OCONNOR et al v. OAKHURST DAIRY et al
Filing
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ORDER ON FINAL SETTLEMENT APPROVAL AND ATTORNEYS' FEES AND EXPENSES granting 214 Motion for Approval of Attorneys' Fees and Reimbursement of Case Expenses; approving 215 Joint MOTION for Final Approval of Class Settlement and Plan of Allocation and Service Awards By JUDGE NANCY TORRESEN. (mlm)
UNITED STATES DICTRICT COURT
DISTRICT OF MAINE
CHRISTOPHER O’CONNOR, et al.
Plaintiffs,
v.
OAKHURST DAIRY, et al.
Defendants.
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Docket No. 2:14-00192-NT
ORDER ON FINAL SETTLEMENT APPROVAL AND
ATTORNEYS’ FEES AND EXPENSES
Before me are a request for final approval of the settlement of all claims in this
suit, (ECF No. 215), and a motion for attorneys’ fees and costs (ECF No. 214). For the
reasons stated below, I will approve the settlement and grant the motion for
attorneys’ fees.
BACKGROUND
This case concerns claims by Oakhurst Dairy (“Oakhurst”) Route Sales
Drivers who pursued their claims for unpaid wages, other damages, costs, and
attorneys’ fees, on their own behalf and on behalf of other Route Sales Drivers
assigned to an Oakhurst location in Maine between May 5, 2008 and August 29,
2012.1 In May 2014, the Plaintiffs filed suit against Oakhurst and Dairy Farmers
of America, Inc. Summary judgment was granted for the Defendants on the
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The delivery drivers made claims under various provisions of Maine wage and hour law.
26 M.R.S.A. § 664(3) (overtime wages); 26 M.R.S. § 621-A (timely and full payment of wages); id.
§ 626 (payment of wages after cessation of employment); id. § 626-A (penalties provisions).
Plaintiffs’ state law claims based on the statutory interpretation of a Maine law
exemption to overtime. That judgment was reversed on appeal, and the parties
conducted substantial discovery including depositions of all five Named Plaintiffs.
The Plaintiffs filed a motion for class certification, and the Defendants filed a motion
to decline supplemental jurisdiction. The parties mediated the Plaintiffs’ claims and
separately participated in a judicial settlement conference, and they agreed to settle
their dispute in advance of trial. In March 2018, I authorized the Plaintiffs to circulate
notices of the proposed settlement to potential class members. Order Authorizing
Notice to Class and Establishing Schedule for Further Action (ECF No. 2 1 2 ).2
After conducting a fairness hearing on June 13, 2018, as Federal Rule of Civil
Procedure 23(e) requires, I conclude that: (1) the settlement is fair, reasonable, and
adequate; (2) that the attorney fees and expenses requested by Class Counsel are
reasonable; and (3) the service awards to the five Named Plaintiffs are warranted
and reasonable.
DISCUSSION
I.
Settlement
A.
Legal Standard
1.
Rule 23
This Order incorporates by reference the definitions in the Settlement Agreement and
Release, see ECF No. 206-1, and all terms defined therein shall have the same meaning in this Order
as set forth in the Settlement Agreement and Release.
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Federal Rule of Civil Procedure 23(e) requires the following for approval of a
class action settlement:
(1)
(2)
(3)
(4)
(5)
The court must direct notice in a reasonable manner to all class
members who would be bound by the proposal.
If the proposal would bind class members, the court may approve
it only after a hearing and on finding that it is fair, reasonable,
and adequate.
The parties seeking approval must file a statement identifying any
agreement made in connection with the proposal.
If the class action was previously certified under Rule 23(b)(3), the
court may refuse to approve a settlement unless it affords a new
opportunity to request exclusion to individual class members who
had an earlier opportunity to request exclusion but did not do so.
Any class member may object to the proposal if it requires court
approval under this subdivision (e); the objection may be withdrawn
only with the court’s approval.
Fed. R. Civ. P. 23(e). The following factors are relevant for determining whether a
settlement is “fair, reasonable, and adequate” under Rule 23(e)(2):
(1)
(2)
(3)
(4)
(5)
(6)
comparison of the proposed settlement with the likely result
of litigation;
stage of the litigation and the amount of discovery completed;
reaction of the class to the settlement;
quality of counsel;
conduct of negotiations;
prospects of the case, including risk, complexity, expense and
duration.
Scovil v. FedEx Ground Package Sys., Inc., No. 1:10-cv-515-DBH, 2014 WL 1057079,
at *2 (D. Me. Mar. 14, 2014).
B.
Application
1.
Rule 23
Regarding the Rule 23(e) requirements: (1) notice has been directed to
Settlement Class Members who would be bound by the settlement; (2) a fairness
hearing was held; (3) the parties have filed their settlement agreement and have
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confirmed that there are no additional agreements made in connection with the
settlements; (4) there have been no previous class certifications under Rule 23(b)(3);
and (5) no objectors have appeared.
Regarding the Scovil factors, I take the following into account
in my determination of whether the settlement is “fair, reasonable, and adequate”
as required by Fed. R. Civ. P. 23(e)(2).
a. Comparison of Proposed Settlement with Likely
Result of Litigation
The total amount of the settlement in this case is $5,000,000 (although the
Defendants have agreed to pay the employer share of wage-related taxes for payments
made to Settlement Class Members under the Settlement Agreement). According to the
Plaintiffs’ damages expert, the $5,000,000 settlement represents more than 90% of the
$5,452,686.93 in total alleged overtime damages for the 122 Settlement Class Members.
ECF No. 218-1. If the settlement is approved, the Settlement Class Members will
receive, on average, more than $26,000 each; more than 20 will receive greater than
$50,000 each; and none will receive less than $100. ECF No. 218-1.
The settlement amount takes into account potential weaknesses in t h e
Plaintiffs’ case including the Defendants’ pending motion to decline supplemental
jurisdiction, t h e Defendants’ federal preemption defenses and other remaining
defenses to liability, objections to the Plaintiffs’ method for calculating the amount of
overtime damages, and the legal availability of liquidated damages. I find that the
settlement fairly and reasonably compensates employees for their lost wages given
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the challenges the class members would have faced were they to continue litigating
their claims. This factor favors approval.
b. Stage of the Litigation and Amount of Discovery
Completed
The parties agreed to settle this case well more than four years after the Plaintiffs
filed suit. The settlement was reached after both sides undertook substantial
discovery including the Defendants’ depositions of all five Named Plaintiffs; the
Defendants’ production of comprehensive pay and time data for all class members;
the Plaintiffs’ designation of their damages expert and production of his detailed
damage calculations; responses by the named and additional Plaintiffs to the
Defendants’ interrogatories and documents requests; and supplemental affidavits by
the five Named Plaintiffs. This factor favors approval.
c.
Class Reaction
On March 30, 2018, the Settlement Administrator sent notice of the proposed
settlement to the 122 class members. No objections have been filed, and no class
member has opted out of the settlement. No objections were voiced by any class
member at the Final Fairness Hearing.3
d.
Quality of Counsel
Three notices were returned as undeliverable, and search results indicated that these three
class members may be deceased. Efforts to locate their next of kin were unsuccessful. Supp. Decl. of
Jake Hack (ECF No. 117-1).
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Class Counsel’s represented the Class Members interests zealously and
achieved an excellent result for the class. They have devoted 2600 hours and over
$900,000 in hourly fees to this suit. This factor favors settlement approval.
e.
Conduct of Negotiations
The record confirms vigorous and lengthy settlement negotiations. In
February 2015, the parties engaged in all-day settlement conference with an
experienced mediator. More than 30 months later, the parties resumed settlement
efforts at a judicial settlement conference on November 21, 2017, and those armslength negotiations continued until December 8, 2017, when a tentative settlement
was finally reached. This factor favors settlement approval.
f.
Prospects of the Case
This case involved substantial risk to the Plaintiffs. The Plaintiffs’ case was
initially dismissed and was only reinstated following a lengthy appeal. Other
substantial risks remained. To prevail on their overtime claims, the Plaintiffs would
have had to succeed on their pending motion for class certification, as well as
overcome the Defendants’ pending motion to decline supplemental jurisdiction
and the Defendants’ other liability defenses including claims of federal
preemption and defenses based on Maine’s overtime exemptions. There was a
very real possibility that the Plaintiffs might have recovered nothing in this case.
Had they not settled, the Plaintiffs would have faced more expense and delay.
At the time the case settled, the litigation already had spanned more than four
years. Considering time for trial, potential post-trial motions, and appeals, the litigation
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could have continued for two or three more years had a settlement not been reached.
I find that the settlement accounts for the risks and likely costs associated with
continued litigation. This factor weighs in favor of approval.
2.
Service and Incentive Payments
Class Counsel has proposed, and the Defendants do not object to, service
payments to the five Named Plaintiffs in the following amounts: Chris O’Connor
($15,000); James Adam Cox ($12,000); Robert McNally ($10,000); Kevin O’Connor
($6,500); and Michael Fraser ($6,500). Class Counsel recommends these amounts
because all Named Plaintiffs played a significant role in motivating settlement,
including agreeing to be a Named Plaintiff with the attendant time demands and
risk of public criticism, responding under oath to the Defendants’ written discovery
requests, providing multiple affidavits under oath in support of the Plaintiffs’
claims, meeting and staying in contact with Class Counsel multiple times over
several years, and submitting to an in-person deposition. Varying amounts for the
Named Plaintiffs account for differences in duties undertaken. Plaintiff Chris
O’Connor travelled from his residence in North Carolina to Boston to attend the
February 2015 mediation and travelled from North Carolina to Maine three times
to assist Class Counsel, including to attend a deposition of another Named Plaintiff
before his own deposition and to attend the judicial settlement conference in
November 2017. Plaintiff James Adam Cox took unpaid time off from work for three
full days, including to attend the judicial settlement conference. Robert McNally
devoted two full days to the case, including to attend the judicial settlement
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conference. Decl. of David G. Webbert ¶ 11 (ECF No. 214-1). I find these proposed
service awards are appropriate in light of the time the Named Plaintiffs devoted to
the case and the significant role they played in motivating settlement.
II.
Attorneys’ Fees
Under Rule 23(h), “[i]n a certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law or by the parties’
agreement.”
The First Circuit recognizes two general methods for awarding
attorneys’ fees in class actions: (1) the “percentage of fund” (“POF”) method; and (2)
the “lodestar” method. Plaintiffs’ counsel requests that I use the percentage of fund
method to award the attorneys’ fees in this case, citing our precedents using the
POF method. The First Circuit has approved of the POF method as the prevailing
approach used in common fund cases. See In re Thirteen Appeals Arising out of the
San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295, 307 (1st Cir. 1995).
The Plaintiffs’ counsel has requested one third of the $5,000,000 settlement
amount in attorneys’ fees or $1,666,666.67, and $50,000 in expenses. Plaintiffs’
counsel has represented that the legal services agreements with the five class
representatives and three other plaintiffs provided for a contingent fee of one-third of
the recovery plus reimbursement of all case expenses. Webbert Decl. ¶ 2.
A one-third contingent fee is common in class action wage-and-hour cases. Scovil,
2014 WL 1057079, at *5, 2014 U.S. Dist. LEXIS 33361 at *20-22; see also Curtis v.
Scholarship Storage Inc., No. 2:14-cv-303-NT, 2016 U.S. Dist. LEXIS 70410, at *10-11
(D. Me. May 31, 2016).
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This hard-fought class action, filed more than four years ago, has proven to be
complex and risky. Class Counsel engaged in extensive briefing of hotly disputed legal
issues and thorough discovery, as well as an all-day mediation in Boston and a judicial
settlement conference and related settlement negotiations. Webbert Decl. ¶¶ 3-5. Class
counsel filed a motion for summary judgment; responded to cross-motions for partial
summary judgment; successfully appealed summary judgment in the Defendants’ favor
regarding the Plaintiffs’ state law claims; moved for Rule 23 class certification; and
opposed the Defendants’ motion to decline supplemental jurisdiction. ECF Nos. 24, 25,
26, 27, 29, 35, 52, 53, 54, 94, 97, 100, 102, 104, 105, 112, 114, 123, 138, 142, 158, 159,
160, 163, 164, 170, 173, 176, 182, 188. In addition, Class Counsel (1) propounded
interrogatories and document requests to the Defendants and a detailed notice of subject
matters for 30(b)(6) deposition of the Defendants, (2) pursued the Defendants’ objections
to the Plaintiffs’ discovery requests, (3) prepared written discovery responses for the
Named and opt-in Plaintiffs; and (4) prepared for, and defended, depositions of all five
Named Plaintiffs. Webbert Decl. ¶ 5.
The fee petition indicates that Class Counsel’s lodestar is over $960,000. ECF
No. 214. Plaintiffs’ counsel performed this work on a contingent fee basis, assuming
the risk that there would be no recovery and therefore no compensation. I find that
Class Counsel’s request for attorneys’ fees and costs is reasonable.
As provided in the Settlement Agreement, the court-approved award of
attorneys’ fees and expenses shall be paid out of the Global Settlement Fund. I
assume continuing jurisdiction over it.
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III. Class Action Fairness Act
Under the Class Action Fairness Act (“CAFA”), no later than 10 days after a
proposed settlement of a class action is filed in court, the defendant is required to
serve notice of the proposed settlement with the appropriate federal and state
officials. See 28 U.S.C. § 1715(b). A court may not finally approve a settlement until
90 days after the delivery of such notice. See 28 U.S.C. § 1715(d).
Defense counsel have advised that the appropriate state and federal officials
have been notified. Def.s’ Notice of Service of CAFA Notifications to Federal and
State Officials (ECF No. 207). None of those state and federal officials have filed an
objection to the proposed settlement. Final approval is now appropriate because
more than 90 days have passed since defense counsel sent the appropriate
documents to the federal and state officials. See 28 U.S.C. § 1715(d).
IV.
Final Approval of Settlement Class
I previously granted (ECF No. 212) the parties’ request for preliminary
certification of the following Rule 23 Settlement Class for the sole, and limited,
purpose of implementing the terms of the Settlement Agreement, subject to my final
approval:
All current and former Route Sales Drivers assigned to an Oakhurst
location in Maine who performed compensable work as employees of
Oakhurst Dairy between May 5, 2008 and August 29, 2012 and received
from Oakhurst Dairy at least one non-zero dollar check for compensable
work during that time period.
An action can be settled as a class action that binds absent class members only
if it is first certified as a class action under Rule 23. See Fed. R. Civ. P. 23.
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Certification of an action requires that it meet the requirements of Rule 23(a) and
one of the types of class actions described in Rule 23(b) for settlement purposes.
Michaud, 2015 WL 1206490 at *2. This action satisfies the requirements of Rule 23
such that it may be certified for settlement purposes.
Rule 23(a) requires the following: (1) the class is so numerous that joinder of
all members is impracticable; (2) there are questions of law or fact common to the
class; (3) the claims or defenses of the representative parties are typical of the claims
or defenses of the class; and (4) the representative parties will fairly and adequately
protect the interests of the class. Fed. R. Civ. P. 23(a).
The “numerosity” requirement does not mandate any strict numerical cutoff
for class certification.
Michaud, 2015 WL 1206490 at *2. Furthermore,
“impracticability does not mean impossibility, but only the difficulty or inconvenience
of joining all members of the class.” Id. (internal punctuation and citations omitted).
Courts in the First Circuit “have generally found that a class of 40 or more individuals
satisfies the numerosity requirement.” Id. This requirement may be loosened “where
a class contains employees suing their present employer . . . because class members
may be unwilling to sue their employer out of fear of retaliation.” Id. (internal
punctuation and citation omitted). This case thus easily satisfies the numerosity
requirement, as there are 122 Settlement Class Members, some of whom remain
employed by Oakhurst. Id.
The “commonality” element requires the Settlement Class Members’ claims
“must depend upon a common contention” and one “that is capable of classwide
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resolution – which means that determination of its truth or falsity will resolve an
issue that is central to the validity of each one of the claims in one stroke.” Id. at 3
(quoting Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011)). Named Plaintiffs’ common claim
that the Defendants failed to pay overtime wages for each hour worked over 40 in a
week is central to all Settlement Class Members’ claims. Plaintiffs have satisfied the
commonality requirement.
The “typicality” requirement “is satisfied when the representative plaintiff’s
injuries arise from the same events or course of conduct as do the injuries of the class
and when plaintiff’s claims and those of the class are based on the same legal theory.”
Michaud, 2015 WL 1206490 at *3. Named Plaintiffs, like the other class members,
claim to have been injured by not receiving wages, including overtime wages, they
were owed. The interests of the Named Plaintiffs align with the members of the class
they seek to represent. The five Named Plaintiffs have established typicality with
respect to the class.
Rule 23(a)(4) requires that “the representative parties will fairly and
adequately protect the interests of the class.” The adequacy requirement “serves to
uncover conflicts of interest between named parties and the class they seek to
represent,” and “factors in competency and conflicts of class counsel.” Amchem Prods.,
Inc., 521 U.S. at 625, 626 n.20. There are three factors to consider when determining
whether this requirement has been met. First, plaintiffs’ attorney must be qualified,
experienced, and generally able to conduct the proposed litigation. Second, the
representative plaintiff cannot have interests antagonistic to the class. Third, the
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representative party and the representative attorney must be expected to prosecute
the action vigorously.
The Plaintiffs are represented by attorneys Jeffrey Neil Young, David Webbert
and Carol Garvan and the firm of Johnson, Webbert & Young, LLP. Class Counsel
advise that attorney Young has practiced labor and employment law for over 30 years;
attorney Webbert has been specializing in prosecuting complex civil rights cases for
over 30 years; attorney Garvan has been specializing in prosecuting complex
employment and civil rights cases for over 7 years and has been named as a “Rising
Star” by New England Super Lawyers for the past three years. Decl of Jeffrey Neil
Young (ECF No. 26-2); Third Decl. of Jeffrey Neil Young (ECF No. 164-10); Aff.
Resume of Webbert (ECF No. 165-1); Amended Aff. Of Carol Garvan (ECF No. 167);
Amended Aff. of Webbert (ECF No. 168); Decl. of Donald F. Fontaine (ECF No. 2145); Decl. of Chad Hansen (ECF No. 214-6). Attorneys Young, Webbert, and Garvan
have represented plaintiffs in many of class and collective action lawsuits. Id.
Class representatives cannot have interests that are antagonistic, or in
conflict, with the interests of the class they are seeking to protect. Amchem, 521 U.S.
at 625, 626 n.20. “Here, the interests of the named plaintiffs align with the members
of the class they seek to represent” in the settlement class. Michaud, 2015 WL
1206490 at *3.
Regarding vigorous prosecution of the case, Class Counsel have significant
experience handling labor, employment, and civil rights actions and are qualified to
handle this case. All five Named Plaintiffs have taken an active role in the
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prosecution of this action; in particular, all five were deposed in person and submitted
sworn affidavits in support of the claims of the Class. None of the class
representatives settled his claims without settling the claims of all of the members of
the class. Extensive written discovery was exchanged, including interrogatories and
document production requests by both parties, in addition to the disclosures. There
appears to have been a willingness of the class representatives to take an active role
in the litigation and to protect the interests of the absentees. The adequacy
requirement is therefore met for the class.
Rule 23(b)(3) requires that questions or facts common to class members
predominate over questions only affecting individual class members. Fed. R. Civ. P.
23(b)(3). Moreover, a class action must be superior to other available methods for
fairly, and efficiently, adjudicating the controversy, considering: (1) the class
members’ interests in individually controlling the prosecution of separate actions; (2)
the extent of any litigation concerning the controversy already begun by class
members; and (3) the desirability of concentrating the litigation in the forum.4 Id.
Common questions predominate here because all claims arise from the same practice
of treating class members as if they were not eligible for overtime. See Michaud, 2015
WL 1206490 at *4. Although damage awards could have varied due to, among other
things, the amount of overtime worked, individualized damages determinations are
For purposes of the certification of a settlement class, because there are no trial management
issues to consider, the Court need not consider the Rule 23(b)(3)(D) factor of the likely difficulties in
managing a class action. Curtis v. Scholarship Storage, No. 2:14-cv-303-NT, 2016 U.S. Dist. LEXIS
9001 at * 8 n.1 (D. Me. January 25, 2016) (citation omitted).
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not predominance-defeating, particularly when they can be resolved with payroll
records. Id. The superiority requirement is met because the class action will resolve
all claims in a single proceeding in a forum already familiar with the facts and
theories of the case, there are no pending individual suits, and there is no indication
in the record that class members are interested in bringing separate actions. Id. at 5.
CONCLUSION
For the reasons stated above, I APPROVE final settlement of all claims in this
matter and the plan of distribution, including the service award to the five Named
Plaintiffs. I also GRANT the motion for attorneys’ fees and costs (ECF Nos. 214 and
215).
I further GRANT the parties’ motion to certify this Action as a class action for
settlement purposes only and because the Action has been certified as a class action
under Federal Rule of Civil Procedure 23, all Settlement Class Members who did not
actively opt-out of the case (and the Settlement thereof) shall be bound by the
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dismissal with prejudice on the merits, and by the release of claims described in the
Settlement Agreement.
I further DENY as moot any pending motions not resolved in this order.
I further ORDER that the parties shall report to me on the distribution and
any settlement funds remaining for cy pres distribution on, or before, October 15,
2018.
The case is DISMISSED with prejudice on the merits; provided, however,
that, without affecting the finality of this Judgment and Order of Dismissal with
Prejudice, I hereby retain exclusive and continuing jurisdiction for purposes of
supervising,
administering,
implementing,
interpreting,
and
enforcing
this
Judgment and Order of Dismissal with Prejudice, as well as the Settlement
Agreement, including administration and distribution of payment thereunder.
SO ORDERED.
/s/ Nancy Torresen
United States Chief District Judge
Dated this 19th day of June, 2018.
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