McCulloch v. Baker Hughes Inteq Drilling Fluids, Inc., et al.

Filing 61

ORDER Granting Motion for Final Approval of Class Settlement and Granting Motion for Attorneys' Fees and Costs re 54 , 56 , signed by District Judge Dale A. Drozd on 11/22/17. CASE CLOSED. (Gonzalez, R)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10
11

MARC MCCULLOCH, et al.,

12
13
14
15
16

No. 1:16-cv-00157-DAD-JLT

Plaintiffs,
v.
BAKER HUGHES INTEQ DRILLING
FLUIDS, INC., et al.,
Defendant.

ORDER GRANTING MOTION FOR FINAL
APPROVAL OF CLASS SETTLEMENT AND
GRANTING MOTION FOR ATTORNEYS’
FEES AND COSTS
(Doc. Nos. 54, 56)

17
18
19

On July 21, 2017, plaintiffs filed a motion for final approval of class settlement. (Doc.

20

No. 56.) In connection with this motion, plaintiffs also filed a motion for attorneys’ fees and

21

costs on June 22, 2017. (Doc. No. 54.) The motions are unopposed and came before the court for

22

hearing on September 6, 2017. Attorney Daniel Brome appeared on behalf of plaintiffs.

23

Attorney Michael Burns appeared on behalf of defendants. Oral argument was heard and the

24

motion was taken under submission. (Id.) For the reasons discussed below, the court will grant

25

plaintiffs’ motion for final approval.

26
27
28

BACKGROUND
This court previously granted preliminary approval of the class action settlement in this
action on May 23, 2017. (Doc. No. 53.) Pertinent factual details as well as plaintiffs’ allegations
1

1

may be found in that order and will not be repeated here. Following the court’s grant of

2

preliminary approval, defendants provided the Settlement Administrator, Rust Consulting, Inc., a

3

list of plaintiffs and their contact information. (Doc. No. 56 at 5.) On June 6, 2017 notices were

4

mailed to plaintiffs. (Id.) Although eight notices were returned as undeliverable, Rust

5

Consulting, Inc., as well as plaintiffs’ counsel performed a skip trace. (Id.) Two notices were re-

6

mailed and the remaining six notices previously returned as undeliverable were distributed via e-

7

mail. (Id.) No objections or exclusions from the Rule 23 class members have been received and

8

no FLSA Opt-in plaintiffs have rejected their allocations. (Id. at 6.) The Claims Administrator

9

distributed 52 notices of settlement to all the class members, which includes the 20 California

10

class members, the 16 Pennsylvania class members, and the remaining opt-ins. (Id.) All 52 class

11

members are participating in the settlement for a 100 percent participation rate. (Id.)

12

FINAL CERTIFICATION OF CLASS ACTION

13

The court conducted an examination of the class action factors prior to issuing its

14

preliminary approval of the settlement, and found certification warranted. (See Doc. No. 53 at

15

12–15.) Since no other issues concerning whether certification is warranted have been raised, the

16

court will not repeat its prior analysis here, but instead reaffirms and finds final certification

17

appropriate. The parties stipulated to Rule 23 certification for settlement purposes only. (Doc.

18

No. 56 at 14.) The parties assert that nothing has changed about the groups of directional drillers

19

that were certified as part of the class following their entry into this stipulation. (Id.) The parties

20

ask that the court maintain this stipulated certification for settlement purposes and the court

21

agrees that this is appropriate. (Id.) Accordingly, the following classes are certified:

22

California Class: All individuals who performed directional drilling
services for defendants as consultants/independent contractors in
California at any time since February 2, 2012 to April 10, 2017, and
who do not communicate a timely written request for exclusion
from the Settlement.

23
24
25

Pennsylvania Class: All individuals who performed directional
drilling services for defendants as consultants/independent
contractors in Pennsylvania at any time since February 2, 2013 to
April 10, 2017 and who do not communicate a timely written
request for exclusion from the settlement.

26
27
28

/////
2

1

(Doc. No. 50 at 5–6.)1

2

In addition, for the reasons stated in the order granting preliminary approval, plaintiff

3

Marc McCulloch is confirmed as class representative, while the law firm of Nichols Kaster, LLP,

4

is confirmed as class counsel. Finally, Rust Consulting, Inc. is confirmed as the settlement

5

administrator.

6

FINAL APPROVAL OF CLASS ACTION SETTLEMENT

7

Class actions require the approval of the district court prior to settlement. Fed. R. Civ. P.

8

23(e) (“The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed,

9

or compromised only with the court’s approval.”). This requires that: (1) notice be sent to all

10

class members; (2) the court hold a hearing and make a finding that the settlement is fair,

11

reasonable, and adequate; (3) the parties seeking approval file a settlement identifying the

12

settlement agreement; and (4) class members be given an opportunity to object. Fed. R. Civ. P.

13

23(e)(1)–(5). The settlement agreement was previously filed on the court docket (Doc. No. 49-2)

14

and class members have been given an opportunity to object. The court now turns to the

15

adequacy of notice and its review of the settlement following the final fairness hearing.

16

A. Notice

17

“Adequate notice is critical to court approval of class settlement under Rule 23(e).”

18

Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998). “Notice is satisfactory if it

19

‘generally describes the terms of the settlement in sufficient detail to alert those with adverse

20

viewpoints to investigate and to come forward and be heard.” Churchill Vill., L.L.C. v. Gen.

21

Elec., 361 F.3d 566, 575 (9th Cir. 2004) (quoting Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d

22

1338, 1352 (9th Cir. 1980)). Any notice of the settlement sent to the class should alert class

23
24
25
26
27
28

1

As indicated by plaintiffs’ counsel, one of the plaintiffs, Mr. Dan Gilbert, was incorrectly treated
as only a Rule 23 class member and was not provided payment based on his FLSA claims as well.
(Doc. No. 60 at ¶ 2.) As a result, the parties came to an agreement and Mr. Gilbert signed a
release of his FLSA claims to receive a total payment of $140,582.88. (Id. at ¶ 3.) In this regard,
he will receive $97.204.69 as part of the initial payout and the remaining $43,378.19 will be paid
through uncashed checks. (Id.) Should there not be any uncashed checks, that amount will be
paid by reducing plaintiffs’ counsel’s attorneys’ fees and the settlement administrator will hold
that amount in escrow until the check cashing deadline. (Id.)
3

1

members of “the opportunity to opt-out and individually pursue any state law remedies that might

2

provide a better opportunity for recovery.” Hanlon, 150 F.3d at 1025. It is important for class

3

notice to include information concerning the attorneys’ fees to be awarded from the settlement,

4

because it serves as “adequate notice of class counsel’s interest in the settlement.” Staton v.

5

Boeing Co., 327 F.3d 938, 963 n.15 (9th Cir. 2003) (quoting Torrisi v. Tucscon Elec. Power Co.,

6

8 F.3d 1370, 1375 (9th Cir. 1993)) (noting that where the notice references attorneys’ fees only

7

indirectly, “the courts must be all the more vigilant in protecting the interests of class members

8

with regard to the fee award.”).

9

As indicated in the order granting preliminary approval of class settlement,

10

[E]ach of the notice forms [ ] describe the nature of the action and
the claims raised therein, namely that in violation of state and
federal wage and hour laws “defendants misclassified these
directional drillers as independent contractors, rather than
employees, and as a result failed to pay overtime premiums, for
overtime hours worked.” (Doc. No. 50 at 25.) The notice forms
describe the options available to the prospective plaintiffs and the
effect of electing each option. (See id. at 40.) The notice forms
also set forth the terms of the settlement, proposed attorneys’ fees,
and scope of the liability release. (See id. at 42–47.)

11
12
13
14
15
16

(Doc. No. 53 at 16.) In addition, the Settlement Administrator, Rust Consulting, was provided

17

with a list of plaintiffs and their respective contact information. (Doc. No. 56 at 5.) As indicated

18

above, they received eight notices returned as undeliverable and performed a skip trace to locate

19

these eight plaintiffs. Plaintiffs’ counsel also performed a separate skip trace. (Id.) Two notices

20

were re-mailed and the remaining six received notice by e-mail from Rust Consulting. (Id.) The

21

settlement notices advised all class members of their individual settlement amount, and the notice

22

forms also apprised the plaintiffs of the projected attorneys’ fees and costs associated with this

23

class action. (Id.) None of the Rule 23 class members, or any of the FLSA Opt-ins, has objected

24

to the amounts set forth therein. (Id.) Accordingly, the court finds that adequate notice has been

25

given to all the class members.

26
27
28

B. Final Fairness Hearing
In assessing whether a district court’s determination of the fairness of a class action
settlement was within its discretion, the Ninth Circuit Court of Appeals balances the following
4

1

factors:

5

(1) the strength of the plaintiff’s 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.

6

Churchill Vill., L.L.C., 361 F.3d 575; see also In re Online DVD-Rental Antitrust Litig., 779 F.3d

7

937, 944 (9th Cir. 2015); Rodriguez v. West Publ’g Corp., 563 F.3d 948, 964–67 (9th Cir. 2009).

8

These settlement factors are non-exclusive, and not each need be discussed if they are irrelevant

9

to a particular case. Chruchill Vill., L.L.C., 361 F.3d at 576 n.7. While the Ninth Circuit has

2
3
4

10

observed that “strong judicial policy . . . favors settlements,” id. at 576 (quoting Class Plaintiffs v.

11

City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)), where the parties reached a settlement

12

agreement prior to class certification, the court has an independent duty on behalf of absent class

13

members to be vigilant for any sign of collusion among the negotiating parties. See In re

14

Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (noting “settlement class

15

actions present unique due process concerns for absent class members,” because the “inherent

16

risk is that class counsel may collude with the defendants, tacitly reducing the overall settlement

17

in return for a higher attorney’s fee”) (internal quotations and citations omitted).

18

In particular, where a class action settlement agreement was reached prior to a class being

19

certified by the court, “consideration of these eight Churchill factors alone is not enough to

20

survive appellate review.” In re Bluetooth, 654 F.3d at 946–47. District courts must be watchful

21

“not only for explicit collusion, but also for more subtle signs that class counsel have allowed

22

pursuit of their own self-interests and that of certain class members to infect the negotiations.”

23

Id. at 947. These more subtle signs include: (1) “when counsel receive a disproportionate

24

distribution of the settlement, or when the class receives no monetary distribution but class

25

counsel are amply rewarded”; (2) the existence of a “clear sailing” arrangement, which provides

26

“for the payment of attorneys’ fees separate and apart from class funds,” and therefore carries

27

“the potential of enabling a defendant to pay class counsel excessive fees and costs in exchange

28

for counsel accepting an unfair settlement on behalf of the class”; and (3) “when the parties
5

1

arrange for fees not awarded to revert to defendants rather than be added to the class fund.” Id.

2

(internal citations and quotations omitted). The Ninth Circuit has also recognized that a version

3

of a “clear sailing” arrangement exists when a defendant expressly agrees not to oppose an award

4

of attorneys’ fees up to a certain amount. Lane v. Facebook, Inc., 696 F.3d 811, 832 (9th Cir.

5

2012); In re Bluebook, 654 F.3d at 947; In re Toys R Us-Delaware, Inc., 295 F.R.D. 438, 458

6

(C.D. Cal. 2014) (“In general, a clear sailing agreement is one where the party paying the fee

7

agrees not to contest the amount to be awarded by the fee-setting court so long as the award falls

8

beneath a negotiated ceiling.”) (quoting Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518,

9

520 n.1 (1st Cir. 1991)).

10

While this court has wide latitude to determine whether a settlement is substantively fair,

11

it is held to a higher procedural standard and “must show it has explored comprehensively all

12

factors, and must give a reasoned response to all non-frivolous objections.” Allen v. Bedolla, 787

13

F.3d 1218, 1223–24 (9th Cir. 2015) (quoting Dennis v. Kellogg Co., 597 F.3d 858, 864 (9th Cir.

14

2012)). Thus, while the court should examine any relevant Churchill factors, the failure to review

15

a pre-class certification settlement for those subtle signs of collusion identified above may also

16

constitute error. Id. at 1224–25.

17

1. Strength of Plaintiffs’ Case

18

The parties agree that the defendants’ liability is still an issue that can be contested. (Doc.

19

No. 56 at 8.) Plaintiffs’ arguments are mainly that defendants were employers because they

20

exercised sufficient control over the directional drillers, and that the FLSA exemptions do not

21

apply because the directional drillers were paid a day rate. (Id.) Defendants, on the other hand,

22

argue that they were not an employer because they contracted with third party labor providers.

23

(Id.) In the alternative, defendants contend that “even if plaintiffs were employees they were

24

subject to the administrative, executive, combination, or highly compensated exemptions.” (Id.)

25

In addition, defendants argue that plaintiffs enjoyed significant periods of downtime during shifts

26

after being relieved of their duties. (Id. at 9.) According to defendants, in proving that they were

27

an employer, plaintiffs would instead have to show that no FLSA exemptions apply because most

28

had significant experience or worked independently without supervision. (Id.) Despite these
6

1

arguments by defendants, plaintiffs believe their claims are meritorious and warrant potential

2

litigation. (Id.) It is against this backdrop that the parties have been able to reach a resolution of

3

this action. (Id.) The court finds that the settlement here, as posited by the parties, appropriately

4

balances the strengths and weaknesses of the plaintiffs’ case specifically with respect to

5

“employer status, FLSA exemptions, and hours worked, while providing significant recovery for

6

class members.” (Id.) This settlement is particularly fair and reasonable since, according to the

7

parties, it will pay out 92 percent of the plaintiffs’ realistic value of the claims after attorneys’

8

fees and costs. (Id.) It is clear that plaintiffs’ case, despite its strengths, was seriously contested

9

by defendants in this litigation. Consideration of this factor therefore weighs in favor of the court

10
11
12

concluding this settlement should be approved.
2. Risk, Expense, Complexity, and Likely Duration of Further Litigation, and Risk of
Maintaining Class Action Status Through Trial

13

The court notes that absent class settlement, fully litigating this case would be costly given

14

the number of complex factual and legal issues, and the fact that the class members are spread out

15

across the country. (Id. at 9–10.) It is likely that defendants would have contested class

16

certification, sought decertification, and moved for summary judgment in their favor, requiring

17

additional discovery in the case. (Id.) Even if issues such as whether the plaintiffs were

18

independent contractors and whether the exemptions applied were to be resolved through

19

summary judgment, plaintiffs would still need to prove at trial the number of hours worked. (Id.

20

at 10.) “[W]age and hour trials are complex, expensive, and unpredictable.” (Id.) If plaintiffs

21

were successful at trial, it is likely that defendants would appeal. (Id.) In light of these

22

considerations, the court finds that given the complexity of the issues, the expense of litigation,

23

and the interest of judicial economy, the settlement here provides an appropriate form of relief.

24

3. The Amount Offered in Settlement

25

The total settlement amount offered here is $3,000,000. (Id.) The average settlement

26

payment per person amounts to $42,625 after attorneys’ fees and costs. (Id.) Plaintiffs have

27

requested $750,000 in attorneys’ fees and $20,000 costs. (Id. at 6.) Unexpended costs are

28

included in the settlement allocation. (Id.) Plaintiffs estimate $40,000 to be deduced for half of
7

1

the employer-side taxes. (Id.) Approximately $2,190,000 has been allocated to the 48 opt-in

2

plaintiffs and class members, to be distributed based on their individual earnings and the total

3

number of days worked. (Id.) The settlement agreement provides that anything remaining after

4

the distribution of checks and expiration of time shall be donated to Legal Aid at Works as a cy

5

pres beneficiary. (Id.) The settlement agreement does not provide for any incentive payment for

6

the named plaintiff. The payments range from at least $220.28 for an employee who worked only

7

one covered week up to $243,473.62 for the named plaintiff who worked for defendant, Baker

8

Hughes, for three years. (Id. at 11.) Accordingly, the workers who worked the most hours within

9

the statute of limitations and have the most significant claims will receive the largest payment.

10

(Id.) As stated, the settlement payout reflects 92 percent of the estimated potential value of the

11

class members’ claims. The court agrees that the scope of this recovery strongly weighs in favor

12

of approval. (Id.) Additionally, the court notes that defendants no longer classify directional

13

drillers as independent contractors.

14

As found in the court’s prior order granting preliminary approval, this settlement amount

15

is fair and reasonable in relation to the potential recovery and the court’s analysis of that issue

16

remains unchanged. The amount offered in the settlement supports final approval of the

17

settlement.

18

4. Extent of Discovery Completed and the Stage of the Proceedings

19

The parties engaged in significant discovery prior to negotiating the settlement agreement.

20

In addition to exchanging tens of thousands of documents, the named plaintiff participated in a

21

Rule 30(b)(6) deposition. (Id. at 12.) During discovery, defendants also provided plaintiffs’

22

counsel with data regarding the class members’ work and pay history. (Id.) Plaintiffs’ counsel

23

was able to use this information during class interviews and was able to assess the value of the

24

plaintiffs’ claims prior to mediation. (Id.) As a result of productive discovery, the parties were

25

able to engage in arms-length negotiations to reach a settlement in this case. (Id.)

26

5. Experience and Views of Counsel

27

Plaintiffs’ counsel is a national law firm that specializes in litigating wage and hour class

28

actions, particularly for workers in the oil industry. (Id.) As the parties note, this court in its
8

1

order granting preliminary approval of class settlement recognized that “[t]his case’s early

2

resolution can partly be attributed to counsel’s experience representing thousands of employees in

3

wage and hour cases for thirty years, particularly within the oil and gas industry.” (Doc. No. 53

4

at 14.) Based on their years of experience, plaintiffs’ counsel believes the settlement is fair and

5

reasonable and presents clear advantages over continued litigation - prompt and certain payment.

6

(Doc. No. 56 at 12.) According to the parties, this agreement was procured by arms-length

7

negotiations through a mediator and by experienced counsel on both sides after significant

8

investigation.

9
10

6.

Reaction of the Class to Proposed Settlement

As stated, no Rule 23 class members have objected to the settlement and all FLSA Opt-ins

11

have returned their claim forms. (Id. at 13.) The settlement administrator and plaintiffs’ counsel

12

sought to deliver notices to all class members and even performed skip traces or contacted class

13

members, whose notices were otherwise undeliverable, via e-mail. (Id.) The parties maintain

14

that in light of these steps, the 100 percent participation rate, and the lack of any objections

15

having been received, the settlement agreement warrants approval. (Id.) Accordingly,

16

consideration of this factor weighs significantly in favor of granting final approval and the court

17

therefore approves the settlement as fair, reasonable, and adequate.

18

7. The FLSA Settlement

19

The parties maintain that the settlement agreement satisfies Lynn’s Food Stores, which is

20

a less rigorous standard than Rule 23. (Id. at 13.) While defendants’ status as an employer, the

21

applicability of the FLSA exemptions, and total number of hours worked by plaintiffs were

22

disputed, the court finds the agreement reasonable because the class members will receive 92

23

percent of the estimated potential value of their claims. (Id.) In addition, all FLSA Opt-ins are

24

participating in the settlement. (Id.)

25

8. Cy Pres Recipient

26

Cy pres award allows for “aggregate calculation of damages, the use of summary claim

27

procedures, and distribution of unclaimed funds to indirectly benefit the entire class.” Six

28

Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). “To ensure
9

1

that the settlement retains some connection to the plaintiff class and the underlying claims,

2

however, a cy pres award must qualify as ‘the next best distribution’ to giving the funds directly

3

to class members.” Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012) (quoting Six

4

Mexican Workers, 904 F.2d at 1308).

5

Under the terms of the settlement agreement, in the event settlement checks remain

6

uncashed after 90 days, those funds shall be donated to Legal Aid at Work, formerly known as the

7

Legal Aid Society – Employment Law Center, as a cy pres beneficiary. (Id. at 14.) Legal Aid at

8

Work is a non-profit organization that “‘works to ensure that all workers benefit from the laws

9

that regulate pay and work hours.’” (Id. at 14 (quoting Eddings v. Health Net, Inc., No. CV-10-

10

1744-JST (RZX), 2013 WL 3013867, at *4 (C.D. Cal. 2013) (approving Legal Aid at Work as a

11

cy pres beneficiary in a wage and hour class action))). The court finds a sufficient nexus between

12

the class and Legal Aid at Work, and accordingly approves it as the cy pres beneficiary.
ATTORNEYS’ FEES AND COSTS

13
14

Plaintiffs have filed a motion for attorneys’ fees and costs in connection with their motion

15

for final approval of class settlement. (Doc. No. 54.) For the reasons discussed below, the court

16

will grant this motion as well.

17
18

A. The Requested Attorneys’ Fees are Reasonable
This court has an “independent obligation to ensure that the award [of attorneys’ fees],

19

like the settlement itself, is reasonable, even if the parties have already agreed to an amount.” In

20

re Bluetooth, 654 F.3d at 941. This is because, when fees are to be paid from a common fund, the

21

relationship between the class members and class counsel “turns adversarial.” In re Mercury

22

Interactive Corp. Secs. Litig., 618 F.3d 988, 944 (9th Cir. 2010); In re Wash. Pub. Power Supply

23

Sys. Secs. Litig., 19 F.3d 988, 994 (9th Cir. 1994). As such, the district court assumes a fiduciary

24

role for the class members in evaluating a request for an award of attorneys’ fees from the

25

common fund. Id.; see also Rodriguez v. Disner, 688 F.3d 645, 655 (9th Cir. 2012); Rodriguez v.

26

West Publ’g Corp., 563 F.3d 948, 968 (9th Cir. 2009).

27
28

Because this case is premised on federal question jurisdiction (Doc. No. 1 at 1), federal
law governs the award of attorneys’ fees. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047
10

1

(9th Cir. 2002) (“Because Washington law governed the claim, it also governs the award of

2

fees.”); see also 10 Fern Smith, Moore’s Federal Practice Civil § 54.171 (2015) (“In cases within

3

the district courts’ federal-question jurisdiction, state fee-shifting statutes generally are

4

inapplicable.”). “Under Ninth Circuit law, the district court has discretion in common fund cases

5

to choose either the percentage-of-the-fund or lodestar method” for awarding attorneys’ fees.

6

Vizcaino, 290 F.3d at 1047. The Ninth Circuit has generally set a 25 percent benchmark for the

7

award of attorneys’ fees in common fund cases. Id. at 1047–48; see also In re Bluetooth, 654

8

F.3d at 942 (“[C]ourts typically calculate 25% of the fund as the ‘benchmark’ for a reasonable fee

9

award, providing adequate explanation in the record of any ‘special circumstances’ justifying a

10

departure.”). Reasons to vary the benchmark award may be found when counsel achieves

11

exceptional results for the class, undertakes “extremely risky” litigation, generates benefits for the

12

class beyond simply the cash settlement fund, or handles the case on a contingency basis.

13

Vizcaino, 290 F.3d at 1048–50; see also In re Online DVD-Rental, 779 F.3d at 954–55.

14

Ultimately, however, “[s]election of the benchmark or any other rate must be supported by

15

findings that take into account all of the circumstances of the case.” Vizcaino, 290 F.3d at 1048.

16

The Ninth Circuit has approved the use of the lodestar cross-checks as a way of determining the

17

reasonableness of a particular percentage recovery of a common fund. Id. at 1050 (“Where such

18

investment is minimal, as in the case of an early settlement, the lodestar calculation can be helpful

19

in suggesting a higher percentage when litigation has been protracted.”); see also In re Online

20

DVD-Rental, 779 F.3d at 955.
Here, plaintiffs are requesting attorneys’ fees at 25 percent of the common fund, or

21
22

$750,000. (Doc. No. 54 at 3.) This attorneys’ fees request is supported by the record before the

23

court. The notice forms issued specifically informed the class members about the amount of

24

attorneys’ fees and costs sought. (Id.) As stated, no objections to the attorneys’ fees sought by

25

counsel have been made by class members. Plaintiffs’ counsel avers that assessing fees from the

26

common fund is appropriate because the amount allocated to each individual is “undisputed and

27

mathematically ascertainable,” where individual payments here will be assessed by considering:

28

/////
11

1
2
3

. . . the individual’s day rate, actual days worked, consent for filing
date and applicable statute of limitations, an assumption that each
shift included 12.5 hours of compensable work time, an assumption
of 100% chance of success on overtime state and federal law
claims, and an assumption of 50% risk of loss on derivative
California law claims, among other factors.

4
5

(Id. at 5.) Plaintiffs here are not seeking attorneys’ fees above the 25 percent benchmark amount.

6

After deducting attorneys’ fees and costs, $2,190,000, or 92 percent of the calculated damages,

7

will still be distributed among the class members, at an average of $45,625 per individual based

8

on the number of hours and weeks worked. (Id. at 7.) Plaintiffs’ counsel maintains that the case

9

was handled on a contingency-basis and that payment for time spent litigating the case and

10

reimbursement for out of pocket costs were not received in advance of litigation. (Id. at 11.)

11

Plaintiffs’ counsel has expended a total of 637.5 hours on this case. (Id. at 12.) The parties have

12

exchanged tens of thousands of documents during discovery and engaged in a Rule 30(b)(6)

13

deposition for the named plaintiff. (Id. at 9.) The evidence before the court reflects a significant

14

investment of time and effort by counsel in obtaining this favorable settlement. These

15

considerations support the benchmark attorney fee award in this case.

16

Finally, a lodestar cross-check bolsters the attorneys’ fees request even further. Where a

17

lodestar is merely being used as a cross-check, the court “may use a ‘rough calculation of the

18

lodestar.’” Bond v. Ferguson Enters., Inc., No. 1:09-cv-1662 OWW MJS, 2011 WL 2648879, at

19

*12 (E.D. Cal. June 30, 2011) (quoting Fernandez v. Victoria Secret Stores, LLC, No. CV 06-

20

04149 MMM (SHx), 2008 WL 8150856 (C.D. Cal. July 21, 2008)). Beyond simply the

21

multiplication of a reasonable hourly rate by the number of hours worked, a lodestar multiplier is

22

typically applied. “Multipliers in the 3–4 range are common in lodestar awards for lengthy and

23

complex class action litigation.” Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 298 (N.D.

24

Cal. 1995) (citing Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 549 (S.D. Fla. 1988)); see

25

also 4 Newberg on Class Actions § 14.7 (courts typically approve percentage awards based on

26

lodestar cross-checks of 1.9 to 5.1 or even higher, and “the multiplier of 1.9 is comparable to

27

multipliers used by the courts”); In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,

28

148 F.3d 283, 341 (3d Cir. 1998) (“[M]ultiples ranging from one to four are frequently awarded
12

1
2

in common fund cases when the lodestar method is applied.”) (quoting Newberg).
This court has previously accepted as reasonable for lodestar purposes hourly rates of

3

between $370 and $495 for associates, and $545 and $695 for senior counsel and partners. See

4

Emmons v. Quest Diagnostics Clinical Labs., Inc., 1:13-cv-00474-DAD-BAM, at *8 (E.D. Cal.

5

Feb. 27, 2017). Some judges in the Fresno division of the Eastern District of California have

6

approved similar rates in various class action settings, while others have approved lower rates.

7

Barbosa v. Cargill Meat Sols. Corp., 297 F.R.D. 431, 452 (E.D. Cal. 2013) (awarding between

8

$280 and $560 per hour for attorneys with two to eight years of experience, and $720 per hour for

9

attorney with 21 years of experience); Gong-Chun v. Aetna Inc., No. 1:09-cv-01995-SKO, 2012

10

WL 2872788, at *23 (E.D. Cal. July 12, 2012) (awarding between $300 and $420 per hour for

11

associates, and between $490 and $695 per hour for senior counsel and partners). But see In re

12

Taco Bell Wage and Hour Actions, 222 F. Supp. 3d 813, 838–40 (E.D. Cal. 2016) (concluding

13

that Fresno division rates are $350 to $400 per hour for attorneys with twenty or more years of

14

experience, $250 to $350 per hour for attorneys with less than fifteen years of experience, and

15

$125 to $200 per hour for attorneys with less than two years of experience); Reyes v. CVS

16

Pharm., Inc., No. 1:14-cv-00964-MJS, 2016 WL 3549260, at *12–13 (E.D. Cal. June 29, 2016)

17

(awarding between $250 and $380 for attorneys with more than twenty years of experience, and

18

between $175 and $300 for attorneys with less than ten years’ experience); Rosales v. El Rancho

19

Farms, No. 1:09-cv-00707-AWI, 2015 WL 4460635, at *25 (E.D. Cal. July 21, 2015) (awarding

20

between $175 and $300 per hour for attorneys with less than ten years of experience and $380 per

21

hour for attorneys with more than twenty years’ experience); Schiller v. David’s Bridal, Inc., No.

22

1:10-cv-00616-AWI-SKO, 2012 WL 2117001, at *22 (E.D. Cal. June 11, 2012) (awarding

23

between $264 and $336 per hour for associates, and $416 and $556 per hour for senior counsel

24

and partners). Here, the court generally adopts the hourly rates proposed by class counsel for

25

lodestar cross-check purposes as appropriate.

26

Additionally, counsels’ declarations are sufficient to establish the number of attorney

27

hours expended on this litigation. See Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 264

28

(N.D. Cal. 2015) (“[I]t is well established that ‘[t]he lodestar cross-check calculation need entail
13

1

neither mathematical precision nor bean counting . . . [courts] may rely on summaries submitted

2

by the attorneys and need not review actual billing records.’”) (quoting Covillo v. Specialtys Café,

3

No. C-11-00594 DMR, 2014 WL 954516 (N.D. Cal. Mar. 6, 2014)).

4

Plaintiffs’ counsel’s fees under the lodestar method amount to $189,927.50 and represents

5

637.5 hours of billable work at an hourly rate of $175 for paralegals, $350 for associate attorneys,

6

and $525 for partners. (Id. at 12.) Additionally, plaintiffs’ counsel anticipates an additional forty

7

hours of work to resolve the case, which brings the lodestar value to $203,052.50. (Id.) The

8

hours spent in calculating the lodestar method include: investigating claims, interviewing

9

potential class members and opt-in plaintiffs, preparing discovery, reviewing documents, drafting

10

the motion for conditional certification, preparing and taking depositions, assessing damages,

11

conducting mediation, and briefing the motion for preliminary approval of class settlement as

12

well as the current motion. (Doc. No. 54-1 at 3.) Of the 637.5 hours, Attorney Daniel Brome

13

billed 265.8 hours at an hourly rate of $350. (Id.) Attorney Brome has been practicing law for

14

six years, since 2011. (Id.) Attorney Michele Fisher expended 41.5 hours on the case at an

15

hourly rate of $525. (Id.) Attorney Fisher has been practicing law for over 17 years, has been

16

partner at Nichols Kaster, LLP since 2008, and has represented over 100,000 individuals in wage

17

and hour cases particularly in the oil and gas industry. (Id.) Attorney Mathew Morgan expended

18

49.5 hours on the case at an hourly rate of $525. (Id. at 5.) He was admitted to the California Bar

19

in 2000 and became partner in 2011. (Id.) The court finds these rates consistent with the rates

20

applied in other cases using the lodestar cross-check method. Here, awarding attorneys’ fees at a

21

25 percent benchmark of the common fund would yield a lodestar multiplier of 3.95, which is

22

within the range of acceptable lodestar multipliers previously approved by this court and others.

23

(Id. at 15.)

24
25
26

Accordingly, and in light of the significant relief obtained by counsel on behalf of the
class members, the court finds that the requested attorneys’ fee award is reasonable.
B. Counsels’ Requested Expenses are Reasonable

27

Additionally, class counsel seeks to recover the costs expended on this litigation. Expense

28

awards “should be limited to typical out-of-pocket expenses that are charged to a fee paying client
14

1

and should be reasonable and necessary.” In re Immune Response Secs. Litig., 497 F. Supp. 2d

2

1166, 1177 (S.D. Cal. 2007). These can include reimbursements for “(1) meals, hotels, and

3

transportation; (2) photocopies; (3) postage, telephone, and fax; (4) filing fees; (5) messenger and

4

overnight delivery; (6) online legal research; (7) class action notices; (8) experts, consultants, and

5

investigators; and (9) mediation fees.” Id.

6

As indicated in counsel’s supplemental declaration, counsel incurred $16,537.49 in

7

unreimbursed costs during the course of litigation. (Doc. No. 60 at ¶ 4.) At the time of

8

preliminary approval, plaintiffs’ counsel had incurred $15,857.64 in unreimbursed costs during

9

the course of litigation and based on this amount, requested $20,000 based on future anticipated

10

costs. (Id.) These costs include filing fees, postage, Westlaw and PACER usage, deposition

11

expenses, and expenses related to travel in connection with this suit. (Doc. No. 60-1, Ex. A.)

12

Since the actual amount expended is less than the requested amount of $20,000, the difference of

13

$3,462.51 will be allocated pro rata to plaintiffs. (Doc. No. 60 at ¶ 4.) The court finds that these

14

are reasonable expenses to be properly awarded in the amount sought.

15
16

CONCLUSION
For all of the foregoing reasons, the court finds certification is warranted here and that the

17

settlement is fair, reasonable, and adequate. Therefore, plaintiffs’ motion for final approval of

18

class settlement (Doc. No. 56) and motion for attorneys’ fees and costs (Doc. No. 54) are granted.

19
20
21
22
23
24
25
26

Accordingly,
1. The court certifies the following classes for settlement purposes only:
California Class: All individuals who performed directional drilling
services for defendants as consultants/independent contractors in
California at any time since February 2, 2012 to April 10, 2017, and
who do not communicate a timely written request for exclusion
from the Settlement.
Pennsylvania Class: All individuals who performed directional
drilling services for defendants as consultants/independent
contractors in Pennsylvania at any time since February 2, 2013 to
April 10, 2017 and who do not communicate a timely written
request for exclusion from the settlement.

27

2. The law firms of Nichols Kaster, LLP is appointed as class counsel;

28

3. Plaintiff Marc McCulloch confirmed as class representatives;
15

1
2
3
4
5
6
7
8
9
10

4. Payment to the Rule 23 class members and FLSA Opt-ins shall be made in accordance
with the terms of the settlement
5. The court awards class counsels’ attorneys’ fees in the sum of $750,000, and class counsel
shall be reimbursed for litigation costs amounting to $20,000.
6. The parties are directed to abide by the settlement agreement, and the court will retain
jurisdiction over this matter for the purpose of enforcing the settlement agreement; and
7. The Clerk of the Court is directed to close this case.
IT IS SO ORDERED.
Dated:

November 22, 2017
UNITED STATES DISTRICT JUDGE

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
16