Mar v. Genuine Parts Company et al

Filing 40

MEMORANDUM and ORDER signed by District Judge Morrison C. England, Jr on 4/25/17 ORDERING that Plaintiff's unopposed MOTION for SETTLEMENT APPROVAL 37 , is GRANTED. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SEAN MAR, individually and on behalf
of others similarly situated, and on
behalf of the general public,

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Plaintiff,

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No. 2:15-cv-01405-MCE-AC

v.

MEMORANDUM AND ORDER

GENUINE PARTS COMPANY and
NAPA AUTO PARTS,
Defendants.

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Before the Court is Plaintiff Sean Mar’s Unopposed Motion for Amended

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Settlement Approval. ECF No. 37. Plaintiff and Defendants Genuine Parts Co. and

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NAPA Auto Parts have agreed to settle Plaintiff’s class claims made under the Fair

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Labor Standards Act (“FLSA”). The Court rejected the parties’ first settlement

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agreement due to the unreasonableness of its attorney’s fees. ECF No. 36. The

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amended settlement reduces the amount of attorney’s fees to 25% of the common fund

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provided for the FLSA class. The Court finds the amended settlement sufficiently fair

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and reasonable, and Plaintiff’s motion is GRANTED.

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BACKGROUND

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Plaintiff Sean Mar brought this suit on behalf of himself and all those similarly

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situated against Genuine Parts Co. and NAPA Auto Parts on the basis that Executive

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Management Trainees (“EMTs”) were misclassified as non-exempt, and were therefore

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denied statutory protections and wages afforded to hourly employees. After negotiations

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before a mediator, the parties agreed on a settlement under the Fair Labor Standards

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Act, 29 U.S.C. § 216(b). An employee may settle and waive claims under the FLSA if

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the parties present to a district court a proposed settlement agreement, and the district

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court enters a judgment approving the settlement. Lynn’s Food Stores, Inc. v. United

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States, 679 F.2d 1350, 1353 (11th Cir. 1982). The FLSA also requires that class

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members opt into any settlement. See 29 U.S.C. § 216(b) (“No employee shall be a

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party plaintiff to any such action unless he gives his consent in writing to become such a

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party and such consent is filed in the court in which such action is brought.”). Ninety-four

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of Defendants’ 100 EMTs opted into the settlement.
Under the terms of the agreement, Defendants are to pay $775,000, disbursed

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among the 94 opt-in class members. Attorney’s fees would be paid in the amount of

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25% of this $775,000 ($193,750). The remaining funds would be apportioned such that

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each of the 94 EMTs would receive $5,623.13—an increase of $687.06 (about 7.4%)

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over the original settlement. Named Plaintiff Mar would receive an enhancement of

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$7,500 for his time and effort in bringing the case. Similarly, three pre-settlement opt-ins

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would receive enhancements of $2,500. NAPA also agreed to pay the cost of settlement

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administration and the employer’s share of payroll taxes, as well as to re-classify EMTs

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as non-exempt going forward.

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STANDARD

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Before approving an FLSA settlement, the court must scrutinize it to determine if it

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is “a fair and reasonable resolution of a bona fide dispute.” Lynn’s Food Stores,

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679 F.2d at 1354–1355. If the settlement reflects a reasonable compromise over issues

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that are actually in dispute, the Court may approve the settlement “to promote the policy

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of encouraging settlement of litigation.” Id. at 1354. “Where a proposed settlement of

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FLSA claims includes the payment of attorney’s fees, the court must also assess the

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reasonableness of the fee award.” Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332,

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336 (S.D.N.Y. 2012); accord Selk v. Pioneers Mem’l Healthcare Dist., 159 F. Supp. 3d

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1164, 1180 (S.D. Cal. 2016).

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In the Ninth Circuit, 25% is considered the “benchmark” for determining whether

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attorney’s fees are reasonable when they are based on a percentage of the award. In re

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Bluetooth Headset Prods. Liability Litig., 654 F.3d 935, 942 (9th Cir. 2011). “[H]owever,

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such fee awards range from 20 percent to 30 percent of the fund created.” Paul,

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Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 272 (9th Cir. 1989). Fees as high as

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33.3% have also been awarded. See, e.g., Barbosa v. Cargill Meat Sols. Corp.,

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297 F.R.D. 431, 448 (E.D. Cal. 2013) (collecting six Eastern District of California cases

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where 33.3% was approved in support of the proposition that “[t]he typical range of

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acceptable attorneys’ fees in the Ninth Circuit is 20 percent to 33.3 percent of the total

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settlement value”). If attorney’s fees deviate from the 25% benchmark, “it must be made

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clear by the district court how it arrives at the figure ultimately awarded.” Graulty,

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886 F.2d at 272; see also Gribble v. Cool Transps. Inc., No. CV 06-04863 GAF (SHx),

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2008 WL 5281665, at *11 (C.D. Cal. Dec. 15, 2008) (applying Graulty in an FLSA case).

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ANALYSIS

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The Court has already held that this case involves a bona fide dispute over the

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existence and extent of Defendants’ FLSA liability. Mem. & Order, at 4. Nothing has

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changed to upset that finding. Thus, the Court turns to the terms of the settlement itself

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to determine whether it reflects “a reasonable compromise over [disputed] issues.”

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Lynn’s Food Stores, 679 F.2d at 1354.
Plaintiff estimates that full relief would constitute $884,385.33, and accordingly,

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the settlement represents 87.6% of full relief. Given the uncertainty and costs of

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litigation, a recovery of over 80% of full relief makes settlement approval appropriate.

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Furthermore, 94% of class members affirmatively opted in to the settlement,

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demonstrating the class members’ approval of its terms. The Court also finds the

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enhancements of $7,500 and $2,500 for those who opted in to the case pre-settlement

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reasonable to compensate them for their time and effort in bringing this case. See

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generally, Staton v. Boeing Co., 327 F.3d 938, 976–77 (9th Cir. 2003) (collecting cases

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approving the receipt of incentive awards to named plaintiffs).
Finally, the Court also finds the revised attorney’s fees fair and reasonable. A

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25% award is the benchmark for determining the reasonableness of attorney’s fees.

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Additionally, a 25% award ($193,750) tracks closely with the attorney’s fees resulting

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from the lodestar method using rates typical to this district ($194,812.50). See Mem. &

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Order, ECF No. 36, at 6 (finding “rates of $425 per hour for principals and $225 per hour

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for associates” typical to the Eastern District of California). Thus, the settlement taken

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as a whole is both fair and reasonable and is accordingly approved.

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CONCLUSION

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For the reasons provided above, Plaintiff’s Unopposed Motion for Settlement
Approval, ECF No. 37, is GRANTED.
IT IS SO ORDERED.
Dated: April 25, 2017

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