Roe v. Frito-Lay, Inc.

Filing 125


Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JANE ROE, Plaintiff, 8 v. 9 10 FRITO-LAY, INC., Defendant. 11 United States District Court Northern District of California Case No.14-cv-00751-HSG 12 ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND GRANTING IN PART AND DENYING IN PART MOTION FOR CLASS COUNSEL’S ATTORNEYS’ FEES AND COSTS Re: Dkt. Nos. 108, 109 13 14 I. INTRODUCTION Pending before the Court are two motions in this putative class action dispute. First, 15 16 Plaintiff Jane Roe moves the Court for an order granting final approval of the parties’ proposed settlement. Dkt. No. 108. Second, Plaintiff moves the Court for an award of attorneys’ fees and 17 costs. Dkt. No. 109. The Court held a final fairness hearing on both motions on February 9, 2017. 18 For the reasons stated below, the Court GRANTS final approval. The Court also GRANTS IN 19 PART AND DENIES IN PART Plaintiff’s motion for attorneys’ fees and costs. 20 21 22 23 II. BACKGROUND A. Litigation History Plaintiff Jane Roe’s operative class action complaint alleges a single claim for violations of the Fair Credit Reporting Act (“FCRA”) against Defendant Frito-Lay, Inc. Dkt. No. 27 (“FAC”). 24 Specifically, Plaintiff alleges that Defendant violated 15 U.S.C. § 1681b(b)(3)(A) by failing to 25 provide notice to prospective and existing employees before taking adverse employment action 26 based on information disclosed in consumer reports. Id. ¶¶ 12, 28, 30–34, 38. Without proper 27 notice, putative class members could not challenge the accuracy or relevancy of the report. Id. 28 1 ¶¶ 6, 33. Defendant answered on October 3, 2014, denying Plaintiff’s allegations and arguing that 2 the case is not appropriate for class certification. Dkt. No. 28 ¶¶ 18–43, 46–50. Defendant also 3 raised twenty-five affirmative defenses. See id. at 11–16. The settlement process was protracted. Following lengthy mediation sessions with 4 mediator Mark Rudy, Esq., see Dkt. No. 31, 35, Plaintiff filed its initial motion for preliminary 6 approval on October 14, 2015. See Dkt. No. 53. Nevertheless, at the November 19, 2015, hearing 7 on the motion, the Court determined that the parties were not actually in agreement. The parties 8 consequently engaged Mr. Rudy to assist with further settlement negotiations. The parties notified 9 the Court that they had reached a new settlement on May 11, 2016, see Dkt. No. 93, and filed 10 another motion for preliminary approval of class action settlement on June 23, 2016. Dkt. No. 11 United States District Court Northern District of California 5 100. On August 5, 2016, the Court granted preliminary approval. Dkt. No. 103. The Court also 12 appointed Plaintiff as class representative; appointed Devin H. Fok, Joshua E. Kim of A New Way 13 of Life Reentry Project, and John A. Girardi Keese as class counsel; and provisionally certified a 14 Rule 23(b)(3) damages class. Id. Plaintiff represented that it would file a motion for attorneys’ 15 fees not to exceed thirty-three and one-third percent and for reasonable costs. Dkt. No. 100-5 at 16 16. 17 B. 18 On June 23, 2016, the parties submitted a class action settlement agreement that details the 19 20 Overview of Settlement Agreement provisions of the proposed settlement. See SA. The key terms are as follows: Class Definition: All individuals residing in the United States who were the subject of a 21 consumer report obtained by Frito Lay, Inc. for employment between December 20, 2011, and 22 February 28, 2014, and (1) for whom a disposition of “Background Check Review – Fail” or 23 “Criminal Background Fail” was entered in Frito-Lay, Inc.’s applicant tracking system; and/or 24 (2) whose report was updated following a dispute with Frito-Lay’s background check vendor; 25 and/or (3) whose applicant file includes a letter sent to the applicant on the basis of the applicant’s 26 failure of a pre-employment background check. Dkt. No. 100-5 (“SA”) at 9. The parties have 27 represented that there are a total of 2,931 persons who fall within this class definition. Dkt. No. 28 108 at 4. 2 1 Monetary Relief: In full settlement of the claim asserted in the FAC, Defendant agrees to 2 pay a gross settlement sum of $950,000. This includes any award of attorneys’ fees and costs, an 3 incentive award to the named Plaintiff, and all costs of administration, including settlement 4 administration fees. SA at 3. Given the currently estimated class size and fees, each class member 5 will receive a payment of approximately $193.45. Dkt. No. 108 at 7. To the extent that any funds 6 remain after all claims are paid, the National Consumer Law Center will receive the balance as a 7 cy pres recipient. SA at 15–16. Release: The class will release Defendant from all claims, whether known or unknown, 8 9 that were alleged or asserted or that could have been asserted based on the factual allegations forth in the operative complaint. Id. at 10–12. Named Plaintiff Roe also provides a general release to 11 United States District Court Northern District of California 10 Defendant for any past, present, or future claims under state and federal law in connection with 12 any act or omission by Defendant. Id. at 12–13. Attorneys’ Fees and Costs: The settlement agreement authorizes class counsel to seek 13 14 attorneys’ fees not to exceed thirty-three and one-third percent of the gross settlement fund and to 15 seek reasonable costs. Id. at 16. It further provides that class counsel may seek an incentive 16 award for named Plaintiff not to exceed $10,000. 17. 17 III. 18 19 20 ANALYSIS A. Final Settlement Approval 1. Class Certification Final approval of a class action settlement requires, as a threshold matter, an assessment of 21 whether the class satisfies the requirements of Federal Rule of Civil Procedure 23(a) and 22 (b). Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019–1022 (9th Cir. 1998). Because no facts that 23 would affect these requirements have changed since the Court preliminarily approved the class on 24 August 5, 2016, this order incorporates by reference its prior analysis under Rules 23(a) and (b) as 25 set forth in the order granting preliminary approval. See Dkt. No 103 at 3–8. The Court affirms 26 its previous findings and certifies the settlement class. 27 28 2. The Settlement “The claims, issues, or defenses of a certified class may be settled . . . only with the court’s 3 1 approval.” Fed. R. Civ. P. 23(e). The Court may finally approve a class settlement “only after a 2 hearing and on finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2); Officers 3 for Justice v. Civil Serv. Comm’n of the City and County of San Francisco, 688 F.2d 615, 625 (9th 4 Cir. 1982) (“The district court’s role in evaluating a proposed settlement must be tailored to fulfill 5 the objectives outlined above. In other words, the court’s intrusion upon what is otherwise a 6 private consensual agreement negotiated between the parties to a lawsuit must be limited to the 7 extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or 8 overreaching by, or collusion between, the negotiating parties . . . .”). To assess whether a 9 proposed settlement comports with Rule 23(e), the Court “may consider some or all” of the following factors: (1) the strength of plaintiff’s case; (2) the risk, expense, complexity, and likely 11 United States District Court Northern District of California 10 duration of further litigation; (3) the risk of maintaining class action status throughout the trial; 12 (4) the amount offered in settlement; (5) the extent of discovery completed, and the stage of the 13 proceedings; (6) the experience and views of counsel; (7) the presence of a governmental 14 participant; and (8) the reaction of the class members to the proposed settlement. Rodriguez v. 15 West Publ’g Corp., 563 F.3d 948, 963 (9th Cir. 2009); see also Hanlon, 150 F.3d at 1026. “The 16 relative degree of importance to be attached to any particular factor” is case specific. Officers for 17 Justice, 688 F.2d at 625. 18 In addition, “[a]dequate notice is critical to court approval of a class settlement under Rule 19 23(e).” Hanlon, 150 F.3d at 1025. As discussed below, the Court finds that the proposed 20 settlement is fair, adequate, and reasonable, and that class members received adequate notice. 21 22 a. Adequacy of Notice Under Federal Rule of Civil Procedure 23(e), the Court “must direct notice in a reasonable 23 manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1). 24 Rule 23(c)(2)(B) requires “the best notice that is practicable under the circumstances, including 25 individual notice to all members who can be identified through reasonable effort.” The notice 26 must “clearly and concisely state in plain, easily understood language” the nature of the action, the 27 class definition, and the class members’ right to exclude themselves from the class. Fed. R. Civ. 28 P. 23(c)(2)(B). Although Rule 23 requires that reasonable efforts be made to reach all class 4 1 members, it does not require that each class member actually receive notice. See Rannis v. 2 Recchia, 380 F. App’x 646, 650 (9th Cir. 2010) (noting that “due process requires reasonable 3 effort to inform affected class members through individual notice, not receipt of individual 4 notice”). 5 The Court finds that the notice and notice plan previously approved by the Court, Dkt. No. 6 103 at 13–15, was implemented and complies with Rule 23(c)(2)(B). The Court ordered that 7 third-party settlement administrator, Rust Consulting, Inc., send class notice via first class mail to 8 each putative class member at their last known address, as provided by Defendant and updated as 9 appropriate. Id. at 14. Prior to sending class notice, Rust Consulting verified the addresses for the class members with the National Change of Address Database. Dkt. No. 108-1 ¶ 5. It also set 11 United States District Court Northern District of California 10 up a website and a toll free number to field any questions about the proposed settlement. Id. ¶ 4. 12 Rust Consulting states that class notice was provided as directed. Id. ¶ 6. Fifteen notices were 13 returned as undeliverable with no forwarding address or further information provided by the U.S. 14 Postal Service. Id. ¶¶ 7–8; Dkt. No. 117 ¶ 5; Dkt. No. 108 at 10. The parties received no 15 objections to the settlement and no requests for exclusion from the settlement. Dkt. No. 108-1 ¶¶ 16 9–10; Dkt. No. 117 ¶¶ 6–7. In light of these facts, the Court finds that the parties have sufficiently 17 provided the best practicable notice to the class members. 18 19 20 21 22 b. Fairness, Adequacy, and Reasonableness Having found the notice procedures adequate under Rule 23(e), the Court next considers whether the entire settlement comports with Rule 23(e). i. Strength of Plaintiff’s Case and Litigation Risk Approval of a class settlement is appropriate when plaintiffs must overcome significant 23 barriers to make their case. Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D. 24 Cal. 2010). Courts “may presume that through negotiation, the Parties, counsel, and mediator 25 arrived at a reasonable range of settlement by considering Plaintiff’s likelihood of recovery.” 26 Garner v. State Farm Mut. Auto. Ins. Co., No. 08-cv-1365-CW, 2010 WL 1687832, at *9 (N.D. 27 Cal. Apr. 22, 2010). Additionally, difficulties and risks in litigating weigh in favor of approving a 28 class settlement. Rodriguez, 563 F.3d at 966. “Generally, unless the settlement is clearly 5 1 inadequate, its acceptance and approval are preferable to lengthy and expensive litigation with 2 uncertain results.” Ching v. Siemens Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210, at *4 3 (N.D. Cal. June 27, 2014) (quotation omitted). 4 This action reached settlement before the Court had an opportunity to consider the merits 5 of the claims. Yet Plaintiff would face both factual and legal hurdles were she to continue 6 litigating. First, in its answer, Defendant denied all of Plaintiff’s substantive allegations. See Dkt. 7 No. 28 ¶¶ 18–43. Second, statutory damages under the FCRA — ranging from $100 to $1,000 — 8 are only available if Plaintiff establishes that Defendant violated the FCRA willfully. 15 U.S.C. 9 § 1681n(a)(1)(A). Plaintiff acknowledges that this would be challenging due to the Supreme Court’s opinion in Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57–59 (2007), which left open a 11 United States District Court Northern District of California 10 defense for a defendant’s reasonable or even careless construction of a statute. See Dkt. No. 53 at 12 15. In light of Defendant’s apparent willingness to defend against this action and the uncertain 13 state of the law, Plaintiff would not be guaranteed a favorable result. In reaching a settlement, 14 however, Plaintiff has ensured a favorable recovery for the class. See Rodriguez, 563 F.3d at 966 15 (finding litigation risks weigh in favor of approving class settlement). Accordingly, these factors 16 weigh in favor of approving the settlement. See Ching, 2014 WL 2926210, at *4 (favoring 17 settlement to protracted litigation). 18 19 ii. Risk of Maintaining Class Action Status In considering this factor, the Court looks to the risk of maintaining class certification if 20 the litigation were to proceed. Certifying a class encompassing approximately 2,931 prospective 21 employees presents complex issues that could undermine certification. Accordingly, this factor 22 also weighs in favor of settlement. 23 24 iii. Settlement Amount The amount offered in the settlement is another factor that weighs in favor of approval. 25 Based on the facts in the record and the parties’ arguments at the final fairness hearing, the Court 26 finds that the $950,000 settlement amount falls “within the range of reasonableness” in light of the 27 risks and costs of litigation. Each class member will receive an estimated pro rata share of 28 $193.45 after deductions for attorneys’ fees and costs, settlement administration costs, and an 6 1 enhancement award for Plaintiff. That is still within the range of potential statutory damages. See 2 15 U.S.C. § 1681n(a)(1)(A). And as discussed above, Plaintiff and the class could only receive 3 statutory damages if they proved that Defendant willfully failed to provide the proper notice. The 4 Ninth Circuit has cautioned that just because a settlement could have been better “does not mean 5 the settlement presented was not fair, reasonable or adequate.” Hanlon, 150 F.3d at 1027 6 (“Settlement is the offspring of compromise; the question we address is not whether the final 7 product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from 8 collusion.”). 9 10 iv. Extent of Discovery Completed and Stage of Proceedings The Court finds that class counsel had sufficient information to make an informed decision United States District Court Northern District of California 11 about the merits of the case. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 12 2000). Here, Plaintiff conducted an in-depth investigation into Defendant’s use of consumer 13 reports in its hiring practices. Plaintiff propounded and reviewed discovery, including third-party 14 subpoenas and “thousands of lines of data,” and conducted multiple depositions. Dkt. No. 108 at 15 8–9; see also Dkt. No. 100 at 5–6. The Court thus finds that the parties have received, examined, 16 and analyzed information, documents, and materials that sufficiently enabled them to assess the 17 likelihood of success on the merits. This factor weighs in favor of approval. 18 19 v. Reaction of Class Members The reaction of the class members supports final approval. “[T]he absence of a large 20 number of objections to a proposed class action settlement raises a strong presumption that the 21 terms of a proposed class settlement action are favorable to the class members.” Nat’l Rural 22 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528–29 (C.D. Cal. 2004); In re Linkedin 23 User Privacy Litig., 309 F.R.D. 573, 589 (N.D. Cal. 2015) (“A low number of opt-outs and 24 objections in comparison to class size is typically a factor that supports settlement approval.”). 25 Class notice, which was served on each class member in accordance with the methods 26 approved by the Court, advised the class of the requirements to object or opt out of the settlement. 27 See Section III.A.2.a. No objections were received and no class members opted out. The Court 28 finds that the absence of objections and opt-outs indicates overwhelming support among the class 7 1 members and weighs in favor of approval. See, e.g., Churchill Village LLC v. Gen. Elec., 361 2 F.3d 566, 577 (9th Cir. 2004) (affirming settlement where 45 of approximately 90,000 class 3 members objected); Rodriguez v. West Publ. Corp., Case No. CV05–3222 R, 2007 WL 2827379, 4 at *10 (C.D. Cal. Sept. 10, 2007) (finding favorable class reaction where 54 of 376,301 class 5 members objected). * 6 7 * * After considering and weighing the above factors, the Court finds that the settlement 8 agreement is fair, adequate, and reasonable, and that the settlement class members received 9 adequate notice. Accordingly, Plaintiffs’ motion for final approval of class action settlement is 10 GRANTED. Attorneys’ Fees and Costs United States District Court Northern District of California 11 B. 12 In its unopposed motion, class counsel asks the Court to approve an award of $316,666.67 13 in attorneys’ fees and $24,071.95 in costs for a total of $340,738.62. Dkt. No. 109 at 2. Class 14 counsel also seeks $35,158 for Rust Consulting’s settlement administration costs and a $10,000 15 incentive award for the named Plaintiff for her assistance in this case. Id. 16 17 1. Attorneys’ Fees “In a certified class action, the court may award reasonable attorney’s fees and nontaxable 18 costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). The Court 19 has discretion in a common fund case to choose either (1) the lodestar method or (2) the 20 percentage-of-the-fund when calculating reasonable attorneys’ fees. Vizcaino v. Microsoft Corp., 21 290 F.3d 1043, 1047 (9th Cir. 2002). 22 Under the lodestar method, a “lodestar figure is calculated by multiplying the number of 23 hours the prevailing party reasonably expended on the litigation (as supported by adequate 24 documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.” 25 In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011) (citing Staton v. 26 Boeing Co., 327 F.3d 938, 965 (9th Cir. 2003)). Whether the Court awards the benchmark amount 27 or some other rate, the award must be supported “by findings that take into account all of the 28 circumstances of the case.” Vizcaino, 290 F.3d at 1048. 8 1 Under the percentage-of-recovery method, twenty-five percent of a common fund is the 2 benchmark for attorneys’ fees awards. See, e.g., In re Bluetooth, 654 F.3d at 942 (“[C]ourts 3 typically calculate 25% of the fund as the ‘benchmark’ for a reasonable fee award, providing 4 adequate explanation in the record of any ‘special circumstances’ justifying a departure.”); Six 5 Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990). 6 Although “the choice between lodestar and percentage calculation depends on the 7 circumstances, . . . either method may . . . have its place in determining what would be reasonable 8 compensation for creating a common fund.” Id. To guard against an unreasonable result, the 9 Ninth Circuit has encouraged district courts to cross-check any calculations done in one method against those of another method. Vizcaino, 290 F.3d at 1050–51. The Ninth Circuit has approved 11 United States District Court Northern District of California 10 factors that may be relevant to the Court’s determination under either method, including: (1) the 12 results achieved; (2) the risk of litigation; (3) the skill required and the quality of work; (4) the 13 contingent nature of the fee and the financial burden carried by the plaintiffs; and (5) awards made 14 in similar cases. See id. at 1048–50. 15 Here, class counsel seeks thirty-three and a third percent of the settlement amount — a 16 total of $316,666.67 — which is significantly above the twenty-five percent benchmark for a 17 reasonable fee award. To justify this upward departure, class counsel states that this figure is still 18 less than its attorneys’ fees under the lodestar method. See Dkt. No. 109 at 6–7. Yet class counsel 19 did little more than summarily list the hourly rate and number of hours for each of the four 20 attorneys who worked on this case. See id. It also provided no other explanation for this large fee 21 request aside from a cursory recitation of the Vizcaino factors. See Dkt. No. 109 at 8. Because the 22 Court could not properly determine the lodestar with this meager information, the Court requested 23 supplemental briefing. See Dkt. No. 118. 24 Class counsel initially failed to respond at all and the Court issued an order to show cause 25 why it missed this deadline. See Dkt. No. 119. Class counsel then belatedly provided billing 26 records showing that it has expended a combined 932.3 hours on this case from 2012 through 27 February 2017. See Dkt. No. 121. Four attorneys worked on this case, requesting billing rates of 28 $800, $650, $600, and $450 per hour respectively. See Dkt. No. 109 at 6–7; see also Dkt. No. 9 1 109-1 ¶¶ 34–51 (listing relevant consumer class action experience). Class counsel calculates a 2 lodestar of $481,560, see Dkt. No. 109 at 2, though its supplemental documentation indicates a 3 lodestar of $500,080, see Dkt. No. 121. 4 5 6 After reviewing class counsel’s time records and billing reports in detail, the Court still finds class counsel’s fees request is too high. As a preliminary matter, the Court finds that the billing rates used by class counsel to 7 calculate the lodestar are reasonable and in line with prevailing rates in this District for personnel 8 of comparable experience, skill, and reputation. See, e.g., Watkins v. Hireright, Inc., 2016 U.S. 9 Dist. LEXIS 136200, *9 (S.D. Cal. Sept. 30, 2016) (approving class counsel’s rates and similar 10 United States District Court Northern District of California 11 attorneys’ rates as reasonable in three-year class action settlement). However, class counsel seeks fees for 6.5 hours, or $3,900, billed in 2012, almost two 12 years before the original complaint was filed in Alameda County Superior Court. See Dkt. No. 13 121; see also Dkt. No. 1-2 (original class action complaint filed December 20, 2013). The Court 14 also finds unnecessary and duplicative billing. For example, class counsel billed over 100 hours, 15 or $67,370, for its initial mediation efforts and preliminary approval motion. Class counsel 16 suggests that the two rounds of settlement discussions actually warrant an enhanced fee, but the 17 Court disagrees. At the November 2015 hearing on the first motion for preliminary approval, 18 Plaintiff withdrew its request for approval because it no longer thought the settlement amount 19 would fairly compensate the putative class. Class counsel argues that he realized the day before 20 the hearing that the number of class members was substantially larger than he had originally 21 anticipated, see, e.g., Dkt. No. 109 at 3, and withdrew the motion to protect the class. Id. Yet the 22 onus is on class counsel to thoroughly investigate its case prior to moving for preliminary 23 approval. Rather than adequately investigate the case beforehand, class counsel inverted that 24 process, spending over 700 hours after the hearing on the first motion for preliminary approval. 25 That is almost 80% of class counsel’s total time spent working on this case. 26 The Court also notes that although the class period changed, the class size did not 27 ultimately change significantly from the parties’ first motion for preliminary approval (estimating 28 3,142 class members), Dkt. No. 53 at 8, and its second motion for preliminary approval (2,928 10 1 class members), Dkt. No. 100 at 12. See St. Bernard v. State Collection Serv., Inc., 782 F. Supp. 2 2d 823, 828 (D. Ariz. 2010) (declining to credit time spent correcting “error of counsel’s own 3 making”). Class counsel also failed to identify any similar awards against which the Court could 4 compare this request. Vizcaino, 290 F.3d at 1048–50. Rather, it filed a conclusory motion for 5 attorneys’ fees without any supporting documentation and failed to timely respond to the Court’s 6 request for additional briefing. 7 Although the Court calculates a lodestar of $429,600 with deductions for the time in 2012 8 and for the first preliminary motion for approval, the Court is still not persuaded that a fees award 9 of thirty-three and a third percent of the settlement is warranted. Class counsel’s efforts are not atypical of those required in any large class action, and the quality of class counsel’s work simply 11 United States District Court Northern District of California 10 does not justify the requested award. Class counsel’s performance on this motion for attorneys’ 12 fees is illustrative: the motion lacked even the bare minimum analysis necessary for Court 13 approval. The Court then had to order class counsel (more than once) to provide support for the 14 award sought before counsel provided any explanation for its request. Class counsel’s requested 15 fees would also substantially reduce the cash settlement pool available to the individual class 16 members. The Court acknowledges the significant results that class counsel achieved for the class 17 and the detailed discovery it conducted over the course of several years, and finds that a 18 benchmark award of twenty-five percent of the settlement fund is appropriate. The Court 19 accordingly GRANTS IN PART class counsel’s motion for attorneys’ fees in the amount of 20 $237,500. 21 22 2. Attorneys’ Costs Class counsel seeks reimbursement of $24,071.95 in out-of-pocket costs. Class counsel is 23 entitled to recover “those out-of-pocket expenses that would normally be charged to a fee paying 24 client.” Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (quotation omitted). 25 Plaintiff has submitted Mr. Devin H. Fok’s statement that his records and those of his co- 26 counsel indicate that they incurred this amount in litigation-related costs and expenses. Dkt. No. 27 109-1 ¶ 53. Yet class counsel did not initially itemize each expense incurred during this case to 28 allow the Court to evaluate whether the costs were reasonable and properly expended. See Gaudin 11 1 v. Saxon Mortgage Servs., Inc., No. 11-CV-01663-JST, 2015 WL 7454183, at *9 (N.D. Cal. Nov. 2 23, 2015) (“To support an expense award, Plaintiffs should file an itemized list of their expenses 3 by category and the total amount advanced for each category, allowing the Court to assess whether 4 the expenses are reasonable.”). Consequently, the Court was required to order class counsel to file 5 an itemization with supporting documentation. See Dkt. No. 123. Having reviewed the additional 6 documentation, the Court is satisfied that these costs were reasonably incurred and GRANTS in 7 full the motion for costs in the amount of $24,071.95. 8 3. Settlement Administration Costs Class counsel seeks $35,158 for the costs of class administration conducted by Rust 10 Consulting. Dkt. No. 109 at 2. The parties selected Rust Consulting as it was the lowest bid from 11 United States District Court Northern District of California 9 among the three reputable class action administrative firms class counsel contacted. Dkt. No. 109 12 at 7; see also Dkt. No. 124-3 at 1–4 (class notice proposal from Rust Consulting). 13 Rust Consulting’s duties included: verifying all class members’ mailing addresses, 14 preparing and disseminating the class notice, and operating and maintaining a toll-free phone 15 number and website for the settlement. See SA 20–25; see also Dkt. No. 108-1; Dkt. No. 117. 16 Rust Consulting also conducted an additional round of skip-tracing to identify missing mailing 17 addresses for class members. See Dkt. No. 108-1 ¶¶ 5–8; Dkt. No. 117 ¶ 5 . The class notice 18 informed class members that administration costs would be deducted from the $950,000 19 settlement fund, Dkt. No. at 3, and no class member objected. Dkt. No 108-1; Dkt. No. 117. 20 Courts regularly award administrative costs associated if notice is provided to the class. See, e.g., 21 Smith v. Am. Greetings Corp., No. 14-CV-02577-JST, 2016 WL 2909429, at *11 (N.D. Cal. May 22 19, 2016); Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 266 (N.D. Cal. 2015). Given the 23 scope of Rust Consulting’s administrative duties in this case, the Court concludes that Rust 24 Consulting’s costs were reasonably incurred for the benefit of the class and GRANTS the full 25 amount of $35,158. 26 27 28 4. Incentive Award Class counsel requests a service award of $10,000 for named Plaintiff. “[N]amed plaintiffs . . . are eligible for reasonable incentive payments.” Staton, 327 F.3d at 977; Rodriguez v. West 12 Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2009) (“Incentive awards are fairly typical in class 2 action cases.”). They are designed to “compensate class representatives for work done on behalf 3 of the class, to make up for financial or reputational risk undertaken in bringing the action, and, 4 sometimes, to recognize their willingness to act as a private attorney general.” Rodriguez, 563 5 F.3d at 958–59. Nevertheless, the Ninth Circuit has cautioned that “district courts must be vigilant 6 in scrutinizing all incentive awards to determine whether they destroy the adequacy of the class 7 representatives . . . .” Radcliffe v. Experian Info. Solutions, Inc., 715 F.3d 1157, 1165 (9th Cir. 8 2013) (quotation omitted). This is particularly true where “the proposed service fees greatly 9 exceed the payments to absent class members.” Id. The district court must evaluate an incentive 10 award using “relevant factors includ[ing] the actions the plaintiff has taken to protect the interests 11 United States District Court Northern District of California 1 of the class, the degree to which the class has benefitted from those actions, . . . [and] the amount 12 of time and effort the plaintiff expended in pursuing the litigation . . . .” Id. at 977. 13 Here, the Court finds that Plaintiff added substantial value to this case. She participated in 14 regular meetings with class counsel to discuss case strategy. Dkt. No. 109-2 ¶ 9. She also assisted 15 in drafting and reviewing several filings, including the motion for class certification and two 16 motions for preliminary approval. Dkt. No. 109-2 ¶¶ 9–12. Plaintiff was intimately involved in 17 the lengthy settlement process and had to be “available on a moment’s notice.” Id. ¶ 13. She took 18 several days off work to ensure her availability and also took time away from personal activities to 19 litigate this action over the past three years. Id. ¶¶ 13–14. She conservatively estimates spending 20 ninety-six hours on this case. Id. ¶ 15. The Court also acknowledges that to act as named 21 Plaintiff, she gave up the ability to seek actual damages for any lost wages. See id. ¶¶ 5–6. 22 The Court finds that a $5,000 service award is reasonable to compensate Plaintiff. 23 Plaintiff’s contributions, though significant, would be necessary in any class action. A reduced 24 award of $5,000 is also in keeping with numerous courts’ findings that a $5,000 incentive award is 25 “presumptively reasonable” in the Ninth Circuit. See, e.g., Smith, No. 14-CV-02577-JST, 2016 26 WL 362395, at *10 (rejecting $7,500 incentive award where class members were estimated to 27 receive $1,608.16); Willner v. Manpower Inc., No. 11-CV-02846-JST, 2015 WL 3863625, at *9 28 (N.D. Cal. June 22, 2015) (rejecting $11,000 incentive award where class members were estimated 13 to receive between $600 and $4,000); Ko v. Natura Pet Prod., Inc., No. C 09-02619 SBA, 2012 2 WL 3945541, at *15 (N.D. Cal. Sept. 10, 2012) (awarding $5,000 incentive award for 50–100 3 hours in contributions over two-year litigation). Neither class counsel nor Plaintiff has identified 4 any conduct that warrants doubling this presumption, particularly in light of the overall settlement 5 amount. A $10,000 incentive award is substantially disproportionate to class members’ 6 anticipated recovery of $193.45. See, e.g., Zepeda v. PayPal, Inc., No. C 10-1668 SBA, 2017 WL 7 1113293, at *19 (N.D. Cal. Mar. 24, 2017) (rejecting proposed $2,500 incentive award as “wholly 8 disproportionate” to the approximately $3 recovery of other class members); cf. Staton, 327 F.3d 9 at 976–77 (citing cases approving a $5,000 incentive award in a $1.725 million settlement; a 10 $2,000 incentive award for $3 million settlement; a $5,000 award for $22 million settlement). 11 United States District Court Northern District of California 1 Accordingly, class counsel’s request for an incentive award is GRANTED IN PART in the 12 amount of $5,000 for the named Plaintiff. 13 IV. CONCLUSION 14 For the foregoing reasons it is hereby ordered that: 15 1. 16 Plaintiff’s Motion for Final Approval of Class Action Settlement is hereby GRANTED. 2. 17 Plaintiff’s Motion for class counsel’s Attorneys’ Fees and Costs is hereby 18 GRANTED IN PART AND DENIED IN PART. 19 3. 20 fees in the amount of $237,500; costs in the amount of $24,071.95; claims administration fees in 21 the amount of $35,158.00; and an incentive fee for the named Plaintiff in the amount of $5,000. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// The Court approves the settlement amount of $950,000, including payments of attorneys’ 14 1 The parties and settlement administrator are directed to implement this Final Order and the 2 settlement agreement in accordance with the terms of the settlement agreement. The Court directs 3 the Clerk of the Court to enter Final Judgment consistent with this order, and to close the case. 4 The Court retains jurisdiction over the parties to enforce the terms of the judgment. 5 6 IT IS SO ORDERED. Dated: 4/7/2017 7 8 HAYWOOD S. GILLIAM, JR. United States District Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?