MICHAEL J. SENG, Magistrate Judge.
On February 15, 2017, this Court entered an order preliminarily approving the Joint Stipulation of Settlement of Class Actions ("Settlement Agreement") resolving the claims in this action ("
On August 4, 2017, Plaintiffs' counsel filed a motion for attorney's fees and costs. (ECF No. 501, as amended and supplemented by ECF Nos. 502, 521, 523-29.) On August 29, 2017, Plaintiffs filed their motion seeking final approval of the Settlement Agreement, wherein they requested enhancement awards to the Representative Plaintiffs. (ECF No. 505.) Defendants responded to the motions on September 8, 2017. (ECF No. 513.) Plaintiffs replied on September 15, 2017. (ECF No. 520.)
The Court held the Fairness and Approval Hearing on September 22, 2017. (ECF No. 530.) Mario Martinez and Anna Walther appeared on behalf of Plaintiffs. Leonard Comden and Kelton Lee Gibson appeared on behalf of former class counsel. Named Plaintiffs Sabas Arredondo, Hilario Gomez, Irma Landeros, and Rosalba Landeros also were present. William Hahesy, Sarah Bigelow, and David Bruce appeared on behalf of Defendant Delano Farms Company. D. Greg Durbin and Laura Wolfe appeared on behalf of the remaining Defendants.
The matter is submitted and stands ready for adjudication. The Court herein sets forth its findings and conclusions with respect to the requested enhancement awards, attorney's fees, and costs. These findings and conclusions will be expressly incorporated in the Court's final order and judgment.
The Settlement Agreement requires Defendants to pay a total of $6,000,000.00 into a Qualified Settlement Fund ("QSF"). The following amounts are expected to be deducted or set aside from the QSF prior to any payments on class members' claims:
The remaining net settlement fund is estimated to be $3,501,710.83. This amount will be distributed to the approximately 5,656 class members who have submitted claims forms. Accordingly, the average recovery for each class member is approximately $619.11.
To the extent taxes and administration costs are lower than estimated, the difference will be distributed to class members in a supplemental payment.
"Incentive awards are fairly typical in class action cases."
In the Ninth Circuit, $5,000 is considered presumptively reasonable for an incentive award.
The issue of enhancement awards has been a matter of some dispute and discussion in this matter. Four of the representative plaintiffs initially refused to sign the settlement agreement. Mr. Arredondo, Ms. Irma Landeros, Ms. Rosalba Landeros, and Mr. Gomez sought enhancement awards of $50,000 each. (ECF No. 469.) After some discussion between counsel and client and discussions in open court, the involved parties agreed to proceed with the proposed settlement while, apparently, reserving the right to seek additional enhancements later. (ECF Nos. 476, 478, 484.) They have done so here.
The Court preliminarily approved $37,000 in enhancement awards as set out in the settlement agreement
In declarations submitted with the motion for final approval, the five
Defendants object to any increase. They argue that the increased enhancement, if granted, would represent too large a share of the settlement fund and would produce a grossly disproportionate recovery for the representatives as compared to class members. They argue that the hours allegedly spent and the requested rate of compensation appears inflated. They opine that such increased requests may require re-notification to the class. Finally, and most significantly, they argue that the requests are outside the scope of what has been found to be reasonable in other cases and are unlikely to withstand scrutiny.
The Court begins its analysis by recognizing the significant contributions of the representative plaintiffs in this action, and particularly the
However, as also previously indicated and discussed with the representatives in open Court, the Court believes it cannot in good faith increase the amount awarded. An enhancement award of $77,000 would constitute 2.2% of the net settlement fund. An award of $127,000 would constitute 3.6% of the net settlement fund. These awards would result in a recovery for the representative plaintiffs that is 24 to 40 times greater than that of the average class member. The requested amounts are simply out of proportion with the size of the common fund and the recovery of the class as a whole.
It is recognition of the
Accordingly, the Court will award $7,000 in enhancement payments to each of the
Class counsel requests an award of $1,500,000 in attorney's fees. (ECF No. 501.) They also request that any unclaimed funds and any refunded taxes on those funds be distributed to counsel as fees, so long as such distribution, when combined with the $1,500,000 fee award, does not exceed 33% of the settlement fund. Counsel estimates that such unclaimed funds and associated taxes will not exceed $50,000. The Court will first address the $1,500,000 request alone.
Attorney's fees "authorized by law or by the parties' agreement" may be awarded pursuant to Rule 23(h). However, the court "ha[s] an independent obligation to ensure that the award [of attorney's fees], like the settlement itself, is reasonable, even if the parties have already agreed to an amount."
Where, as here, fees are to be paid from a common fund, the relationship between the class members and class counsel "turns adversarial."
The Ninth Circuit has approved two methods of evaluating requests for attorney's fees in cases where the attorney's fee award is taken from the common fund: the "percentage of the fund" method and the "lodestar" method.
Because this case involves a common settlement fund with an easily quantifiable benefit to the class, the Court first will evaluate attorney's fees using the percentage of fund method, but will cross-check the reasonableness of that award by applying a lodestar analysis.
Under the percentage of the fund method, the court may award class counsel a given percentage of the common fund recovered for the class. The percentage method is particularly appropriate in common fund cases because "the benefit to the class is easily quantified."
To assess whether the percentage requested is reasonable, courts may consider a number of factors, including "the extent to which class counsel achieved exceptional results for the class, whether the case was risky for class counsel, whether counsel's performance generated benefits beyond the cash settlement fund, the market rate for the particular field of law (in some circumstances), the burdens class counsel experienced while litigating the case (e.g., cost, duration, foregoing other work), and whether the case was handled on a contingency basis."
Here, the requested award of $1,500,000 is 25 percent of the common fund and therefore presumptively reasonable. The results obtained and amount of work counsel performed on this case support the benchmark award.
There is ample support for an award of 25% of the common fund.
There is a strong presumption that the lodestar is a reasonable fee.
To determine a reasonable hourly rate, the Court must examine "the prevailing market rates in the community charged for similar services by lawyers of reasonably comparable skill, experience, and reputation."
In the Sacramento Division of the Eastern District of California, the Court recently calculated the lodestar in a wage and hour class action using $400 as the hourly rate for more seasoned attorneys and $175 as the rate for associate attorneys.
Current class counsel submits time records showing 11,730 hours of work (inclusive of paralegal time) and $4,434,941.00 in fees.
The hourly rates charged are substantially in excess of those charged by competent attorneys in the Fresno Division. Nonetheless, the Court can envision no reduction in hours, downward adjustment of rates, or other modification which would result in a lodestar less than the requested $1,500,000 in fees. Assuming the documented 9,381.53 hours of attorney time claimed by the Martinez and Ball & York firms were reasonably expended, the $1,500,000 award would result in an average hourly rate for them of only $160 per hour, before taking into account paralegal time or estimated hours by Mr. Callaham. This is lower than competent attorneys in this Division charge for standard hourly work and certainly provides no extra compensation for the risk involved in a contingency fee case such as this. Additionally, former class counsel has submitted a notice of claim for attorney's fees in relation to the fee allocation dispute. (ECF Nos. 493-95, 499, 506.) Without resolving the competing claims or commenting on their propriety, adding all attorney hours and dividing them into the $1.5M would result in an average hourly rate of approximately $100.
The requested fees are well within the range of any reasonable lodestar calculation. They will be awarded in full.
As stated, Class Counsel requests that any unclaimed funds and any refunded taxes on those funds be distributed to counsel as attorney's fees, so long as such distribution, when combined with the $1,500,000 fee award, does not exceed 33% of the settlement fund. In essence, counsel asks the Court to award up to $480,000 in additional attorney's fees, even though they estimate the unclaimed funds and associated taxes to amount to less than $50,000.
Based on the analysis in the preceding section, the Court finds that an award of up to and even exceeding $50,000 in additional attorney's fees would certainly be reasonable. Such an increase would be negligible under the percentage of fund method and fully supported by any reasonable lodestar calculation. The Court, however, is not prepared at this juncture to approve in advance payment over to counsel of amounts in excess of $50,000 without knowing how much in excess they may be. Thus, any amount of unclaimed funds and taxes in excess of $50,000 shall be held in the Qualified Settlement Fund for distribution by order of the Court on motion made once the amount thereof is finally determined.
As noted, former class counsel has also submitted claims for attorney's fees. (ECF Nos. 493-95, 499, 506.) They do not seek fees in addition to the $1,500,000 awarded herein, but rather a share of that award. (
On August 23, 2017, the Court directed the parties to brief the issue of whether it could proceed to address the motion for final approval of settlement before determining how fees are to be distributed among counsel. (ECF No. 504.) All agreed, and the Court has concluded, that it may so proceed. The Court has entered a separate order providing for the parties to propose procedures for resolution of class counsel's various fee claims after final approval of the settlement. (ECF No. 517.) The final approval order will expressly retain continuing jurisdiction over these claims. Thus, they are not addressed further herein.
Plaintiffs request the reimbursement of costs incurred by five law firms that represented Plaintiffs during the lengthy course of this action. Each firm's request is addressed in turn.
"[I]t is the duty of this Court to ensure that any costs awarded from the common fund are reasonable."
On September 15, 2017, after having preliminarily reviewed the request for reimbursement of costs, the Court ordered counsel to supplement their requests by identifying, by date, description, and amount sought, all costs associated with the failed, apparently falsified, survey conducted by California Survey Research Services, including costs of the survey, depositions, expert services, travel expenses, copying and messenger services, or any other costs associated therewith or occasioned thereby. For each such expense, counsel was ordered to indicate when the expense was incurred in relation to which stage of the survey. Counsel also was ordered to provide a declaration stating whether any reimbursements were sought or received in relation to this survey. (ECF No. 522.)
Each firm responded to this request on September 19, 2017. (ECF Nos. 524-29.) Martinez, Aguilasoch & Lynch identified $4,640.28 in costs relating to the failed survey. (ECF No. 527.) Wilcoxen Callaham, LLP, identified $33,400 in such costs. (ECF No. 528.) Ball & Yorke identified $57,131.40 in such costs, although $21,888.00 was incurred in relation to analysis of Defendants' Pilot Study, prior to the survey. (ECF No. 529.) Wasserman, Comden & Casselman, LLP, identified no such costs and they apparently were no longer counsel for the class at the time of the failed survey. (
Allen R. Ball, current class counsel, has provided a declaration stating that, on March 30, 2017, he filed suit in Los Angeles County Superior Court in relation to the failed survey.
It appears to the Court that sums paid for the failed survey were paid in good faith and for the benefit of the class. Given the reassurance of counsel about payment to the class of amounts recovered in the Superior Court action, no double recovery will accrue to counsel if the costs are awarded as requested. Accordingly, the Court finds that the costs of the failed survey are recoverable by counsel here.
The Martinez firm requests reimbursement of $21,977.40 in costs incurred in relation to this action.
The requested amount of $21,977.40 will be granted in full.
The Wilcoxen firm requests reimbursement of $96,223.87 in costs incurred in relation to this action. Nearly half of these costs are attributable to various expert expenses. The remaining costs are primarily attributable to deposition transcripts (over $14,000), mediation fees (over $14,000), and minimal travel expenses ($3,283.97).
In its September 15, 2017 order, the Court invited counsel to provide further support for $10,573.38 in unspecified costs from Jay-Allen Eisen Law Group. (ECF No. 522.) Counsel since has explained that these costs were incurred
(ECF No. 528 at 2-3.)
In light of this explanation, the costs attributable to Jay-Allen Eisen Law Group are reasonable, as are the remainder of the requested costs. The requested amount of $96,223.87 will be granted in full.
The Law Office of Ball & Yorke requests reimbursement of $96,055.48 in costs incurred in this action. (ECF No. 501-1 at 60-62, 531.)
The costs requested are reasonable. Nearly $16,000 is attributable to deposition transcripts. Based on the invoice numbers provided with counsel's supplemental declaration (ECF No. 529), it appears the cost of transcripts was split with co-counsel. Substantial additional expenses — over $77,000 are attributable to the services of various experts, consultants, and surveyors (including the aforementioned failed survey). The remaining costs are primarily attributable to minimal travel expenses.
The Court finds the amounts requested are reasonable and the request for $96,055.48 in costs will be granted in full.
Myers Widders requests $122,808.09 in costs.
The Court invited the firm to provide further support for nearly $75,000 in unspecified professional services from Morrison & Foerster LLP. Kelton Lee Gibson of Myers Widders explains, through his declaration, that these costs were incurred for expert witness services provided by Lloyd W. Aubry, Jr., for purposes of establishing that Defendant Delano Farms jointly employed the class along with the farm labor contractor defendants. Mr. Aubrey billed for 106.5 hours at a rate between $675 and $705 per hour. He also billed approximately $419.78 in costs associated with his services. Having reviewed the declaration and associated billing, the Court has determined that, while retention of such an expert was reasonable, the costs expended here were excessive. Some might suggest that the expert fee was adequate to cover the entire cost of litigating the issue the expert addressed. Given its size, one might ask why both the expert and the Plaintiff's attorneys were necessary. Or, perhaps the expert's billing should have been challenged and reduced. Regardless of the answers to the foregoing queries, as noted above, other courts have determined that a reasonable rate for a seasoned attorney in the Sacramento Division (where Mr. Aubry ultimately testified) is $400 per hour.
The firm also was invited to provide further support for travel-related costs. Attorneys Gregory J. Ramirez and James E. Perero incurred travel costs in the amount of $15,044.05. The Court's review of the nature and extent of the individual costs leads it to conclude that, although actually incurred, some were incurred at a rate greater than necessary and with little regard for the needs of the firm's clients. For example, counsel enjoyed more than one sushi dinner in excess of $50
In sum, Myers Widders will be awarded costs in the reduced amount of $100,216.17.
Wasserman requests $171,299.47 in costs.
The travel costs billed by Wasserman reflect an even more profound resort to luxury than those incurred by Myers Widders. To illustrate by example, the Court refers to the $7,039.55 in expenses incurred by the firm in relation to attendance at the September 2011 mediation. The firm was invited to provide additional support for these costs. They did so. Review of those records demonstrates:
Again, contrast is telling: The representative Plaintiffs travelled to San Francisco to attend a mediation in 2016. There, they shared hotel rooms at an average rate of $147 per person per night. (ECF No. 523-1 at 23.) And, as stated, their meals rarely, if ever, exceeded $15 per person. In contrast to the $7,039.55 spent by Wasserman, the Martinez firm spent approximately $1,655 for a very similar trip.
These travel costs are far outside the scope of what is recoverable in this action.
Such excessive costs cast serious doubt on the reasonableness of the firm's cost billing. An additional area of concern is copying and printings costs which, by the Court's calculation, amount to $6,641.12 of the firm's request. Only minimal detail is provided regarding what was copied, and nothing about the number of pages or the rate per page. Although this case has involved substantial briefing, investigation, and discovery, the charges nonetheless appear high. Given the skepticism raised by excessive travel cost charges and the meager explanation given for copying costs, the court will reduce them by 25%.
In sum, Wasserman will be awarded costs in the reduced amount of $161,816.25.
The total cost award in this action shall be $476,289.17, to be awarded as follows:
Based on the foregoing, the following deductions from the QSF will be incorporated into the final approval order:
IT IS SO ORDERED.
It also appears that other duplicate charges may plague the billing. For example, on March 12, 2010, the firm incurred two identical charges of $276.82 from two different sources for meals for two attorneys, for a total of $553.64 in meals. As no further detail regarding these charges is provided, the Court is unable to evaluate their legitimacy.