Paniani Taafua v. Quantum Global Technologies, LLC

Filing 57

ORDER by Magistrate Judge Virginia K. DeMarchi granting 53 Motion for Final Approval of Class Action Settlement and granting Motion for Attorneys' Fees and Costs. The Clerk shall enter judgment and close this file. (vkdlc2S, COURT STAFF) (Filed on 2/16/2021)

Download PDF
Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 1 of 16 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 PANIANI TAAFUA, 8 Plaintiff, 9 v. 10 QUANTUM GLOBAL TECHNOLOGIES, LLC, 11 United States District Court Northern District of California Case No. 18-cv-06602-VKD 12 Defendant. ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS’ FEES AND COSTS Re: Dkt. No. 53 13 14 15 I. BACKGROUND Plaintiff Paniani Taafua filed this action for himself, and on behalf of a putative class, for 16 alleged violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2)(A)(i)-(ii), 17 based on a disclosure form used by his former employer, Quantum Global Technologies, LLC 18 (“QGT”), that reportedly included an extraneous liability waiver. Mr. Taafua claims that QGT 19 required him, and all prospective employees, to sign a standard company form authorizing QGT to 20 obtain a consumer report from third party First Contact HR to verify an applicant’s background 21 and experience. Mr. Taafua contends that because QGT’s form included a liability waiver, in 22 addition to a disclosure concerning a consumer report, QGT violated the FCRA’s stand-alone 23 disclosure requirement, and as a result, QGT also never received proper authorizations for any 24 reports it obtained using its standard form. Mr. Taafua claims that he “was confused by the 25 standard disclosure and authorization form and did not understand that [QGT] would be requesting 26 a consumer report as defined in the FCRA.” Dkt. No. 1 ¶ 10. He further alleges that 27 “[n]onetheless, upon information and belief, [QGT] then secured a consumer report from First 28 Contact HR.” Id. Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 2 of 16 Several months after this Court held an initial case management conference, and before a 1 2 noticed hearing on QGT’s then-pending motion to transfer venue, the parties settled. The Court previously denied preliminary approval of a proposed class action settlement 3 4 agreement that contemplated a release of claims in return for a total payment of $125,902. 5 Although the Court found no issue with certain aspects of the settlement, including the class 6 definition, the scope of the release and the proposed cy pres award, Mr. Taafua’s motion for 7 preliminary approval was denied because the proposed settlement appeared to account for QGT’s 8 potential statute of limitations defense with respect to Mr. Taafua’s claims, at the expense of 9 approximately half of the putative class members who have no such issue. The Court also expressed concern that the requested fees for Mr. Taafua’s counsel comprised over 33% of the 11 United States District Court Northern District of California 10 total settlement, and thus exceeded the 25% benchmark used in the Ninth Circuit. Further, the 12 Court noted that Mr. Taafua had not provided sufficient support for the requested $5,000 service 13 award. Dkt. No. 41. 14 The parties subsequently agreed to an Amended Class Action Release and Settlement 15 Agreement (“Amended Settlement Agreement”) that provides for payment of $174,980 and a 16 modified proposed distribution of those funds. On August 14, 2020, the Court preliminarily 17 approved the amended settlement, conditionally certified a Rule 23 class action, ordered notice to 18 be given to the class, and set a final fairness hearing for February 16, 2021. Dkt. No. 52. The proposed amended settlement covers the period October 30, 2013 to December 31, 19 20 2018, on behalf of the following class: 21 all individuals who applied for employment with and/or were employed by Defendant in the United States and were the subject of a consumer report that was procured by Defendant or caused to be procured by Defendant through third-party consumer reporting agency First Contact HR during the Class Period. 22 23 24 Dkt. No. 53-3, Section I.2. The settlement is non-reversionary and contemplates a release of 25 claims1 in return for a total payment of $174,980 (“Global Settlement Fund”), from which 26 27 28 1 The release remains the same as that in the original settlement. 2 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 3 of 16 1 $15,5922 in estimated administrator expenses, $41,967.33 in attorney’s fees, $1,993.723 in costs, 2 and a $3,500 service award will be deducted before the remaining $111,926.954 (“Net Settlement 3 Fund”) is distributed to the class, which has 1,040 members. See id., Section III.3, 8., 12., 13.; see 4 also Dkt. No. 53-1 at 4, 5 n.3; Dkt. No. 53-2 ¶ 14. The settlement contemplates that 13% of the 5 Net Settlement Fund will be distributed to class members whose claims fall outside the two-year 6 statute of limitations period5 and 87% will be distributed among those whose claims are 7 unquestionably timely. Individual payments will be made on a pro rata basis, depending on the 8 number of reports that were obtained for a given class member. Dkt. No. 53-3, Section III.3. Any 9 unclaimed funds will be given as a cy pres award to the Education Fund of the National 10 Association of Consumer Advocates (“NACA”). Id., Section III.11. Mr. Taafua reports that pursuant to the terms of the Amended Settlement Agreement, the United States District Court Northern District of California 11 12 settlement administrator, JND Legal Administration (“JND”), sent notice to all 1,040 class 13 members identified by QGT. Dkt. No. 53-9 ¶ 4. Based on JND’s report, it appears that ultimately 14 nine notices were returned as undeliverable, with no forwarding address and for which JND was 15 not able to obtain updated address information. Id. ¶¶ 6-7. JND states that as of January 8, 2021, 16 it received no objections to the settlement and only two requests for exclusion. Id. ¶¶ 12, 14. 17 Thus, it appears that there is a total settlement class of 1,038 individuals, of whom 1,029 are 18 presumed to have successfully received notice of the settlement. An individual class member may be entitled to more or less money depending on the 19 20 number of reports that were obtained for that individual and the period of time when the report(s) 21 were procured. Dkt. No. 53-3, Section III.4. JND estimates that the average settlement payment 22 23 2 This sum is lower than the previously estimated administrator expenses of $16,000. 24 3 This sum is lower than Mr. Taafua’s counsel’s previously estimated costs of $2,200. 25 4 26 27 28 Mr. Taafua’s counsel explain that because their requested costs are lower than their original estimate of $2,200, the Net Settlement Fund will be slightly higher than the $111,720.67 anticipated by the settlement administrator. Dkt. No. 53-1 at 5 n.3; Dkt. No. 53-2 ¶ 14. The FCRA requires a plaintiff to bring his claims within “2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability” or “5 years after the date on which the violation that is the basis for such liability occurs,” whichever is earlier. 15 U.S.C. § 1681p. 3 5 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 4 of 16 1 is expected to be $107.10, with the lowest estimated payment being $20.70 and the highest 2 estimated payment being $560.65. Dkt. No. 53-9 ¶¶ 20-22. These estimates apparently are based 3 on a Net Settlement Fund of $111,720.67. See id. ¶ 19. As noted above, Mr. Taafua indicates that 4 these numbers may be somewhat higher, inasmuch as the Net Settlement Fund will be slightly 5 higher due to his counsel’s lower-than-estimated costs. Mr. Taafua now moves pursuant to Rule 23 for final approval of the proposed settlement, 6 7 including payment of his service award, as well as his attorneys’ fees and costs. QGT does not 8 oppose Mr. Taafua’s motion, and the Court has received no objections to the proposed settlement 9 or counsel’s requested fees and costs.6 The Court held a final fairness hearing on February 16, 2021. Having considered the arguments of counsel and the papers submitted, the Court grants Mr. 11 United States District Court Northern District of California 10 Taafua’s motion for final approval of the class action settlement and grants his motion for his 12 attorneys’ fees and costs.7 13 II. LEGAL STANDARD 14 Court approval is required for the settlement of Rule 23 class actions. See Fed. R. Civ. P. 15 23(e) (“The claims, issues, or defenses of a certified class—or a class proposed to be certified for 16 purposes of settlement—may be settled, voluntarily dismissed, or compromised only with the 17 court’s approval.”). The Ninth Circuit has declared that a strong judicial policy favors settlement 18 of Rule 23 class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). 19 However, no broad presumption of fairness applies to such settlements. Roes v. SFBSC Mgmt., 20 LLC, 944 F.3d 1035, 1049 (9th Cir. 2019). And where the parties reach a settlement before class 21 certification, courts must “employ[] extra caution and more rigorous scrutiny,” id., and “peruse the 22 proposed compromise to ratify both the propriety of the certification and the fairness of the 23 24 25 26 27 28 6 The Notice of Class Action Settlement directed class members who wished to object to file their objection with the Court, with a postmark deadline of November 17, 2020, and to provide a copy of their objection to the parties’ attorneys and JND. Dkt. No. 53-3 at ECF 39-40; Dkt. No. 53-9 ¶ 13. As discussed above, JND confirms that it has received no objections, and there were no objections stated at the final fairness hearing. 7 All parties have expressly consented that all proceedings in this matter may be heard and finally adjudicated by a magistrate judge. 28 U.S.C. § 636(c); Fed. R. Civ. P. 73; Dkt. Nos. 6, 9. The consent of absent class members is not required for this Court to exercise jurisdiction over this matter. Koby v. ARS Nat’l Servs., Inc., 846 F.3d 1071, 1076 (9th Cir. 2017). 4 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 5 of 16 1 settlement,” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003); see also In re Bluetooth 2 Headset Products Liability Litig., 654 F.3d 935, 946 (9th Cir. 2011) (“Prior to formal class 3 certification, there is an even greater potential for a breach of fiduciary duty owed the class during 4 settlement. Accordingly, such agreements must withstand an even higher level of scrutiny for 5 evidence of collusion or other conflicts of interest than is ordinarily required under Rule 23(e) 6 before securing the court’s approval as fair.”). First the Court must assess whether a class exists. Staton, 327 F.3d at 952. Second, the 7 8 Court must assess whether the proposed settlement is “fundamentally fair, adequate, and 9 reasonable,” considering “the settlement taken as a whole, rather than the individual component parts, that must be examined.” Id. (internal quotations and citation omitted). 11 United States District Court Northern District of California 10 III. DISCUSSION 12 A. 13 Mr. Taafua bears the burden of establishing, by a preponderance of the evidence, that class Final Class Certification 14 certification is appropriate under Rule 23. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 15 (2011) (“A party seeking class certification must affirmatively demonstrate his compliance with 16 the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, 17 common questions of law or fact, etc.”). Class certification under Rule 23 requires two steps. 18 First, Mr. Taafua must satisfy the four prerequisites under Rule 23(a), namely numerosity, 19 commonality, typicality and adequacy of representation. Id. at 349. Additionally, Mr. Taafua 20 must show that at least one of the bases for certification under Rule 23(b) is met. Amchem. 21 Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997). Mr. Taafua seeks certification under Rule 22 23(b)(3) and therefore must show that “questions of law or fact common to class members 23 predominate over any questions affecting only individual members, and that a class action is 24 superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. 25 R. Civ. P. 23(b)(3). 26 27 28 1. Rule 23(a) Certification In the Court’s order granting preliminary approval of the settlement, the Court found that the putative class satisfied the numerosity, commonality, typicality, and adequacy of 5 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 6 of 16 1 representation requirements of Rule 23(a). Dkt. No. 52. Mr. Taafua’s present motion for final 2 approval does not indicate that there have been any changes that would require the Court to alter 3 its prior analysis or conclusions, and the parties did not indicate at the fairness hearing that any 4 such developments had occurred. Thus, the Court concludes that all four of Rule 23(a)’s 5 requirements have been met. 6 2. Rule 23(b)(3) Certification In the Court’s order granting preliminary approval of the settlement, the Court found that 7 8 the superiority and predominance requirements were satisfied. Dkt. No. 52. Mr. Taafua’s present 9 motion for final approval does not indicate that there have been any changes that would require the Court to alter its prior analysis or conclusions, and the parties did not indicate at the fairness 11 United States District Court Northern District of California 10 hearing that any such developments had occurred. As noted above, neither JND nor the Court has 12 received any objections by individual class members who claim to have an interest in controlling 13 the prosecution of this action or any related actions.8 The Court concludes that the Rule 23(b)(3) 14 requirements for certification are met. 15 3. Rule 23(c)(2) Notice 16 If the Court certifies a class under Rule 23(b)(3), it “must direct to class members the best 17 notice that is practicable under the circumstances, including individual notice to all members who 18 can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). The rule governs both 19 the form and content of a proposed notice and requires that the notice “clearly and concisely” state 20 “the nature of the action,” the “definition of the class certified,” the “class claims, issues, or 21 defenses,” information about appearing and opting out, and “the binding effect of a class judgment 22 on members.” Id. The Ninth Circuit has held “that neither due process nor Rule 23’s standard 23 necessarily require actual notice,” SFBSC Mgmt., 944 F.3d at 1046 n.7, and parties are not 24 required to implement all potential options in every case, id. at 1047. The notice “requirement is 25 designed to ensure that class notice procedures comply with the demands of due process” and 26 essentially means that the method of providing notice “‘must be such as [a person] desirous of 27 28 8 During the course of these proceedings, no one has identified any actions that are related to the present litigation. 6 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 7 of 16 1 actually informing the absentee might reasonably adopt to accomplish it.’” Id. at 1045-46 2 (quoting Mullane v. Cent. Hanover Bank & Trust Co., 338 U.S. 306, 315 (1950)). 3 As the Amended Settlement Agreement provides, JND says that it mailed notice of the 4 settlement to the 1,040 class members identified by QGT. Dkt. No. 53-9 ¶ 4. Prior to mailing, 5 JND says it updated the addresses for 144 class members using the U.S. Postal Service’s National 6 Change of Address database. Id. ¶ 5. After JND mailed the notices, two were returned to JND as 7 undeliverable, with forwarding addresses, and JND says it promptly forwarded those two notices. 8 Id. ¶ 6. Additionally, JND says that it tracked 68 notices that were returned as undeliverable, 9 without a forwarding address. As to those notices, JND obtained updated address information for 59 class members and remailed the notice of settlement to them. Id. ¶ 7. Thus, it appears that 11 United States District Court Northern District of California 10 ultimately there are nine class members for whom notices were returned as undeliverable and for 12 whom no forwarding address information was obtained. At the final fairness hearing, the parties 13 confirmed that JND did not receive any further forwarding addresses. Therefore, 1,029 class 14 members, or approximately 99% of the class, are assumed to have received the notice of 15 settlement. In light of these facts, the Court is satisfied that this system of providing notice was 16 reasonably calculated to provide notice to class members and was the best form of notice available 17 under the circumstances. 18 Further, the Court finds, as it did before, that the notice “clearly and concisely state[s] in 19 plain, easily understood language” the nature of the action, the class definition, and the class 20 members’ right to exclude themselves from the class and the time and manner in which to request 21 exclusion. Fed. R. Civ. P. 23(c)(2)(B). 22 In sum, because the settlement class satisfies Rules 23(a) and 23(b)(3), and the notice 23 requirements of Rule 23(c)(2) have been met, the Court grants Mr. Taafua’s motion for final class 24 certification. 25 B. 26 Having determined that class treatment is warranted, the Court now addresses whether the Final Approval of Settlement 27 terms of the parties’ proposed settlement is fair, adequate and reasonable under Rule 23(e). In 28 making that determination, district courts consider several factors, including: 7 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 8 of 16 the strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement. 1 2 3 4 5 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998), overruled on other grounds by 6 Wal-Mart v. Dukes, 564 U.S. 338 (2011). Rule 23 requires the Court to consider a similar list of 7 factors before approving a settlement, including whether: 8 (A) the class representatives and class counsel have adequately represented the class; 9 (B) the proposal was negotiated at arm’s length; 10 (C) the relief provided for the class is adequate, taking into account: United States District Court Northern District of California 11 (i) the costs, risks, and delay of trial and appeal; 12 (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing classmember claims; 13 14 (iii) the terms of any proposed award of attorney’s fees, including timing of payment; and 15 16 (iv) any agreement required to be identified under Rule 23(e)(3); and 17 (D) the proposal treats class members equitably relative to each other. 18 19 Fed. R. Civ. P. 23(e)(2). This list of factors is not intended to displace any factors currently 20 considered by courts, “but rather to focus the court and the lawyers on the core concerns of 21 procedure and substance that should guide the decision whether to approve the proposal.” Fed. R. 22 Civ. P. 23(e) Advisory Comm. Note (2018). The overall purpose of Rule 23(e) is to ensure that 23 class representatives and their counsel do not obtain a disproportionate benefit at the expense of 24 the unnamed class members, who class counsel have a duty to represent. SFBSC Mgmt., LLC, 944 25 F.3d at 1049. 26 In determining whether a proposed settlement is fair, the Court must apply “an even higher 27 level of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required 28 under Rule 23(e).” In re Bluetooth, 654 F.3d at 946. Additionally, courts “must be particularly 8 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 9 of 16 1 vigilant not only for explicit collusion, but also for more subtle signs that class counsel have 2 allowed pursuit of their own self-interests and that of certain class members to infect the 3 negotiations.” Id. at 947. Such signs include (1) class counsel’s receipt of a disproportionate 4 distribution of the settlement, (2) a “clear sailing” agreement “providing for the payment of 5 attorneys’ fees separate and apart from class funds, which carries the potential of enabling a 6 defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an 7 unfair settlement on behalf of the class”; and (3) an arrangement whereby fees that are not 8 awarded are reverted to the defendants, rather than added to the class fund. Id. 9 10 1. Strength of Mr. Taafua’s Case; Risks, Expense, Complexity and Likely Duration of Litigation; and Maintaining Class Action Status United States District Court Northern District of California 11 “In determining the settlement’s fairness, the Court must balance against the risks of 12 continued litigation, including the strengths and weaknesses of [p]laintiff’s case, the benefits 13 afforded to class members, and the immediacy and certainty of a recovery.” Ching v. Siemens 14 Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210, at *4 (N.D. Cal. June 27, 2014). “[T]here 15 is no ‘particular formula by which th[e] outcome must be tested. Rather, the Court’s assessment 16 of the likelihood of success is ‘nothing more than an amalgam of delicate balancing, gross 17 approximations and rough justice.’” Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 255 18 (N.D. Cal. 2015) (quoting Rodriguez v. West Publishing Corp., 563 F.3d 948, 965 (9th Cir. 19 2009)). “Approval of a class settlement is appropriate when plaintiffs must overcome significant 20 barriers to make their case.” Der-Hacopian v. DarkTrace, Inc., No. 18-cv-06726-HSG, 2020 WL 21 7260054, at *5 (N.D. Cal. Dec. 10, 2020) (citing Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 22 2d 848, 851 (N.D. Cal. 2010)). “Additionally, difficulties and risks in litigating weigh in favor of 23 approving a class settlement.” Id. (quoting Rodriguez, 563 F.3d at 966). “‘Generally, unless the 24 settlement is clearly inadequate, its acceptance and approval are preferable to lengthy and 25 expensive litigation with uncertain results.’” Id. (quoting Ching, 2014 WL 2926210, at *4). 26 The Court finds that the amount offered in settlement is reasonable in light of the risks Mr. 27 Taafua would face in litigating this matter. Most notably, Mr. Taafua states that QGT contends 28 that its liability, if any, should be limited to individuals who can show they were actually confused 9 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 10 of 16 1 by the inclusion of a liability waiver in the disclosure form and would not have signed an 2 authorization but for inclusion of the waiver. See Dkt. No. 53-2 ¶ 29. Additionally, QGT has 3 taken the position that a number of class members necessarily were aware of the alleged FCRA 4 violation at the time they signed the authorization form, rendering their claims untimely. With 5 respect to Mr. Taafua, for example, QGT contends that its employment offer letter conditioned 6 employment on passing a background check, and he therefore knew or should have known, at least 7 several years prior to filing this suit, that QGT conducted a background check when he was hired 8 in 2015. While payments will vary for individual class members, and a given class member might 9 have received more if that individual proceeded to trial and prevailed on his or her claims, as discussed above, such class members also face the added expense of proceeding through trial and 11 United States District Court Northern District of California 10 a risk that the litigation might result in a recovery substantially smaller than they claimed, or no 12 recovery at all. In reaching a settlement, Mr. Taafua has ensured an immediate and favorable 13 recovery for class members, who need not do anything in order to receive their payment. This 14 factor weighs in favor of approving the settlement. 15 16 2. Amount Offered in Settlement “To evaluate adequacy, courts primarily consider plaintiffs’ expected recovery balanced 17 against the value of the settlement offer.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 18 1080 (N.D. Cal. 2007). 19 For a willful violation of the FCRA, a plaintiff may recover damages between $100 and 20 $1,000. 15 U.S.C. § 1681n. Although Mr. Taafua initially estimated the maximum potential 21 value of all claims at $1,476,000, i.e., based on an estimated 1, 476 reports procured x $1,000 22 (Dkt. No. 49 at 28), he now states that the estimated maximum potential recovery is $2,080,000, 23 based on an assumption that the FCRA’s disclosure and authorization requirements are deemed 24 separate violations. Dkt. No. 53-1 at 16 n.11; Dkt. No. 53-2 ¶ 42. As noted above, JND estimates 25 that the settlement payments to individual class members will range between $20.70 and $560.65, 26 with the estimated average payment of $107.10, and Mr. Taafua suggests that these figures may be 27 somewhat higher inasmuch as his counsel’s lower estimated costs will result in a slightly higher 28 Net Settlement Fund for distribution to the class. Dkt. No. 53-9 ¶¶ 19-22; Dkt. No. 53-1 at 5 n.3; 10 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 11 of 16 Dkt. No. 53-2 ¶ 14. Thus, while some claims may be compensated at a rate lower than the 2 statutory minimum, as discussed above, the distribution of the Net Settlement Fund is structured in 3 a way that reflects relative risks of the statute of limitations and differentiates between claims 4 outside the two-year limitations period and those that unquestionably are timely. See generally 5 Schofield v. Delta Air Lines, Inc., No. 18-cv-00382-EMC, 2019 WL 955288 (N.D. Cal. Feb. 27, 6 2019) (approving a settlement with a proposed distribution of funds that differentiated between 7 class members whose claims were filed within the two-year limitations period and those whose 8 claims were not). Moreover, “[t]he fact that a proposed settlement may only amount to a fraction 9 of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly 10 inadequate and should be disapproved.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 11 United States District Court Northern District of California 1 (9th Cir. 1998) (internal quotations and citation omitted). As noted, class members who 12 participate in the settlement may avoid the costs and delays of proceeding to a trial, and will not 13 need to make a claim or do anything to receive a payment. The Court finds that the proposed 14 settlement amount falls within the range of reasonableness, considering the potential risks and 15 costs of proceeding to trial, as well as the relative ease with which class members may receive 16 their funds. This factor weighs in favor of approval of the settlement. 17 18 3. Stage of Proceedings and Settlement Negotiations Although the parties settled relatively early in these proceedings, with little or no 19 substantive litigation, the Court finds that class counsel had sufficient information to properly 20 evaluate the merits of the claims and to make an informed decision about settlement. See Linney, 21 151 F.3d at 1239 (“In the context of class action settlements, ‘formal discovery is not a necessary 22 ticket to the bargaining table’ where the parties have sufficient information to make an informed 23 decision about settlement.”) (citation omitted). Both sides in this matter are represented by 24 experienced counsel. QGT informally produced Mr. Taafua’s personnel file and the FCRA 25 background form that he signed, and also provided estimates of the class size. Mr. Taafua’s 26 counsel states that the settlement is the result of this informal discovery, as well as discussions 27 between the parties and their investigation of the claims. Dkt. No. 53-2 ¶¶ 46-48. Even after the 28 Court denied Mr. Taafua’s initial motion for preliminary approval of the settlement, the parties 11 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 12 of 16 1 continued their negotiations and ultimately reached a settlement that the Court concluded 2 warranted notice to the class. This factor weighs in favor of approval of the settlement. 3 4 4. Requested Attorney’s Fees Because the proposed settlement was negotiated prior to formal class certification, “there is an even greater potential for a breach of fiduciary duty owed the class during settlement.” In re 6 Bluetooth, 654 F.3d at 946. “Accordingly, such agreements must withstand an even higher level 7 of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under 8 Rule 23(e) before securing the court’s approval as fair.” Id. As noted above, courts consider 9 whether there are “subtle signs that class counsel have allowed pursuit of their own self-interests 10 and that of certain class members to infect the negotiations.” Id. at 947. Several such signs are: 11 United States District Court Northern District of California 5 (1) “when counsel receive a disproportionate distribution of the settlement, or when the class 12 receives no monetary distribution but class counsel are amply rewarded; (2) “when the parties 13 negotiate a ‘clear sailing’ arrangement providing for the payment of attorneys’ fees separate and 14 apart from class funds”; and (3) “when the parties arrange for fees not awarded to revert to 15 defendants rather than be added to the class fund.” Id. 16 The proposed settlement does not include a “clear sailing” agreement and is fully non- 17 reversionary with all unclaimed funds to be given as a cy pres award to NACA. Dkt. No. 53-3. 18 As discussed below in connection with class counsel’s unopposed motion for fees and costs, 19 counsel are seeking fees that are less than 25% of the Global Settlement Fund and considerably 20 lower than their claimed lodestar. This factor weighs in favor of approving the settlement. 21 22 5. Experience and Views of Counsel As noted above, the Court is satisfied that counsel meet the adequacy requirement and 23 finds no basis on the record presented to question the competence of Mr. Taafua’s counsel, who 24 aver that they have considerable experience in consumer litigation and believe that the proposed 25 settlement is fair and reasonable. Dkt. No. 53-2 ¶¶ 62-63. This factor weighs in favor of 26 settlement. 27 28 6. Presence of a Government Participant A court may not grant final approval of a class action settlement until the Class Action 12 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 13 of 16 1 Fairness Act (“CAFA”) notice requirement is met. 28 U.S.C. § 1715(d) (“An order giving final 2 approval of a proposed settlement may not be issued earlier than 90 days after the later of the dates 3 on which the appropriate Federal official and the appropriate State official are served with the 4 notice required under subsection (b).”). “Although CAFA does not create an affirmative duty for 5 either state or federal officials to take any action in response to a class action settlement, CAFA 6 presumes that, once put on notice, state or federal officials will raise any concerns that they may 7 have during the normal course of the class action settlement procedures.” Bellinghausen, 306 8 F.R.D. at 258 (citation omitted). Although no government entity is a party to this action, Mr. Taafua previously represented 10 that QGT will have provided the required CAFA notice no later than April 24, 2020. Dkt. No. 49 11 United States District Court Northern District of California 9 at 32 n.22. QGT confirmed at the final fairness hearing that such notice was provided and that it 12 has received no substantive responses. 13 14 7. Reaction of the Class Members to the Proposed Settlement Courts recognize that the absence of a large number of objections to a proposed class 15 action settlement supports the reasonableness of the settlement terms. Bellinghausen, 306 F.R.D. 16 at 258 (citation omitted); see also Der-Hacopian, 2020 WL 7260054 at*6 (same). As discussed 17 above, only two class members requested exclusion from the settlement, and the Court is not 18 aware of a single class member who objects to the settlement. The lack of objections and low 19 number of requested exclusions relative to the size of the class as a whole indicates support among 20 the class members and weighs in favor of approving the settlement. 21 22 8. Equitable Treatment of Class Members Relative to Each Other In assessing whether “the proposal treats class members equitably relative to each other,” 23 Fed. R. Civ. P. 23(e)(2)(D), the Court considers whether the proposed settlement “improperly 24 grant[s] preferential treatment to class representatives or segments of the class . . . .” In re 25 Tableware Antitrust Litig., 484 F. Supp. 2d at 1079 (internal quotations and citation omitted). 26 Under the proposed amended settlement, each class member who remains in the settlement class 27 will receive payment from the Net Settlement Fund based on the number of consumer reports that 28 QGT procured for that individual. Allocating the Net Settlement Fund on a pro rata basis in this 13 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 14 of 16 1 manner is equitable and fair. Additionally, for the reasons discussed above, the Court is satisfied 2 that the proposed greater allocation of funds for indisputably timely claims fairly reflects the risks 3 of statute of limitations issues. This factor weighs in favor of approving the settlement. Motion for Attorneys’ Fees and Costs 4 C. 5 “In a certified class action, the court may award reasonable attorney’s fees and nontaxable 6 costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). 7 Additionally, the FCRA provides for reasonable attorney’s fees and costs as determined by the 8 Court. See 15 U.S.C. §§ 1681n(a)(3), 1681o(a)(2). “The Ninth Circuit has approved two methods of determining attorneys’ fees in cases 10 where, as here, the amount of the attorneys’ fee award is taken from the common fund set aside for 11 United States District Court Northern District of California 9 the entire settlement: the ‘percentage of the fund’ method and the ‘lodestar’ method.” 12 Bellinghausen, 306 F.R.D. at 259-260 (citing Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 13 (9th Cir. 2002)). “The district court retains discretion in common fund cases to choose either 14 method.” Id. “Because the benefit to the class is easily quantified in common-fund settlements, 15 [the Ninth Circuit has] allowed courts to award attorneys a percentage of the common fund in lieu 16 of the often more time-consuming task of calculating the lodestar.” In re Bluetooth, 654 F.3d at 17 942. “Under either approach, ‘[r]easonableness is the goal, and mechanical or formulaic 18 application of either method, where it yields an unreasonable result, can be an abuse of 19 discretion.’” Bellinghausen, 306 F.R.D. at 260 (quoting Fischel v. Equitable Life Assurance Soc’y 20 of the U.S., 307 F.3d 997, 1007 (9th Cir.2002)). 21 In their unopposed motion for fees and costs, Mr. Taafua’s counsel seek $41,967.33 in fees 22 and $1,993.72 in costs. Dkt. No. 53. With respect to the requested fees, counsel avers that her 23 firm spent a total of 152.40 hours in this litigation, resulting in a total lodestar of $74,727.00. Dkt. 24 No. 53-2 ¶ 103. Nevertheless, their fee request remains at $41,967.33, the same sum sought when 25 Mr. Taafua sought preliminary approval of the parties’ amended settlement. With respect to 26 hourly rates, the rates requested are between $325 and $400 for associates, and $625 to $850 for 27 partners. Id. ¶¶ 92-97. 28 Counsel’s billing rates used to calculate their lodestar are reasonable and in line with 14 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 15 of 16 1 prevailing rates in this district for attorneys of comparable experience, skill, and reputation. See, 2 e.g., Der-Hacopian, 2020 WL 7260054 at *8 (approving in an FCRA class action hourly rates at 3 $400 for associates and $500-$775 for partners) (citing cases). While counsel have not submitted 4 their timesheets to the Court, their requested fees are considerably lower their claimed lodestar. 5 Additionally, the Court finds that the 152.40 hours counsel say they spent working on this matter 6 is not unreasonable for litigation that has been pending for a little over two years and involved two 7 prior motions for preliminary approval of the parties’ proposed settlements. Moreover, counsel 8 have obtained a good result for the class, with only two requests for exclusion and no objections. 9 Further, the Court recognizes that counsel assumed substantial risk in litigating this action on a contingency fee basis, and incurring costs, with those risks being “even higher in the current 11 United States District Court Northern District of California 10 economic climate.” Dkt. No. 53-2 ¶ 84. Counsel also demonstrated persistence, even after the 12 Court denied Mr. Taafua’s motion to approve the parties’ original settlement. Having reviewed 13 counsel’s costs (Dkt. No. 53-4), the Court finds that those expenses reasonably were incurred. 14 15 Accordingly, the Court grants the motion for payment of $41,967.33 in fees and $1,993.72 in costs. 16 D. 17 While service awards are permissible, they must also be reasonable. Staton, 327 F.3d at Service Award 18 977. Courts must evaluate such awards individually, using “relevant factors includ[ing] the 19 actions the plaintiff has taken to protect the interests of the class, the degree to which the class has 20 benefitted from those actions, . . . the amount of time and effort the plaintiff expended in pursuing 21 the litigation . . . and reasonabl[e] fear[s of] workplace retaliation.” Id. (internal quotations and 22 citation omitted). Courts in this district have recognized that a $5,000 service award, as a general 23 matter, is a reasonable amount. See Schofield, 2019 WL 955288 at *7. 24 Mr. Taafua requests a service award of $3,500 for his time and effort in assisting counsel 25 with the investigation of his claims, gathering information, and reviewing the settlement. Dkt. No. 26 53-8. The Court has some concern about the requested incentive award which is approximately 27 three times higher than the maximum estimated settlement payment other class members might 28 receive. Additionally, as noted in the Court’s order preliminarily approving the settlement, to the 15 Case 5:18-cv-06602-VKD Document 57 Filed 02/16/21 Page 16 of 16 1 extent the Amended Settlement Agreement suggests that the requested service award is also meant 2 to compensate Mr. Taafua for his execution of a general release (Dkt. No. 53-3, Section III.8), that 3 is not a purpose for which service awards are intended. See SFBSC Mgmt., LLC, 944 F.3d at 4 1046-47. Nevertheless, in view of the benefit Mr. Taafua helped obtain for the class, the requested 5 $3,500 is appropriate and Mr. Taafua’s motion for the same is granted. 6 IV. 7 CONCLUSION Based on the foregoing, Mr. Taafua’s motion for final approval of the class action settlement, as well as his motion for class counsel’s attorneys’ fee and costs, are granted. The 9 parties and JND are directed to implement the terms of this order and the class action settlement in 10 accordance with the terms of the Amended Settlement Agreement. The Clerk of Court shall enter 11 United States District Court Northern District of California 8 judgment and close this file. 12 13 IT IS SO ORDERED. Dated: February 16, 2021 14 15 VIRGINIA K. DEMARCHI United States Magistrate Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 16

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?