Allen Buckingham v. Bank of America Corp., Inc.

Filing 103

ORDER AND JUDGMENT by Judge Richard Seeborg GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT [#96]; ATTORNEY FEES AND COSTS [#92] (AS MODIFIED BY THE COURT)(cl, COURT STAFF) (Filed on 7/11/2017)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA – SAN FRANCISCO DIVISION 9 10 Case No.: 3:15-cv-6344-RS 11 ALLEN BUCKINGHAM, EUNICE ANN ROBINSON, ALVIN COURTS, and MELISSA 12 AGOSTO-CRUZ, individually, on behalf of others 13 similarly situated, and on behalf of the general public, 14 Plaintiffs, 15 vs. 16 17 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) BANK OF AMERICA, National Association, 18 19 Defendant. 20 21 22 23 24 25 26 27 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 1 This matter, a wage and hour class and collective action under the federal Fair Labor 2 Standards Act (FLSA) and several state laws, comes before the Court on plaintiffs’ motion for 3 final approval of class action settlement (ECF No. 96), and motion for payment of attorney fees 4 and costs (ECF No. 92). A hearing was held on June 29, 2017. 5 The Court has reviewed and considered the record in this matter, including the 6 memorandum and declarations submitted in support of the motion for preliminary approval and 7 the exhibits attached thereto; the proposed settlement agreement and each of the class notices; 8 Plaintiffs’ motion for final approval of the Settlement Agreement; the memorandum in support of 9 the motion for final approval submitted by plaintiffs; and the memorandum and declarations 10 submitted in support of the fee petition. 11 Good cause appearing, the Court GRANTS the final approval and fee motions. The 12 Court’s order is based upon the following: 13 I. BACKGROUND 14 Plaintiffs were Client Fulfillment Consultants (CFCs) (also called Implementation 15 Advisors), employees in the treasury services department of defendant Bank of America, N.A. 16 (“BANA”), who allege they were misclassified as exempt from overtime. They now seek final 17 approval of a class-wide settlement that achieves a common fund, in addition to prospective relief 18 for the class. 19 On January 26, 2017, this Court granted preliminary approval of this settlement, certifying 20 the settlement class, preliminarily approving the settlement, and ordering dissemination of notice 21 to class members (ECF No. 87). This Court granted the parties’ amendment to this settlement on 22 March 9, 2017 (ECF No. 91). 23 The claims administrator provided notice in accordance with this Court’s order. Out of the 24 529 initial class members, only one class member requested exclusion from the class, and no 25 objections were filed. This settlement will result in recovery of $6.6 million for class members, in 26 addition to the reclassification of the vast majority of currently employed class members and other 27 current CFCs as non-exempt. Under the settlement, defendant will deposit the settlement fund 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 1 1 with the claims administrator within 15 days of this Order, and class members will receive their 2 pro-rata allocations shortly thereafter by mail. 3 II. SUMMARY OF SETTLEMENTS 4 A. 5 The proposed settlements resolve all wage-and-hour claims against defendant stemming Settlement Terms 6 from its alleged misclassification of CFCs. The settlement classes are defined as follows (ECF No. 7 91 at 3-4): 8 The California Class shall be “All persons who are or who have been employed by 9 defendant as exempt employees in its internal job code CI066, which includes the job titles 10 Implementation Advisors and Client Fulfillment Consultants, within the State of California from 11 December 31, 2011 through October 17, 2016.” 12 The North Carolina Class shall be “All persons who are or who have been employed by 13 Defendant as exempt employees in its internal job code CI066, which includes the job titles 14 Implementation Advisors and Client Fulfillment Consultants, within the State of North Carolina 15 from December 31, 2013 through October 17, 2016.” 16 The Illinois Class shall be “All persons who are or who have been employed by Defendant 17 as exempt employees in its internal job code CI066, which includes the job titles Implementation 18 Advisors and Client Fulfillment Consultants, within the State of Illinois from December 31, 2012 19 through October 17, 2016.” 20 The Connecticut Class shall be “All persons who are or who have been employed by 21 Defendant as exempt employees in its internal job code CI066, which includes the job titles 22 Implementation Advisors and Client Fulfillment Consultants, within the State of Connecticut from 23 December 31, 2013 through October 17, 2016.” 24 The FLSA Collective shall be: “All persons who are or who have been employed by 25 Defendant as exempt employees in its internal job code CI066, which includes the job titles 26 Implementation Advisors and Client Fulfillment Consultants, from December 31, 2012 through 27 October 17, 2016 and who timely joins the Collective Action.” 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 2 1 The proposed settlement classes mirror the classes certified for settlement purposes by this 2 Court on January 26 and March 9, 2017. 3 B. The Settlement Consideration 4 Under the proposed settlement, defendant will pay a total of $6.6 million in cash, in 5 addition to the employer share of payroll taxes. Defendant also committed to reviewing all CFCs 6 and either (1) reclassifying current CFCs as non-exempt, or (2) modifying their job duties, all of 7 which it completed last year. 8 C. Release of Claims 9 Class members will release all federal and state-law wage-and-hour claims against 10 defendant if the settlement becomes final, relating to the conduct alleged in plaintiffs’ complaint, 11 including: [C]laims, demands, rights, liabilities, and causes of action that were asserted in the 12 Second Amended Complaint (“SAC”) in the Lawsuit on behalf of Implementation Advisors and any additional wage and hour claims that could have been brought 13 based on the facts alleged in the SAC on behalf of Implementation Advisors. The Released Claims include all claims relating to or arising out of the designation and 14 treatment of the Class Representative and Class Members as “exempt” from 15 overtime compensation while they worked as Implementation Advisors, including claims for violations of any state or federal statutes, rules, or regulations. This 16 includes, but is not limited to, claims that, during the Class Periods, Defendant failed to pay overtime or any other wages due under California, North Carolina, 17 Illinois, or Connecticut state laws; failed to pay overtime or any other wages due under the Fair Labor Standards Act; failed to provide legally-required meal and rest 18 periods or pay wages due for such failure; failed to timely furnish accurate itemized 19 wage statements; engaged in conduct subjecting Defendant to any statutory or civil penalties under any statute, ordinance, or otherwise arising from or related to the 20 classification of Plaintiffs and Class Members as exempt from overtime, including, without limitation, California Labor Code section 2698, et seq. and Labor Code 21 sections 203 and 226; engaged in any unfair business practices arising from the 22 misclassification alleged; and failed to pay all wages due to Class Representative and Class Members upon termination of employment. 23 24 ECF No. 77-1 at ¶ 26. Class representatives Buckingham, Robinson, Courts, and Agosto-Cruz will 25 execute a general release of claims related to their employment with defendant, unlike absent class 26 members. Id. 27 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 3 1 III. THE SETTLEMENT IS FAIR, REASONABLE AND ADEQUATE 2 In order to approve a settlement in a class action, the court must conduct a three-step 3 inquiry. First, it must assess whether defendants have met the notice requirements under the Class 4 Action Fairness Act (CAFA). See 28 U.S.C. § 1715(d). Second, it must determine whether the 5 notice requirements of Federal Rule of Civil Procedure 23(c)(2)(B) have been satisfied. Finally, it 6 must conduct a hearing to determine whether the settlement agreement is “fair, reasonable, and 7 adequate.” See Fed. R. Civ. P. 23(e)(2); Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) 8 (discussing the Rule 23(e)(2) standard); Adoma v. Univ. of Phoenix. Inc., 913 F. Supp. 2d 964, 972 9 (E.D. Cal. 2012) (conducting three-step inquiry). Each of these requirements is met here. 10 A. The Parties Have Complied with the Class Action Fairness Act 11 CAFA requires that “[n]ot later than 10 days after a proposed settlement of a class action is 12 filed in court, each defendant that is participating in the proposed settlement shall serve [notice of 13 the proposed settlement] upon the appropriate State official of each State in which a class member 14 resides and the appropriate Federal official[.]” See 28 U.S.C. § 1715(b). The court may not grant 15 final approval of a class action settlement until the CAFA notice requirement is met. See 28 16 U.S.C. § 1715(d). Here, defendant timely provided the required CAFA notice. No Attorneys 17 General have submitted statements of interest or objections in response to these notices. 18 B. The Settlement Class Meets All Requirements of Rule 23(e) 19 In its order granting preliminary approval, and its order certifying the class on January 26, 20 2017 (ECF No. 87), the Court certified the class pursuant to Rule 23(b)(3). The same analyses 21 apply here, and the Court affirms its order certifying the class for settlement purposes under Rule 22 23(e). 23 C. The Parties Have Complied with Rule 23(c) Notice Requirements 24 Class actions brought under Rule 23(b)(3) must satisfy the notice provisions of Rule 25 23(c)(2), and upon settlement of a class action, “[t]he court must direct notice in a reasonable 26 manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(l). Rule 27 23(c)(2) prescribes the “best notice that is practicable under the circumstances, including 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 4 1 individual notice” of particular information. Fed. R. Civ. P. 23(c)(2)(B). 2 The proposed notice plan was undertaken and carried out pursuant to the preliminary 3 approval order. The notice administrator provided direct notice via mail and, where possible, e4 mail (obtained from defendant) to class members. In addition, the notice administrator established 5 a toll-free telephone number that class members could contact with any questions. Plaintiffs’ 6 counsel also made a case website publicly available which contained the full settlement 7 agreement, the operative complaint, the Court’s order granting preliminary approval to this 8 settlement, plaintiffs’ motion for preliminary approval, plaintiffs’ motion for attorney fees and 9 costs, and the notices. 10 The Court previously found that the notice itself informed class members of the nature of 11 the action, the terms of the proposed settlements, the effect of the action and the release of claims, 12 as well as class members’ right to exclude themselves from the action and their right to object to 13 the proposed settlements (ECF Nos. 87, 91). Plaintiffs have complied with all of the requirements 14 of Rule 23 and have complied with the notice provisions of the Class Action Fairness Act of 2005, 15 28 U.S.C. § 1715. 16 D. The Proposed Settlement is Fair, Adequate and Reasonable 17 The Court may approve a settlement that is fair, reasonable, and adequate. Fed. R. Civ. P. 18 23(e)(2). “It is the settlement taken as a whole, rather than the individual component parts, that 19 must be examined for overall fairness.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 20 1998). The factors typically considered when evaluating the fairness of a settlement agreement 21 are: 22 23 24 25 (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 of the proposed settlement. 26 In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 943 (9th Cir. 2011) (citing Churchill 27 Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). “[W]here, as here, a settlement is 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 5 1 negotiated prior to formal class certification, consideration of the[ ] eight Churchill factors alone is 2 not enough to survive appellate review.” Id. at 946. The award must also be scrutinized for 3 evidence of collusion between class counsel and the defendant, including: “when counsel receive a 4 disproportionate distribution of the settlement”; “when the parties negotiate a ‘clear sailing’ 5 arrangement”; and “when the parties arrange for fees not awarded to revert to defendants.” Id. at 6 947. 7 “Where a settlement produces a common fund for the benefit of the entire class, courts 8 have discretion to employ either the lodestar method or the percentage-of-recovery method” when 9 determining a proper attorney fees award. In re Bluetooth, 654 F.3d at 942. Under the percentage10 of-recovery method, the Ninth Circuit “has established 25% of the common fund as a benchmark 11 award for attorney fees.” Hanlon, 150 F.3d at 1029. Yet the lodestar method, which multiplies 12 “the number of hours reasonably expended by a reasonable hourly rate,” id., also produces a 13 “presumptively reasonable” fee award, Bluetooth, 654 F.3d at 941. Although the Court has 14 discretion to use either method, in either case the Ninth Circuit encourages a cross-check with the 15 alternative method in order to ensure the reasonableness of any award. Id. at 944. The Court may 16 also award reasonable litigation costs. Id. at 941. 17 The proposed settlement is sufficiently fair, reasonable, and adequate to qualify for final 18 approval. The settlement secures a substantial recovery for the plaintiff class members — 35% of 19 the case’s arguable value of over $18 million — and resulted in reclassification of hundreds of 20 class members as nonexempt from the overtime laws at issue. Like the monetary reward, the 21 reclassification of CFCs as nonexempt represents something of value to the class. See Vizcaino v. 22 Microsoft Corp., 290 F.3d 1043, 1049 (9th Cir. 2002) (“the litigation also benefitted employers 23 and workers nationwide by clarifying the law of temporary worker classification . . . many 24 workers who otherwise would have been classified as contingent workers received the benefits 25 associated with full time employment”). 26 Other factors favoring approval include the inherent risks of litigation, and the fact that 27 plaintiffs’ theories of liability have apparently never been tested for CFCs. Moreover, plaintiffs’ 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 6 1 recovery under the FLSA and California Labor Code would be diminished if they could not prove 2 BANA willfully misclassified them as exempt, and BANA could bar or diminish the value of 3 many claims if it successfully raised a good faith defense. Likewise, the settlement was reached 4 with the assistance of an experienced mediator. Finally, there are not strong indicia of collusion 5 between class counsel and the defendant: proposed attorney fees are at the 25% benchmark and 6 are not disproportionate to the common fund, see infra Part IV, and there is no reversion of 7 unclaimed funds to defendants. 8 There is, however, a “clear sailing” provision, which is to be viewed with disfavor, 9 notwithstanding the fact the settlement agreement is not predicated on approval of the fee request. 10 See Bluetooth, 654 F.3d at 948. Yet the theoretical problem with a “clear sailing” provision is that 11 it “increases the likelihood that class counsel will have bargained away something of value to the 12 class,” id., a circumstance which does not appear to have occured, given that the class members 13 are set to receive substantial compensation (and non-monetary benefit in the form of 14 reclassification), no class members have objected, and class counsel is seeking fees at the 15 benchmark percentage. 16 *** 17 In summary, the proposed settlement is fair, reasonable and adequate is approved. 18 IV. ATTORNEY FEES AND COSTS 19 Although the request for attorney fees is at the presumptively acceptable 25% benchmark, 20 see Bluetooth, 654 F.3d at 942, it should nonetheless be cross-checked according to the lodestar 21 method. Class counsel has thus far expended 806.7 hours on this action. Billed at rates of $675 to 22 $375 per hour for attorneys, and $200 to $150 per hour for law clerks, paralegals, and 23 administrative support, the hours worked result in a lodestar calculation of $310,917.50, meaning 24 the requested $1,650,000 in attorney fees is a 5.31-times multiple of the lodestar. (Class counsel 25 represents that, after all its work in this matter is complete, the attorney fees request will amount a 26 4.89-time multiple of the lodestar.) 27 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 7 1 Class counsel’s billing rates are clearly reasonable for the market; similar and higher rates 2 have been approved in this District. See, e.g., In re Magsafe Apple Power Adapter Litig., No. 5:093 CV-01911-EJD, 2015 WL 428105, at *12 (N.D. Cal. Jan. 30, 2015) (“In the Bay Area, reasonable 4 hourly rates for partners range from $560 to $800, for associates from $285 to $510, and for 5 paralegals and litigation support staff from $150 to $240.”). The multiple, meanwhile, is certainly 6 on the high side, but is not fatal. See Steiner v. Am. Broad. Co., 248 F. App’x 780, 783 (9th Cir. 7 2007) (citation omitted) (“Although this [6.85 times] multiplier is higher than those in many 8 common fund cases . . . it still falls well within the range of multipliers that courts have 9 allowed.”). 10 Similar multiples have been approved in this District. See, e.g., Gutierrez v. Wells Fargo 11 Bank, N.A., No. C 07-05923 WHA, 2015 WL 2438274, at *7 (N.D. Cal. May 21, 2015) 12 (“Accordingly, this order allows a multiplier of 5.5 mainly on account of the fine results achieved 13 on behalf of the class, the risk of non-payment they accepted, the superior quality of their efforts, 14 and the delay in payment.”); In re Apple iPhone/iPod Warranty Litig., 40 F. Supp. 3d 1176, 1181 15 (N.D. Cal. 2014) (“Furthermore, plaintiffs are correct that the resulting [3.62 times] multiplier 16 necessary to reach a $15.9 award would not be out of bounds, given the success they achieved in 17 this action and the other relevant factors.”). While the multiple is high, class counsel has achieved 18 substantial recovery for the class, and the lack of objections and opt-outs indicates the class is 19 pleased with the results. Accordingly, and because the fee request is at the 25% benchmark, the 20 motion for attorney fees is granted. 21 Class counsel also seeks $15,000 in costs. Most of the claimed costs are from mediation 22 fees ($6,250), mailing notices and reminders ($4,043), and conducting depositions ($2,280.45). 23 The remaining $2,785.04 is for travel, document reproduction, legal research, and other litigation 24 costs. This cost request is reasonable, and is granted. 25 V. SERVICE AWARDS FOR CLASS REPRESENTATIVES 26 Plaintiffs request service awards in the amount of $15,000 for plaintiff Buckingham, and 27 $2,500 each for plaintiffs Robinson, Courts, and Agosto-Cruz, to be deducted from the gross 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 8 1 common fund. In the Ninth Circuit, service awards “compensate class representatives for work 2 done on behalf of the class, to make up for financial or reputational risk undertaken in bringing the 3 action, and, sometimes, to recognize their willingness to act as a private attorney general.” 4 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958-59 (9th Cir. 2009). 5 Here, the four class representatives have spent a significant amount of time assisting in the 6 litigation of this case. Plaintiff Buckingham sat for a full-day deposition and attended the parties’ 7 mediation in person. Each class representative provided relevant information to plaintiffs’ counsel, 8 reviewed the settlement agreement to ensure it was in the best interest of the class, and, more 9 generally, took a reputational risk by representing the other class members. The class 10 representatives made these efforts on behalf of class members without receiving the benefits of the 11 reclassification, because they are all former employees. Moreover, each class representative 12 executed a broader release than absent class members, warranting additional consideration. The 13 requested awards are therefore approved. 14 VI. THE REQUESTED CY PRES IS APPROPRIATE 15 The requested cy pres beneficiary, Legal Aid at Work (formerly called Legal Aid Society- 16 Employment Law Center), meets the test under Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 17 2012), “that there be a driving nexus between the plaintiff class and the cy pres beneficiaries.” 18 This suit seeks to enforce wage protections for workers. Legal Aid at Work 19 (https://legalaidatwork.org), provides direct legal services for low-wage workers in California. 20 Accordingly, the beneficiary is approved. 21 VII. CONCLUSION 22 The Court hereby enters Judgment approving the terms of the Settlement. This document 23 shall constitute a final judgment with respect to the Claims of the Settlement Class for purposes of 24 Rule 58 of the Federal Rules of Civil Procedure, and the Settlement Class Members are barred and 25 permanently enjoined from initiating or prosecuting the Released Claims as defined in the 26 Agreement. 27 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 9 1 The claims of the Settlement Class Members are hereby DISMISSED WITH PREJUDICE, 2 with each party to bear his, her, or its own attorney fees and costs, except as set forth herein, and 3 with this Court retaining exclusive jurisdiction to enforce the Settlement Agreement, including 4 jurisdiction regarding the disbursement of the Settlement Fund. Without affecting the finality of 5 this Order and Final Judgment, the Court retains jurisdiction over the Class Representatives, the 6 Settlement Class, and the Defendant as to all matters concerning the administration, 7 consummation, implementation, interpretation, and enforcement of the Settlement Agreement. 8 IT IS SO ORDERED. 9 10 11 DATED: July 11, 2017 _____________________________ HON. RICHARD SEEBORG UNITED STATES DISTRICT COURT 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [proposed] ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT; ATTORNEY FEES AND COSTS (AS MODIFIED BY THE COURT) 10

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