Ogbuehi v. Comcast of California/Colorado/Florida/Oregon, Inc.

Filing 30

ORDER signed by Judge Kimberly J. Mueller on 6/8/2015 ORDERING that the Court GRANTS final approval of the settlement. The court AWARDS the class counsel attorney's fees in the amount of $33,333. The court AWARDS the class counsel reimbur sement of expenses in the amount of $8,004.69. The court AWARDS an incentive payment of $5,000 to the class representative, Tysheika Ogbuehi. The court AWARDS administration costs in the amount of $5,000 to the claims administrator G ilardi & Co. LLC. The parties and the settlement administrator shall perform their respective obligations under the terms of the settlement agreement. The court enters JUDGMENT and CLOSES the case. The court in its discretion DECLINES to maintain jurisdiction to enforce the terms of the parties' settlement agreement. This order resolves ECF Nos. 25 and 28 . CASE CLOSED. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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TYSHEIKA OGBUEHI,

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Plaintiff,

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No. 2:13-cv-00672-KJM-KJN

v.

ORDER

COMCAST OF
CALIFORNIA/COLORADO/FLORIDA/
OREGON, INC.,

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Defendant.

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This matter is before the court on the unopposed motion by Tysheika Ogbuehi

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(“plaintiff” or “class representative”) for final approval of class action settlement. (ECF No. 28.)

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Also before the court is plaintiff’s unopposed motion for attorney’s fees and costs. (ECF No. 25.)

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The court held a hearing on the matter on March 13, 2015, at which David Spivak appeared for

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plaintiff and Daryl S. Landy appeared for defendant. As explained below, the court GRANTS

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plaintiff’s motions.

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I.

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FACTUAL AND PROCEDURAL BACKGROUND
This class action lawsuit arises out of the alleged failure of Comcast Cable

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Communications Management, LLC (incorrectly named as Comcast of California/Colorado/

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Florida/Oregon, Inc.) (“defendant”) to properly compensate plaintiff and other employees under

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the Fair Labor Standards Act (“FLSA”), the California Labor Code, California Industrial Welfare
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Commission order provisions and the California Business and Professions Code. (See generally

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Second Am. Compl. (“SAC”), ECF No. 16.)

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The second amended complaint is the operative complaint and alleges as follows.

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Plaintiff and other similarly situated employees were employed with defendant in the position of

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Virtual Customer Account Executive. (Id. ¶ 4, ECF No. 16.) In this position, the employees

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primarily worked from home. (Id.) Defendant classified plaintiff and other Virtual Customer

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Account Executives as non-exempt, hourly employees. (Id. ¶ 11.) Plaintiff and other employees

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worked more than eight hours in a day and more than forty hours in a workweek, but defendant

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failed to pay them overtime wages. (Id.) Defendant also required Virtual Customer Account

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Executives to work “off the clock” but did not pay them for this work. (Id.) Plaintiff brings nine

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separate claims for relief: (1) failure to indemnify in violation of the California Labor Code;

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(2) failure to provide meal periods in violation of the California Labor Code; (3) failure to

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provide rest periods in violation of the California Labor Code; (4) failure to pay wages in

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violation of the FLSA; (5) failure to pay employees minimum and overtime wages for all hours

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worked in violation of the California Labor Code; (6) failure to pay waiting time penalties in

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violation of the California Labor Code; (7) failure to provide accurate written wage statements in

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violation of the California Labor Code; (8) unfair competition under the California Business &

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Professions Code; and (9) recovery of civil penalties under the California Labor Code. (Id. at 10–

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26.)

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On July 11, 2014, following the parties’ participation in private mediation,

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plaintiff filed a motion for preliminary approval of class action settlement. (ECF No. 21.) In

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granting plaintiff’s motion for preliminary approval of the class settlement agreement, the court

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conditionally certified the following class:

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[A]ll persons employed by Comcast in the State of California from
February 26, 2009 through and including the implementation of the
California Call Center Closure [on November 30, 2012], who held
positions as Virtual Customer Account Executives, and were not
paid a severance payment that was offered as a result of the
California Call Center Closure. The Class includes the estates of
such persons and, if any such person is incompetent or deceased,
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the legal representative or successor in interest as evidenced by
reasonable verification.

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(ECF No. 24 at 24.)

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The court’s preliminary approval was with reservations, however. First, the court

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was concerned with the 33.33 percent attorney’s fee request of plaintiff’s counsel. (ECF No. 24

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at 17.) That is because “the benchmark for such an award is 25 percent, the settlement was

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reached during an early stage of litigation, and . . . counsel has a ‘clear sailing’ agreement with

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defendant.” (Id.) Therefore, the court asked plaintiff’s counsel to “provide the court with the

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information to permit the court to perform a lodestar cross-check.” (ECF No. 24 at 17.) To allow

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the court to conduct a lodestar cross-check, the court asked plaintiff’s counsel to provide a

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“detailed description of each task completed, the number of hours spent on each task, when the

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work was completed, who performed the work, each person’s hourly rate and the total number of

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hours worked.” (Id.)

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Second, with respect to plaintiff’s request for an enhancement award, the court

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noted that class counsel’s generalized summary of the services plaintiff provided was not

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sufficient “to enable the court to make a well-informed decision regarding approval of plaintiff’s

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proposed enhancement award.” (Id. at 18–19.) Accordingly, the court asked plaintiff to “provide

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a detailed declaration describing her current employment status, any risks she faced as class

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representative, specific activities she performed as class representative and the amount of time

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she spent on each activity.” (Id. at 19.) At the hearing on the instant motion, the parties

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represented plaintiff is gainfully employed.

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Third, with respect to the parties’ negotiations, the court asked the parties for

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information relating to their mediation to assess the settlement’s reasonableness. (Id. at 19–20.)

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Specifically, the court required the parties to “provide information exchanged during their private

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mediation including, but not limited to, mediation statements and any relevant communications

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during the parties’ negotiations.” (Id. at 20.)

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Finally, with respect to the cy pres provision of the settlement agreement, the court

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noted that it would require the parties to address the appropriateness of that provision at the final

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hearing. (Id. at 21.)

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On December 1, 2014, plaintiff filed a motion for attorney’s fees (ECF No. 25),

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and on February 28, 2015, plaintiff filed a motion for final approval of class action settlement

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(ECF No. 28). Defendant filed a brief in support of plaintiff’s motion for final approval of class

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action settlement. (ECF No. 26.) Finally, the parties have lodged certain documents with the

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court for in camera review. (ECF No. 27.)

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II.

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THE KEY TERMS OF THE SETTLEMENT AGREEMENT
Under the settlement agreement, defendant has agreed to pay a gross settlement

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amount (“GSA”) of $100,000. (ECF No. 24 at 10.) The GSA includes class counsel’s attorney’s

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fees, litigation expenses, claims administration costs, the Private Attorney General Act (“PAGA”)

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penalty payment, settlement payments to class members, and the enhancement award. (ECF

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No. 21-2 ¶ 2.17.) The GSA does not include defendant’s share of payroll taxes. (Id.) By the

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instant motion, the parties seek the court’s approval of the following terms of the settlement

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agreement. The GSA of $100,000 is to be distributed as follows:

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1. The amount to be paid to the class representative is $5,000;

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2. The amount to be paid for class counsel fees is $33,333;

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3. The amount to be paid for litigation expenses is $8,004.69;

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4. The PAGA payment is $2,500, of which $1,875 will go to the California Labor

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and Workforce Development Agency (“LWDA”), and the $625 balance will be

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distributed to the class members on a pro rata basis; and

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5. The amount to be paid to the class administrator is $5,000.

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(ECF No. 28-1 at 1–2.)

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Plaintiff further seeks the court’s approval of the appointment of plaintiff as class

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representative, the appointment of David Spivak of The Spivak Law Firm and Walter Haines of

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the United Employees Law Group as class counsel, and the appointment of Gilardi & Co., LLC as

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class administrator. (Id. at 1.) After deducting the above distributions from the GSA ($100,000 –
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$53,212.69), the net settlement amount available to the class members is $46,787.31.

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After the claim administrator mailed the notice packets to the participating class

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members, it received neither objections nor requests to opt-out. At the hearing, the parties

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confirmed that no objections or opt-out requests were received.

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III.

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CLASS CERTIFICATION
A party seeking to certify a class must demonstrate that it has met the requirements

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of Federal Rule of Civil Procedure 23(a) and at least one of the requirements of Rule 23(b).

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Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997); Ellis v. Costco Wholesale Corp., 657

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F.3d 970, 979–80 (9th Cir. 2011). Although the parties have stipulated that a class exists for

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purposes of settlement, the court must nevertheless undertake the Rule 23 inquiry independently.

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West v. Circle K Stores, Inc., No. 04-0438, 2006 WL 1652598, at *2 (E.D. Cal. June 13, 2006).

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Under Rule 23(a), before certifying a class, the court must be satisfied that:

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(1) the class is so numerous that joinder of all members is
impracticable (the “numerosity” requirement);

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(2) there are questions of law or fact common to the class (the
“commonality” requirement);
(3) the claims or defenses of representative parties are typical of the
claims or defenses of the class (the “typicality” requirement); and

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(4) the representative parties will fairly and adequately protect the
interests of the class (the “adequacy of representation” inquiry).

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Collins v. Cargill Meat Solutions Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011) (quoting In re Itel

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Secs. Litig., 89 F.R.D. 104, 112 (N.D. Cal. 1981)); accord FED. R. CIV. P. 23(a).

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The court must also determine whether the proposed class satisfies Rule 23(b)(3),

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on which plaintiff relies in this action. To meet the requirements of that subdivision of the rule,

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the court must find that “‘questions of law or fact common to class members predominate over

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any questions affecting only individual members, and that a class action is superior to other

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available methods for fairly and effectively adjudicating the controversy.’” Wal-Mart Stores, Inc.

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v. Dukes, ___ U.S. ___, ___, 131 S. Ct. 2541, 2558 (2011) (quoting FED. R. CIV. P. 23(b)(3)).

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“The matters pertinent to these findings include: (A) the class members’ interests in individually

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controlling the prosecution or defense of separate actions; [and] (B) the extent and nature of any
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litigation concerning the controversy already begun by or against class members . . . .” FED. R.

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CIV. P. 23(b)(3)(A)–(B).

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Here, as noted above, plaintiff filed a motion, which the court granted, for
preliminary certification of the following class:

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[A]ll persons employed by Comcast in the State of California from
February 26, 2009 through and including the implementation of the
California Call Center Closure [on November 30, 2012], who held
positions as Virtual Customer Account Executives, and were not
paid a severance payment that was offered as a result of the
California Call Center Closure. The Class includes the estates of
such persons and, if any such person is incompetent or deceased,
the legal representative or successor in interest as evidenced by
reasonable verification.

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(ECF No. 24 at 24.)

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There has been no objection to certification of the class, and nothing before the

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court suggests the preliminary certification was improper. Hence, for the same reasons as set

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forth in the court’s preliminary approval order (id. at 4–10), the court finds certification of the

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class appropriate for the purpose of the final approval of the settlement agreement.

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IV.

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NOTICE TO AND RESPONSE FROM THE CLASS MEMBERS
The number of potential class members in this action is eighty-eight. (ECF No. 24

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at 5.) On October 24, 2014, the class administrator mailed the class notices and the claim forms

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to the eighty-eight class members. (ECF No. 28-3 ¶ 4.) The claims administrator received only

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one returned notice with a forwarding address, which it immediately mailed to the forwarding

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address the United States Postal Services (“USPS”) provided. (Id. ¶ 5.) The claims administrator

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has also received nine undeliverable notices. (Id. ¶ 6.) Through an address search, the claims

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administrator found updated addresses for seven of those nine. (Id.) It re-mailed the packets to

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those seven addresses; it also re-mailed packets to the two addresses for which it was unable to

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locate updated addresses. (Id.) Following the re-mailing, “five were returned once again as

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undeliverable.” (Id.) At the hearing on the instant motion, the parties agreed that a total of five

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undeliverable packets was an acceptable number. In addition, the class administrator established

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a toll-free telephone number, enabling the class members to inquire about the settlement. (Id. ¶
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7.) That number was provided on the notice sent to the class members. (Id.) The call center

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system at the other end of that toll-free number has English and Spanish speaking live operators,

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who “are available Monday through Friday between the hours of 7:00 a.m. and 5:00 p.m.” (Id.)

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The claims period closed on December 11, 2014. (Id. ¶ 9.) As of that date, there

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were no objections to the settlement and no requests to opt out of the settlement. (Id. ¶¶ 9–10.)

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At hearing, the parties confirmed that no other packets were returned as undeliverable and no opt-

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out forms or objections were received after December 11, 2014.

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V.

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THE SETTLEMENT AND FAIRNESS
A.

Legal Framework

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When parties settle a class action, a court cannot simply accept the parties’

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resolution; rather it must also satisfy itself the proposed settlement is “fundamentally fair,

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adequate, and reasonable.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).

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After the initial certification and notice to the class, a court conducts a fairness hearing before

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finally approving any proposed settlement. Narouz v. Charter Commc’ns, Inc., 591 F.3d 1261,

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1267 (9th Cir. 2010); FED. R. CIV. P. 23(e)(2) (“If the proposal would bind class members, the

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court may approve it only after a hearing and on finding that it is fair, reasonable, and

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adequate.”). A court must balance a number of factors in determining whether a proposed

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settlement is in fact fair, adequate and reasonable:

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[(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.

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Hanlon, 150 F.3d at 1026; Adoma v. Univ. of Phx., 913 F. Supp. 2d 964, 974–75 (E.D. Cal.

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2012). The list is not exhaustive, and the factors may be applied differently in different

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circumstances. Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of S.F., 688 F.2d 615,

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625 (9th Cir. 1982).

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The court must consider the settlement as a whole, rather than its component parts,
in evaluating fairness; the settlement “must stand or fall in its entirety.” Hanlon, 150 F.3d at
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1026. Ultimately, the court must reach “a reasoned judgment that the agreement is not the

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product of fraud or overreaching by, or collusion between, the negotiating parties, and that the

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settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” Officers for

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Justice, 688 F.2d at 625.

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B.

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The Strength of Plaintiff’s Case
When assessing the strength of plaintiff’s case, the court does not reach “any

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ultimate conclusions regarding the contested issues of fact and law that underlie the merits of

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[the] litigation.” In re Wash. Pub. Power Supply Sys. Secs. Litig., 720 F. Supp. 1379, 1388

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(D. Ariz. 1989). The court cannot reach such a conclusion because evidence has not been fully

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presented and the “settlements were induced in large part by the very uncertainty as to what the

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outcome would be, had litigation continued.” Id. Instead, the court is to “evaluate objectively the

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strengths and weaknesses inherent in the litigation and the impact of those considerations on the

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parties’ decisions to reach these agreements.” Id.

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Here, “[m]uch of what led to [p]laintiff’s devaluation of the lawsuit came to her

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attention at mediation.” (ECF No. 28-1 at 6–7.) Specifically, plaintiff took, among other things,

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the following issues and risks into account when negotiating with defendant and concluded the

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settlement amount was reasonable:

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Defendant informed Plaintiff at the mediation that leading up to and
during the California Call Center Closure, Defendant offered its
Virtual CAEs a severance payment in exchange for a release of all
claims against Defendant. . . . Of the 294 potential Class
Members, 88 did not sign releases and did not receive a severance
payment. . . . Defendant also reminded Plaintiff at mediation that it
had reimbursed her for mileage she had incurred. . . . Additionally,
based on Defendant's disclosures, Plaintiff learned at the mediation
that the actionable time period for the remaining 88 Class Members
is limited to a period of only 28 months . . . .1

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(ECF No. 28-1 at 7; ECF No. 28-2 ¶¶ 13–15.)
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The 28 month limitation was a result of a related wage and hour class action involving
defendant and individuals employed as Customer Account Executives, including Virtual
Customer Account Executives, at defendant’s California call centers. (ECF No. 28-1 at 7 & n.3
(referencing class action Blouin v. Comcast Corp., Case No. 3:08-cv-04787-MEJ (N.D. Cal.).)
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The court agrees that in light of the uncertainties of litigating this case, an

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immediate benefit to the purported class members is in their interest. See Officers for Justice, 688

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F.2d at 625 (noting that “voluntary conciliation and settlement are the preferred means of dispute

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resolution”).

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This factor favors approving the settlement.

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C.

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The Risk, Expense, Complexity and Likely Duration of Further Litigation;
The Risk of Maintaining Class Status
“Approval of settlement is ‘preferable to lengthy and expensive litigation with

uncertain results.’” Morales v. Stevco, Inc., No. 09-00704, 2011 WL 5511767, at *10 (E.D. Cal.

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Nov. 10, 2011) (quoting Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc. (DIRECTV), 221

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F.R.D. 523, 526 (C.D. Cal. 2004)). The Ninth Circuit has explained “there is a strong judicial

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policy that favors settlements, particularly where complex class action litigation is concerned.” In

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re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008) (citing Class Plaintiffs v. City of

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Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)). “‘[I]t must not be overlooked that voluntary

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conciliation and settlement are the preferred means of dispute resolution. This is especially true

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in complex class action litigation . . . .’” Id. (quoting Officers for Justice, 688 F.2d at 625).

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Here, the parties agree there are significant risks associated with litigating the

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claims in this case. For instance, plaintiff faces the difficulty of prevailing at summary judgment,

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certifying the class, and then prevailing on appeal. See Rodriguez v. W. Publ’g Corp., 563 F.3d

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948, 966 (9th Cir. 2009). Those difficulties in turn would result in expenditure of more time and

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resources, for all parties. Given the high costs associated with litigating the claims at issue, and

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the potential lengthy duration of litigation, the court finds this factor weighs in favor of approval.

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In addition, the risk that the court may decertify the proposed class is another

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factor the court considers. See id. (“A district court may decertify a class at any time.”). While

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plaintiff is confident certification is proper for the proposed class, plaintiff also notes that the

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commonality requirement could be an impediment to class certification if the case were to

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proceed forward. (ECF No. 28-1 at 7–8.) Accordingly, there remains a risk in obtaining and

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maintaining class certification in this case.

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These factors weigh in favor of approving the settlement.
D.

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The Amount Offered in Settlement
As noted above, the parties negotiated a GSA of $100,000 for a potential class of

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eighty-eight persons. (ECF No. 24 at 10–11.) Associated expenses, such as class counsel fees

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and costs, class representative fee, class administrator fee, and penalties under California law are

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to be paid out of the GSA. That would leave a net settlement amount available for payment to the

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participating class members in the amount of $46,787.31. Mr. Spivak indicates he originally

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estimated defendant’s maximum possible liability to the class members to be $443,965.03. He

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indicates that some of the assumptions that went into calculating this amount are “unlikely to hold

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true for other class members.” (ECF No. 28-2 ¶ 34.) Cf. Officers for Justice, 688 F.2d at 628 (“It

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is well-settled law that a cash settlement amounting to only a fraction of the potential recovery

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will not per se render the settlement inadequate or unfair.”). “[I]t is the very uncertainty of

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outcome in litigation and avoidance of wasteful and expensive litigation that induce consensual

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settlements. The proposed settlement is not to be judged against a hypothetical or speculative

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measure of what might have been achieved by the negotiators.” Id. at 625; see also Collins,

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274 F.R.D. at 302 (a court must “‘consider the plaintiffs’ expected recovery balanced against the

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value of the settlement offer’” (quoting In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078,

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1080 (N.D. Cal. 2007))); In re Cendant Corp., Derivative Action Litig., 232 F. Supp. 2d 327, 336

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(D.N.J. 2002) (approving settlement representing less than 2% of the maximum possible

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recovery), cited in Hopson v. Hanesbrands Inc., No. 08-0844, 2009 WL 928133, at *8 (N.D. Cal.

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Apr. 3, 2009).

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The parties claim the settlement amount was reached through compromise and the

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amount each member will receive is significant, all things considered. (ECF No. 28-2 at 6–7.)

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The settlement amount weighs slightly in favor of approval in light of the uncertainties involved

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in litigating this case.

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On balance, the settlement amount weighs in favor of approval.
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E.

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The Extent of Discovery and the Stage of the Proceedings
“In the context of class action settlements, ‘formal discovery is not a necessary

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ticket to the bargaining table’ where the parties have sufficient information to make an informed

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decision about settlement.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir.

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1998) (quoting In re Chicken Antitrust Litig., 669 F.2d 228, 241 (5th Cir. 1982)).

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Plaintiff’s counsel states the parties arrived at the settlement after conducting

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substantial informal discovery, which included “(i) the production of Defendant’s written

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company policies with respect to the various wage and hour issues in this case that applied to

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Class Members; (ii) production of Defendant’s written training materials; (iii) emails; and

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(iv) extensive interviews with Plaintiff.” (ECF No. 21-2 ¶ 13.) The informal discovery facilitated

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a review of “the relative strengths and weaknesses” of each party’s respective cases and

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defendant’s estimated exposure. (Id. ¶ 33.) Defendant further confirms that,

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In advance of an early private mediation, [it] provided substantial
data to [p]laintiff, including the number of putative class members,
the average hourly rate, and the number of workweeks the putative
class members worked during the putative class period. . . .
During the mediation, [defendant] provided new facts and
arguments to [p]laintiff, including substantial putative class size
limitations based on the prior class action settlement in [a different
case] and on severance agreements that a majority of putative class
members signed.

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(ECF No. 26 at 1.)

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While it does not appear extensive discovery was conducted, the court is satisfied
the discovery enabled the parties to reach a meaningful settlement agreement.

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This factor weighs in favor of approving the settlement.
F.

The Experience and Views of Counsel
Class counsel have extensive experience in the area of wage-and-hour class

actions. (ECF No. 21-2 ¶¶ 19–30; ECF No. 21-3 ¶ 3.) Defendant’s counsel is also highly
experienced in wage and hour class action litigation. (ECF No. 26 at 5.) The attorneys agree the
terms of the settlement are fair and in the best interests of the settlement class. (Id. at 5–6.)
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Accordingly, given the experience of counsel and their views, this factor favors approving the

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settlement. See Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 447 (E.D. Cal. 2013).

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G.

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The Reaction of the Class Members to the Proposed Settlement
“It is established that the absence of a large number of objections to a proposed

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class action settlement raises a strong presumption that the terms of a proposed class settlement

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action are favorable to the class members.” DIRECTV, 221 F.R.D. at 529.

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At the final approval hearing, the parties confirmed that no opt-out forms or

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objections to the proposed settlement were filed or served on counsel. As to the notices sent to

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the class members, only five of eighty-eight (or 5.7%) were returned as undeliverable. This

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factor weighs in favor of approving the settlement. Id. (“The absence of a single objection to the

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[p]roposed [s]ettlement provides further support for final approval of the [p]roposed

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[s]ettlement.”); see Fernandez v. Victoria Secret Stores, LLC, No. 06-04149, 2008 WL 8150856,

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at *4 n.18 (C.D. Cal. July 21, 2008) (finding notice to more than 90% of the potential class

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sufficient).

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H.

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The Possibility of Collusion
Where the parties negotiate a settlement agreement before a formal class

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certification, as in the instant case, the court must evaluate the settlement for evidence of

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collusion with a “higher level of scrutiny.” In re Bluetooth Headset Products Liab. Litig., 654

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F.3d 935, 946 (9th Cir. 2011). “Collusion may not always be evident on the face of a settlement,

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and courts therefore must be particularly vigilant not only for explicit collusion, but also for more

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subtle signs that class counsel have allowed pursuit of their own self-interests and that of certain

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class members to infect the negotiations.” Id. at 947. A few such signs may include: (1) a

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disproportionate distribution of the settlement to counsel; (2) a “clear sailing” provision, under

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which the defendant agrees not to oppose an attorney’s fee award up to a certain amount, id.; and

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(3) when, as here, the class representative receives an enhancement payment that is much higher

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than payments unnamed class members stand to receive from the settlement, Staton v. Boeing

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Co., 327 F.3d 938, 975 (9th Cir. 2003).

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Here, with respect to the first sign, the court finds the proposed distribution of the

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settlement to counsel is not disproportionate. Class counsel seeks $33,333, which equates to

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about 33 percent of the $100,000 GSA. As the court explains in further detail below, that amount

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is within the range acceptable by the Ninth Circuit. Thus, the first sign weighs in favor of finding

5

no collusion. As to the second sign, while defendant agreed not to oppose class counsel’s request

6

for attorney’s fees, the court finds that because those fees are to come from the settlement fund,

7

that provision does not raise concern. See Rodriguez, 563 F.3d at 961 (collusion generally

8

inferred from a “clear sailing” provision where attorney’s fees are paid on top of the settlement

9

fund). Moreover, the agreement provides that if the court awards less than that amount, the

10

remaining funds will become a part of the net settlement amount and shall remain binding in the

11

event the court does not approve any or all of the requested attorneys’ fees. (ECF No. 21-2, Ex.

12

1, ¶ 2.7.) Accordingly, the second sign weighs in favor of finding no collusion.

13

Furthermore, the settlement agreement is the product of arms-length mediation

14

involving experienced counsel before an experienced mediator, Mark Rudy of Rudy, Exelrod,

15

Zieff & Lowe LLP. (ECF No. 21-2 ¶ 14, ECF No. 26 at 1). The parties represent that Mr. Rudy

16

is a “respected mediator with extensive experience in wage and hour class actions . . . .” (ECF

17

No. 21-2 ¶ 14.) See Bluetooth, 654 F.3d at 948 (the presence of a neutral mediator is a factor

18

weighing in favor of finding of no collusion); Villegas v. J.P. Morgan Chase & Co., No. 09–

19

00261, 2012 WL 5878390, at *6 (N.D. Cal. Nov. 21, 2012) (participation in mediation “tends to

20

support the conclusion that the settlement process was not collusive”) (citation omitted).

21

As noted above, one of the court’s reservations in preliminarily approving the

22

settlement was the requirement that the parties provide “more detailed evidence concerning the

23

mediation and negotiations of the proposed settlement agreements.” (ECF No. 24 at 19.) In

24

accordance with the court’s requirement, the parties have lodged that information with the court

25

for in camera review. After having carefully reviewed the parties’ in camera submissions, the

26

court finds its concerns about the parties’ negotiations satisfied. Specifically, the parties engaged

27

in negotiations for many hours and, eventually, after multiple rounds of offers and counteroffers,

28

the mediator made a mediator’s proposal, which the parties accepted. (ECF No. 26 at 1.)
13

1
2

Finally, as explained below, the third sign of collusion, the enhancement award
request, is not unreasonable and, therefore, it weighs in favor of finding no collusion.

3

In sum, it appears the settlement is a result of informed and non-collusive

4

negotiations between the parties.

5

VI.

CY PRES PLAN

6

The parties have designated a charity to receive any residual funds not distributed

7

through the class action settlement. (ECF No. 26 at 6–9.) Because most class action settlements

8

result in unclaimed funds, a plan is required for distributing those funds. Six Mexican Workers v.

9

Ariz.Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). The alternatives available are cy pres

10

distribution, escheat to the government and reversion to the defendants or the identified class

11

members. Id. at 1307 n.4 (“A fourth option is the pro rata distribution of the funds to located

12

class members. . . . We express no view as to the propriety of this distribution method.” (internal

13

citation omitted)).

14

Cy pres distribution allows the distribution of unclaimed funds to indirectly benefit

15

the entire class. Id. at 1305. This approach requires the cy pres award to qualify as “the next best

16

distribution” to giving the funds directly to the class members. Dennis v. Kellogg Co., 697 F.3d

17

858, 865 (9th Cir. 2012). “Not just any worthy charity will qualify as an appropriate cy pres

18

beneficiary[,]” there must be “a driving nexus between the plaintiff class and the cy pres

19

beneficiary.” Id. (quoting Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011)). The choice of

20

distribution options should be guided by the objective of the underlying statute and the interests

21

of the class members. Six Mexican Workers, 904 F.2d at 1307. A cy pres distribution is an abuse

22

of discretion if there is “no reasonable certainty” that any class member would benefit from it.

23

Dennis, 697 F.3d at 865 (quoting Six Mexican Workers, 904 F.2d at 1308).

24

Here, the proposed settlement provides that any amount remaining will be

25

distributed for cy pres purposes to The United Way. Considering this action involves

26

employment issues related to compensation arising under the FLSA, the California Labor Code,

27

California Industrial Welfare Commission order provisions and the California Business and

28

Professions Code, it appears to be an appropriate plan for the unclaimed funds to be directed to a
14

1

charitable organization that supports members of the Bay Area and Silicon Valley community by

2

assisting them with, among other things, finding meaningful employment. See Lane v. Facebook,

3

Inc., 696 F.3d 811, 820–21 (9th Cir. 2012) (declining to require “that settling parties select a cy

4

pres recipient that the court or class members would find ideal. On the contrary, such an

5

intrusion into the private parties’ negotiations would be improper and disruptive to the settlement

6

process”).

7

However, in preliminarily approving the parties’ settlement agreement, the court

8

noted that at the final hearing, it would require counsel to address the “reasonable certainty”

9

standard set forth above. Having carefully considered the parties’ responses in their moving

10

papers and at the final approval hearing, the court finds its concerns have been addressed. First, a

11

little more than sixty-five percent of the class members live in the Bay Area, which is served by

12

The United Way Bay Area and United Way Silicon Valley. (ECF No. 26 at 7–8.) Second, the

13

United Way supports projects that would benefit the class members. The gravamen of plaintiff’s

14

complaint is that the class members did not receive pay and related benefits to which they were

15

entitled under the relevant laws; the United Way provides employment and financial assistance

16

targeted to individuals for middle-skills jobs, similar to persons within the class here. (Id. at 7.)

17

VII.

FINAL APPROVAL OF THE CLASS SETTLEMENT IS APPROPRIATE

18

In conclusion, after considering the parties’ submissions and oral argument at the

19

final fairness hearing, and after considering the relevant factors, the court finds final approval of

20

the class settlement to be appropriate. The Ninth Circuit has stated that a district court’s

21

determination regarding the fairness and adequacy of a proposed settlement is ultimately “an

22

amalgam of delicate balancing, gross approximations and rough justice.” Officers for Justice,

23

688 F.2d at 625 (internal quotation marks omitted). A district court must be mindful that

24

“voluntary conciliation and settlement are the preferred means of dispute resolution.” Id.

25

Because the court concludes that the circumstances surrounding the settlement weigh in favor of a

26

finding that the settlement is fair and adequate; because all of the preconditions to certification

27

have remained satisfied since the court preliminarily certified the settlement class; and because

28

the parties have satisfactorily addressed the court’s reservations raised in its preliminary
15

1

certification order, the court GRANTS plaintiff’s motion. Accordingly, the court certifies the

2

settlement class and approves the settlement.

3

VIII.

ATTORNEY’S FEES, COSTS AND INCENTIVE AWARD

4

The class counsel seeks an award of attorney’s fees in the amount of $33,333

5

(33.33% of the GSA); litigation costs in the amount of $8,004.69; and a class representative fee in

6

the amount of $5,000. (ECF No. 25 at 3.)

7

A.

8
9

Request for Attorney’s Fees
Rule 23 permits a court to award “reasonable attorney’s fees . . . that are

authorized by law or by the parties’ agreement.” FED. R. CIV. P. 23(h). Even when the parties

10

have agreed on an amount, the court must award only reasonable attorney’s fees in a class action

11

settlement. Bluetooth, 654 F.3d at 941. “Where a settlement produces a common fund for the

12

benefit of the entire class, courts have discretion to employ either the lodestar method or the

13

percentage-of-recovery method.” Id. at 942. If the court employs the percentage-of-recovery

14

method, “calculation of the lodestar amount may be used as a cross-check to assess the

15

reasonableness of the percentage award.” Adoma, 913 F. Supp. 2d at 981. While exercising

16

discretion in choosing a calculation method, the court must employ the method that will produce

17

a reasonable result. Bluetooth, 654 F.3d at 942.

18

In the Ninth Circuit, the benchmark for percentage of recovery awards is 25

19

percent of the total settlement award, which may be adjusted up or down. Hanlon, 150 F.3d at

20

1029; Ross v. U.S. Nat’l Bank Ass’n, No. 07-02951, 2010 WL 3833922, at *2 (N.D. Cal. Sep. 29,

21

2010) (stating selection of benchmark must be based on all circumstances of the case). Factors

22

that may justify departure from the benchmark include: (1) the result obtained; (2) the risk

23

involved in the litigation; (3) the contingent nature of the fee; (4) counsel’s efforts, experience,

24

and skill; and

25

1048–50 (9th Cir. 2002).

26

(5) awards made in similar cases. Vizcaino v. Microsoft Corp., 290 F.3d 1043,

“The 25% benchmark rate, although a starting point for analysis, may be

27

inappropriate in some cases. Selection of the benchmark or any other rate must be supported by

28

findings that take into account all of the circumstances of the case.” Id. at 1048. “[T]he exact
16

1

percentage varies depending on the facts of the case, and in most common fund cases, the award

2

exceeds that benchmark.” Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal.

3

2010); Williams v. Centerplate, Inc., No. 11-2159, 2013 WL 4525428, at *7 (S.D. Cal. Aug. 26,

4

2013) (concluding “that an award of attorneys’ fees in the amount of 30% of the common fund, or

5

$195,000”); In re Activision Sec. Litig., 723 F. Supp. 1373, 1377 (N.D. Cal. 1989) (noting “nearly

6

all common fund awards range around 30%”).

7

Here, class counsel request an attorney’s fee award higher than the benchmark

8

established by the Ninth Circuit. Nonetheless, as explained below, the court finds the fee request

9

reasonable. See Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 2000).

10

Specifically, the award per participating class member is a favorable result

11

considering class counsel obtained a settlement early in litigation, avoiding increased costs of

12

litigation and significant uncertainties plaintiff would have faced. See Vasquez v. Coast Valley

13

Roofing, Inc., 266 F.R.D. 482, 492 (E.D. Cal. 2010) (result favorable where 56 employees were to

14

receive a recovery of $2,600 per employee); see also Ching, 2014 WL 2926210, at *7 (noting

15

“the overall result and benefit to the class from the litigation is the most critical factor in granting

16

a fee award”). In addition to the reasons discussed above, the court notes class counsel undertook

17

this case on a contingent fee basis. ECF No. 25-1 at 1. Courts have long recognized the public

18

policy of rewarding attorneys for accepting representation on a contingent fee basis. See In re

19

Washington Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1299 (9th Cir. 1994) (“It is an

20

established practice in the private legal market to reward attorneys for taking the risk of non-

21

payment by paying them a premium over their normal hourly rates for winning contingency

22

cases.”). The experience of class counsel also supports a 33.33 percent award. As noted,

23

plaintiff’s counsel have extensive experience in wage and hour class action litigation. (ECF No.

24

25-1 at 15.) Finally, the absence of objections from the class further demonstrates the

25

reasonableness and fairness of the attorney’s fee request. See In re Heritage Bond Litig., No. 02-

26

1475, 2005 WL 1594389, at *17–18 (C.D. Cal. June 10, 2005); see also Garner v. State Farm

27

Mut. Auto. Ins. Co., No. 08- 1365, 2010 WL 1687829, at *2 (N.D. Cal. Apr. 22, 2010) (noting

28

/////

17

1

“single objection out of a sizeable class, after notice, further demonstrates the reasonableness and

2

fairness of [c]lass [c]ounsels’ request”).

3

Comparison with the lodestar method also supports awarding the 33.33 percent

4

request. As noted above, in cases where courts apply the percentage method to calculate

5

attorney’s fees, courts are encouraged to use a calculation of the lodestar as cross-check to

6

evaluate the reasonableness of the percentage award. See Bluetooth, 654 F.3d at 943. In

7

calculating an attorney’s fees award under this method, a court must start by determining how

8

many hours were reasonably expended on the litigation, and then multiply those hours by the

9

prevailing local rate for an attorney of the skill required to perform the litigation. Moreno v. City

10

of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008). When a court uses the lodestar as a cross-

11

check to a percentage claim of fees, it need only make a “rough calculation.” Schiller v. David’s

12

Bridal, Inc., No. 10-00616, 2012 WL 2117001, at *22 (E.D. Cal. June 11, 2012).

13

In granting plaintiff’s motion for a preliminary approval, the court directed class

14

counsel to provide the court with detailed information to permit the court to perform a lodestar

15

cross-check. The class counsel submitted that information along with their motion for an award

16

of attorney’s fees. (ECF Nos. 25, 25-1, 25-2, 25-3, 25-4.) The class counsel represent that their

17

lodestar amount is $90,479.17. (ECF No. 25-1 at 18.) To reach that amount, the class counsel

18

used the rate of $650 per hour for Mr. Spivak (60 hours), an attorney with nineteen years’

19

experience; $250 per hour for Ms. Tahmassian (83.40 hours), a second year attorney; $250 per

20

hour for Ms. Treystman (51.40 hours), a second-year attorney; $250 per hour for Mr. Nguyen (10

21

hours), a second-year attorney; $175 per hour for Mr. Oyama (53.50), a paralegal of six years;

22

$150 per hour (5.40 hours), a second-year paralegal; and $625 per hour for Mr. Haines (7.30

23

hours), an attorney with thirty-seven years’ experience. (Id.) Having reviewed the class

24

counsel’s billing records, the court finds them reasonable. Among other things, the case involved

25

investigation; the filing of a fairly complex complaint; some pre-trial filings; and the subsequent

26

settlement after a mediation session, which in turn required the filing of a motion for preliminary

27

approval and final approval.

28

/////

18

1
2

The court GRANTS plaintiff’s request for attorney’s fees in the amount of
$33,333.

3

B.

4

Request for Costs
The court must determine an appropriate award of costs and expenses. FED. R.

5

CIV. P. 23(h). “[I]n evaluating the reasonableness of costs, ‘the judge has to step in and play

6

surrogate client.’” In re Toys R Us-Delaware, Inc.--Fair & Accurate Credit Transactions Act

7

(FACTA) Litig., 295 F.R.D. 438, 469 (quoting In re Cont’l Ill. Secs. Litig., 962 F.2d 566, 572 (7th

8

Cir. 1992)). “In keeping with this role, the court must examine prevailing rates and practices in

9

the legal marketplace to assess the reasonableness of the costs sought.” Id. (citing Missouri v.

10

Jenkins, 491 U.S. 274, 286–87 (1989)).

11

Here, the class counsel states the total amount of costs is $8,004.69. (ECF No. 25-

12

1 at 18.) The expenses include, among other things, costs for copying, filing, postage,

13

transportation, service of process, and lodging. (ECF No. 30-1, Ex. 4.) The largest expense is the

14

mediation fee in the amount of $5,000. Courts routinely approve reimbursement of such costs.

15

See, e.g., FACTA, 295 F.R.D. at 469 (“Expenses such as reimbursement for travel, meals,

16

lodging, photocopying, long-distance telephone calls, computer legal research, postage, courier

17

service, mediation, exhibits, documents scanning, and visual equipment are typically

18

recoverable.” (internal quotation marks omitted)); see also Pierce v. Rosetta Stone, Ltd., No. 11-

19

01283, 2013 WL 5402120, at *6 (N.D. Cal. Sept. 26, 2013) (reimbursing mediation fees). After

20

reviewing the expenses the class counsel seek, the court finds them quite modest and therefore

21

reasonable.

22
23

Accordingly, the court GRANTS plaintiff’s request for reimbursement of costs in
the amount of $8,004.69.

24

C.

Incentive Award

25

A district court has discretion to grant an incentive award to a named plaintiff to

26

compensate for risks taken and work done on behalf of the class. See Staton v. Boeing Co., 327

27

F.3d 938, 976–78 (9th Cir. 2003). Such awards are fairly typical in class action cases.

28

/////

19

1

Rodriguez, 563 F.3d at 958. In determining whether to approve an incentive award, courts may

2

consider the following factors:

3
4
5
6
7
8

(1) the risk to the class representative in commencing suit, both
financial and otherwise; (2) the notoriety and personal difficulties
encountered by the class representative; (3) the amount of time and
effort spent by the class representative; (4) the duration of the
litigation[;] and[] (5) the personal benefit (or lack thereof) enjoyed
by the class representative as a result of the litigation.
Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995).
Here, with respect to the first factor, the risk in commencing the suit, plaintiff

9

avers that by initiating the instant case she shouldered some degree of personal risk, including

10

financial liability if defendant prevailed and reduced future employment prospects in plaintiff’s

11

field of work. (ECF No. 25-4 ¶¶ 10–11.) Those risks are relevant factors in evaluating an

12

incentive award request. See Staton, 327 F.3d at 977. Hence, the first factor weighs in favor of

13

granting an incentive award to plaintiff.

14

With respect to the second factor, the notoriety and difficulties encountered,

15

plaintiff avers she shouldered many responsibilities. (ECF No. 25-4 ¶ 8.) While that may be true,

16

nothing in the record suggests particular notoriety associated with the instant litigation. Hence,

17

this factor is neutral.

18

With respect to the third factor, the amount of time and effort spent, plaintiff states

19

she spent over fifty hours assisting class counsel with the litigation of the case. (Id. ¶ 9.) Her

20

activities included, among other things, obtaining legal counsel and communicating with her legal

21

counsel on numerous occasions, assisting them in gathering information, “identifying the claims

22

brought in this case . . . [and] participating in a full day mediation . . . .” (Id.) Because plaintiff

23

expended reasonable efforts and was involved in the mediation, this factor weighs in favor of

24

granting an incentive award to plaintiff. See FACTA, 295 F.R.D. at 471.

25

With respect to the fourth factor, the duration of the litigation, the litigation of this

26

case was not protracted: the case was initiated in February 2013 in San Joaquin County Superior

27

Court (ECF No. 1), removed to this court in April 2013 (id.), and settled as a result of a mediation

28

session held in January 2014 (ECF No. 18). Given the length of the litigation, the court finds the
20

1

fourth factor neutral. Cf. Van Vranken, 901 F. Supp. at 299 (where the class representative’s

2

“participation lasted through many years of litigation[,]” an incentive award was appropriate).

3

Next, with respect to the fifth factor, the personal benefit enjoyed by plaintiff,

4

plaintiff has “given up the right to pursue individual claims for unpaid wages, unpaid mileage

5

expenses, unpaid meal and rest period premium wages, interest, waiting time penalties, pay stub

6

penalties, and civil penalties.” (ECF No. 25-4 ¶ 7.) Under the class settlement agreement,

7

plaintiff will not gain any benefit beyond that she would gain as one of the class members. See

8

FACTA, 295 F.R.D. at 472 (“An incentive award may be appropriate when a class representative

9

will not gain any benefit beyond that he would receive as an ordinary class member.”). This

10

factor weighs in favor of granting an incentive award to plaintiff.

11

Finally, the class representative has also addressed the court’s request for a

12

detailed declaration describing the “specific activities she performed . . . and the amount of time

13

she spent on each activity.” (ECF No. 24 at 19.) Specifically, plaintiff has submitted a

14

spreadsheet reflecting the tasks she performed, ranging from assembling documents to attending

15

the mediation session, and the number of hours she spent on this case, a total of 52.75. (ECF No.

16

25-4, Ex. 1.)

17

In sum, after considering the relevant factors, the court finds that an incentive

18

award of $5,000 for plaintiff is justified under the circumstances. See, e.g., In re Mego Fin. Corp.

19

Sec. Litig., 213 F.3d 454, 463 (9th Cir. 2000) (approving a $5,000 incentive award); Ching, 2014

20

WL 2926210, at *9 (approving a $5,000 incentive award and noting that in the Northern District,

21

“a $5,000 incentive award is presumptively reasonable”); see also FACTA, 295 F.R.D. at 470

22

(approving a $5,000 incentive award).

23

/////

24

/////

25

/////

26

/////

27

/////

28

/////

21

1

IX.

CLAIMS ADMINISTRATOR FEE

2

Plaintiff also requests the court approve administrative costs in the amount of

3

$5,000 to be paid to the third-party claims administrator. (ECF No. 28-1 at 8.) The claims

4

administrator breaks down that amount as follows:

5

Notification

6

Case Setup
Mailing Database Preparation
Software Customization
Document Formatting
Case Management
NCOA2
Print Production
Printing
Postage
RUM3 Scanning
RUM Searches – 9 @ $1.50
Remails – 8 @ $4.56
Staff Hours Performing RUM & Remails Services
Phone Script and FAQ Development
Staff Hours Telephone Support

7
8
9
10
11
12
13
14

$ 270.00
1,446.25
437.50
738.75
1,952.50
250.00
90.00
379.28
42.24
2.25
13.50
36.48
90.00
450.00
656.25

15
Subtotal Notification

$ 6,855.00

16
Processing and Reporting

17

Claims Processing
Dispute Processing
Staff Hours for General Claimant Correspondence
Staff Hours Handling Address Updates

18
19

$ 280.00
70.00
270.00
270.00

20
Processing and Reporting continued

21

Declaration of Notice Procedures
Weekly Reporting

22

720.00
720.00

23
Subtotal Reporting

2,330.00

24
25

/////

26
27

2

NCOA is an acronym for national change of address. (ECF No. 28-1 at 3.)

28

3

RUM is an acronym for returned undeliverable mail. (ECF No. 28-2, Ex. D.)
22

1

Distribution

2

Settlement Fund Setup & Management
Name/TIN Mismatch Service
Distribution Calculation
Distribution Preparation
Check Issuance – 88 @ $2.00
W-2 Filing Fee
W-2 Issuance – 88 @ $0.75
1099 Filing Fee
1099-INT Issuance – 27 @ $0.50
1099-MISC Issuance – 27 @ $0.50
Postage
Reissue Request Fulfillment
Staff Hours Handling Check Follow-up & Reissues
Tax Compliance – 1 yr
Final Accounting

3
4
5
6
7
8
9
10
11

Subtotal Distribution

$ 450.00
270.00
450.00
450.00
176.00
350.00
66.00
350.00
13.50
13.50
43.12
5.50
90.00
2,500.00
720.00
5,947.62

12
THIS INVOICE

13

LESS DISCOUNT

14

< 10,132.62>

AMOUNT DUE

15
16

15,132.62

$ 5,000.00

(ECF No. 28-3, Ex. B.)

17

This request is reasonable in light of the claims administrator’s responsibilities

18

before and after the final approval hearing. See Ching, 2014 WL 2926210, at *2 (approving an

19

estimated $15,000 claims administrator fee for 68 claims); Ozga v. U.S. Remodelers, Inc., No. 09-

20

05112, 2010 WL 3186971, at *2 (N.D. Cal. Aug. 9, 2010) (granting $10,000 to the claims

21

administrator for 156 claims); Stuart v. Radioshack Corp., No. 07-4499, 2010 WL 3155645, at *7

22

(N.D. Cal. Aug. 9, 2010) (granting reasonable costs for, among other things, mailing the notice,

23

receiving claims, and resolving disputed claims). Accordingly, the court approves the claims

24

administrator fee in the amount of $5,000.

25

/////

26

/////

27

/////

28
23

1

X.

CONCLUSION

2

For the foregoing reasons, the court orders as follows:

3

1. The court GRANTS final approval of the settlement.

4

2. The court AWARDS the class counsel attorney’s fees in the amount of

5
6
7
8
9
10
11
12
13

$33,333.
3. The court AWARDS the class counsel reimbursement of expenses in the
amount of $8,004.69
4. The court AWARDS an incentive payment of $5,000 to the class
representative, Tysheika Ogbuehi.
5. The court AWARDS administration costs in the amount of $5,000 to the
claims administrator Gilardi & Co. LLC.
6. The parties and the settlement administrator shall perform their respective
obligations under the terms of the settlement agreement.

14

7. The court enters JUDGMENT and CLOSES the case.

15

8. The court in its discretion DECLINES to maintain jurisdiction to enforce the

16

terms of the parties’ settlement agreement.

17

9. This order resolves ECF Nos. 25 and 28.

18

IT IS SO ORDERED.

19

DATED: June 8, 2015.

20
21

UNITED STATES DISTRICT JUDGE

22
23
24
25
26
27
28
24