MORRISON C. ENGLAND, Jr., District Judge.
By way of this wage and hour class action, Plaintiff Steve Turk—individually and on behalf of others similarly situated—asserts seven causes of action against Defendants Gale/Triangle, Inc. and Performance Team Freight Systems, Inc (collectively, "Defendants") stemming from Defendants' alleged failure to provide meal and rest periods as well as proper wages and wage statements to its employees, in violation of California labor laws and California's Unfair Competition Law, Bus. & Prof. Code § 17200
Defendants are engaged in the transportation industry and employed Plaintiff and the Settlement Class Members as truck drivers and/or yard goats. Plaintiff alleges that Defendants violated the California Labor Code by failing to pay Plaintiff and the Class for hours worked during rest periods and nonproductive time, failing to provide meal and rest periods, failing to issue accurate wage statements, and failing to pay wages due at termination. Plaintiff additionally alleges a violation of California's Unfair Competition Law. Defendants deny these claims.
As described in the parties' present Joint Motion as well as in their Motion for Preliminary Approval, ECF No. 8, the parties engaged in significant discovery over the course of the three years this case has been pending. In addition to formal discovery, the parties informally exchanged a great deal of information in preparation for mediation. Intensive, arms-length mediation with a nationally recognized mediator took place over one full day and resulted in a broad agreement to resolve the pending dispute. That broad agreement materialized into the present Settlement Agreement which was preliminarily approved by the Court in November 2016.
The proposed Settlement will resolve the wage and hour class action claims set forth in Plaintiff's First Amended Complaint for Plaintiff Turk and 364 other similarly situated employees of Defendants ("the Settlement Class" or "Settlement Class Members"). As provided in the Court's Order Granting the parties' Stipulation to Modify and Preserve the Settlement Agreement, ECF No. 23, the Settlement Class is made up of "any and all individuals who were employed by either defendant at any time, and for any period, in California as a driver of trucks or yard goats, between April 15, 2010 and April 20, 2016."
Under the terms of the Settlement Agreement, Defendants have agreed to pay a Gross Settlement Amount ("GSA") of $650,000, which funds will be distributed with no reversion to Defendants. Attorneys' fees ($195,000), litigation costs ($17,925), the enhancement to Plaintiff Turk as the class representative ($10,000), settlement administration costs ($9,499), and California Private Attorneys General Act of 2004 ("PAGA") allocation to California Labor and Workforce Development Agency ("LWDA") ($7,500) will be deducted from the GSA, resulting in a Net Settlement Value ("NSV") of $410,076. Each Settlement Class Members' share of the NSV is based on the number of weeks worked, which number has not been disputed by any of the Class Members. The average Settlement Class Member is estimated to receive over $1,100, and the highest individual settlement is estimated at $9,817.02. The parties have executed the Court-approved plan for providing notice to the class, and the response of the Settlement Class Members was positive, with zero Class Members objecting to the terms of the Settlement and only four opting out.
Federal Rule of Civil Procedure 23(e) provides that "[t]he claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval." Fed. R. Civ. P. 23(e). "[I]n the context of a case in which the parties reach a settlement agreement prior to class certification, courts must peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement."
With regard to the settlement agreement itself, "[t]he `universally applied standard' in determining whether a court should grant final approval to a class action settlement is whether the settlement is `fundamentally fair, adequate, and reasonable.'"
Additionally, the Court must ensure that "the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties . . . ."
Based on the facts described above and the Court's weighing of the strength of the case, the risks of litigation, and the costs of continued litigation—and especially in light of the fact that (1) the proposed Settlement Agreement emerged after extensive discovery and a day long arms-length mediation, and (2) no Class Member has filed objections and only four have opted out—the Court finds the terms of the Settlement Agreement to be fair, reasonable, and adequate. Moreover, "With regard to class action settlements, the opinions of counsel should be given considerable weight both because of counsel's familiarity with this litigation and previous experience with cases."
Likewise, the Court finds the proposed payment of $9,499 to the Settlement Administrator and $7,500 of the PAGA allocation to LWDA to be fair, reasonable, and in line with similar awards in other cases. The Court therefore GRANTS final approval of the Settlement Agreement.
Where the payment of attorneys' fees is part of the negotiated settlement, the fee settlement must be evaluated for fairness in the context of the overall settlement.
Under the percentage-of-recovery method, the prevailing attorneys are awarded a percentage of the common fund recovered for the class.
Under the lodestar method, the prevailing attorneys are awarded an amount calculated by multiplying the hours they reasonably expended on the litigation times their reasonable hourly rates.
Regardless of whether the court uses the percentage approach or the lodestar method, the main inquiry is whether the end result is reasonable.
Here, Plaintiff's counsel seeks an award of $195,000, which amounts to 30% of the GSA. Based on the Court's review of the case, the positive results received after three years of litigation that included extensive discovery and mediation, the risks taken on by counsel (and specifically, by accepting the case on contingency), and the experience and skill of counsel, the Court finds this award to be fair and reasonable. Though 30% represents the higher end of what is typically deemed acceptable in other cases applying the percent-of-recovery method, the Court finds a 5% increase from the standard 25% benchmark is warranted under the circumstances. Moreover, a comparison to awards typically made in common fund cases suggests that an award of 30% is appropriate here.
Applying a roughly calculated lodestar crosscheck confirms that the requested amount is fair and reasonable. At the time of briefing, counsel had expended 513.95 hours of attorney work on this case. Those hours, counsel claims, were "necessary to achieve the highly favorable result attained for the Class Members." Mot. Attys' Fees at 10. The Court has no reason to believe a favorable result could have been achieved in less time, nor is there any indication that counsel spent unnecessary time on the case.
As for counsel's hourly rates, a range of $300 per hour for associates to $800 per hour for the most senior partner is high in this district.
For these reasons, 30% of the common fund, or $195,000, is a fair and reasonable attorneys' fees award in this case.
Counsel additionally requests reimbursement of litigation costs in the amount of $17,925. Counsel represents that all costs are related to this litigation including filing fees, travel, mediation fees, copy fees, and postage. Mot. Attys Fees at 11. As $17,925 falls well below the $30,000 limit on costs to which the parties agreed in the Settlement, the Court finds these fees to be reasonable and therefore reimbursable.
Finally, the Plaintiff requests an incentive payment of $10,000 for Representative Plaintiff Turk. Based on counsel's representations that Plaintiff Turk has been involved in every step of the litigation, has been cooperative and helpful in gathering facts and support, and has taken on a risk by suing his former employer, the Court finds this enhancement also to be fair and reasonable. Moreover, as with the attorneys' fees request, Defendants have agreed to the award and no Class Member has objected. As such, the Court approves an incentive payment of $10,000 to Plaintiff Turk.
For the reasons set forth above, the parties' Joint Motion for Final Approval of Settlement, ECF No. 25, is GRANTED and Plaintiff's Motion for Attorneys' Fees, ECF No. 24, is GRANTED as requested.
IT IS SO ORDERED.