Hawkins v. The Kroger Company

Filing 356

ORDER on Final Approval of Class Action Settlement and Motion for Attorneys' Fees, Costs and Incentive Award. Signed by Judge Jeffrey T. Miller on 2/4/2022.(sjt)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Case No.: 15cv2320 JM (AHG)

SHAVONDA HAWKINS, on behalf
of herself and all others similarly
situated,

ORDER ON FINAL APPROVAL OF
CLASS ACTION SETTLEMENT AND
MOTION FOR ATTORNEYS’ FEES,
COSTS, AND INCENTIVE AWARD

Plaintiff,
v.
THE KROGER COMPANY,

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Defendant.

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Presently before the court is Plaintiff Shavonda Hawkins’ Motion for Final

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Approval of Class Action Settlement (Doc. No. 350) and Motion for Attorneys’ Fees,

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Costs, and Incentive Award (Doc. No. 349). A hearing was held on January 31, 2022.

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(Doc. No. 355). For the reasons set forth on the record and as explained in more detail

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below, Plaintiff’s Motions are GRANTED.

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I.

BACKGROUND

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This action arises from the labeling of Kroger breadcrumbs. Plaintiff purchased

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Kroger breadcrumbs in San Diego about six times per year from 2000 to July of 2015.

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(Compl. ¶¶ 16, 71-72). Beginning in 2008, the front label of the breadcrumbs read “0g

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Trans Fat.” (Doc. No. 275-1 at 56-57). On the back of the breadcrumbs, the nutrition
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fact label read “Trans Fat 0g” and included partially hydrogenated vegetable oil (“PHO”)

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as an ingredient. (See Doc. No. 275-1 at 281-87). Because the breadcrumbs contained

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PHO, they contained “trace amounts” of trans fat. (Doc. No. 275 at 12).

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On October 15, 2015, Plaintiff filed a putative class action alleging violations of

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California’s False Advertising Law (“the FAL”), Cal. Bus. & Prof. Code § 17500 et. seq.,

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Unfair Competition Law (“the UCL”), id. § 17200 et. seq., and Consumers Legal

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Remedies Act (“the CLRA”), Cal. Civ. Code. §§ 1750 et seq. Plaintiff also brought

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claims for breach of the implied warranty of merchantability and breach of express

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warranty. (Compl. ¶¶ 122-187).

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On March 17, 2016, the court granted Kroger’s first motion to dismiss. (Doc. No.

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19). On November 16, 2018, the Ninth Circuit reversed and remanded the case. (Doc.

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No. 27). On February 8, 2019, Kroger filed a second motion to dismiss (Doc. No. 34)

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which the court denied (Doc. No. 40).

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On January 21, 2020, Plaintiff filed a motion for class certification. (Doc. No. 89).
On November 9, 2020, the court certified the following class:
All citizens of California who purchased, between January 1,
2010 and December 31, 2015, Kroger Bread Crumb[s]
containing partially hydrogenated oil and the front label claim
“0g Trans Fat.”
(Doc. No. 263 at 38). On December 29, 2020, the court denied Kroger’s motion to
reconsider the court’s class certification order. (Doc. No. 323). On January 13, 2021,
Kroger filed a petition for permission to appeal the court’s class certification order to the
Ninth Circuit (Doc. No. 334) which was denied (Doc. No. 338).
On November 20, 2020, the Parties filed cross-motions for summary judgment.
(Doc. Nos. 275, 277).

On January 11, 2021, the court issued an order granting-in-part

and denying-in-part the Parties’ motions.

(Doc. No. 332).

Specifically, the court:

(1) granted Kroger’s motion as to Plaintiff’s use claim under the unlawful prong of the
UCL; (2) denied Kroger’s motion as to Plaintiff’s use claim under the unfair prong of the
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UCL; (3) denied Kroger’s motions as to Plaintiff’s labeling claims; and (4) denied

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Kroger’s motion as to Plaintiff’s express and implied warranty claims. (Doc. No. 332 at

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22).

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On February 12, 2021, the Parties attended a Mandatory Settlement Conference

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before Magistrate Judge Allison H. Goddard. (Doc. No. 336). Following the conference,

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Judge Goddard issued a Mediator’s Proposal, which the Parties accepted on February 26,

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2021. (Doc No. 337 at 1).

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On April 20, 2021, Plaintiff filed a motion for preliminary approval of the class

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settlement. (Doc. No. 343). The court held a hearing on Plaintiff’s preliminary approval

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motion on June 21, 2021. (Doc. No. 345). On July 2, 2021, the court granted Plaintiff’s

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preliminary approval motion. (Doc. No. 346). The court conditioned its approval,

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however, on the Parties submitting a Revised Notice Plan to address concerns the court

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had with the Parties’ plan of using Facebook advertisements targeting women over the

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age of 25 as the “primary method” of class notification. Id. at 9-10. In response, the

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Parties submitted a Revised Notice Plan on July 21, 2021 (Doc. No. 347) which the court

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approved with modifications on July 28, 2021 (Doc. No. 348).

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On August 2, 2021, Plaintiff filed a Motion for Attorneys’ Fees. (Doc. No. 349).

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On October 4, 2021, Plaintiff filed a Motion for Final Approval. (Doc. No. 350). On

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October 20, 2021, the court issued an order resetting the final approval hearing, in light of

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28 U.S.C. § 1715’s notice requirement. (Doc. No. 351 at 2). The court also requested

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clarification from Plaintiff regarding: (1) whether an amendment was actually made to

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the Settlement Agreement; and (2) the exact pro rata distribution to each individual class

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member. (Doc. No. 351 at 3). Plaintiff submitted a supplemental brief addressing these

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issues on November 1, 2021. (Doc. No. 352).

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A final approval hearing was held on January 31, 2022. (Doc. No. 355).
II.

SETTLEMENT AGREEMENT TERMS

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The Parties have submitted a Class Action Settlement Agreement with

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approximately sixteen pages of substantive terms. (Doc. No. 350-2 at 1-4 (“Weston
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Decl. I”), Ex. A (“Settlement Agreement”)). The Settlement Agreement requires Kroger

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to fund a $780,000 cash settlement fund. (Agreement, § 4). $79,635 of this fund will be

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allocated to notice and administrative expenses, consisting of: (1) $49,635 to be paid to

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the Settlement Administrator after preliminary approval to cover expenses associated

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with the class notice and claims processing and (2) $30,000 to be paid after final approval

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for costs associated with postage and check printing. Id., § 7.A.

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The Agreement estimates class members will be entitled to a recovery of:

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(1) $17.50 for undocumented claims; or (2) up to $100 for claims documented by

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receipts. Id., § 4.1 Each class member’s share shall be increased or reduced on a pro rata

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basis based on whether the combined monetary value of valid claims exceeds the

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settlement fund after administrative expenses are deducted. Id. None of the settlement

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fund will revert to Kroger; instead, any funds remaining after distribution are to be paid

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by the Settlement Administrator in a cy pres payment to the American Heart Association.

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Id. Within ninety days from final approval, Kroger is required to make a separate one-

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time cy pres payment of $21,000 to the American Heart Association. Id., § 5.

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In exchange for their pro rata share, all class members are deemed to release

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Kroger from any claims relating to the “manufacturing, formulation, preparation,

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handling, distribution, advertising, marketing, packaging, sale, labeling, promotion, and

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ingredients of Kroger Bread Crumbs[.]” Id., § 8. The release does not extend to personal

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injury claims “resulting from a defect in Kroger Bread Crumbs or packaging[.]”

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Id., § 8.C.

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Additionally, the Agreement permits the named Plaintiff to move the court for an

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incentive award of up to $7,000 and for Class Counsel to move for up to $400,000 in fees

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and costs. Id., § 10. Kroger agrees not to oppose this application or take any steps to

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In its Supplemental Briefing, Class Counsel represents no class member submitted a
claim documented by grocery store receipts, so this provision had no effect. (Doc. No.
352-1 at ¶ 6).
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encourage objectors, provided these limits are not exceeded. Id. The settlement is

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structured such that attorneys’ fees and the class award will be paid separate from the

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common fund. Id.

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III.

FINAL APPROVAL OF CLASS ACTION SETTLEMENT

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A.

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Before approving the settlement itself, the court’s “threshold task is to ascertain

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whether the proposed settlement class satisfies the requirements of Rule 23(a) of the

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Federal Rules of Civil Procedure applicable to class actions, namely: (1) numerosity,

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(2) commonality, (3) typicality, and (4) adequacy of representation.” Hanlon v. Chrysler

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Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). In addition, the court must determine

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whether “the action is maintainable under Rule 23(b)(1), (2), or (3).” Dunleavy v. Nadler

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(In re Mego Fin. Corp. Sec. Litig.), 213 F.3d 454, 462 (9th Cir. 2000) (quoting Amchem

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Prod., Inc., v. Windsor, 521 U.S. 591, 614 (1997)).

Class Certification

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In the present case, the court has already certified a class under Rule 23(b)(3).

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(See Order on Motion for Class Certification, Doc. No. 263 at 38 (certifying class of

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“[a]ll citizens in California who purchased, between January 1, 2010 and

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December 31, 2015, Kroger Bread Crumb[s] containing partially hydrogenated oil and

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the front label claim ‘0g Trans Fat.’”)). The court subsequently approved an amended

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definition of the class that excludes: “(a) persons or entities who purchased Kroger Bread

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Crumbs for the purpose of resale or distribution; (b) persons who timely and properly

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exclude themselves from the Class, as provided in the Settlement Agreement; (c) Kroger

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and any of its officers, directors, agents, representatives, employees, or other persons

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associated with Kroger, and (d) any judicial officer hearing this Litigation.” (Doc. No.

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346 at 5).

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The court is not aware of any new facts which would alter its conclusion. For

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these reasons, the court reaffirms its prior certification of the Settlement Class and its

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prior appointments of The Weston Firm as Class Counsel, and Plaintiff Shavonda

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Hawkins as the Class Representative.
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B.

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Federal Rule of Civil Procedure 23(e) provides “[t]he claims, issues, or defenses of

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a certified class . . . may be settled, voluntarily dismissed, or compromised only with the

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court's approval.” Fed. R. Civ. P. 23(e).

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determine whether a proposed settlement is fundamentally fair, adequate and

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reasonable.” Id. at 1026. In making this determination, the court is required to “evaluate

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the fairness of a settlement as a whole, rather than assessing its individual components.”

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Lane v. Facebook, Inc., 696 F.3d 811, 818-19 (9th Cir. 2012). Because a “settlement is

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the offspring of compromise, the question we address is not whether the final product

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could be prettier, smarter or snazzier, but whether it is fair, adequate and free from

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collusion.” Hanlon, 150 F.3d at 1027.

Legal Standard for Final Approval

The Rule “requires the district court to

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A court considers several factors in determining whether a proposed settlement is

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“fair, reasonable, and adequate” under Rule 23(e), including: “the strength of plaintiffs’

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case; the risk, expense, complexity, and likely duration of further litigation; the risk of

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maintaining class action status throughout the trial; the amount offered in settlement; the

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extent of discovery completed, and the stage of the proceedings; the experience and

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views of counsel; the presence of a governmental participant; and the reaction of the

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class members to the proposed settlement.” Staton v. Boeing Co., 327 F.3d 938, 959 (9th

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Cir. 2003) (quoting Molski v. Gleic , 318 F.3d 937, 953 (9th Cir. 2003)). This is not an

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“exhaustive list of relevant considerations.” Officers for Justice v. Civil Serv. Com.,

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688 F.2d 615, 625 (9th Cir. 1982). “The relative degree of importance to be attached to

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any particular factor will depend upon and be dictated by the nature of the claims

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advanced, the types of relief sought, and the unique facts and circumstances presented by

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each individual case.” Id.

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In addition to the Hanlon factors, the 2018 amendments to Rule 23 established a

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uniform set of factors courts consider when determining whether a settlement is “fair,

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reasonable, and adequate,” including whether:

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(A) the class representatives and class counsel have adequately
represented the class;

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(B) the proposal was negotiated at arm's length;

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(C) the relief provided for the class is adequate, taking into
account:

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(i) the costs, risks, and delay of trial and appeal;
(ii) the effectiveness of any proposed method of
distributing relief to the class, including the
method of processing class-member claims;
(iii) the terms of any proposed award of attorney's
fees, including timing of payment; and
(iv) any agreement required to be identified
under Rule 23(e)(3); and
(D) the proposal treats class members equitably relative to each
other.

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Fed. R. Civ. P. 23(e)(2); see Perks v. Activehours, Inc., No. 5:19-CV-05543-BLF,

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2021 WL 1146038, at *4 (N.D. Cal. Mar. 25, 2021).

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“The notes of the Advisory Committee explain that the enumerated, specific

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factors added to Rule 23(e)(2) are not intended to ‘displace’ any factors currently used by

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the courts, but instead aim to focus the court and attorneys on ‘the core concerns of

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procedure and substance that should guide the decision whether to approve the

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proposal.’” In re Extreme Networks, Inc. Sec. Litig., No. 15-CV-04883-BLF, 2019 WL

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3290770, at *6 (N.D. Cal. July 22, 2019).

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framework set forth in Rule 23 with guidance from the Ninth Circuit’s precedent[.]” Id.

“Accordingly, the [c]ourt applies the

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When reviewing a proposed settlement, the court’s primary concern remains “the

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protection of those class members, including the named plaintiffs, whose rights may not
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have been given due regard by the negotiating parties.” Officers, 688 F.2d at 624.

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Ultimately, “[i]n most situations, unless the settlement is clearly inadequate, its

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acceptance and approval are preferable to lengthy and expensive litigation with uncertain

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results.” Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D.

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Cal. 2004).

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Adequacy of Notice

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“Adequate notice is critical to court approval of a class settlement[.]” Hanlon,

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150 F.3d at 1025. In its prior Orders (Doc. Nos. 346 and 348), the court approved the

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Parties’ proposed notification plan—subject to the court’s modifications—and authorized

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Classaura LLC to act as the Settlement Administrator.

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In support of the Final Approval Motion, Plaintiff submits the Declaration of Gajan

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Retnasaba, a partner at Classaura. (Doc. No. 350-3 at 1-5 (“Retnasaba Decl.”)). Mr.

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Retnasaba informs the court that Classaura setup a dedicated toll-free number, e-mail

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address, and website on August 9 and August 13, 2021. Id. at ¶¶ 11-13. The website

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includes general information about the instant matter, key case filings, and other details,

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including the deadlines to file a claim, opt-out, submit an objection, and the date of the

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Fairness Hearing. Id. at ¶ 12. The website was visited 39,738 times. Id. The dedicated

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line received 126 calls and 37 voicemails were answered. Id. at ¶ 11. 71 e-mails were

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received and answered. Id. at ¶ 13.

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In addition, Kroger provided Classaura with a list of Kroger’s California-based

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Club Card members who had purchased Kroger Bread Crumbs within the last twelve

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months.

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(2) 52,591 unique mailing addresses (for Club Card members for whom an e-mail address

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was not available). Id. at ¶¶ 8-9. Appropriate e-mail and direct mail notices were sent to

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these addresses. Id. The e-mails contained a link to the settlement website. Id. at ¶ 8.

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Of the e-mails sent, 34,412 recipients opened the e-mail and 10,753 recipients clicked the

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provided link and visited the settlement website. Id.

Id. at ¶ 8.

The list contained: (1) 91,495 unique e-mail addresses; and

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Classaura also published a class notice in the San Diego Uptown Examiner and

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USA Today’s “San Francisco” and “Los Angeles” editions. Id. at ¶ 3. In addition, on

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August 15, 2021, Classaura began an online advertising campaign on Facebook targeting

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adults residing in California over the age of eighteen. Id. at ¶ 4. Mr. Retnasaba declares

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the campaign generated 8,713,061 impressions reaching 8,322,923 unique users.

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Id. at ¶¶ 5-6.

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TopClassActions.com—two “leading website[s] that collect and publicize class

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notices[.]” Id. at ¶ 7.

Classaura further made submissions to ClassActionRebates.com and

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Finally, on August 16, 2021, Classaura sent an informational press release using

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the PR Newswire’s US1 National Newsline providing a summary of the settlement. Id. at

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¶ 10. Mr. Retnasaba declares the press release was picked up by at least 103 media

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outlets. Id.

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As of October 4, 2021, Classaura has received 16,769 valid claims, no objections,

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and 5 requests for exclusion. (Doc. No. 350-1 at 13; Retnasaba Decl. at ¶¶ 14-15).

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Given the above, the court finds the Class Notice provided in this case was the best

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practicable and adequate to satisfy the requirements of Rule 23 and due process.

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2.

Compliance with Class Action Fairness Act

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Class Counsel’s declaration, submitted in support of Plaintiff’s Final Approval

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Motion, states Mr. Weston provided notice of the settlement pursuant to 28 U.S.C.

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§ 1715, on October 1, 2021. (Weston Decl. I at ¶ 25). Although untimely under 28

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U.S.C. § 1715(b), the Parties’ late notice is not fatal to the final approval of their class

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action settlement. See Adoma v. Univ. of Phoenix, Inc., 913 F. Supp. 2d 964, 973 (E.D.

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Cal. 2012) (“[N]umerous courts [have found] that late mailing of notices to state and

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federal officials under [the Class Action Fairness Act (“CAFA”)] is not fatal to approval

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of settlements.”). Instead, the court finds the substance of the requirements—to provide

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federal and state officials sufficient notice and opportunity to be heard—has been

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satisfied here.

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3.

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Strength of Plaintiff’s Case; Risk of Further Litigation; and Risk
of Maintaining Class Action Settlement

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The preferable nature of settlement over the uncertainties, expense, and length of

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litigation, means that “[w]hen assessing the strength of plaintiff’s case, the court does not

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reach any ultimate conclusions regarding the contested issues of fact and the law that

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underlie the merits of this litigation.” Four in One Co. v. S.K. Foods, L.P., No. 2:08-CV-

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3017 KJM EFB, 2014 WL 4078232, at *7 (E.D. Cal. Aug. 14, 2014) (quotations

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omitted). Similarly, “a proposed settlement is not to be judged against a speculative

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measure of what might have been awarded in a judgment in favor of the class.” Nat'l

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Rural Telecomms. Coop, 221 F.R.D. at 526.

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In this case, to succeed on the merits, Plaintiff must prove that: (1) Kroger’s use of

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PHO in its breadcrumbs was unfair under the UCL; (2) Kroger’s product labeling violates

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the UCL, FAL, and CLRA; and (3) Kroger breached implied and express warranties.

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(See Doc. No. 332 at 22). Kroger denies all of Plaintiff’s allegations and asserts several

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defenses to liability, suggesting vigorous and costly litigation if the action proceeds to

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trial. (Agreement, § 2; Doc. No. 332 at 19-21).

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Settlement in this case was reached only after over five years of protracted, heavily

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contested litigation, including an appeal to the Ninth Circuit. See Docket. The inherent

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risk of further litigation in this matter is well-known to all involved. Proceeding to trial

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presents very real risks of an unfavorable decision on the merits and/or on resulting

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appeals. Even if Plaintiff were to prevail at trial, Plaintiff would still be required to

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expend considerable additional time and resources that may potentially outweigh any

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additional recovery obtained through successful litigation. Continued litigation would

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further delay payment to Class Members and increase the amount of attorneys’ fees. All

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in all, the court finds these risks weigh in favor of settlement.

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4.

The Amount Offered in Settlement

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“Basic to the process [of evaluating settlements] is the need to compare the terms

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of the compromise with the likely rewards of litigation.” Protective Comm. for Indep.
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Stockholders of TMT Trailer Ferry v. Anderson, 390 U.S. 414, 424-25 (1968). Here, the

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Settlement Agreement authorizes a recovery of $780,000—minus $79,635 in costs

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associated with administering the settlement. (Agreement, §§ 4, 7.A). Class Counsel

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contends this relief compares favorably to total California sales of Kroger Bread Crumbs

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during the class period, which totaled about $ 2 million. (Doc. No. 350-1 at 12). The

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settlement is fully pro rata—each class member is expected to receive $41.77. Id. at 18.2

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In this case, the amount offered to each individual class member strikes the court as fair,

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reasonable and adequate, especially in light of the $2-$3 purchase price of Kroger Bread

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Crumbs. (Doc. No. 343-1 at 15). In light of the above, and the court’s experience with

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consumer class actions, the court finds this factor weighs in favor of settlement.

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5.

Extent of Discovery and State of Proceedings

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A court should focus on whether the “parties have sufficient information to make

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an informed decision about settlement.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d at

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459 (quoting Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1239 (9th Cir. 1998); see

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also Onitverso v. Zamora, 303 F.R.D. 356, 371 (E.D. Cal. 2014) (“A settlement that

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occurs in an advanced stage of the proceedings indicates the parties carefully investigated

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the claims before reaching a resolution.”).

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Here, as already stated, the Parties have been litigating this case for over five years,

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including an appeal to the Ninth Circuit. See Docket. Both Parties have engaged in

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formal and informal discovery, including multiple depositions. Weston Decl. I at ¶¶ 3-

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13. In addition, the Parties have engaged in lengthy informal settlement negotiations and

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attended multiple settlement conferences at different stages of this litigation. (Weston

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Decl. I at ¶¶ 14-15; Doc. Nos. 57, 114, 336). In light of these facts, the court is

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comfortable finding the Parties possess “sufficient information to make an informed

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In its supplemental briefing, Mr. Weston informs the court the Settlement Administrator
was instructed to round the settlement checks up—with any additional funds to be paid
by the Mr. Weston’s firm as a de minimis unreimbursed litigation cost. (Doc. No. 352-1
at ¶ 5).
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decision about settlement.” Linney, 151 F.3d at 1239. Accordingly, this factor weighs in

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favor of settlement.

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Experience of Counsel

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“The recommendations of plaintiffs’ counsel should be given a presumption of

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reasonableness.” In re Omnivision Technologies, Inc., 559 F. Supp. 2d 1036, 1043 (N.D.

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Cal. 2008) (citing Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979)). Here,

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Class Counsel provided a declaration detailing their experience in prosecuting consumer

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class actions. Weston Decl. I, Ex. B.

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embodied in the Parties’ settlement “was the product of heavily contested arms’ length

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negotiation” and the Parties “invested substantial time and effort to work through initially

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incompatible settlement postures and overcome vigorous disagreements.” Weston Decl. I

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at ¶¶ 14-15. It is Mr. Weston’s belief the settlement is fair and reasonable. Id. at ¶ 16. In

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light of the foregoing, and according proper weight to the judgment of counsel, the court

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finds this factor weighs in favor of the settlement.

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7.

Mr. Weston attests the proposed resolution

Reaction of Class Members

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“It is established that the absence of a large number of objections to a proposed

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class action settlement raises a strong presumption that the terms of a proposed class

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settlement are favorable to the class members.” Nat'l Rural Telecomm. Coop., Inc.,

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221 F.R.D. at 529 (citations omitted). Here, no objections to the settlement have been

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received—although five requests for exclusion were submitted. (Doc. No. 350-1 at 13;

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Retnasaba Decl. at ¶ 15). The absence of an objection “is compelling evidence that the

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Proposed Settlement is fair, just, reasonable, and adequate.” Id. at 529. The court finds

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this factor weighs in favor of settlement.

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8.

Signs of Collusion

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In addition to evaluating the fairness of the settlement terms, the court must be

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watchful for “subtle signs” that “class counsel have allowed pursuit of their own self-

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interests and that of certain class members to infect the negotiations.” Jones v. GN

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Netcom, Inc. (In re Bluetooth Headset Prods. Liab. Litig.), 654 F.3d 935, 947
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(9th Cir. 2011).

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collusion: (1) “when counsel receives a disproportionate distribution of the settlement, or

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when the class receives no monetary distribution but class counsel are amply rewarded”;

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(2) “when the parties negotiate a ‘clear sailing’ arrangement providing for the payment of

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attorneys’ fees”; and (3) “when the parties arrange for fees not awarded to revert to

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defendants rather than be added to the class fund[.]” 654 F.3d at 947. In Briseño v.

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Henderson, 998 F.3d 1014, 1024 (9th Cir. 2021), the Ninth Circuit made clear that courts

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should consider these factors even if settlement is proposed after class certification.

In Bluetooth, the Ninth Circuit identified three possible signs of

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In this case, the first sign of collusion is arguably not present here. The total

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amount Kroger has agreed to pay to settle this case is $1,208,500—the sum of the

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$780,000 settlement fund, $400,000 request for attorneys’ fees and costs, $7,000

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incentive payment, and $21,000 cy pres payment. (Settlement Agreement, §§ 4, 10).

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The amount of attorneys’ fees and costs Kroger agreed not to contest is $400,000.

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Id., § 10. If the court were to award the maximum requested attorneys’ fees and costs—

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this would constitute 33% of the constructive common fund. And while 33.3% is higher

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than the typical Ninth Circuit benchmark, it is considerably lower than the 83.2% that

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was at issue in Bluetooth. Bluetooth, 654 F.3d at 945 (“[W]e are concerned that the

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amount awarded was 83.2% of the total amount defendants were willing to spend to settle

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the case.”).

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The second sign of collusion, however, is clearly present. The Parties’ Settlement

21

Agreement contains a “clear sailing” provision whereby Kroger agrees not to contest the

22

amount of fees and costs awarded, as long as the award falls below the $400,000

23

negotiated ceiling. Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 529 (1st Cir.

24

1991) (“In general, a clear sailing agreement is one where the party paying the fee agrees

25

not to contest the amount to be awarded by the fee-setting court so long as the award falls

26

beneath a negotiated ceiling.”). “The very existence of a clear sailing provision increases

27

the likelihood that class counsel will have bargained away something of value to the

28

class.” Bluetooth, 654 F.3d at 948 (quoting Weinberger, 925 F.2d at 525). “[W]hen
13
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1

confronted with a clear sailing provision” the court has “a heightened duty to peer into

2

the provision and scrutinize closely the relationship between attorneys’ fees and benefit

3

to the class, being careful to avoid awarding ‘unreasonably high’ fees simply because

4

they are uncontested.” Id. at 948.

5

The third sign of collusion is also present in this case. While there is no explicit

6

reversionary provision in the Settlement Agreement, the Agreement is structured such

7

that attorneys’ fees are paid separate from the common fund. Agreement, § 10. Thus, the

8

Agreement suggests Kroger will retain the difference between the negotiated fee cap and

9

any award of fees the court makes below that amount. As the Ninth Circuit has stated, “a

10

kicker arrangement reverting unpaid attorneys' fees to the defendant rather than to the

11

class amplifies the danger of collusion already suggested by a clear sailing provision.”

12

Bluetooth, 654 F.3d at 949.

13

Despite the presence of both a clear sailing and kicker provision, the court is

14

persuaded by the value that the Settlement Agreement provides to class members that

15

these indications of collusion do not warrant invalidating the agreement as a whole. In

16

addition, the court also credits the fact that the Parties resolved this case only after

17

multiple settlement conferences overseen by Magistrate Judge Goddard attended by

18

experienced counsel. (Doc. Nos. 114; 336). Settlement was only achieved upon the

19

Parties’ acceptance of Judge Goddard’s Mediator’s Proposal. (Doc. No. 337).

20

The court can, therefore, put “a good deal of stock” in the fact that the settlement

21

was “the product of an arms-length, non-collusive negotiated resolution.” Rodriquez v.

22

West Publishing Group, 563 F.3d 948, 965 (9th Cir. 2009); see G. F. v. Contra Costa

23

Cty., No. 13-CV-03667-MEJ, 2015 WL 4606078, at *13 (N.D. Cal. July 30, 2015) (“The

24

assistance of an experienced mediator in the settlement process confirms that the

25

settlement is non-collusive.”) (quotation omitted).

26

Ultimately, although there are signs of possible collusion, the court finds the other

27

factors favoring approval and the process by which this settlement was reached is

28
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1

adequate to allow the court to conclude there is insufficient evidence of collusion to

2

warrant denying the Final Approval Motion in its entirety.

3

9.

Balancing of Factors

4

“Ultimately, the district court's determination is nothing more than ‘an amalgam of

5

delicate balancing, gross approximations and rough justice.’” Officers for Justice,

6

688 F.2d at 625 (quoting Detroit v. Grinnell Corp., 495 F.2d 448, 468 (2d Cir. 1974)).

7

“[I]t must not be overlooked that voluntary conciliation and settlement are the preferred

8

means of dispute resolution. This is especially true in complex class action litigation[.]”

9

Id. Having considered the relevant factors, the court finds the settlement fundamentally

10

fair, adequate, and reasonable.

11

IV.

MOTION FOR ATTORNEY’S FEES, COSTS, AND INCENTIVE AWARD

12

The court turns next to Plaintiff’s Motion for Attorneys’ Fees, Costs, and Incentive

13

Award. (Doc. No. 349). Pursuant to the terms of the Parties’ Settlement Agreement,

14

Class Counsel requests $400,000 in attorneys’ fees and costs. (Doc. No. 349 at 2;

15

Settlement Agreement, § 10). Class Counsel further requests a $7,000 incentive payment

16

be awarded to named Plaintiff Shavonda Hawkins. Id. As agreed, Kroger does not

17

object to or oppose Plaintiff’s Motion. See Docket; Settlement Agreement, § 10. The

18

court addresses each of Class Counsel’s requests below.

19
20

A.

Attorneys’ Fees and Costs
1.

Legal Standard

21

Federal Rule of Civil Procedure 23(h) permits a court to award reasonable

22

attorneys’ fees “authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h).

23

However, “courts have an independent obligation to ensure that the award, like the

24

settlement itself, is reasonable, even if the parties have already agreed to an amount.”

25

Bluetooth, 654 F.3d at 941.

26

In a diversity action under CAFA, federal courts apply state law when determining

27

both the right to fees and the method of calculating them. See Mangold v. Cal. Pub.

28

Utilities Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995) (“Existing Ninth Circuit precedent
15
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1

has applied state law in determining not only the right to fees, but also in the method of

2

calculating fees.”); see also Figueroa v. Cap. One, N.A., No. 18CV692 JM(BGS), 2021

3

WL 211551, at *9 (S.D. Cal. Jan. 21, 2021).

4

California courts “recognize two methods for calculating attorney fees in civil class

5

actions: the lodestar/multiplier method and the percentage of recovery method.”

6

Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 254 (2001). “The percentage

7

method calculates the fee as a percentage share of a recovered common fund or the

8

monetary value of plaintiffs’ recovery.” Laffitte v. Robert Half Internat. Inc., 1 Cal. 5th

9

480, 489 (2016).

“The lodestar method, or more accurately the lodestar-multiplier

10

method, calculates the fee ‘by multiplying the number of hours reasonably expended by

11

counsel by a reasonable hourly rate.’” Id.

12

2.

Lodestar Calculation

13

“The fee setting inquiry in California ordinarily begins with the ‘lodestar.’” PLCM

14

Grp., Inc. v. Drexler, 22 Cal. 4th 1084, 1095 (2000) (“California courts have consistently

15

held that a computation of time spent on a case and the reasonable value of that time is

16

fundamental to a determination of an appropriate attorneys’ fee award.”).

17

In support of their fee request, Class Counsel submitted a lodestar calculation of

18

$1,061,821 based on 2,905.4 hours of work. (Doc. No. 349-1 at 15). This lodestar figure

19

is based on the below table provided by Class Counsel, supported by billing records:

20
21
22
23
24
25

Timekeeper
Gregory S. Weston
Andrew C. Hamilton
Conor Trombetta
Senior Paralegals
Junior Paralegals
Totals

Rate Requested
$650
$305
$305
$235
$205

Total Hours
886.8
32.1
198.8
1,616.6
171.1
2,905.4

Lodestar
$576,420.00
$9,790.50
$60,634.00
$379,901.00
$35,075.50
$1,061,821.00

26
27

(Doc. Nos. 349-1 at 26; 349-2, Ex. 3).

28
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The court first considers whether the requested hourly rates are reasonable. “In

2

determining a reasonable hourly rate, the district court should be guided by the rate

3

prevailing in the community for similar work performed by attorneys of comparable skill,

4

experience, and reputation.” Chalmers v. Los Angeles, 796 F.2d 1205, 1210-11 (9th Cir.

5

1986). The party requesting fees bears the burden “to produce satisfactory evidence” the

6

requested rates are reasonable. Blum v. Stenson, 465 U.S. 886, 904 (1984).

7

In this case, Class Counsel submits evidence of: (1) decisions issued by other

8

courts in this circuit in which Class Counsel was awarded fees based on similar rates;

9

(2) survey data; and (3) the blended rates other courts in this circuit have approved as

10

compared to the blended rate in this action. (Doc. Nos. 349-1 at 15-18; 349-2 at 1-8

11

(“Weston Decl. II”) at ¶¶ 12-27).

12

qualifications, as well as those of his associates, Mr. Hamilton and Mr. Trombetta.

13

Weston Decl. II at ¶¶ 3-5.

14

prevailing rates in the San Diego legal market, the court finds the billing rates requested

15

by Class Counsel are reasonable.

Mr. Weston also outlined his experience and

Based on this evidence, and the court’s knowledge of

16

The court next turns to whether the number of hours expended by Mr. Weston, his

17

associates, and his paralegals, were reasonable. See Hensley v. Eckerhart, 461 U.S. 424,

18

434 (1983) (“The district court also should exclude from this initial fee calculation hours

19

that were not ‘reasonably expended.’”).

20

documenting the appropriate hours expended in the litigation and must submit evidence

21

in support of those hours worked.” Gates v. Rowland, 39 F.3d 1439, 1449 (9th Cir.

22

1994).

“The fee applicant bears the burden of

23

In this case, Class Counsel claims the number of hours expended totals 2,905.4

24

comprising: (1) 1,117.7 hours of attorney time (the majority of which was expended by

25

Mr. Weston); and (2) 1,787.7 hours of paralegal time. Weston Decl. II at ¶ 8, Table 1. In

26

support, Class Counsel submits billing records documenting the amount of time spent by

27

each timekeeper on individual tasks. (Doc. No. 349-3, Ex. 3). Mr. Weston further

28

represents prior to the submission of these numbers to the court, he performed a detailed
17
15cv2320 JM (AHG)

1

review of all of the raw timesheets in this case to identify errors, duplicates, and other

2

instances where the hours billed should have been either reduced or struck. Weston Decl.

3

II at ¶ 9. As a result of this review, Mr. Weston states he struck 129 time entries and

4

reduced time in another 80 entries. Id.

5

The court is all too familiar with the contentious nature of this litigation and is

6

confident a more cooperative and civil discourse between the Parties could have avoided

7

unnecessary filings and numerous discovery disputes.

8

conducted a thorough review of the timesheets submitted and determines that although

9

there are some areas of concern—including a number of vague and block-billed entries—

10

in general, the hours billed “appropriately reflects the degree of time and effort

11

expended” by Class Counsel. Laffitte, 1 Cal. 5th at 505.

Nonetheless, the court has

12

Multiplying the time expended by the rates approved, Plaintiff’s lodestar is

13

$1,061,821. Weston Decl. II at ¶ 8. When determining a reasonable fee in a class action,

14

the lodestar figure is “presumptively reasonable.” Bluetooth, 654 F.3d at 941. Because

15

Class Counsel is requesting attorneys’ fees lower than the base lodestar, Class Counsel’s

16

request translates essentially to a negative multiplier. “[A] multiplier below 1.0 is below

17

the range typically awarded by courts and is presumptively reasonable.” Wong v. Arlo

18

Techs., Inc., No. 5:19-CV-00372-BLF, 2021 WL 1531171, at *11 (N.D. Cal. Apr. 19,

19

2021); see also Covillo v. Specialtys Cafe, No. C-11-00594 DMR, 2014 WL 954516, at

20

*7 (N.D. Cal. Mar. 6, 2014) (“Plaintiffs’ requested fee award is approximately 65% of

21

the lodestar, which means that the requested fee award results in a so-called negative

22

multiplier, suggesting that the percentage of the fund is reasonable and fair.”).

23

3.

Percentage Cross-Check

24

Although the lodestar “may be a perfectly appropriate method of fee calculation,”

25

the Ninth Circuit has “encouraged courts to guard against an unreasonable result by

26

cross-checking their calculations against a second method.” Bluetooth, 654 F.3d at 944.

27

“Just as the lodestar method can confirm that a percentage of recovery amount does not

28

award counsel an exorbitant hourly rate, the percentage-of-recovery method can likewise
18
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1

be used to assure that counsel’s fee does not dwarf class recovery.” Id. at 945 (quotation

2

omitted).

3

Here, the constructive common fund in this case totals $1,208,500, comprising the:

4

(1) $780,000 settlement fund; (2) $400,000 request for attorneys’ fees and costs;

5

(3) $7,000 request for an incentive payment; and (4) $21,000 cy pres payment. (Doc. No.

6

349 at 2; Settlement Agreement, §§ 4-5). This amount constitutes the “total amount

7

defendants were willing to spend to settle the case.”

8

(including allotment for attorneys’ fees, incentive awards, cy pres award, and other fees

9

in calculation of constructive common fund). The request for $400,000 in fees, therefore,

10

represents 33% of the constructive common fund, which is higher than the 25%

11

benchmark typically used by the Ninth Circuit. Id. at 942 (“[C]ourts typically calculate

12

25% of the fund as the ‘benchmark’ for a reasonable fee.”).

Bluetooth, 654 F.3d at 945

13

Although a 33% award is on the higher end of the range of approved awards in this

14

circuit, “other courts have approved comparable awards in the appropriate

15

circumstances.” Rabin v. PricewaterhouseCoopers LLP, No. 16-CV-02276-JST, 2021

16

WL 837626, at *8 (N.D. Cal. Feb. 4, 2021) (collecting cases). The court takes into

17

consideration, for example, that the constructive common fund in this case is relatively

18

small.

19

fees above 25%.” Craft v. Cty. of San Bernardino, 624 F. Supp. 2d 1113, 1127 (C.D.

20

Cal. 2008); Alvarez v. Farmers Ins. Exch., No. 3:14-CV-00574-WHO, 2017 WL

21

2214585, at *3 (N.D. Cal. Jan. 18, 2017) (“Fee award percentages generally are higher in

22

cases where the common fund is below $10 million.”). In addition, neither Kroger (as

23

expected) nor any class member filed an objection.

Cases with a relatively small fund, i.e. under $10 million, will “often result in

24

The court does not find this to be a case where Class Counsel’s requested award

25

would “yield windfall profits for class counsel in light of the hours spent on the case[.]”

26

Bluetooth, 654 F.3d at 942. Instead, the court finds the amount of fees requested is

27

reasonable.

28

///
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1

4.

Costs

2

Attorneys are entitled to recover “those out-of-pocket expenses that would

3

normally be charged to a fee paying client.” Harris v. Marhoefer, 24 F.3d 16, 19 (9th

4

Cir. 1994) (quotation omitted). Class Counsel asserts they have incurred $6,942.57 in

5

costs over the course of the litigation, broken down into: (1) $905 in filing fees;

6

(2) $1,348.25 for court reporters and deposition transcripts; (3) $2,450 in expert witness

7

fees; (4) $40.55 in postage; (5) $645.05 in printing services; (6) $45 in process server

8

fees; and (7) $1,508.72 in travel expenses. (Doc. No. 349-1 at 23, 26). No objections

9

have been made to these costs.3 In this case, the court finds Class Counsel’s litigation

10

expenses are reasonable and approves the request for costs.

11

B.

12

Although “incentive awards are fairly typical in class action cases,” they are

Incentive Award

13

discretionary.

14

“Generally, when a person joins in bringing an action as a class action he has disclaimed

15

any right to a preferred position in the settlement.” Staton, 327 F.3d at 967 (quotation

16

omitted).

17

representatives for work done on behalf of the class, to make up for financial or

18

reputational risk undertaken in bringing the action, and, sometimes, to recognize their

19

willingness to act as a private attorney general.”

20

However, “district courts must be vigilant in scrutinizing all incentive awards to

21

determine whether they destroy the adequacy of the class representatives.” Radcliffe v.

22

Experian Info. Solutions Inc., 715 F.3d 1157, 1164 (9th Cir. 2013).

Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2009).

The purpose of incentive awards, therefore, is “to compensate class

Rodriguez, 563 F.3d at 958-59.

23

Class Counsel requests that $7,000 be awarded to Plaintiff Hawkins in this case.

24

In support, Class Counsel contends Plaintiff “persevered for over five years,” expending

25

26
27
28

3

As a point of clarification, Class Counsel is not requesting an additional $6,942.57 in
costs on top of attorneys’ fees. Instead, Class Counsel’s request for costs is incorporated
into the $400,000 fee request. (Doc. No. 349 at 2).
20
15cv2320 JM (AHG)

1

time: (1) sitting for a deposition covering personal topics; (2) assisting in written

2

discovery; and (3) attending multiple court conferences.

3

Plaintiff did not submit a declaration in support of the request.

(Doc. No. 349-1 at 24).

4

Given Plaintiff’s level of involvement, the number of years this case has been

5

pending, and the fact that the amount requested is consistent with those typically awarded

6

as incentive payments, the court finds Plaintiff’s request to be reasonable. See Khoja v.

7

Orexigen Therapeutics, Inc., No. 15-CV-00540-JLS-AGS, 2021 WL 5632673, at *12

8

(S.D. Cal. Nov. 30, 2021) (approving incentive award of $9,230); In re Regulus

9

Therapeutics Inc. Sec. Litig., No. 3:17-CV-182-BTM-RBB, 2020 WL 6381898, at *8

10

(S.D. Cal. Oct. 30, 2020) (“Incentive awards typically range from $2,000 to $10,000.”)

11

(quotation omitted); Mauss v. NuVasive, Inc., No. 13CV2005 JM (JLB), 2018 WL

12

6421623, at *10 (S.D. Cal. Dec. 6, 2018) (finding reimbursement award of $7,500 to be

13

reasonable). For these reasons, the court approves Plaintiff’s requested incentive award

14

of $7,000.

15

C.

16

Finally, the Settlement Agreement authorizes the deduction of up to $79,635 in

17

notice and administration costs incurred by the Settlement Administrator. (Doc. No. 350-

18

1 at 12; Settlement Agreement, § 4). No objections have been made to these expenses.

19

Although the court determines these administration costs may have been excessive in

20

view of the Parties’ original notice plan, the court must also take into account the

21

additional notice measures ordered by the court and subsequently implemented by the

22

Settlement Administrator—including at least one additional newspaper publication and

23

the mailing or e-mailing of Kroger Club Card Members.

24

Retnasaba Decl. at ¶¶ 3, 8-9).

25

procedures, the court finds the Settlement Administrator’s expenses reasonable. The

Settlement Administration Costs

(Doc. Nos. 348 at 2-4;

In light of the added expense of these additional

26
27
28
21
15cv2320 JM (AHG)

1

court, therefore, approves the requested administration expenses in the amount of

2

$79,635.4

3
4

For the foregoing reasons, the court GRANTS Plaintiff’s fee motion.
V.

CONCLUSION

5

In accordance with the foregoing, the court ORDERS as follows:

6

1.

7

Motion for Attorneys’ Fees, Costs, and Incentive Award (Doc. No. 349).

8
9

The court GRANTS Plaintiff’s Final Approval Motion (Doc. No. 350) and

2.

The Parties are DIRECTED to implement the Settlement according to its

terms and conditions.

10

3.

The court APPROVES the Settlement Administration costs in the amount

11

of $79,635, to be paid from the common fund, to Classaura LLC, deducted by an

12

appropriate amount in order to satisfy the two late-mailed claims.

13
14

4.

fees and costs in the amount of $400,000.

15
16

The court APPROVES Class Counsel’s request for an award of attorneys’

5.

The court APPROVES an incentive award to Plaintiff Shavonda Hawkins

in the amount of $7,000.

17

6.

This Order applies to all claims or causes of action settled under the

18

Settlement Agreement and binds all Class Members who did not affirmatively opt-out of

19

the Settlement Agreement by submitting a timely and valid request for exclusion.

20
21

7.

are excluded from the class.

22
23

The Class Members who timely filed a request to opt out of the settlement

8.

The court retains continuing jurisdiction over this settlement solely for the

purposes of enforcing the agreement, addressing settlement administration matters, and

24
25

26
27
28

4

At the hearing, Plaintiff’s counsel represented that they had received two late-mailed
claims, and that these claims would be paid through appropriate deductions to the final
amount paid to the Settlement Administrator.
22
15cv2320 JM (AHG)

1

addressing such post-judgment matters as may be appropriate under Court rules and

2

applicable law.

3

9.

4

close the case.

5
6
7

Judgment is entered on the terms set forth above. The Clerk of Court shall

IT IS SO ORDERED.
DATED: February 4, 2022
JEFFREY T. MILLER
United States District Judge

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15cv2320 JM (AHG)