing the other 12 underlying subfactors, “the Court must balance the continuing risks of litigation 13 (including the strengths and weaknesses of Plaintiffs’ case), with the benefits afforded to 14 members of the Class, and the immediacy and certainty of a substantial recovery.” Baker 15 v. SeaWorld Entm’t, Inc., No. 14-cv-02129-MMA-AGS, 2020 WL 4260712 , at *6 (S.D. 16 Cal. July 24, 2020). In particular, [17] [t]he Court shall consider the vagaries of litigation and compare the [18] significance of immediate recovery by way of the compromise to the mere 19 possibility of relief in the future, after protracted and expensive litigation. In this respect, “[i]t has been held proper to take the bird in hand instead of a [20] prospective flock in the bush.” [21] 22 Nat’l Rural Telecommunications Coop., 221 F.R.D. at 526 (quoting Oppenlander 23 v. Standard Oil Co. (Indiana), 64 F.R.D. 597, 624 (D. Colo. 1974)). 24 a. Risks of Continued Litigation 25 “In determining whether to approve a Settlement Agreement, the Court should also 26 consider the expense, complexity and likely duration of further litigation or delay of trial 27 and appeal.” Baker, 2020 WL 4260712 , at *7 (citing Fed. R. Civ. P 23(e)(2)(C)(i)). 28 “Generally, unless the settlement is clearly inadequate, its acceptance and approval are 1 preferable to lengthy and expensive litigation with uncertain results.” In re LinkedIn 2 User Privacy Litig., 309 F.R.D. 573, 587 (N.D. Cal. 2015) (quoting Ching v. Siemens 3 Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210 , at *4 (N.D. Cal. June 27, 2014)). 4 Here, if the parties had not settled, Plaintiff would have had to spend considerable 5 time and effort litigating formal discovery, class certification, and summary judgment. 6 Further, as Plaintiff acknowledges, “proving the liability and the amount of wages owed 7 on a class-wide basis would be an expensive and uncertain endeavor.” Doc. No. 26-1 at 8 15. Accordingly, the Court finds that the strength of the case, the costs associated with 9 trial and appeal, the stage of the proceedings, and the risk of maintaining class action 10 status throughout the trial favor approval of the Settlement Agreement. 11 b. Effectiveness of Proposed Relief Distribution 12 In determining the effectiveness of distributing the proposed relief to the class and 13 the processing of class claims, the Court should “scrutinize the method of claims 14 processing to ensure that it facilitates filing legitimate claims. A claims processing 15 method should deter or defeat unjustified claims, but the court should be alert to whether 16 the claims process is unduly demanding.” Fed. R. Civ. P. 23(e) advisory committee’s 17 note to 2018 amendment. 18 In this case, the Notice of Class Action Settlement provided as follows: [19] What Are My Options? [20] 21 The purpose of this Notice is to inform you of the proposed Settlement and of your options. Each option has its consequences, which you should understand [22] before making your decision. Your rights regarding each option, and the steps 23 you must take to select each option, are summarized below and explained in more detail in this Notice. [24] 25 Important Note: Defendant will not retaliate against you in any way for either participating or not participating in this Settlement. [26] 27 DO NOTHING: If you do nothing and the Court grants final approval of the Settlement, you will become part of this lawsuit and will receive an [28] 1 Individual Settlement Payment based on the total number of workweeks you were employed by Defendant as an hourly or non2 exempt employee in California during the Class Period. You will 3 release all of the Released Claims, as defined in Section No. 9 below, and you will give up your right to pursue the Released Claims, as [4] defined in Section No. 9 below. [5] OPT OUT: If you do not want to participate as a Class Member, you [6] may “opt out,” which will remove you from the Class and this Action. 7 If the Court grants final approval of the Settlement, you will not receive an Individual Settlement Payment and you will not give up the right to [8] sue the Released Parties, including Defendant, for any the Released 9 Claims as defined in Section No. 9 below. [10] OBJECT: You may file a legal objection to the proposed settlement. If 11 you would like to object, you may not opt out of this Settlement. [12] The procedures for opting out and objecting are set forth below in the sections 13 entitled “How Do I Opt Out or Exclude Myself From This Settlement” and “How Do I Object To The Settlement?” [14] 15 Doc. No. 26-2 at 11. 16 This method of distribution imposes no burden on the Settlement Class Members. 17 Accordingly, the effectiveness of the proposed method of distributing relief to the Class 18 favors approval of the Settlement Agreement. 19 c. Terms of Proposed Attorney’s Fees 20 In assessing whether the relief for a class is adequate, “[e]xamination of the 21 attorney-fee provisions may also be valuable in assessing the fairness of the proposed 22 settlement.” Fed. R. Civ. P. 23(e) advisory committee’s note to 2018 amendment. 23 “Ultimately, any award of attorney’s fees must be evaluated under Rule 23(h), and no 24 rigid limits exist for such awards. Nonetheless, the relief actually delivered to the class 25 can be a significant factor in determining the appropriate fee award.” Id. 26 This subfactor considers the “terms” of any proposed and agreed upon request for 27 attorney’s fees. See Fed. R. Civ. P. 23(e)(C)(iii). Here, the Settlement Agreement 28 contains an attorney’s fees provision which permits Class Counsel to apply for an 1 attorneys’ fees award, which would be paid from the Gross Settlement Amount. See 2 Doc. No. 20-2 at 21, 51. Class Counsel’s entitlement to such award is ultimately 3 contingent upon the corresponding motion for attorney’s fees and costs, which is 4 addressed in detail below. 5 The Court must be mindful when determining whether to approve a proposed 6 attorney’s fee award in the class action settlement context that “settlement class actions 7 present unique due process concerns for absent class members.” Hanlon, 150 F.3d at 8 1026. Accordingly, “the district court has a fiduciary duty to look after the interests of 9 those absent class members.” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015). As 10 the Ninth Circuit recently explained [11] [C]ourts should scrutinize pre-class certification settlements because [12] plaintiffs’ counsel may collude with the defendant to strike a quick settlement 13 without devoting substantial resources to the case. The potential for collusion reaches its apex pre-class certification because, among other things, (1) the [14] court has not yet approved class counsel, who would owe a fiduciary duty to 15 the class members; and (2) plaintiffs’ counsel has not yet devoted substantial time and money to the case, and may be willing to cut a quick deal at the [16] expense of class members’ interests. [17] In contrast, by the time a court has certified a class — the theory goes [18] — the parties have vigorously litigated the dispute, reducing the chance that 19 class counsel will settle on the cheap for a quick buck. By devoting substantial time and resources to the case, class counsel has skin in the game, [20] guaranteeing his or her interest in maximizing the size of the settlement fund. 21 Likewise, because a district court has appointed class counsel who owes a fiduciary duty to the class members, class counsel would be ethically [22] forbidden from sacrificing the class members’ interests. [23] 24 Briseño v. Henderson, 998 F.3d 1014, 1024-25 (9th Cir. 2021) (internal citations 25 omitted). 26 Here, the parties reached their Settlement prior to class certification. This requires 27 the Court to take on the fiduciary role that would ordinarily fall to Class Counsel. See 28 Allen, 787 F.3d at 1223. Upon review, the Court does not find any evidence of collusion 1 but the Settlement Agreement in this case does contain a “clear sailing” provision. See 2 Doc. No. 20-2 at 22. However, the parties also agreed that if the Court approves a lesser 3 attorney’s fee award, the difference will revert to the Net Settlement Amount and 4 therefore the Settlement Class, see id., thus ameliorating the collusive concerns addressed 5 in Briseño. 6 d. Underlying Settlement Agreement 7 “It is well-settled law that a proposed settlement may be acceptable even though it 8 amounts to only a fraction of the potential recovery that might be available to the class 9 members at trial.” Rodriguez v. Bumble Bee Foods, LLC, No. 17-cv-2447-MMA 10 (WVG), 2018 WL 1920256 , at *4 (S.D. Cal. Apr. 24, 2018) (brackets omitted) (quoting 11 Nat’l Rural Telecommunications Coop., 221 F.R.D. at 527 ). That is because a settlement 12 “embodies a compromise; in exchange for the saving of cost and elimination of risk, the 13 parties each give up something they might have won had they proceeded with litigation.” 14 Officers for Justice, 688 F.2d at 624 (quoting United States v. Armour & Co., 402 U.S. 15 673, 681 (1971)). Further, the Ninth Circuit has held that the number of class members 16 who object to a proposed settlement is a factor to be considered. See Mandujano v. Basic 17 Vegetable Prod., Inc., 541 F.2d 832, 837 (9th Cir. 1976) (first citing Bryan v. Pittsburgh 18 Plate Glass Co. (PPG Indus.), 494 F.2d 799, 803 (3d Cir. 1974); and then citing 19 Amalgamated Meat Cutters & Butcher Workmen of N. Am., Local 340 v. Safeway Stores, 20 Inc., No. W-3915, 1972 WL 141 , at *1 (D. Kan. Feb. 4, 1972)). The absence of a large 21 number of objectors supports the fairness, reasonableness, and adequacy of the 22 settlement. See In re Austrian & German Bank Holocaust Litig., 80 F. Supp. 2d 164 , 175 23 (S.D.N.Y. 2000); Boyd v. Bechtel Corp., 485 F. Supp. 610, 624 (N.D. Cal. 1979) (finding 24 “persuasive” that 84% of the class filed no opposition). 25 Here, the Settlement Agreement provides for a Gross Settlement Amount of $1.55 26 million for 1,084 Class Members and, after deducting various fees and costs, each Class 27 Member is estimated to recover, on average, $923.81. Ferraro Decl. ¶ 18. Only thirteen 28 Class Members have opted out of the Settlement and no objections to the Settlement 1 terms have been received by either the attorneys, the Settlement Administrator, or the 2 Court. Doc. No. 27-1 at 5; Doc. No. 26-1 at 18. Accordingly, the Court finds that the 3 underlying Settlement Agreement favors approval of the Settlement. 4 e. Conclusion 5 Based on the foregoing, the Court finds that on balance, the relief provided for the 6 Class is adequate and favors approval of the Settlement Agreement. 7 4. Equitable Treatment of Class Members 8 Rule 23(e)(2) requires the Court to consider whether “the proposal treats class 9 members equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(D). “Matters of 10 concern could include whether the apportionment of relief among class members takes 11 appropriate account of differences among their claims, and whether the scope of the 12 release may affect class members in different ways that bear on the apportionment of 13 relief.” Fed. R. Civ. P. 23(e) advisory committee’s note to 2018 amendment. In 14 assessing this factor, courts determine whether the settlement unreasonably gives 15 preferential treatment to the class representatives or other class members. See Ferrell v. 16 Buckingham Prop. Mgmt., 2020 WL 291042 , at *23 (quoting In re Tableware Antitrust 17 Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007)). 18 The Settlement payments will be distributed pro rata to the Class based on a share 19 that is equal to the number of weeks the Class Member worked during the Class Period 20 divided by the total number of weeks worked by all participating members. Doc. No. 2021 2 at 27. This is fair, reasonable, and adequate in light of the underlying harm and the lack 22 of facts indicating certain Class Members suffered a disproportionate injury compared to 23 others. Further, although disproportionate, as discussed below, the Court finds that 24 Plaintiff’s Class Representative Service Award is reasonable. Accordingly, the general 25 equitable treatment of class members favors approval of the Settlement Agreement. 26 C. Conclusion 27 Upon due consideration of the factors set forth above, the Court finds that the Class 28 Settlement is on balance “fair, reasonable, and adequate” under Rule 23(e)(2) and 1 therefore GRANTS Plaintiff’s motion for final approval of the Settlement. 2 D. PAGA Penalty 3 Under PAGA, an “aggrieved employee” may bring an action for civil penalties for 4 labor code violations on behalf of himself and other current or former employees. Cal. 5 Lab. Code § 2699(a). A plaintiff suing under PAGA “does so as the proxy or agent of the 6 state’s labor law enforcement agencies.” Arias v. Superior Ct., 95 Cal. Rptr. 3d 588 , 600 7 (2009). A PAGA plaintiff thus has “the same legal right and interest as state labor law 8 enforcement agencies” and the action “functions as a substitute for an action brought by 9 the government itself”; therefore, “a judgment in that action binds all those, including 10 nonparty aggrieved employees, who would be bound by a judgment in an action brought 11 by the government.” Id. A plaintiff bringing a representative PAGA action not only 12 owes a duty to their “fellow aggrieved workers,” but “also owes responsibility to the 13 public at large; they act, as the statute’s name suggests, as a private attorney general.” 14 O’Connor v. Uber Techs., Inc., 201 F. Supp. 3d 1110 , 1133–34 (N.D. Cal. 2016). 15 Under PAGA, civil penalties collected are distributed between the aggrieved 16 employees (25%) and the LWDA (75%). Cal. Lab. Code § 2699 (i). Any settlement of 17 PAGA claims must be approved by the Court. Cal. Lab. Code § 2699 (l)(2). The 18 proposed settlement must also be sent to the agency at the same time that it is submitted 19 to the court. Cal. Lab. Code § 2699 (l)(2). 20 While PAGA requires a trial court to approve a PAGA settlement, district courts 21 have noted there is no governing standard to review PAGA settlements. Sanchez 22 v. Frito-Lay, Inc., No. 1:14cv797-DAD-BAM, 2019 U.S. Dist. LEXIS 170556 , at *31 23 (E.D. Cal. Sept. 30, 2019) (acknowledging the “absence of authority governing the 24 standard of review of PAGA settlements”). “‘[N]either the California legislature, nor the 25 California Supreme Court, nor the California Courts of Appeal, nor the [LWDA] has 26 provided any definitive answer’ as to what the appropriate standard is for approval of a 27 PAGA settlement.” Jordan v. NCI Grp., Inc., No. EDCV 161701 JVS (SPx), 2018 U.S. 28 Dist. LEXIS 25297, at *5 (C.D. Cal. Jan. 5, 2018) (quoting Flores v. Starwood Hotels & 1 Resorts Worldwide, Inc., 253 F. Supp. 3d 1074, 1075 (C.D. Cal. 2017)). Consequently, 2 some district courts have used the guidance provided by the LWDA in O’Connor v. Uber 3 Techs., Inc., 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016). See Haralson v. U.S. Aviation 4 Servs. Corp., 383 F. Supp. 3d 959, 971 (N.D. Cal. 2019); Sanchez, 2019 U.S. Dist. 5 LEXIS 170556 , at *32. In O’Connor, the LWDA commented, [6] 7 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 [8] purpose of the statute to benefit the public and, in the context of a class action, 9 the court evaluate whether the settlement meets the standards of being “fundamentally fair, reasonable, and adequate” with reference to the public [10] policies underlying the PAGA. [11] 12 O’Connor, 201 F. Supp. 3d at 1133 . Based on LWDA’s response in O’Connor, district 13 courts have applied “a Rule 23-like standard” asking whether the settlement of the PAGA 14 claims is “fundamentally fair, reasonable, and adequate.” Haralson, 383 F. Supp. 3d at 15 972. 16 First, in accordance with the statutory requirements, Plaintiff submitted the 17 Settlement Agreement to the LWDA. Doc. No. 26-1 at 18. The Court finds it persuasive 18 that the LWDA was permitted to file a response to the proposed Settlement and no 19 comment or objection has been received. 20 The Settlement Agreement provides for a $50,000 PAGA Penalty. As noted 21 above, this represents roughly 3.2 percent of the Gross Settlement Amount, which is 22 within the range of penalties approved by courts. See Magadia v. Wal-Mart Assocs., Inc., [23] 384 F. Supp. 3d 1058, 1101 (N.D. Cal. 2019) (collecting cases in which settlements 24 providing for $10,000 in PAGA penalties were preliminarily or finally approved despite 25 total settlement amounts of $900,000 and $6.9 million); see also Alcala v. Meyer 26 Logistics, Inc., No. CV 17-7211 PSG (AGRx), 2019 U.S. Dist. LEXIS 166879 , at *26 27 (C.D. Cal. June 17, 2019) (collecting cases in which PAGA penalties within the zero to 28 two percent rage were approved by courts). Further, the Settlement Agreement provides 1 that 75% of the PAGA Penalty will be paid to the LWDA and 25% will be paid to the 2 PAGA Class, in accordance with California Labor Code § 2699(i). Therefore, the Court 3 finds that the Settlement Agreement’s $50,000 PAGA Penalty is reasonable, 4 fundamentally fair, and adequate. 5 ATTORNEY’S FEES AND COSTS 6 Plaintiff seeks and award of attorney’s fees and costs pursuant to California Labor 7 Code §§ 226, 1194, 2802, and 2699 and California Code of Civil Procedure § 1021.5. 8 Doc. No. 27-1 at 10. Plaintiff requests fees in the aggregate amount of $465,000, which 9 is 30% of the Gross Settlement Amount. Id. 10 A. Attorney’s Fees 11 1. Legal Standard 12 Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified 13 class action, the court may award reasonable attorney’s fees and nontaxable costs that are 14 authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). And as 15 mentioned above, in addition to the reasonableness inquiry mandated under Rule 23(h), 16 “district courts must now consider ‘the terms of any proposed award of attorney’s fees’ 17 when determining whether ‘the relief provided for the class is adequate’” pursuant to 18 Rule 23(e). Briseño, 998 F.3d at 1024 (quoting Fed. R. Civ. P. 23(e)(2)(C)(iii)). 19 Importantly, “whether the attorneys’ fees come from a common fund or are otherwise 20 paid, the district court must exercise its inherent authority to assure that the amount and 21 mode of payment of attorneys’ fees are fair and proper.” Zucker v. Occidental Petroleum 22 Corp., 192 F.3d 1323, 1328 (9th Cir. 1999). 23 The Court has discretion in a common fund case such as this to choose either the 24 lodestar method or the percentage-of-the-fund method when calculating reasonable 25 attorneys’ fees. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). 26 Under the percentage-of-recovery method, 25% of a common fund is the benchmark for 27 fee awards. See, e.g., In re Bluetooth, 654 F.3d at 942 (“[C]ourts typically calculate 25% 28 of the fund as the ‘benchmark’ for a reasonable fee award, providing adequate 1 explanation in the record of any ‘special circumstances’ justifying a departure.”). Under 2 the lodestar method, a “lodestar figure is calculated by multiplying the number of hours 3 the prevailing party reasonably expended on the litigation (as supported by adequate 4 documentation) by a reasonable hourly rate for the region and for the experience of the 5 lawyer.” Id. at 941 (citing Staton, 327 F.3d at 965). 6 Whether the Court awards the benchmark amount or some other rate, the award 7 must be supported “by findings that take into account all of the circumstances of the 8 case.” Vizcaino, 290 F.3d at 1048 . To guard against an unreasonable result, the Ninth 9 Circuit has encouraged district courts to cross-check any calculations done in one method 10 against those of another method. See id. at 1050–51. 11 2. Discussion 12 As noted above, Plaintiff on behalf of Class Counsel requests $465,000 in fees, or 13 30% of the Gross Settlement Amount. This amount exceeds the Ninth Circuit’s 14 “benchmark” for a reasonable fee award under the percentage-of-recovery method. See, 15 e.g., Espinosa v. Ahearn (In re Hyundai & Kia Fuel Econ. Litig.), 926 F.3d 539, 570 (9th 16 Cir. 2019) (noting the 25% benchmark). As discussed below, it is also more than Class 17 Counsel’s fees would be if calculated using the lodestar method and “[i]f the lodestar 18 amount exceeds the 25% benchmark for percentage-of-recovery awards, a second look to 19 evaluate the reasonableness of the lodestar calculation is appropriate.” Johnson v. MGM 20 Holdings, Inc., 943 F.3d 1239, 1242 (9th Cir. 2019). 21 a. Lodestar Calculation 22 In order to determine the lodestar figure, the Court calculates the number of hours 23 reasonably expended on the litigation and then multiplies that number by a reasonable 24 hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). 25 The Court first considers whether Class Counsel’s hourly rates are reasonable. A 26 reasonable hourly rate is typically based upon the prevailing market rate in the 27 community for “similar work performed by attorneys of comparable skill, experience, [28] 1 and reputation.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986) 2 (citing Blum v. Stenson, 465 U.S. 886 , 895 n.11 (1984)). 3 Here, Plaintiff requests hourly rates of $500 for both Mr. Ferraro and Ms. Vega. In 4 addition to the declarations of counsel, the Court relies on its own knowledge and 5 experience of customary rates concerning reasonable and proper fees, see Ingram 6 v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011), and considers the relevant Kerr factors. 7 See Davis v. City of San Francisco, 976 F.2d 1536, 1546 (9th Cir. 1992) (finding that 8 district courts may consider the Kerr factors in determining an appropriate market rate). 9 Recently, courts in this District have awarded hourly rates for work performed in civil 10 cases by attorneys with significant experience anywhere in range of $550 per hour to 11 more than $1000 per hour. See, e.g., Herring Networks, Inc. v. Maddow, No. 3:19-cv12 1713-BAS-AHG, 2021 U.S. Dist. LEXIS 23163 , at *21 (S.D. Cal. Feb. 5, 2021) (finding 13 $1150-$1050 to be reasonable rates for partners with more than 30 years of experience 14 from a Top 100 law firm); Kries v. City of San Diego, No. 17-cv-1464-GPC-BGS, 2021 15 U.S. Dist. LEXIS 6826 , at *26–27 (S.D. Cal. Jan. 13, 2021) (finding rates of $650 per 16 hour for attorneys with more than 30 years of experience to be reasonable); Sunbelt 17 Rentals, Inc. v. Dubiel, No. 20-cv-876-WQH-BGS, 2020 WL 6287462 , at *2 (S.D. Cal. 18 Oct. 27, 2020) (finding $405 rate per hour to be a reasonable rate for a partner in a breach 19 of contract action); Kailikole v. Palomar Cmty. Coll. Dist., No. 18-cv-2877-AJB-MSB, [20] 2020 WL 6203097 , at *3 (S.D. Cal. Oct. 22, 2020) (finding $550 rate per hour to be a 21 reasonable rate for a partner in an employment action); Vasquez v. Kraft Heinz Foods 22 Co., No. 3:16-CV-2749-WQH-BLM, 2020 WL 1550234 , at *1–2, 7 (S.D. Cal. Apr. 1, 23 2020) (approving of rates between $700 and $725 for attorneys with approximately 30 24 years of experience and rate of $550 for attorney with 12 years of experience); San Diego 25 Comic Convention v. Dan Farr Productions, No. 14cv1865-AJB-JMA, 2019 WL 26 1599188, at *13–14 (S.D. Cal. Apr. 15, 2019) (finding reasonable the hourly rates of 27 $760 for partners from a Top 100 law firm with 28-29 years of experience), attorney fees 28 aff’d by 807 F. App’x 674 (9th Cir. Apr. 20, 2020); Kikkert v. Berryhill, No. 14cv17251 MMA-JMA, 2018 WL 3617268 , at *2 n.1 (S.D. Cal. July 30, 2018) (an unopposed fee 2 motion after a successful social security appeal, finding de facto hourly rate of $943 3 reasonable, citing other decisions in the district approving rates from $656 to $886). 4 Therefore, the Court finds that Class Counsel’s $500 rate is reasonable. 5 The Court next considers whether Class Counsel’s expenditure of 390 hours on 6 this case is reasonable. “The fee applicant bears the burden of documenting the 7 appropriate hours expended in the litigation and must submit evidence in support of those 8 hours worked.” Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992) (citing 9 Hensley, 461 U.S. at 433, 437 ). A district court “should defer to the winning lawyer’s 10 professional judgment as to how much time he was required to spend on the case.” 11 Chaudhry, 751 F.3d at 1111 (citing Moreno, 534 F.3d at 1112). However, the Court 12 “should exclude from [the] initial fee calculation hours that were not ‘reasonably 13 expended.’” Hensley, 461 U.S. at 434 . Hours are not “reasonably expended” if they are 14 “excessive, redundant, or otherwise unnecessary.” Id. 15 Class Counsel has provided detailed billing records, which indicate that the hours 16 of work performed on this case were generally reasonable, necessary, and thus 17 compensable. See Doc. No. 31. Moreover, “[t]he lodestar ‘cross-check’ need not be as 18 exhaustive as a pure lodestar calculation” because it only “serves as a point of 19 comparison by which to assess the reasonableness of a percentage award.” Fernandez v. 20 Victoria Secret Stores, LLC, No. CV 06-04149 MMM (SHx), 2008 U.S. Dist. LEXIS 21 123546, 2008 WL 8150856 , at *14 (C.D. Cal. July 21, 2008). Accordingly, “the lodestar 22 can be approximate and still serve its purpose.” Id. 23 Accordingly, finding the hourly rates identified above and hours expended to be 24 reasonable, the Court agrees with Class Counsel’s calculation of the lodestar figure in this 25 case of $195,000. See Doc. No. 27-1 at 15. 26 b. Lodestar Crosscheck 27 This Court has previously acknowledged that “California courts routinely award 28 attorneys’ fees of one-third of the common fund.” Espinosa v. Cal. Coll. of San Diego, 1 Inc., No. 17cv744-MMA (BLM), 2018 U.S. Dist. LEXIS 60106 , at *24 (S.D. Cal. Apr. 9, 2 2018) (quoting Beaver v. Tarsadia Hotels, No. 11-CV-01842-GPC-KSC, 2017 U.S. Dist. 3 LEXIS 160214 , 2017 WL 4310707 , at *9 (S.D. Cal. Sept. 28, 2017)) (collecting cases). 4 But “[r]egardless of whether the Court uses the percentage approach or the lodestar 5 method, the ultimate inquiry is whether the end result is reasonable.” Espinosa, 2018 6 U.S. Dist. LEXIS 60106 , at *27-28 (emphasis added) (citing Powers v. Eichen, 229 F.3d 7 1249, 1258 (9th Cir. 2000)). “Calculation of the lodestar, which measures the lawyers’ 8 investment of time in the litigation, provides a check on the reasonableness of the 9 percentage award. Where such investment is minimal, as in the case of an early 10 settlement, the lodestar calculation may convince a court that a lower percentage is 11 reasonable.” Vizcaino, 290 F.3d at 1050 . 12 “[A]n appropriate positive or negative multiplier reflect[s] . . . the quality of 13 representation, the benefit obtained for the class, the complexity and novelty of the issues 14 presented, and the risk of nonpayment.” In re Bluetooth, 654 F.3d at 941-42 (quoting 15 Hanlon, 150 F.3d at 1029). Likewise, a “percentage amount can . . . be adjusted upward 16 or downward to account for any unusual circumstances involved in this case.” Paul, 17 Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989). 18 The lodestar crosscheck supports the requested fee award in this case. The 19 requested award of $465,000—30% of the Gross Settlement Amount—represents a 20 performance multiplier of approximately 2.4 over the lodestar figure. The Court finds 21 that this is reasonable. 22 Accordingly, the Court GRANTS Plaintiff’s motion for an attorney’s fee award of 23 $465,000. 24 B. Costs 25 Plaintiff requests reimbursement for $6,421.50 in actual litigation costs expended 26 by Class Counsel. 27 1. Legal Standard 28 Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified 1 class action, the court may award reasonable attorney’s fees and nontaxable costs that are 2 authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Counsel is 3 entitled to reimbursement of the out-of-pocket costs they reasonably incurred 4 investigating and prosecuting the case. See In re Media Vision Tech. Sec. Litig., 913 F. 5 Supp. 1362, 1366 (N.D. Cal. 1996) (citing Mills v. Elec. Auto-Lite Co., 396 U.S. 375 , 6 391–92 (1970)); see also Staton, 327 F.3d at 974. 7 2. Discussion 8 Plaintiff seeks an award of costs totaling $6,421.50 expended by Class Counsel for 9 filing fees, service fees, photocopying costs, postage, and other litigation related 10 expenses. See Doc. No. 27-3 at 12. The Court finds that upon review, the requested 11 award is reasonable in light of the itemized costs. Costs for service of process are taxable 12 under 28 U.S.C. § 1920 as well as Civil Local Rule 54.1.b.1, which provides that “(c)osts 13 for service of subpoenas are taxable as well as service of summonses and complaints.” 14 Filing fees are recoverable under 28 U.S.C. §1920 (1). Additionally, the Ninth Circuit has 15 held that an award to a prevailing party “can include reimbursement for out-of-pocket 16 expenses including . . . travel, courier and copying costs.” Grove v. Wells Fargo Fin. 17 Cal., Inc., 606 F.3d 577, 580 (9th Cir. 2010). Other recoverable expenses include 18 expenses related to discovery and expenses related to computerized research. See Harris 19 v. Marhoefer, 24 F.3d 16, 19-20 (9th Cir. 1994) (noting that “expenses related to 20 discovery” are recoverable); Trs. Of Constr. Indus. & Laborers’ Health & Welfare Trust 21 v. Redland Ins. Co., 460 F.3d 1253, 1258-59 (9th Cir. 2006) (holding that “reasonable 22 charges for computerized research may be recovered.”); Hartless v. Clorox Co., 273 23 F.R.D. 630 , 646 (S.D. Cal. 2011) (holding that consulting fees as costs were reasonable 24 because the evidence was necessary to negotiate a settlement). 25 Accordingly, because Class Counsel’s out-of-pocket costs were reasonably 26 incurred in litigating this action and were advanced by counsel for the benefit of the 27 Class, the Court APPROVES reimbursement of litigation costs in the full amount [28] 1 requested. See, e.g., Fontes v. Heritage Operating, L.P., No. 14-cv-1413-MMA (NLS), [2] 2016 WL 1465158 , at *6 (S.D. Cal. Apr. 14, 2016). 3 CLASS REPRESENTATIVE SERVICE AWARD 4 Finally, Plaintiff requests an incentive award of $10,000 for her service as the 5 Class Representative in this action. 6 A. Legal Standard 7 “Incentive awards are payments to class representatives for their service to the 8 class in bringing the lawsuit.” Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157 , 1163 9 (9th Cir. 2013). “Such awards are discretionary.” Rodriguez v. W. Publ’g Corp. 10 (Rodriguez I), 563 F.3d 948, 958 (9th Cir. 2009). The Ninth Circuit has instructed 11 district courts to “to scrutinize carefully the awards so that they do not undermine the 12 adequacy of the class representatives.” See Radcliffe, 715 F.3d at 1163 . Incentive 13 awards that are disproportionate to the class’s recovery risk a conflict of interest between 14 a class representative’s interests and the class’s interests. See id. (quoting Rodriguez I, [15] 563 F.3d at 959 ). This is especially relevant where retainer agreements require class 16 counsel to request an incentive award or where the settlement agreement conditions the 17 award on the class representatives’ approval of the settlement. See id. at 1163–64. 18 “Where . . . the class representatives face significantly different financial incentives than 19 the rest of the class because of the conditional incentive awards that are built into the 20 structure of the settlement, we cannot say that the representatives are adequate.” Id. at 21 1165. Additionally, in evaluating the reasonableness of incentive awards, [22] [t]he district court must evaluate their awards individually, using “relevant [23] factors includ[ing] the actions the plaintiff has taken to protect the interests of 24 the class, the degree to which the class has benefitted from those actions, . . . the amount of time and effort the plaintiff expended in pursuing the litigation [25] . . . and reasonabl[e] fear[s of] workplace retaliation.” [26] 27 Staton, 327 F.3d at 977 (quoting Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)). [28] 1 Further, “class members can certainly be repaid from any cost allotment for their 2 substantiated litigation expenses.” Id. Taken together, courts examine the following 3 factors when scrutinizing incentive awards on an individual basis in class action 4 settlements: (1) conflicts of interest between the class representative and the class in 5 assessing the terms or disparity of an award, (2) actions taken by the class representative 6 to protect the class’s interest, (3) the benefit received by the class based on the class 7 representative’s actions, (4) the time and effort expended by the class representative, and 8 (5) the class representative’s reasonable fears of workplace retaliation. 9 B. Discussion 10 Pursuant to the Settlement Agreement [11] 12 Class Representative Service Payment: The amount the Court awards to Plaintiff Sarah Blount for her service as a Class Representative, which will [13] not exceed $10,000. The payment shall be paid from the Qualified Settlement 14 Fund and will not be opposed by Defendant. This Service Payment is subject to approval of the Court. If the Court awards less than the amount requested, [15] any amount not awarded will become part of the Net Settlement Amount for 16 distribution to Participating Class Members. [17] 18 Doc. No. 420-2 at 22. The $10,000 incentive award as requested by Plaintiff in this case 19 is at the high end of the range of such awards in this Circuit. However, after reviewing 20 the declarations of both Class Counsel and Plaintiff, the Court agrees that a substantial 21 incentive award is appropriate here in light of the time and effort Plaintiff expended on 22 this litigation, the benefit obtained for the class, and the risks associated with bringing a 23 class action lawsuit against a former employer. 24 Accordingly, the Court APPROVES Plaintiff’s request for a $10,000 incentive 25 award. [28] CONCLUSION 2 Based on the foregoing, the Court GRANTS Plaintiff's motion for final approval 3 || of the class settlement and GRANTS Plaintiff's motion for attorney’s fees, costs, and an 4 || incentive award. 5 The Court CERTIFIES the Settlement Class for the purposes of the Settlement. 6 || The Court APPROVES the Settlement as fair, reasonable, and adequate pursuant to 7 || Federal Rule of Civil Procedure 23(e). The Court ORDERS the parties to undertake the 8 || obligations set forth in the Settlement Agreement that arise out of this Order. 9 The Court AWARDS attorneys’ fees to Class Counsel in the amount of $465,000 10 || and costs in the amount of $6,421.50. 11 The Court further AWARDS to Plaintiff an incentive payment for work performed 12 || as the class representative in the amount of $10,000. 13 The Court DIRECTS the Clerk of Court to enter a separate judgment of dismissal 14 || in accordance herewith, see Fed. R. Civ. P. 58(a), and to close the case. 15 Without affecting the finality of this Order, the Court maintains jurisdiction over 16 matter for purpose of enforcing the Judgment. 17 IT IS SO ORDERED. 18 || Dated: April 12, 2022 19 lh ~ hdl 20 HON. MICHAEL M. ANELLO 1 United States District Judge