Walsh v. CorePower Yoga LLC

Filing 52

ORDER by Judge Maria-Elena James granting 28 Motion for Settlement; granting in part and denying in part 29 Motion for Attorney Fees. Status Report due by 2/15/2018. Status Conference set for 2/22/2018 10:00 AM in Courtroom B, 15th Floor, San Francisco before Magistrate Judge Maria-Elena James. (mejlc3, COURT STAFF) (Filed on 10/3/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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WILLIAM WALSH,

Case No. 16-cv-05610-MEJ

Plaintiff,
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v.
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COREPOWER YOGA LLC,
Defendant.

ORDER RE: UNOPPOSED MOTION
FOR FINAL APPROVAL OF CLASS
SETTLEMENT; UNOPPOSED MOTION
FOR ATTORNEYS’ FEES AND COSTS
Dkt. Nos. 28, 29

United States District Court
Northern District of California

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INTRODUCTION

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Plaintiff William Walsh (“Plaintiff”) filed this putative class and collective action against

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Defendant CorePower Yoga LLC (“Defendant” or “CorePower”) on October 3, 2016. See

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Compl., Dkt. No. 1. Pending before the Court are Plaintiff’s unopposed (1) Motion for

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Certification of the Settlement Class, Final Approval of the Class Action Settlement, and Approval

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of the FLSA Settlement (Cert. Mot., Dkt. No. 28); and (2) Motion for Attorneys’ Fees and Costs

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(Fees Mot., Dkt. No. 29). The Motions came on for hearing on July 13, 2017.
Having considered the parties’ positions, the relevant legal authority, and the record in this

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case, the Court GRANTS the Certification Motion and GRANTS IN PART the Fees Motion for

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the reasons set forth below.
BACKGROUND

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A.

Background
CorePower owns and operates dozens of yoga studios nationwide. To maintain its

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facilities and until approximately 2015, CorePower created and operated a “Yoga for Trade”

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(“YFT”) program at dozens of studios in California and around the country. Through the YFT

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program, CorePower Yoga customers (called “students”) worked approximately two- to three-

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hour scheduled weekly shifts during which they cleaned and performed other project-based work

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at their local studio. In exchange, they received free yoga classes. CorePower did not pay these

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students (“YFT Cleaners”) any wages for their work.
Beginning in late 2013, CorePower phased out the YFT program and replaced it with the

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Studio Experience Team (“SET”). Under the SET program, CorePower students continued to

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work regular weekly shifts of approximately one-and-a-half hours, but CorePower paid them an

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hourly wage for their work. Instead of receiving free yoga classes, however, Plaintiff alleges that

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SET Cleaners were required to apply a large portion of their wages towards the purchase of a

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discounted yoga membership at CorePower, which reduced their pay below the applicable

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minimum wage. Plaintiff worked for CorePower as both a YFT and SET Cleaner at one of

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CorePower’s studios in Berkeley, California.
Plaintiff contends that CorePower violated wage and hour laws by: (1) failing to pay YFT

United States District Court
Northern District of California

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Cleaners any wages for the hours they worked, in violation of California and the Fair Labor

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Standards Act (“FLSA”) minimum wage provisions; and (2) paying California SET Cleaners

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subminimum wages by requiring them to purchase yoga memberships as a condition of work.
CorePower denies any wrongdoing, but agreed to settle these claims before Plaintiff filed

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suit. Plaintiff filed this action on behalf of the California Class and as a representative of the

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FLSA Collective.
The Court preliminarily approved the settlement, provisionally certified the proposed class

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and approved the FLSA Collective, and directed notice to Class and Collective members. See

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Prelim. Approval Order, Dkt. No. 21.

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The Court held a final fairness hearing on July 13, 2017. See Dkt. No. 38 (minutes). As of

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the date of the hearing, four potential Class members objected to the settlement in writing, each on

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the ground that they had enjoyed the YFT and SET Programs and did not feel the lawsuit was

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warranted. See Turner Decl., Ex. G (Patton Decl.) ¶ 11 & Ex. B, Dkt. No. 30-7; Suppl. Patton

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Decl. ¶ 7, Dkt. No. 35. As of the date of the hearing, thirty-four potential class members requested

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they be excluded from the Class. Patton Decl. ¶ 10 & Ex. A; Suppl. Patton Decl. ¶ 5 & Ex. A.1

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In a Declaration submitted after the hearing to update the Court about a number of matters,
including whether potential Class and Collective members who had received notice later had
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No Class or Collective members appeared at the hearing.

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B.

Settlement Terms

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The terms of the Settlement Agreement are set out in full detail in the Preliminary

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Approval Order. See Prelim. Approval Order at 2-7. The Settlement Agreement and Amendment

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thereto are attached as Exhibits A and B to the Turner Declaration. After the hearing, the parties

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submitted by Joint Stipulation a second Amendment in response to the Court’s concerns. See

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Suppl. Mem., Dkt. No. 43; Suppl. Patton Decl. ¶ 6 (Range of Payments); Minutes, Dkt. No. 49;

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Stip. with Proposed Order, Dkt. No. 50; Order on Stip., Dkt. No. 51. The Court summarizes the

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key terms of the amended Settlement Agreement here.

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The Settlement Agreement defines the “California Class” as all individuals who rendered

United States District Court
Northern District of California

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services to Defendant as YFT Cleaners or SET Cleaners in the State of California during the

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California Class Period. The Class Period applicable to the California Class is May 19, 2012

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through February 14, 2017 (the date of the Preliminary Approval Order). The “FLSA Collective”

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is defined as “all individuals who rendered services to Defendant as YFT Cleaners during the

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FLSA Class Period.” Individuals within the FLSA Collective are referred to as “FLSA Collective

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Members.” The Class Period applicable to the FLSA Collective is May 19, 2013 through

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February 14, 2017. “YFT Cleaners” shall mean all individuals who worked for CorePower

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cleaning studios in exchange for yoga classes pursuant to its YFT program during the applicable

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Class Period. “SET Cleaners” shall mean all individuals who worked for CorePower cleaning

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studios in exchange for wages, pursuant to its SET program, during the California Class Period.

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There are approximately 6,482 potential members of the FLSA Collective who participated

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in the YFT program, and 4,873 California Class members who participated in the YFT program at

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California CorePower studios. Turner Decl. ¶ 21; Second Suppl. Turner Decl. ¶ 4, Dkt. No. 44.

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submitted additional objections or requests for exclusion, Counsel for Plaintiffs stated the Claims
Administrator had received no additional objections or exclusions, and had received one additional
consent to join form. Second Suppl. Turner Decl. ¶ 6, Dkt. No. 44. Counsel also represented that,
as of July 25, 2017, there were a total of 1,038 opt-ins, 20 exclusions, and 4 objections. Id. This
latter representation conflicts with the Supplemental Declaration of the Claims Administrator, who
declared there were 31 timely (and 3 untimely) requests for exclusions as of June 29, 2017. Suppl.
Patton Decl. ¶ 5.
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There are 3,519 California Class members who cleaned CorePower studios in California through

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the SET program, 653 of whom overlap with the individuals in California who worked in the YFT

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program. Id. (both)

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Notice initially was distributed to Class and Collective members on March 28, 2017.

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Patton Decl. ¶ 4; see also Turner Decl., Exs. E-F. California Class members did not receive a

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separate FLSA Notice. Second Suppl. Turner Decl. ¶ 5. Notice was provided by both U.S. Mail

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and e-mail when that information was available; the Settlement Administrator made multiple

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mailings when mail was returned as undeliverable. Class members who received the initial

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mailing had until May 30, 2017 to exclude themselves from or object to the Settlement (or thirty
days from any subsequent mailing if the original mail was returned as undeliverable). FLSA

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United States District Court
Northern District of California

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Collective members were required to opt in by May 30, 2017, or thirty days from any subsequent

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mailing if the original mail was returned as undeliverable.

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Defendant agreed to pay a Total Settlement Amount of $1,650,000.00. This was expected

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to represent a recovery of approximately 41% of the estimated unpaid minimum wages for

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California Class members’ YFT workweeks, 8.6% for California Class members’ SET

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workweeks, and 25% for the FLSA Collective members’ workweeks. Turner Decl. ¶¶ 22, 25. At

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the conclusion of the opt-in period, only 16% of the FLSA Collective members had returned

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Consent to Join and Release Forms; under the distribution method contemplated by the Settlement

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Agreement, this participation rate meant “FLSA Collective Members would receive higher per-

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workweek payments than California Class Members, even though the YFT claims of the

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California Class are relatively stronger.” Suppl. Mem. at 3. The resulting payment differential

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between the Participating FLSA Collective members and the Participating California Class

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members would have been contrary to the parties’ intent and caused the Court to question the

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fairness of the settlement. By stipulation, the parties agreed to amend the Settlement Agreement

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to redistribute to FLSA Collective and Class members the portion of the FLSA Collective Share of

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Net Settlement Fund that exceeds the sum total of the Estimated Settlement Shares of all

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Participating FLSA Collective members, consistent with their proportionate shares of the Net

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Settlement Fund. Order on Stip. at 2.
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The Settlement Agreement authorizes Class Counsel to apply for an award of attorneys’

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fees in an amount not to exceed one-third of the Total Settlement Amount, plus the costs incurred

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in litigating this case. In the separately filed Motion for Attorneys’ Fees, Class Counsel requests

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$550,000 in fees and $11,917.39 in costs. See Fees Mot.; Second Suppl. Turner Decl. ¶ 8. Class

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Counsel also requests an incentive payment of $10,000 to Plaintiff. See id. The Settlement

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Administrator requests costs in the amount of $69,875. Fees Mot. Finally, $7,500 will be paid to

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the California Labor and Workforce Development Agency, representing 75% of the total penalties

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allocated to the claims brought under the California Private Attorneys General Act (“PAGA”).

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See Settlement Agreement ¶ 3.1(A).2
After deducting the proposed fees and costs, the Net Settlement Fund is estimated to be

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United States District Court
Northern District of California

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approximately $993,183. The Settlement Agreement originally contemplated allocating 65% of

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the Net Settlement Fund to California Class members and 35% to FLSA Collective members; the

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allocation has been changed to ensure FLSA Collective members will not receive an unfair

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proportion of the Net Settlement Fund. See Order on Stip. at 2 (“The portion of the FLSA

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Collective Share of Net Settlement Fund that exceeds the sum total of the Estimated Settlement

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Shares of all Participating FLSA Collective Members (i.e., an amount equal to the difference

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between the FLSA Collective Share of Net Settlement Fund and the sum total of the Estimated

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Settlement Shares of all Participating FLSA Collective Members) (the ‘FLSA Redistribution

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Amount’) will be distributed between the Participating FLSA Collective Members and the

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Participating California Class Members consistent with their proportionate shares of the Net

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Settlement Fund.”). In addition, California Class members had the option of electing to receive a

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gift card with a face value of twice their settlement amount; as of the date of the hearing, 542

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California Class members elected to receive a gift card. Patton Decl. ¶ 9; Order on Stip. at 2-3

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(the value of the gift card will be increased by double the portion of the FLSA Redistribution

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Amount).
Participating Class members release Defendant from all California Labor Code and FLSA

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The Settlement Agreement also earmarked $10,000 to cover any errors and omissions by the
Claims Administrator. This amount will revert to the Net Settlement Funds if no claims are made.
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claims there were or could have been pleaded to the extent they are based on the same facts and

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circumstances as the claims brought here. See Settlement Agreement ¶ 3.6(A) (endorsement

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language on settlement checks). Participating Collective members release Defendant from all

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FLSA claims that were alleged, related to, or that reasonably could have arisen out of the same

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facts alleged here, and that arise out of services rendered as part of the YFT Program. Id. ¶ 3.6(A)

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& (B).
Unclaimed funds for the California Class are non-reversionary. Uncashed checks mailed

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to FLSA Collective members who opted in to the Settlement will revert to CorePower if they have

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not been cashed within 90 days.
DISCUSSION – FINAL APPROVAL

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United States District Court
Northern District of California

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A.

Legal Standard
The Ninth Circuit maintains a “strong judicial policy” that favors the settlement of class

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actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Nonetheless,

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“[t]he claims, issues, or defenses of a certified class may be settled . . . only with the court’s

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approval.” Fed. R. Civ. P. 23(e). “The purpose of Rule 23(e) is to protect the unnamed members

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of the class from unjust or unfair settlements affecting their rights.” In re Syncor ERISA Litig.,

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516 F.3d 1095, 1100 (9th Cir. 2008) (citation omitted). “Adequate notice is critical to court

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approval of a class settlement under Rule 23(e).” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025

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(9th Cir. 1998).

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Additionally, Rule 23(e) requires the Court to determine whether the proposed settlement

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“is fundamentally fair, adequate, and reasonable.” Id. at 1026; Fed. R. Civ. P. 23(e)(2) (“If the

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proposal would bind class members, the court may approve it only after a hearing and on finding

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that it is fair, reasonable, and adequate.”). To assess whether a settlement proposal is fair,

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adequate, and reasonable, the Court must generally balance a number of factors, including:

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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
state 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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In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citations omitted).

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Where a settlement agreement is negotiated prior to formal class certification, it is subject to a

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higher level of scrutiny, and a court’s approval order must ensure that the settlement is not the

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product of collusion among the negotiating parties. Id. at 946-47. But, “[g]enerally, unless the

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settlement is clearly inadequate, its acceptance and approval are preferable to lengthy and

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expensive litigation with uncertain results.” Ching v. Siemens Indus., Inc., 2014 WL 2926210, at

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*4 (N.D. Cal. June 27, 2014).

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B.

Class Certification
Final approval of a class action settlement requires, as a threshold, an assessment of

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whether the class satisfies the requirements of Federal Rule of Civil Procedure 23(a) and (b). See

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United States District Court
Northern District of California

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Hanlon, 150 F.3d at 1019, 1022. Because no new facts that would affect these requirements have

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arisen since the Court preliminarily approved the Class on February 14, 2017, this Order

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incorporates by reference its prior analysis under Rules 23(a) and (b)(3) as set forth in the

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Preliminary Approval Order. See Prelim. Approval Order at 12-15. The Court affirms its

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previous findings and certifies the California Class.

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C.

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Adequacy of Notice
Rule 23(e) requires that “[t]he court must direct notice in a reasonable manner to all class

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members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1). The notice must be

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“reasonably calculated, under all the circumstances, to apprise interested parties of the pendency

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of the action and afford them an opportunity to present their objections.” Mullane v. Cent.

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Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950) (citations omitted); see also Officers for

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Justice v. Civil Serv. Comm’n of City & Cty. of S.F., 688 F.2d 615, 624 (9th Cir. 1982) (“The class

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must be notified of a proposed settlement in a manner that does not systematically leave any group

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without notice.” (citation omitted)). “Rule 23(e) requires notice that describes the terms of the

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settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come

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forward and be heard.” In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 946 (9th Cir.

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2015) (internal quotation marks omitted). The Court’s role in reviewing a proposed settlement is

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to represent those class members who were not parties to the settlement negotiations and
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agreement. See, e.g., S.F. NAACP v. S.F. Unified Sch. Dist., 59 F. Supp. 2d 1021, 1027 (N.D. Cal.

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1999).

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The Court approved the form and content of the revised proposed Class Notice which

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Claims Administrator SSI mailed to Class and Collective members. See Prelim. Approval Order.

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The Court also approved the Notice Plan as set forth in the Settlement Agreement. Id. SSI sent

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hard copy notices to a total of 14,873 Class and Collective members, and sent email notices to

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13,689 Class and Collective members. Patton Decl. ¶ 4. The notice process described in the

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Patton Declaration comports with the Notice Plan. Moreover, SSI employed several quality

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control measures to locate Potential Class and Collective members, including checking lists of
addresses against the National Change of Address database and performing computerized locator

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United States District Court
Northern District of California

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traces to locate Potential Class and Collective members when USPS returned their Notice Packets

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as undeliverable. Id. ¶ 5. The Settlement Administrator represents 33 Class members and 18

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FLSA Collective members did not receive any successful notice attempt. Patton Decl. ¶ 5; Suppl.

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Patton Decl. ¶ 12.

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With respect to those California Class members whose Notice Packets were not delivered,

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Rule 23 does not require actual notice of settlement to class members in time to opt out of the

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class; rather, due process requires notice be given in a manner “reasonably calculated, under all

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the circumstances, to apprise interested parties of the pendency of the action and afford them an

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opportunity to present their objections.” Mullane, 339 U.S. at 314-15, 319 (“Therefore notice

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reasonably certain to reach most of those interested in objecting is likely to safeguard the interests

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of all, since any objections sustained would inure to the benefit of all. We think that under such

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circumstances reasonable risks that notice might not actually reach every beneficiary are

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justifiable.”); see also Silber v. Mabon, 18 F.3d 1449, 1454-55 (9th Cir. 1994) (concluding, under

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Mullane and other precedent, that “the appropriate standard is the ‘best notice practicable’”—not

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actual notice). Under the circumstances, the Court finds SSI’s method of providing notice to Class

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members was the best practicable means of apprising Class members of the Settlement. See

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Schuchardt v. Law Office of Rory W. Clark, 314 F.R.D. 673, 680 (N.D. Cal. 2016) (finding notice

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by U.S. Mail best notice available under the circumstances). Consequently, notice was adequate
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as of May 16, 2016.3

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D.

Fairness, Adequacy, and Reasonableness
The Court preliminarily found the Settlement “fair, reasonable, and adequate” under Rule

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23(e)(2). Prelim. Approval. Order. The preliminary approval stage is “an ‘initial evaluation’ of

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the fairness of the proposed settlement made by the court on the basis of written submissions and

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informal presentation from the settling parties.” In re High-Tech Emp. Antitrust Litig., 2013 WL

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6328811, at *1 (N.D. Cal. Oct. 30, 2013) (citation omitted). The Court now examines the

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Settlement Agreement anew to ensure it is “fair, reasonable, and adequate” in light of the In re

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Bluetooth factors. 654 F.3d at 946. When settlement occurs before formal class certification,
settlement approval requires a higher standard of fairness in order to ensure that class

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United States District Court
Northern District of California

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representatives and their counsel do not secure a disproportionate benefit at the expense of the

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class. See Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).

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In re Bluetooth Factors

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The strength of Plaintiff’s case. Where plaintiffs face significant barriers to succeed on the

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merits, such as establishing the existence of an employer-employee relationship, the first

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Bluetooth factor favors settlement. See Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848,

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851 (N.D. Cal. 2010). Courts “may presume that through negotiation, the Parties, counsel, and

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mediator arrived at a reasonable range of settlement by considering Plaintiff’s likelihood of

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recovery.” Garner v. State Farm Mut. Auto. Ins. Co., 2010 WL 1687832, at *9 (N.D. Cal. Apr.

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22, 2010). “Generally, unless the settlement is clearly inadequate, its acceptance and approval are

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preferable to lengthy and expensive litigation with uncertain results.” Ching, 2014 WL 2926210,

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at *4 (internal quotation marks omitted). The Court need not “‘reach any ultimate conclusions on

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the contested issues of fact and law which underlie the merits of the dispute, for it is the very

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

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During a telephonic hearing regarding the proposed Amendment to the Settlement Agreement,
Counsel for Plaintiff argued it was not necessary to issue a second notice of settlement to inform
Settlement Class and FLSA Collective members of the Amendment because all participating Class
and Collective members would receive amounts greater than the approximate amounts indicated in
their Notices. See Sept. 7, 2017 FTR at 11:05.
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consensual settlements.’” In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prods.

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Liab. Litig., 229 F. Supp. 3d 1052, 1064-65 (N.D. Cal. 2017) (quoting Officers for Justice, 688

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F.2d at 625).
To prevail on the merits of this action, Plaintiffs would need to prove that CorePower

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employed both YFT and SET Cleaners, that CorePower’s remuneration of the cleaners violated

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the FLSA and California wage and hour laws, and that requiring SET Cleaners to purchase yoga

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memberships resulted in subminimum wages under California wage and hour law. CorePower

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contends YFT Cleaners were properly classified as independent contractors, not employees, and

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that SET Cleaners voluntarily purchased discounted memberships because of their interest in
yoga.4 Because Plaintiff would face significant barriers to succeed on the merits, this factor favors

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United States District Court
Northern District of California

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final approval.
The risk, expense, complexity, and likely duration of further litigation. Difficulties and

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risks of litigating weigh in favor of approving a class settlement. See Rodriguez v. W. Publ’g

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Corp., 563 F.3d 948, 966 (9th Cir. 2009). Should final approval be denied, CorePower will

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continue to deny liability, and Plaintiff will be forced to litigate the merits of his claims in a

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nation-wide FLSA Collective Action and a California Class Action comprising two differently-

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situated groups. While there are no facts before the Court to suggest this litigation will be

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particularly expensive, complex, or lengthy, there is no doubt litigation would be hard fought and

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costly, and as indicated above, the outcome of the case on the merits is not clear. Even if Plaintiff

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ultimately prevailed on his claims, an appeal would delay recovery to Collective and Class

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members and might increase the fees Class Counsel would seek to recover from any ultimate

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award. This factor therefore also favors final approval.
The risk of maintaining class action status throughout the trial. Absent settlement,

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CorePower would oppose a motion for class certification. Plaintiff would need to overcome

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CorePower’s argument that some of the threshold issues, such as whether SET Cleaners were

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In fact, some of the Potential Class members who objected to and/or excluded themselves from
the Settlement expressed both these viewpoints. Patton Decl., Ex. B at ECF pp. 35-39; Suppl.
Patton Decl., Ex. A at ECF pp. 13, 29, 32, 44.
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coerced into buying memberships, present individualized questions that are not appropriately

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resolved on a class-wide basis. In its Preliminary Approval Order, the Court noted the material

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risks Plaintiff faced in proving liability on a class-wide basis. The bases for Class members’

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objections and exclusions to the Settlement underscore this risk. See supra; see also Certification

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Mot. at 19 (“[O]bjectors have taken issue with the premise of Plaintiff’s lawsuit, as they wish to

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continue participating in CorePower’s YFT and SET programs. . . .”). This factor favors final

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approval.

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The amount offered in settlement. At the Preliminary Approval stage, Class Counsel
estimated that, before deducting for fees and costs, California Class members who were YFT
Cleaners would receive $9.34 per workweek, California Class members who were SET Cleaners

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United States District Court
Northern District of California

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would receive $1.17 per workweek, and FLSA Collective members would receive $4.60 per

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workweek. Sagafi Decl. ¶ 34, Dkt. No. 11. Counsel represented that, without factoring in

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liquidated damages, this recovery amounted to 41% of the estimated unpaid minimum wages for

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the California YFT Cleaner workweeks, 8.6% of the estimated unpaid minimum wages for the

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SET Cleaner workweeks, and 25% of the estimated unpaid minimum wages for the FLSA

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Collective workweeks. Prelim. Approval Mot. at 5, Dkt. No. 10; Sagafi Decl. ¶ 38.

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Pursuant to the revised distribution framework (see supra at 3-5), Counsel estimates that

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California YFT Cleaners will receive $7.00 per workweek, SET Cleaners will receive $0.87 per

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workweek, and FLSA Collective members will receive $2.78 per workweek. Suppl. Mem. at 4 &

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n.3. In addition, almost 550 California Class members elected to receive their settlement amount

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in the form of a gift card, which doubles the amount of their settlement award. Patton Decl. ¶ 9.

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

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recovery does not per se render the settlement inadequate or unfair.” In re Omnivision Techs.,

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Inc., 559 F. Supp. 2d 1036, 1042 (N.D. Cal. 2008) (citation omitted). In light of the significant

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risks of continued litigation, especially with respect to securing class certification, and based on

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Plaintiff’s Counsel’s endorsement of the settlement (see below), the Court does not find that the

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cash settlement in this instance renders the settlement inadequate or unfair. Cf. Hunt v. VEP

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Healthcare, Inc., 2017 WL 3608297, at *1 (N.D. Cal. Aug. 22, 2017) (denying preliminary
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approval of class and collective action settlement where workers would recover approximately 4%

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of amount allegedly owed to them: “If a defendant is to receive a discount of this magnitude, there

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must be good reasons why. And those reasons must be explained thoroughly. . . .”).

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The extent of discovery completed and the state of the proceedings. Courts often “look to

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the amount of exchanged information prior to settlement to determine whether the parties have

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made an informed decision to settle the case.” Willner v. Manpower Inc., 2015 WL 3863625, at

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*4 (N.D. Cal. June 22, 2015) (citation omitted). Although no formal discovery took place in this

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matter, Class Counsel spent significant time investigating the claims and interviewing Plaintiff and

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other Class members; the parties also exchanged information pre-filing and participated in private

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United States District Court
Northern District of California

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mediation. Turner Decl. ¶¶ 14-16. This factor also weighs in favor of final approval.
The experience and views of counsel. The experience of Class Counsel also weighs in

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favor of final approval. “Parties represented by competent counsel are better positioned than

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courts to produce a settlement that fairly reflects each party’s expected outcome in litigation.” In

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re Pac. Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995). Class Counsel are experienced class

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action attorneys who have been qualified as lead class counsel by other California courts, both in

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employment wage and hour litigation and in other types of cases. See Sagafi Decl. ¶¶ 5, 10.

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Based on their experience and their knowledge of the current case, Class Counsel endorses the

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Settlement as fair, adequate, and reasonable. This too weighs in favor of final approval.

19

The presence of a governmental participant. Although no governmental entity is a party to

20

these proceedings, the United States and California Attorneys General were notified of the

21

settlement pursuant to the notice provisions of CAFA. See 28 U.S.C. § 1715. No federal or state

22

official has objected to or raised concerns about the Settlement.

23

The reaction of the class members to the proposed settlement. “[T]he absence of a large

24

number of objections to a proposed class action settlement raises a strong presumption that the

25

terms of a proposed class settlement action are favorable to the class members.” In re Omnivision,

26

559 F. Supp. 2d at 1043 (citation omitted). According to the Claims Administrator, four persons

27

objected to the Settlement, and 34 requested to be excluded from the Settlement. Thus, while

28

there were some dissenting voices, the objectors represent a small percentage of the Class. This
12

1
2
3

factor favors final approval.
In summary, having considered the In re Bluetooth factors, the Court finds they weigh in
favor of settlement.

4

2.

Potential Collusion

5

Where a settlement is reached prior to class certification, courts must also consider whether

6

the settlement is the product of collusion among the negotiating parties. In re Bluetooth, 654 F.3d

7

at 947. The parties reached an agreement in principle when they participated in a formal private

8

mediation, then spent several weeks negotiating the details of the Settlement Agreement and the

9

class notice. The presence of a mediator strongly suggests the absence of collusion or bad faith by
the parties or counsel. See Chun-Hoon, 716 F. Supp. 2d at 852; Satchell v. Fed. Express Corp.,

11
United States District Court
Northern District of California

10

2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) (“The assistance of an experienced mediator in

12

the settlement process confirms that the settlement is non-collusive.”). The Court previously

13

found this type of arms-length negotiation weighed in favor of preliminary approval (Prelim.

14

Approval Order at 16-17) and finds this to be the case again on final approval.

15

In addition to the procedure by which the parties arrived at their settlement, the Court must

16

also look for other signs that may demonstrate collusion, including (1) when counsel receive a

17

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

18

but class counsel are amply rewarded; (2) when the parties negotiate a “clear sailing” arrangement

19

providing for the payment of attorneys’ fees separate and apart from class funds, which carries the

20

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

21

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

22

fees not awarded to revert to defendants rather than be added to the class fund. In re Bluetooth,

23

654 F.3d at 947. As to the first factor, the monetary distribution to the Class constitutes

24

approximately 60% of the Total Settlement Amount, while Class Counsel will receive up to one-

25

third of the Total Settlement Amount. As discussed below, one-third is not necessarily

26

disproportionate, though it does exceed the 25% benchmark in the Ninth Circuit. As to the second

27

factor, the Settlement Agreement contains a clear sailing provision in which CorePower agrees not

28

to object to Class Counsel’s request for fees constituting up to one-third of the Total Settlement
13

1

Amount. Nevertheless, because the fee will be awarded from the same common fund as the

2

recovery to the Class, this particular clear sailing provision does not signal the possibility of

3

collusion. See In re High-Tech Emp., 2015 WL 5158730, at *14 (where attorneys’ fees will be

4

awarded from the same common fund as the recovery to the class, where counsel did not negotiate

5

fees separate and apart from class funds, and where no portion of the common fund would revert

6

to defendant, clear sailing provision did not signal possibility of collusion). And as to the third

7

factor, it only applies to a minimal degree. No money allocated to the Class will revert to

8

Defendant; instead, any residual amount that is too small to be redistributed to Class members will

9

be paid to a cy pres recipient, the National Employment Law Project (“NELP”). The Court
previously found NELP has a “driving nexus” to the members of this wage and hour employment

11
United States District Court
Northern District of California

10

class. Prelim. Approval Order at 18-19. The only money that will revert to Defendant are checks

12

that have been mailed to FLSA Collective members (who by definition have opted in to the

13

Collective), which have not been cashed within 90 days of mailing.

14

In sum, the Court finds these facts do not raise an inference of collusion.

15

3.

16

Given the foregoing analysis, the Court finds that even under heightened scrutiny, the

17
18
19

Summary

Settlement Agreement is fair, reasonable, and adequate to warrant final approval.
DISCUSSION – FLSA COLLECTIVE
The Court conditionally certified the FLSA collective action. Prelim. Approval Order at

20

23-24. The standard for certification of an FLSA collective action is “not as stringent a standard”

21

as that for certification of a class under Rule 23. See Tijero v. Aaron Bros., Inc., 301 F.R.D. 314,

22

323 (N.D. Cal. 2013) (citing Harris v. Vector Mktg. Corp., 753 F. Supp. 2d 996, 1003 (N.D. Cal.

23

2010)). For the same reasons identified above, the Court finds the settlement of the FLSA

24

Collective, as revised by the parties on September 27, 2017, “constitutes a ‘fair and reasonable

25

resolution of a bona fide dispute,’ and approves it.” Sarkisov v. StoneMor Partners L.P., 2015

26

WL 5769621, at *3 (N.D. Cal. Sept. 30, 2015) (quoting Lynn’s Food Stores, Inc. v. United States,

27

679 F.2d 1350, 1353 (11th Cir. 1982)).

28
14

DISCUSSION – ATTORNEYS’ FEES AND COSTS

1
2

A.

Attorneys’ Fees
Plaintiffs’ counsel requests $550,000 in fees. At the Preliminary Approval hearing, Class

3
4

Counsel represented it expected its final lodestar to be approximately $220,000, which would

5

represent a multiplier of 2.3. The Court found this multiplier was within the range of

6

reasonableness for purposes of preliminary approval but “expressed some concern that 33 and 1/3

7

% of the Total Settlement Fund represents an unwarranted upward departure from the norm.”

8

Prelim. Approval Order at 19. Since that time, Class Counsel performed additional work in

9

responding to Class and Collective members, moving for final approval, and responding to
inquiries from the Court. Class Counsel represents its current lodestar amounts to $403,643 and

11
United States District Court
Northern District of California

10

its total costs are $11,917.39; the requested fees now represent a multiplier of 1.36. Second Suppl.

12

Turner Decl. ¶ 8.

13

1.

14

Courts have discretion to award attorneys’ fees to a prevailing plaintiff if: “(1) fee-shifting

Legal Standard

15

is expressly authorized by the governing statute; (2) the opponents acted in bad faith or willfully

16

violated a court order; or (3) the successful litigants have created a common fund for recovery or

17

extended a substantial benefit to a class.” In re Bluetooth, 654 F.3d at 941. An award of

18

attorneys’ fees is authorized in this case by the governing statutes,5 and because Plaintiff has

19

created a common fund for recovery and extended a substantial benefit to the class. Nonetheless,

20

“courts have an independent obligation to ensure that the award, like the settlement itself, is

21

reasonable, even if the parties have already agreed to an amount.” Id. (citations omitted).

22

In this circuit, there are two primary methods used to calculate reasonable attorneys’ fees:

23

the lodestar method and the percentage-of-recovery method. In re Online DVD-Rental, 779 F.3d

24

at 949. Courts have the discretion to award fees employing either method. In re Bluetooth, 654

25
26
27
28

5

The California Labor Code provides for the recovery of reasonable attorneys’ fees and costs in
connection with the claims Plaintiff asserted in this action. See Cal. Lab. Code § 1194(a) (in
actions to recover minimum wage or legal overtime compensation); id. § 2802(c) (in actions for
reimbursement of necessary expenditures).
15

1

F.3d at 942 (citation omitted). Whichever method they choose to employ, courts should cross-

2

check the fees awarded using the second method. Id. at 944-45. In evaluating the reasonableness

3

of a percentage-of-fund award or a lodestar, courts consider the following factors:

4

(1) the time and labor required, (2) the novelty and difficulty of the
questions involved, (3) the skill requisite to perform the legal service
properly, (4) the preclusion of other employment by the attorney due
to acceptance of the case, (5) the customary fee, (6) whether the fee
is fixed or contingent, (7) time limitations imposed by the client or
the circumstances, (8) the amount involved and the results obtained,
(9) the experience, reputation, and ability of the attorneys, (10) the
“undesirability” of the case, (11) the nature and length of the
professional relationship with the client, and (12) awards in similar
cases.

5
6
7
8
9

Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975). The most important factor is

11
United States District Court
Northern District of California

10

the benefit counsel obtained for the class. In re Bluetooth, 654 F.3d at 942. Finally, “the lack of

12

objection from any Class Member supports the attorneys’ fees award.” In re Immune Response,

13

497 F. Supp. 2d 1166, 1177 (S.D. Cal. 2007).

14
15

The Court analyzes Class Counsel’s request for fees under percentage-of-funds method
and confirms the result by applying a lodestar analysis.

16

2.

Percentage of Funds Analysis

17

In the Ninth Circuit, the “benchmark” percentage for an award of attorneys’ fees in a class

18

action is 25%. In re Bluetooth, 654 F.3d at 942. This “benchmark percentage should be adjusted,

19

or replaced by a lodestar calculation, when special circumstances indicate that the percentage

20

recovery would be either too small or too large in light of the hours devoted to the case or other

21

relevant factors.” Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir.

22

1990). In this case, several factors balance each other out to suggest that the benchmark

23

percentage is appropriate.

24

Class Counsel is experienced in this type of litigation and handled the matter on a purely

25

contingent basis starting at the latest in January 2016 when it sent CorePower a letter notifying it

26

of Plaintiff’s claims. Sagafi Decl. ¶ 25. The parties settled this case before filing suit. In all

27

likelihood, this was a more economic approach than litigating the case aggressively before

28

exploring pre-suit resolution; however, it also means Class Counsel did not need to expend as
16

1

many resources to resolve the action.
Class Counsel obtained monetary compensation for Class and Collective members in a

2
3

case involving significant litigation risks and in which certification was not an obvious outcome.

4

See supra. But it is not evident whether Collective and Class members believe the lawsuit was in

5

their best interest: only 16% of potential FLSA Collective members who received notice by mail

6

and/or email opted into the Settlement, and it remains to be seen how many Class members will

7

cash their Settlement Checks. Indeed, one potential Class member requested to be excluded

8

because the claims were “ridiculous” and another because cleaners had been “more than

9

adequately compensated for” their services and “in no way feel entitled to monetary
compensation.” Patton Decl., Ex. A at ECF pp. 14, 25. Others objected to the Settlement because

11
United States District Court
Northern District of California

10

they were “clearly told, both verbally and in writing, that [their] cleaning services would be

12

compensated only in a trade for unlimited yoga classes in the week of [their] cleaning work . .

13

.[this] deal was fair and honestly [they feel they] got the better end of the bargain.” Patton Decl.,

14

Ex. B at ECF pp. 35-36. Others felt it was “unfortunate to see CPY being sued for something that

15

was such a wonderful gift.” Id. at ECF p. 37; see also Suppl. Patton Decl., Ex. A at ECF pp. 32,

16

44; Suppl. Br., Dkt. No. 20.6 Moreover, Plaintiff’s characterization of the recovery of $0.87 per

17

workweek for SET Class members7 as “highly favorable” (Fees Mot. at 5) does not resonate

18
19

6

26

Plaintiff correctly notes that employers are not free to accept free labor, even from workers who
are willing to work for no pay. Cert. Mot. at 19 (citing Tony & Susan Alamo Found. v. Sec’y of
Labor, 471 U.S. 290, 295 (1985)). But Tony and Susan Alamo Foundation is distinguishable.
First, the volunteers in that case received food, shelter, clothing, transportation and medical
benefits, which the Supreme Court described as “simply wages in another form” and used as a
basis for finding the volunteers were employees. Alamo Found., 471 U.S. at 293-94. Here, it is
not evident that purchasing discounted memberships would be earning “wages in another form.”
Second, and more important, there has been no finding that the SET and YFT Cleaners were
employees of CorePower: CorePower denies all liability and wrongdoing, and agreed to settle the
action only “to avoid the burden, expense, and uncertainty of continued litigation.” Settlement
Agreement at 1. CorePower asserts that YFT Cleaners were independent contractors and that SET
Cleaners voluntarily purchased their memberships as a benefit. See Fees Mot. at 5; Suppl. Br. iso
Prelim. Approval at 2-3, Dkt. No. 20.

27

7

20
21
22
23
24
25

28

This represents significantly less than 8.6% of their estimated unpaid minimum wages. Class
Counsel represented this allocation was “fair and reasonable because it reflects the lower potential
damages, weaker claims, and greater class certification risks for the SET claims. Whereas YFT
17

1

loudly with the Court. See also Turner Decl. ¶ 22 (estimated recovery of $1.17 per workweek for

2

Class members who were SET Cleaners is 8.6% of estimated unpaid minimum wages, before

3

deducting proposed fees and costs).

4
5
6

No Class members objected specifically to the proposed fee award. Patton Decl.; Suppl.
Patton Decl.
However, the Court was required to involve itself numerous times to obtain sufficient

7

information and/or clarification from Plaintiff’s Counsel. See, e.g., Order re: Hearing, Dkt. No. 17

8

(Plaintiff did not sufficiently address several factors relevant to preliminary approval, did not

9

clearly explain gift card procedures, etc.); Suppl. Br., Dkt. No. 20 (addressing additional questions
from Court regarding obvious deficiencies in settlement, preferential treatment, and reasonable

11
United States District Court
Northern District of California

10

range of approval); Order re: Motion for Final Class Cert., Dkt. No. 32 (addressing discrepancies

12

between declarations); Suppl. Turner Decl. ¶ 4, Dkt. No. 34 (acknowledging errors); Suppl. Br.

13

Order, Dkt. No. 42 (asking whether 16% participation rate for FLSA Collective meant YFT

14

Cleaners outside of California who were Participating FLSA Collective members would receive

15

significantly greater settlement than California YFT Cleaners whose claims counsel generally

16

considered more valuable, and questioning whether this was fair); Second Suppl. Turner Decl. ¶ 6

17

(responding to Court’s questions raised during Fairness Hearing, but providing erroneous

18

information re total number of exclusions); Order Setting Telephonic Hearing, Dkt. No. 45

19

(setting hearing to discuss mechanics of proposed change in “unclaimed funds,” which Plaintiff

20

did not address in the Suppl. Mem.).

21
22

For these reasons, the Court does not find it appropriate to award attorneys’ fees in an
amount greater than the 25% benchmark.

23

3.

Lodestar Comparison

24

The lodestar represents a reasonable hourly fee multiplied by the number of hours

25
26
27
28

Cleaners were not paid any wages for their work, SET Cleaners were paid at an hourly rate at or
above the applicable minimum wage. Plaintiff alleges that SET Cleaners were required, as a
condition of employment, to pay for discounted CorePower memberships that brought their pay
below the minimum wage.” Suppl. Br. iso Prelim. Approval at 2-3; see also supra.
18

1

reasonably expended on the litigation. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The

2

lodestar figure is presumptively reasonable. Clark v. City of L.A., 803 F.2d 987, 990 (9th Cir.

3

1986). The lodestar comparison in this case confirms 25%, rather than 33%, of the Total

4

Settlement Amount is warranted for attorneys’ fees.

5
6

a.

Hourly Rate

To determine the appropriate lodestar amount, courts first assess the reasonableness of the

7

hourly billing rate. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). To

8

determine whether rates are reasonable, courts must identify the relevant community and assess

9

the prevailing hourly rate in that community for similar services by lawyers of reasonably
comparable skill, experience, and reputation. See id. at 979. “Generally, when determining a

11
United States District Court
Northern District of California

10

reasonable hourly rate, the relevant community is the forum in which the district court sits.” Id.

12

Here, the relevant community is the San Francisco Bay Area, and the reasonableness of rates

13

charges should therefore be determined by reference to the rates charged by Bay Area attorneys

14

with commensurate skill, experience, and reputation.

15

Plaintiff seeks an hourly rate of between $200 and $775 per hour depending on the

16

particular support staff, attorney, or partner. Second Suppl. Turner Decl. Ex. B. Class Counsel

17

described the skill, experience, and reputation of the attorneys and support staff who worked on

18

the matter. Sagafi Decl. ¶¶ 6-19 (describing experience of Sagafi, Eiland, and Turner); Turner

19

Decl. ¶¶ 4-13 (describing experience of Turner, Sagafi, Eiland, Schrum-Herrera, and Levinson).

20

The range of rates requested for the attorneys and support staff identified in the declarations is in

21

line with the overall range of market rates in this District for attorneys and for litigation support

22

staff of similar abilities and experience. See Prison Legal News v. Schwarzenegger, 608 F.3d 446,

23

455 (9th Cir. 2010) (district court did not abuse its discretion in awarding 2008 hourly rates for

24

Bay Area attorneys of up to $875 for a partner, $700 for an attorney with 23 years of experience,

25

$425 for an attorney with approximately five years of experience, and $190 for paralegals); see

26

also Gutierrez v. Wells Fargo Bank, N.A., 2015 WL 2438274, at *5 (N.D. Cal. May 21, 2015)

27

(finding reasonable rates for Bay Area attorneys of between $475-$975 for partners, $300-$490

28

for associates, and $150-$430 for litigation support and paralegals). Under the circumstances, the
19

1

Court is satisfied the hourly rates requested for the work performed by Sagafi, Eiland, Turner,

2

Schrum-Herrera, and Levinson fall within the range of reasonable fees.
But Class Counsel also seeks to recover fees for the work performed by seven attorneys

4

and eight support staff members whose experience was not described by Sagafi or Turner. See

5

Second Suppl. Turner Decl., Ex. B. Counsel provided the biographical information for the

6

attorneys and staff “with primary involvement in” the case, and offered to provide supplemental

7

information to the Court. Turner Decl. ¶ 13 & n.2.8 While this approach may have been

8

appropriate if the unidentified staff performed minimal work, the work performed by the seven

9

attorneys and eight support staff Counsel never described amounts to almost $89,000. See Second

10

Suppl. Turner Decl., Ex. B. Counsel should not place the onus upon the Court to ensure the Fees

11
United States District Court
Northern District of California

3

Motion is adequately supported. The lack of information about these individuals prevents the

12

Court from ascertaining whether their experience warrants the fees charged, which range from

13

$230 for “Part-Time Paralegal” to $650 for Nantiya Ruan.
b.

14

Hours Expended

15

Beyond establishing a reasonable hourly rate, a party seeking attorneys’ fees bears the

16

burden to “document[ ] the appropriate hours expended.” Hensley, 461 U.S. at 437. Such an

17

applicant must exercise sound “billing judgment” as to the number of hours worked, eliminating

18

excessive, redundant, or unnecessary hours, and provide billing records supporting the time

19

claimed. Id. at 433-34. Class Counsel “is not required to record in great detail how each minute

20

of his time was expended,” but should “identify the general subject matter of his time

21

expenditures.” Id. at 437 n.12; Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1121 (9th Cir. 2000)

22

(quoting id.). From the inception of the matter until August 11, 2017, Class Counsel declares they

23

have spent 1,163 hours litigating the case. Second Suppl. Turner Decl. ¶ 8 & Ex. B. Counsel

24

declares staffing and billing were handled in a reasonable manner, but only “identif[ies] the

25

general subject matter of [ ] time and expenditure” in the most abstract manner; Counsel does not

26
27
28

8

Not only does Counsel fail to describe the experience of these individuals, but Counsel fails to
even name some of them: Counsel seeks to recover $9,432 in fees billed by “San Francisco Law
Clerk” and $1,725 in fees billed by “Part-Time Paralegal.” Second Suppl. Turner Decl., Ex. B.
20

1

provide any details as to how those hours were spent. See Turner Decl. ¶¶ 37-39, 43 & Ex. H;

2

Second Suppl. Turner Decl. ¶ 8 & Ex. B. The Court has no reason to believe the reported hours

3

are unreasonable under the circumstances, but again, Counsel’s submissions do not permit the

4

Court to make such a finding. To that end, Counsel’s submissions do not support an upward

5

modification from the 25% benchmark fee award.
c.

6

Enhancement or Multiplier

Class Counsel calculates the lodestar fee for the work performed is $403,643. Second

7
8

Suppl. Turner Decl. ¶ 8 & Ex. B. Class Counsel’s request for $550,000 amounts to a multiplier of

9

1.36. Id. ¶ 8.
4.

11
United States District Court
Northern District of California

10

Conclusion

The circumstances of this case do not warrant an upward departure from the 25%

12

benchmark, and do not warrant a lodestar multiplier. The lodestar comparison – to the extent

13

Counsel has provided sufficient information for the Court to perform it – confirms this amount is

14

appropriate. The Court in its discretion accordingly grants Plaintiff’s motion in part and awards it

15

attorneys’ fees in the amount of $412,500, an amount just above Counsel’s lodestar. The

16

difference between this amount and the fees requested will be added to the Net Settlement Fund.

17

Settlement Agreement ¶ 3.2(b).

18

B.

19

Class Counsel Costs
Class Counsel seeks to recover $11,917.39 in disbursed costs. See Turner Decl. ¶ 50 & Ex.

20

I; Second Suppl. Turner Decl., Ex. B at ECF p. 3. The bulk of the requested costs are for

21

mediation fees, computer research, court fees and travel. Id. (both). As with their attorneys’ fees,

22

Counsel provides no detail to support these requests. Id. (both). Counsel represents these costs

23

were necessary and reasonable, and expended solely for the benefit of the Class. Fees Mot. at 14.

24

Class Counsel previously requested $785 in “Court fees”; the Court asked counsel to explain what

25

accounted for the $80.00 that Counsel requested above the $705 listed on the docket. See Order ¶

26

7, Dkt. No. 32. Class Counsel provided that explanation. Suppl. Turner Decl. ¶ 6. Class Counsel

27

now seeks a total of $1,001.50 in Court fees, but again fails to provide any explanation for the

28

additional $216.05 fee request. Second Suppl. Turner Decl., Ex. B at ECF p. 3. Absent any
21

1

reasons for the increased request, the Court cannot ascertain whether the costs were incidental and

2

necessary to the representation, and therefore reimbursable. See Harris v. Marhoefer, 24 F.3d 16,

3

19 (9th Cir. 1994); Millan v. Cascade Water Servs., Inc., 2016 WL 3077710, at *12 (E.D. Cal.

4

May 31, 2016). The request for costs is denied without prejudice; Class Counsel may submit a

5

detailed explanation supporting its cost request within one week of the date of this Order.

6

C.

Service Award
Courts have the discretion to approve service or “incentive” awards to representative

8

plaintiffs in class actions as compensation for their time and effort for the benefit of others, and for

9

having undertaken the risks inherent in serving as a named plaintiff. See, e.g., Staton v. Boeing

10

Co., 327 F.3d 938, 977 (9th Cir. 2003). In evaluating the reasonableness of a requested award,

11
United States District Court
Northern District of California

7

courts should consider factors such as “the actions the plaintiff has taken to protect the interests of

12

the class, the degree to which the class has benefitted from those actions, [and] the amount of time

13

and effort the plaintiff expended in pursuing the litigation.” Staton, 327 F.3d at 977 (internal

14

punctuation and citation omitted). Additionally, courts focus on the number of class

15

representatives, the average incentive award permitted by courts, and the proportion of the entire

16

settlement that is spent on the incentive award. In re Online DVD-Rental, 779 F.3d at 947

17

(approving a $5,000 incentive award for each of nine class representatives even where each class

18

member only received $12). A $5,000 service award is squarely within the range of what other

19

courts in this District have approved. See, e.g., In re LinkedIn User Privacy Litig., 309 F.R.D.

20

573, 592 (N.D. Cal. 2015) (“[I]n this district, a $5,000 incentive award is presumptively

21

reasonable.”).

22

The terms of the Settlement Agreement provide that Plaintiff should receive a service

23

award of $10,000 to compensate him for his efforts on behalf of the Class and Collective. In

24

granting preliminary approval, the Court noted the proposed award appeared excessive in light of

25

how little Plaintiff had to do in this case, which settled before Plaintiff filed suit. Prelim.

26

Approval Order at 20. For purposes of preliminary approval, the Court nonetheless found this

27

amount reasonable and noted Class Counsel would file a motion for attorneys’ fees and costs to

28

establish the reasonableness of the Service Award prior to final approval. Plaintiff argues he is
22

1

entitled to a $10,000 service award because he “provided Class Counsel with documents and

2

information, assisted Class Counsel in understanding documents and data produced by

3

CorePower, described CorePower’s policies and practices regarding Class members’ job duties,

4

was available by phone and contributed to Class Counsel’s arguments in the full-day mediation,

5

and reviewed and approved the Settlement Agreement.” Fees Mot. at 16. He also was in contact

6

with Class Counsel about the progress of the case and strategic issues as they arose. Id. The

7

Court does not find that this level of participation, without more, warrants doubling the standard

8

fee award to a class representative.
But Plaintiff also “took on considerable reputational risk with respect to his current and

9

future employers.” Id.; see also Turner Decl. ¶ 35. Plaintiff declares that he “believe[s] other

11
United States District Court
Northern District of California

10

yoga studios may be reluctant to hire him because [he is] viewed as a ‘troublemaker’” as a result

12

of filing this lawsuit. Walsh Decl. ¶ 4, Dkt. No. 44-1. He declares his ability to find employment

13

has already been adversely affected by his decision to lead this suit. For instance, a Google search

14

of his name and “yoga” turns up several articles about the lawsuit: “Given that potential employers

15

are likely to research new hires online, I suspect that my actions in this case are likely to have

16

dimmed my prospects for employment just based on Google results alone.” Id. ¶ 6. Another

17

studio owner also told him that “the fact [he] had sued another yoga studio was a concern to her”

18

and Walsh “feel[s] that the fact [he] was a plaintiff in a case against a yoga studio had a

19

detrimental effect on my relationship with her studio.” Id. ¶ 7. He “suspect[s]” the owner began

20

to “unduly scrutinize[]” his conduct and “treat[] him differently” after learning of the fact. Id. ¶ 8.

21

As the authorities Plaintiff cites in the Fees Motion demonstrate, courts recognize the “unique

22

risks” named plaintiffs in employment class actions face with respect to future employment. See

23

Fees Mot. at 16 n.7 (citing cases awarding fees between $2,500 and $25,000 based on

24

contributions to lawsuit and risk of retaliation or potential impact on future employment).
The Court accordingly approves a $10,000 service award for Plaintiff.

25
26
27
28

D.

SSI’s Administrative Fees
Plaintiff requested, and the Court preliminarily approved, paying Claims Administrator

SSI $69,875 for administration costs. See Prelim. Approval Order at 6, 22-23. After Plaintiff filed
23

1

his Fees Motion, the Court asked him to provide a declaration from SSI documenting the

2

reasonableness of the fees requested. Suppl. Br. Order at 2, Dkt. No. 32. SSI provided the

3

requested declaration; SSI also explained that due to a number of factors, the revised fee estimate

4

for administering the case will be approximately $121,966 – almost 75% more than the amount

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the Court preliminarily approved. Suppl. Patton Decl. ¶¶ 8-11. Plaintiff asks the Court to approve

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the payment of the original $69,875 requested to administer the Settlement. See Cert. Mot. at 22.

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Based on Mr. Patton’s Supplemental Declaration, the Court approves payment of $69,875

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to the Claims Administrator as reasonable.
CONCLUSION

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In summary, the Court GRANTS the Certification Motion and certifies the California

United States District Court
Northern District of California

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Class; grants final approval of the Settlement Agreement as amended on February 6, 2017 (Dkt.

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No. 30-2) and September 18, 2017 (Dkt. Nos. 50, 51); and certifies the FLSA Collective.

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The Court also GRANTS IN PART the Fees Motion and approves payment of $412,500

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in attorneys’ fees to Class Counsel; payment of $10,000 as a service award to William Walsh; and

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payment of $69,875 to SSI for the costs of administering the Settlement.

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The Court DENIES WITHOUT PREJUDICE the requests for costs. No later than
October 10, 2017, Class Counsel may submit a detailed explanation supporting its cost request.
The Court schedules a status conference for February 22, 2018 at 10:00 a.m. The parties

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shall file a joint status report a week before the status conference describing any issues they

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believe should be addressed at the status conference, outlining a proposed course of conduct for

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remedying such issues, and indicating the percentage of Class and Collective members who have

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cashed settlement checks up to that point.

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IT IS SO ORDERED.

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Dated: October 3, 2017
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

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