noting that “courts often apply the Rule 23 factors for 1 assessing proposed class action settlements when evaluating the fairness of an FLSA 2 settlement, while recognizing that some of those factors do not apply because of the 3 inherent differences between class actions and FLSA actions”
How later courts described this case
- noting that “courts often apply the Rule 23 factors for 1 assessing proposed class action settlements when evaluating the fairness of an FLSA 2 settlement, while recognizing that some of those factors do not apply because of the 3 inherent differences between class actions and FLSA actions”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
10
11 MONICA SMITH and ERIKA SIERRA, Case No.: 18-cv-00780-KSC
individually and on behalf of all others
12
similarly situated individuals, ORDER
13
Plaintiffs,
(1) GRANTING FINAL APPROVAL
14
v. OF CLASS/ COLLECTIVE ACTION
15 SETTLEMENT; and
KAISER FOUNDATION HOSPITALS, a
16 California corporation,
(2) GRANTING MOTION FOR
17 Defendant. ATTORNEYS’ FEES, LITIGATION
COSTS, CLASS REPRESENTATIVE
18
INCENTIVE AWARDS AND
19 SETTLEMENT ADMINISTRATION
EXPENSES
20
21 [Doc. Nos. 86, 92]
22
23 Before the Court are plaintiffs’ Motion for Final Approval of Class/Collective
24 Action Settlement (the “Final Approval Motion,” Doc. No. 92) and Motion for Attorneys’
25 Fees, Litigation Costs, Class Representative Incentive Awards, and Settlement
26 Administration Expenses (the “Fee Motion,” Doc. No. 86, and collectively the “Motions”).
27 The Motions are unopposed. The Court heard oral argument on the Motions on June 9,
28 2021 (the “Fairness Hearing”). The Court has carefully considered the parties’ moving
1 papers, the arguments of counsel, and the applicable law. For the reasons stated below, the
2 Court finds the proposed settlement is fair, reasonable, and adequate, and GRANTS the
3 Final Approval Motion. The Court further finds that that the attorneys’ fees and other
4 expenditures from the common fund are reasonable, and GRANTS the Fee Motion.
5 I. BACKGROUND
6 A. Plaintiffs’ Allegations
7 Plaintiffs Monica Smith and Erika Sierra (“plaintiffs”) filed this action individually
8 and on behalf of similarly-situated employees of defendant Kaiser Foundation Hospitals
9 (“defendant”), alleging that defendant violated the Fair Labor Standards Act (“FLSA”) and
10 California wage and hour laws. See generally Doc. No. 1 (complaint); Doc. No. 70
11 (amended complaint). The Court has previously described plaintiffs’ allegations in detail
12 and presumes familiarity with the facts of the case. Briefly stated, defendant employs
13 “Telemedicine Specialists,” “Customer Support Specialists,” and “Wellness Specialists”
14 to receive and respond to call center calls. Plaintiffs allege that defendant, in violation of
15 federal and state labor laws, failed to compensate these employees for certain tasks
16 performed at the start of each shift, during their off-the-clock breaks, and at the end of their
17 shift. The allegedly uncompensated tasks included, inter alia, starting up and shutting
18 down computers, logging into and out of applications, locating equipment, shredding
19 patient notes, and traveling to defendant’s offices for training, meetings, and to pick up
20 equipment. Plaintiffs further allege that defendant failed to reimburse employees for
21 necessary business expenditures.
22 B. Procedural History
23 On February 13, 2019, following the exchange of “voluminous” information
24 between the parties and two full-day sessions facilitated by a third-party mediator, the
25 parties reached an agreement in principle to settle. Doc. No. 92-1 at 10-11; see also Doc.
26 No. 65 (Notice of Settlement). Thereafter, plaintiffs twice moved for preliminary approval
27 of the settlement. See Doc. Nos. 67, 72, 78, 81. The Court denied those motions, citing
28 concerns with the structure of the settlement, the scope of the proposed FLSA collective,
1 failure to obtain proper consent for settlement of the FLSA claims, and inadequate notice.
2 See, e.g., Doc. No. 72 at 18-23; Doc. No. 81 at 29, 31-33. The Court required plaintiffs to
3 remedy these deficiencies in any renewed motion for preliminary approval.
4 On October 6, 2020, plaintiffs moved for a third time for preliminary settlement
5 approval. Doc. No. 82. The renewed motion was supported by a Second Amended
6 Collective and Class Action Settlement Agreement1 and an amended proposed notice. See
7 generally id. Upon review of plaintiffs’ renewed motion and supporting documents, the
8 Court found that plaintiffs had “addressed all the deficiencies and concerns previously
9 identified by the Court and have made all appropriate amendments and corrections to the
10 Second Amended Agreement and the Amended Notice.” Doc. No. 84 at 2. The Court
11 therefore preliminarily approved the settlement, provisionally certified the Class and the
12 Collective,2 and directed that notice be mailed to each member of the Settlement Class. Id.
13 The Court set a date for the Fairness Hearing and ordered that any objections to the
14 settlement be filed with the Court no later than April 19, 2021. Id. at 3.
15 The Fairness Hearing took place on June 9, 2021. All parties were represented by
16 counsel. No class members filed objections to the settlement nor appeared at the Fairness
17 Hearing. See Doc. No. 92-1 at 28; Doc. No. 95 at 3. Only six of the 474 Class or Collective
18 members requested exclusion. See id.
19 C. The Settlement
20 The Settlement Agreement provides that defendant will pay a gross settlement
21 amount of $1,475,000 (plus all applicable employer-side payroll taxes).3 Subject to the
22
23
24
1 The Court will hereafter refer to this document, which was attached to the motion for preliminary
25 approval and to the Final Approval Motion, as the “Settlement Agreement.” See Doc. Nos. 82-1, 92-2.
All citations to the Settlement Agreement are to the numbered paragraphs therein.
26
2 The Court will hereafter refer to the Class and the Collective jointly as the “Settlement Class.” See Doc.
27 No. 92-2 at ¶1.39.
28 3 The Court will hereafter refer to this as the “Gross Settlement Amount” or the “Settlement Funds.”
1 Court’s approval, the following amounts are to be deducted from the Gross Settlement
2 Amount:
3 Class Counsel’s Fees $442,500.00
4 Class Counsel’s Costs $55,000.00
5 Service Awards $15,000.00
6 Settlement Administration Costs $9,900.004
7 PAGA Payment $30,000.00
8
9 See Doc. No. 92-2 at ¶¶1.25, 5.1, 5.2, 5.3, 5.4. The remaining $922,600.00 (the “Net
10 Settlement Amount”) will be distributed to members of the Settlement Class. Id. at ¶1.25.
11 The parties have allocated $203,142.50 of the Net Settlement Amount to the FLSA
12 Collective, to be distributed to its members according to the following formula:
13
The FLSA Settlement Payment to a FLSA Collective Member will be
14 calculated by dividing the number of Eligible Workweeks attributed to the
FLSA Collective Member worked during the Collective Period by all Eligible
15
Workweeks during the Collective Period attributed to members of the FLSA
16 Collective, multiplied by $203,142.50. Otherwise stated, the formula for a
FLSA Collective Member is: (individual’s Eligible Workweeks ÷ total FLSA
17
Collective Eligible Workweeks) x $203,142.50.
18
The number of Eligible Workweeks for Telemedicine Specialists shall be
19 multiplied by 2.4, because they earned, on average, 2.4 times the amount
earned by other FLSA Collective Members. Otherwise stated, the formula for
20
a FLSA Collective Member who worked as a Telemedicine Specialist is:
21 ((individual Eligible Workweeks x 2.4) ÷ total FLSA Collective Eligible
Workweeks) x $203,142.50.
22
23 Doc. No. 92-2 at ¶5.5.1.
24
25
26
27 4 At the time plaintiffs filed their Final Approval Motion, they estimated the Settlement Administration
Costs would not exceed $15,000. Doc. No. 92-1 at 23. Plaintiffs recently reported that their counsel’s
28
1 The parties have allocated all remaining funds (i.e., the Net Settlement Amount
2 minus the $203,142.50 allocated to the FLSA Collective) to the Settlement Class, to be
3 distributed to its members according to the following formula:
4
The individual settlement payment to a Settlement Class Member will be
5 calculated by dividing the number of Eligible Workweeks attributed to the
Settlement Class Member worked during the Class Period by all Eligible
6
Workweeks during the Class Period attributed to members of the Settlement
7 Class, multiplied by the Net Settlement Amount (after reduction of the
$203,142.50 attributed to FLSA Collective Members). Otherwise stated, the
8
formula for a Class Member is: (individual’s Eligible Workweeks ÷ total
9 Settlement Class Eligible Workweeks) x (Net Settlement Amount -
$203,142.50).
10
The number of Eligible Workweeks for Telemedicine Specialists shall be
11 multiplied by 2.4, because they earned, on average, 2.4 times the amount
12 earned by other Settlement Class Members. Otherwise stated, the formula for
a Class Member who worked as a Telemedicine Specialist is: ((individual
13 Eligible Workweeks x 2.4) ÷ total Settlement Class Eligible Workweeks) x
14 (Net Settlement Amount - $203,142.50).
15 Doc. No. 92-2 at ¶5.6.1.
16 Each eligible Settlement Class member will automatically receive a check for the
17 appropriate amount(s) based on these formulas. Any distribution checks not cashed within
18 the timeframes set forth in the Agreement will be cancelled. Id. at ¶5.6.2. If the total
19 amount of cancelled settlement distributions is greater than $5,000, those funds will be re-
20 distributed pro rata to members of the Settlement Class who cashed the first distribution
21 check, and otherwise will be paid to California Rural Legal Assistance, Inc. Id.
22 In exchange for the Gross Settlement Amount, plaintiffs and all other members of
23 the Settlement Class agree to release any and all claims that “relate in any way” to the
24 allegations in the Complaint, including defendant’s alleged violations of California’s Labor
25 Code and unfair competition laws, and further agree to a general release of claims under
26 California Civil Code § 1542. See id. at ¶¶6.1, 6.3. The members of the FLSA Collective
27 further agree to release claims related to the allegations in the complaint arising under the
28 FLSA. Id. at ¶6.2. Ms. Smith and Ms. Sierra, as class representatives, generally release
1 all claims against defendant arising out of their relationship with defendant, not including
2 any claims arising out of their participation in this lawsuit. Id. at ¶6.4.
3 II. THE SETTLEMENT CLASS WILL BE CERTIFIED
4 The Court begins with plaintiffs’ request that it “confirm as final” the certification
5 of the Class (including appointment of the class representatives and class counsel) and the
6 designation of the action as a collective action under the FLSA. Doc. No. 92-1 at 8. To
7 do so, the Court must ascertain whether the Class satisfies the “four threshold requirements
8 of … Rule 23(a): numerosity, commonality, typicality, and adequacy of representation,”
9 as well as the requirements of one of the subsections of Rule 23(b). Leyva v. Medline
10 Indus. Inc., 716 F.3d 510, 512 (9th Cir. 2013) (quoting Fed. R. Civ. P. 23). The Court
11 provisionally certified the Class when it preliminarily approved the settlement and is not
12 aware of any reason to depart from its prior analysis. Nevertheless, the Court addresses
13 each of the relevant requirements here.
14 A. Numerosity
15 Rule 23(a)’s numerosity requirement is satisfied where the class is “so numerous
16 that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). The Rule “provides
17 no bright-line test or minimum number of class members necessary to meet the numerosity
18 requirement,” although many courts have adopted a “rule of thumb” that a proposed class
19 of more than 40 persons is sufficiently numerous. A.R. ex rel. Legaard v. Providence
20 Health Plan, 300 F.R.D. 474, 480 (D. Or. 2013) (citations omitted). Here, the Class
21 consists of “approximately [468]5 hourly Telemedicine Specialists, Customer Support
22 Specialists, and Wellness Specialists.” Doc. No. 92-1 at 7. Joinder of all these potential
23 plaintiffs would be impracticable. Accordingly, the Court finds the numerosity
24 requirement is met.
25 ///
26
27
5 This number has been revised to reflect the six opt-outs. See Doc. No. 95 at 3 (“As of this date, there
28
1 B. Commonality
2 Rule 23(a)’s commonality requirement is satisfied where “there are questions of law
3 or fact common to the class.” Fed. R. Civ. P. 23(a)(2). A single common issue will suffice.
4 See Jimenez v. Allstate Ins. Co., 765 F.3d 1161, 1165 (9th Cir. 2014) (collecting cases).
5 Here, the class members’ claims involve common questions of law and fact regarding
6 whether defendant’s official or unofficial policies resulted in underpayment of work
7 performed by Class members, and whether defendant issued wage statements that did not
8 comply with California law. The answers to these questions would “‘resolve … issue[s]
9 that [are] central to the validity of each one of the claims in one stroke.’” Id. (citations
10 omitted). Accordingly, the Court finds the commonality requirement is satisfied.
11 C. Typicality
12 Rule 23(a) also requires that “the claims or defenses of the representative parties are
13 typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “‘The test of
14 typicality is whether other members have the same or similar injury, whether the action is
15 based on conduct which is not unique to the named plaintiffs, and whether other class
16 members have been injured by the same course of conduct.’” Ellis v. Costco Wholesale
17 Corp., 657 F.3d 970, 984 (9th Cir. 2011) (citation omitted). Here, the claims of the named
18 plaintiffs (and proposed class representatives) arise out of the same course of conduct and
19 resulted in the same injuries as those of the subclasses they seek to represent. The wrongful
20 conduct alleged in the complaint is not unique to the named plaintiffs, and the damages to
21 the class members, if any, arise out of the non-payment of wages for time spent on required
22 job functions at the beginning, middle, and end of their shifts and failure to provide accurate
23 wage statements. The Court finds the typicality requirement is satisfied.
24 D. Adequacy
25 Rule 23(a)’s final requirement is that “the representative parties will fairly and
26 adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). To determine
27 whether this requirement is met, the Court must assess whether (1) the interests of the class
28 representatives and their counsel conflict with those of other class members and (2)
1 whether the class representatives and their counsel will prosecute the action vigorously on
2 behalf of the class. See Ellis, 657 F.3d at 985. “These inquiries require the court to consider
3 a number of factors, including ‘the qualifications of counsel for the representatives, an
4 absence of antagonism, a sharing of interests between representatives and absentees, and
5 the unlikelihood that the suit is collusive.’” Ontiveros v. Zamora, 303 F.R.D 356, 364 (E.D.
6 Cal. 2014) (quoting Brown v. Ticor Title Ins. Co., 982 F.2d 386, 390 (9th Cir. 1992)).
7 The Court finds that the proposed class representatives and their counsel have
8 vigorously prosecuted this action, leading ultimately to the settlement now before it, and
9 have faithfully discharged their duties as fiduciaries to the absent class members. The
10 Court finds no evidence of collusion or antagonism. Furthermore, counsel for the class is
11 experienced in employment litigation, and has successfully litigated numerous wage-and-
12 hour class actions such as this one. Therefore, the Court finds this requirement has been
13 satisfied.
14 E. Rule 23(b)(3) – Superiority and Predominance
15 In addition to “satisfy[ing] each prerequisite of Rule 23(a),” a party seeking class
16 certification must also “establish an appropriate ground for maintaining the class action
17 under Rule 23(b).” Walker v. Life Ins. Co. of the S.W., 953 F.3d 624, 630 (9th Cir. 2020).
18 Here, plaintiffs seek certification under Rule 23(b)(3), which permits certification where
19 “the [C]ourt finds that the questions of law or fact common to class members predominate
20 over any questions affecting only individual members, and that a class action is superior to
21 other available methods for fairly and efficiently adjudicating the controversy.” Fed. R.
22 Civ. P. 23(b)(3).
23 The predominance inquiry asks whether a proposed class is “sufficiently cohesive
24 to warrant adjudication by representation.” Walker, 953 F.3d at 630 (citations omitted).
25 The Court should answer in the affirmative where there are significant, common questions
26 that “can be resolved in a single adjudication” and there is “a clear justification” for
27 adjudication on a representative, rather than individual, basis. See id. “Rule 23(b)(3)’s
28 superiority test requires the court to determine whether maintenance of this litigation as a
1 class action is efficient and whether it is fair.” Wolin v. Jaguar Land Rover N. Am., LLC,
2 617 F.3d 1168, 1175–76 (9th Cir. 2010). “In the settlement context,” however, the Court
3 “‘need not inquire whether the case, if tried, would present intractable management
4 problems.’” Jabbari v. Farmer, 965 F.3d 1001, 1007 (9th Cir. 2020) (citation omitted).
5 The Court reaffirms its findings that the requirements of superiority and
6 predominance have been satisfied here. See Doc. No. 81 at 14. The Court’s conclusions
7 that resolution of the significant and common questions regarding defendant’s conduct and
8 whether that conduct violated the law would “drive” resolution of the class members’
9 claims, and that classwide adjudication of those claims was superior considering “the
10 relatively limited potential recovery for the class members as compared with the costs of
11 litigating the claims,” remain unchanged. Id.
12 F. Certification of the Settlement Class Is Appropriate
13 Having found the requirements of Rule 23(a) and (b)(3) are met, the Court certifies
14 the following class for settlement purposes:
15 All current and former employees who, between February 21, 2013 and
16 February 18, 2021, worked for Kaiser Foundation Hospitals at its San Diego,
California location, with the job title of Customer Support Specialist,
17 Wellness Specialist, or Telemedicine Specialist, in job codes 20005, 50278,
18 and 20186, and did not timely file a request for exclusion from the class.
19 See Doc. No. 92-1 at 19; Doc. No. 92-2 at ¶1.6; Doc. No. 94-4 at 13. Named plaintiffs
20 Monica Smith and Erika Sierra are appointed class representatives, and will hereafter be
21 referred to collectively as the “Class Representatives.” Finkelstein & Krinsk, LLP and
22 Sommers Schwartz, P.C. are jointly appointed to represent the class, and will hereafter be
23 referred to collectively as Class Counsel.
24 The Court further finds that the FLSA’s less stringent requirement that the members
25 of the proposed collective be “similarly situated” is satisfied. See 29 U.S.C. § 216(b).
26 Plaintiffs “are similarly situated, and may proceed in a collective, to the extent they share
27 a similar issue of law or fact material to the disposition of their FLSA claims.” Campbell
28 v. City of Los Angeles, 903 F.3d 1090, 1117 (9th Cir. 2018). For the same reasons the
1 Court finds that the proposed Class may be certified pursuant to Rule 23, the Court finds
2 plaintiffs are similarly situated with respect to other members of the proposed collective.
3 Accordingly, the Court designates the following FLSA collective for the purposes of
4 settlement:
5 All current and former employees who, between December 21, 2014 and
6 February 18, 2021, worked for Kaiser Foundation Hospitals at its San Diego,
California location, with the job title of Customer Support Specialist,
7 Wellness Specialist, or Telemedicine Specialist, in job codes 20005, 50278,
8 and 20186, and who timely submitted an opt-in consent form.
9 See Doc. No. 92-1 at 19; Doc. No. 92-2 at ¶1.7; Doc. No. 94-4 at 13, 19.
10 III. FINAL SETTLEMENT APPROVAL DETERMINATION
11 A. Standard for Approval Under Rule 23(e)
12 Judicial policy strongly “favors settlements, particularly where complex class action
13 litigation is concerned.” In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008).
14 Nevertheless, Rule 23 imposes upon district courts an “independent obligation to ensure
15 that any class settlement is ‘fair, reasonable, and adequate,’” to ensure that neither the class
16 representatives nor their counsel have “bargained away absent class members’ rights” in
17 the settlement. Briseño v. Henderson, __ F.3d __, 2021 WL 2197968, at **4, 6 (9th Cir.
18 June 1, 2021) (citing Fed. R. Civ. P. 23(e)(2)(C)). “This requires a balancing assessment
19 of:
20
(1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and
21 likely duration of further litigation; (3) the risk of maintaining class action
status throughout the trial; (4) the amount offered in settlement; (5) the extent
22
of discovery completed and the stage of the proceedings; (6) the experience
23 and views of counsel; (7) the presence of a governmental participant; and (8)
the reaction of the class members to the proposed settlement.
24
25 Chambers v. Whirlpool Corp., 980 F.3d 645, 669 (9th Cir. 2020) (quoting Churchill Vill.,
26 L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). “The Court must also determine
27 that the settlement is not the ‘product of collusion among the negotiating parties.’” Id.
28 ///
1 B. Standard for Approval of FLSA Settlement
2 The Court’s approval is also required for settlement of an FLSA collective class
3 action claim. See Kerzich v. Cty. of Tuolomne, 335 F.Supp.3d 1179, 1183 (E.D. Cal. 2018)
4 (“Because an employee cannot waive claims under the FLSA, they may not be settled
5 without supervision of either the Secretary of Labor or a district court.”) (citing Barrentine
6 v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981)). Before approving the settlement,
7 the Court must determine that it constitutes “a fair and reasonable resolution of a bona fide
8 dispute” over “the existence and extent of [d]efendant’s FLSA liability.” Selk v. Pioneers
9 Mem’l Healthcare Dist., 159 F.Supp.3d 1164, 1172 (S.D. Cal. 2016) (citations omitted);
10 see also Ambrosino v. Home Depot U.S.A., Inc., No. 11-cv-1319 L(MDD), 2014 WL
11 3924609, at *1 (S.D. Cal. Aug. 11, 2014) (noting that the Court may approve an FLSA
12 settlement that “reflects ‘a reasonable compromise over [disputed] issues.’”).
13 In considering whether to approve the proposed settlement of the collective’s FLSA
14 claims, the Court will consider:
15
(1) the plaintiff’s range of possible recovery; (2) the stage of
16 proceedings and amount of discovery completed; (3) the seriousness
of the litigation risks faced by the parties; (4) the scope of any
17
release provision in the settlement agreement; (5) the experience and
18 views of counsel and the opinion of participating plaintiffs; and (6)
the possibility of fraud or collusion.
19
20 Selk, 159 F.Supp.3d at 1173. The Court will approve the settlement if, upon consideration
21 the totality of the circumstances as reflected in these factors, it appears that the settlement
22 “is a reasonable compromise” that will “vindicate, rather than frustrate, the purposes of the
23 FLSA.” Id. at 1172-73.
24 C. Application to the Proposed Settlement
25 Although there are important distinctions between the policy objectives of – and the
26 rights protected by – Rule 23 and the FLSA, the foregoing discussion demonstrates that
27 there is considerable overlap between the factors considered for settlement approval. See
28 Kerzich, 335 F.Supp.3d at 1184 (noting that “courts often apply the Rule 23 factors for
1 assessing proposed class action settlements when evaluating the fairness of an FLSA
2 settlement, while recognizing that some of those factors do not apply because of the
3 inherent differences between class actions and FLSA actions”). Furthermore, the Court
4 has a “‘considerably less stringent’ obligation to ensure fairness of the settlement in an
5 FLSA collective action [as compared to] a Rule 23 action because parties who do not opt
6 in are not bound by the settlement.” Millan v. Cascade Water Svcs. Inc., 310 F.R.D. 593,
7 607 (E.D. Cal. 2015) (citation omitted). Thus, the Court finds that if the proposed
8 settlement warrants approval under Rule 23, it should also be approved under the FLSA,
9 and will therefore conduct its Rule 23 and FLSA analyses in tandem.
10 1. Strength of Plaintiff’s Case
11 As a rule, “unless the settlement is clearly inadequate, its acceptance and approval
12 are preferable to lengthy and expensive litigation with uncertain results.” Nat’l Rural
13 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 529 (C.D. Cal. 2004) (quoting 4 A.
14 Conte & H. Newberg, Newberg on Class Actions, § 11:50 at 155 (4th ed. 2002)). This is
15 particularly true where “there are significant barriers plaintiffs must overcome in making
16 their case.” Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D. Cal. 2010).
17 Here, although plaintiffs believed their claims had merit, defendant raised many factual
18 and legal defenses to plaintiffs’ allegations, including that due to a six-minute “shift
19 tolerance” window, many members of the Settlement Class were likely overcompensated;
20 that plaintiffs “grossly overstate[d] the amount of time spent on pre- and post-shift tasks;
21 that defendant maintains a policy and trains employees not to clock in until their shift
22 begins; and that plaintiffs’ FLSA and California claims were not actionable. Doc. No. 92-
23 1 at 13-14. In the face of these many legal and factual disputes, continued litigation
24 presented a real risk of negative outcomes at class certification, summary judgment, trial
25 and appeal. The Court finds this factor weighs in favor of approval.
26 2. The Value of the Settlement Compared to Plaintiffs’ Potential Recovery
27 In deciding whether a proposed settlement is fair, reasonable and adequate, the Court
28 must “consider[]” the “settlement’s benefits … by comparison to what the class actually
1 gave up by settling.” See Campbell v. Facebook, 951 F.3d 1106, 1123 (9th Cir. 2020)
2 (citation omitted). However, the Court must remain mindful that “‘the very essence of a
3 settlement is compromise ….’” Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003)
4 (citation omitted). The Court should not “withhold [its] approval” of a proposed settlement
5 merely because it represents “a fraction of the potential recovery at trial.” Nat’l Rural
6 Telecomms. Coop., 221 F.R.D. at 527.
7 As noted, the Settlement Agreement calls for a gross non-reversionary payment of
8 $1,475,000.00. Doc. No. 92-1 at 18. Based on counsel’s and their experts’ damages
9 analysis, this amount represents between 82.35 and 189.69 percent of defendant’s potential
10 off-the-clock wage claim exposure. Id. Further, even assuming plaintiffs were successful
11 at trial on all “potentially meritorious” claims for labor code violations and including
12 PAGA penalties, the Gross Settlement Amount represents between 28.84 and 35.97 percent
13 of defendant’s greatest possible exposure. Id. After subtracting fees, counsel’s costs,
14 settlement administration costs, incentive awards, and PAGA penalties, there remains a net
15 settlement amount of $922,600.00 for distribution to the Settlement Class. Id. at 18-21. A
16 total of $203,142.50 of the Net Settlement Amount (approximately 22%) will be allocated
17 to the FLSA collective members, with the remainder (approximately 78%) apportioned to
18 the Class. Id. at 21. Each Settlement Class member will automatically receive an average
19 payment of $1,971.37 (the highest estimated payment being $5,894.70) calculated using a
20 formula developed by expert economists. Id. at 20-21, 31; see also Doc. No. 95 at 4.
21 The Court finds that the amount of the settlement as compared to plaintiffs’ potential
22 recovery weighs in favor of approval of the settlement.
23 3. Extent of Discovery
24 Next, the Court assesses whether the “‘parties have sufficient information to make
25 an informed decision about settlement.’” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454,
26 459 (9th Cir. 2000) (citation omitted)). “A settlement following sufficient discovery and
27 genuine arms-length negotiation is presumed fair.” Nat’l Rural Telecomms. Coop., 221
28 F.R.D. at 528. Plaintiffs here represent that at the time of the settlement, defendants had
1 produced, and plaintiffs’ counsel had reviewed, extensive documents and data related to
2 plaintiffs’ claims, including: time and pay records; policies for timekeeping, logging in and
3 logging off; training manuals; badge swipe records; and data modeling and statistical
4 analyses for identifying pre-shift and post-shift activities for the members of the Settlement
5 Class. Doc. No. 92-1 at 11. In addition, plaintiffs’ counsel conducted intake interviews,
6 reviewed intake forms for potential opt-in plaintiffs, and consulted with expert economists.
7 Id. at 11-12. The parties attended two full-day mediation sessions facilitated by a neutral
8 mediator, in preparation for which plaintiffs’ counsel spent a significant amount of time
9 researching the law and engaging with their damages expert. Id. at 10, 29.
10 Given this history, the Court is persuaded that the parties entered into the Settlement
11 knowing the relevant facts and strengths and weaknesses of their claims and defenses. The
12 Court finds this factor weighs in favor of approving the settlement.
13 4. Views of Counsel
14 “The recommendations of plaintiffs’ counsel should be given a presumption of
15 reasonableness.” In re Omnivision Technologies, Inc., 559 F. Supp. 2d 1036, 1043 (N.D.
16 Cal. 2008) (citation omitted). Here, Kevin Stoops, lead counsel for the Settlement Class,
17 has submitted a declaration in support of the Final Approval Motion. Doc. No. 92-3. Mr.
18 Stoops has nearly 17 years’ experience litigating in the areas of employment law and
19 commercial litigation, including complex and class actions. Id. at 5-10. Mr. Stoops
20 represents that once an agreement in principle was reached with defendant, both Class
21 Counsel and defendant’s counsel worked diligently to ensure that the settlement was fair,
22 reasonable and adequate, including by consulting extensively with third-party economic
23 experts. Id. at 17, 20-21. Mr. Stoops further declares that the settlement is “substantial”
24 and “a fair compromise of the claims,” which he “fully endorse[s]” as “in the best interests
25 of all parties.” Id. at 25-27. Given Mr. Stoops’ considerable experience in this area, the
26 Court finds that his assessment is entitled to consideration, and further finds his
27 recommendation weighs in favor of approval.
28 ///
1 5. Reaction of Class Members
2 As noted, as of this date, no member of the Settlement Class objected to the
3 Settlement, and only six Settlement Class members opted out of participating in the
4 Settlement. The lack of objections and relatively small number of opt-outs “raises a strong
5 presumption” that the proposed Settlement is “favorable” to members of the Settlement
6 Class. Nat’l Rural Telecomm. Coop., 221 F.R.D. at 529 (citations omitted). The Court
7 finds this factor weighs in favor of approval.
8 6. Indicia of Collusion
9 The Ninth Circuit recently clarified that as part of its balancing of factors, the Court
10 must examine the terms of the Settlement for the presence of any “red flags” that indicate
11 collusion between the settling parties at the expense of the absent class members, and
12 “scrutinize them where they appear.” Briseño, 2021 WL 2197968, at *9. Those red flags
13 are: an attorney fee award that is “disproportionate” to the overall settlement; an agreement
14 among counsel not to challenge the amount of fees requested, and a reversion of unclaimed
15 funds to the defendant rather than to the class. Id. at **8-9.
16 Here, the Settlement is non-reversionary, and, for reasons discussed in more detail
17 below, the Court finds that the attorney fee award requested by counsel is fair and
18 reasonable. Thus, the only red flag for the Court’s scrutiny is the agreement by defendants
19 not to oppose Class Counsel’s fee request (a so-called “clear sailing” provision). See Doc.
20 No. 92-2 at ¶5.2. As the Briseño court noted, the existence of a clear-sailing provision,
21 standing alone, is not “an independent basis for withholding settlement approval.” Briseño,
22 2021 WL 2197968, at *10. On examination, the Court observes that the parties explicitly
23 stated that the payment of counsel’s requested fees is not a material term of the agreement.
24 See Doc. No. 92-2 at ¶5.2.1. The parties also agreed that if the Court approved a lesser fee
25 award, the difference between the award and the fees requested would revert to the
26 Settlement Class, thereby avoiding the collusive concerns addressed in Briseño. See id. at
27 ¶¶5.2, 5.2.1; see also Briseño, 2021 WL 2197968, at *9 (noting that when “excessive fees”
28 are returned to defendant, “a class member may not have standing to object” to the fee
1 request). The Court is therefore persuaded that the clear-sailing provision in the Settlement
2 is not evidence of collusion between the parties or their counsel at the expense of the
3 Settlement Class.
4 D. Balancing of Factors
5 The Court has considered the foregoing factors and finds that on balance, they weigh
6 in favor of the Settlement. Therefore, the Court finds the Settlement fundamentally fair,
7 adequate, and reasonable, and approves the settlement of the class claims under Rule 23.
8 The Court further finds that the settlement constitutes a fair and reasonable resolution of a
9 bona fide dispute over FLSA provisions, and approves the settlement of the FLSA claims.
10
IV. ATTORNEYS’ FEES AND OTHER EXPENDITURES
11 FROM THE SETTLEMENT FUNDS
12 A. Attorneys’ Fees
13 Rule 23(h) provides that “[i]n a certified class action, the court may award
14 reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’
15 agreement.” Fed. R. Civ. P. 23(h). “[C]ourts have an independent obligation to ensure that
16 the [fee] award, like the settlement itself, is reasonable, even if the parties have already
17 agreed to an amount.” In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 946
18 (9th Cir. 2011). The “need to carefully scrutinize the fee award” is not lessened by the fact
19 that the request is unopposed by defendant. Id. at 948. The Court must also review the
20 payment of attorneys’ fees from settlement proceeds in approving an FLSA settlement.
21 See Kerzich, 335 F.Supp.3d at 1184.
22 In the Ninth Circuit, there are two methods of assessing attorneys’ fees in common
23 fund cases: the “percentage-of-recovery” method and the “lodestar” method. Bluetooth,
24 654 F.3d at 942. Although the method applied is a matter of the Court’s discretion, the
25 “primary” method used is the percentage method. See Vizcaino v. Microsoft Corp., 290
26 F.3d 1043, 1047 (9th Cir. 2002). As discussed above, the Court must also “scrutinize[e]
27 the fee arrangement for potential collusion or unfairness to the class.” Briseño, 2021 WL
28 2197968, at *8.
1 In this Circuit, 25% is the “benchmark” for fee awards from a common fund, but the
2 Court may at its discretion award a higher percentage, taking into consideration the result
3 achieved, the risks undertaken by counsel (including by working on contingency),
4 comparison to fee awards in similar cases, and the lodestar crosscheck. See Bluetooth, 654
5 F. 3d at 942; see also Vizcaino, 290 F.3d at 1050 (noting that the “25% benchmark rate” is
6 “a starting point for analysis”). The Court should also consider “the size of the fund” in
7 determining whether a higher percentage is appropriate. See Craft v. Cty. of San
8 Bernardino, 624 F. Supp. 2d 1113, 1127 (C. D. Cal. 2008). Where, as here, the gross
9 settlement amount is less than $10 million, courts often award fees in the range of 30-50%
10 of the funds. See id. (citing Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294, 297-
11 98 (N.D. Cal. 1995)).
12 Here, Class Counsel request a fee award of 30% of the Gross Settlement Amount,
13 or $442,500.00. See Doc. No. 86-1 at 6, 10. On consideration of the foregoing factors, the
14 Court finds that this request is reasonable. The Settlement Class’s recovery is substantial,
15 representing at least 82% of defendant’s potential exposure for labor-code violations, and
16 at least 28% of defendant’s greatest possible exposure for all claims. Doc. No. 86-1 at 10.
17 The risk of nonpayment assumed by Class Counsel was not trivial given the many
18 challenges defendant raised to class certification and liability. See Selk, 159 F. Supp. 3d at
19 1175 (finding a settlement that was 26% of the total possible recovery “fair and reasonable”
20 and “stress[ing] the possibility that plaintiffs would recover nothing”). The Settlement
21 provides for direct, automatic payment to each Settlement Class member. Further, the
22 Court-approved notice advised the Settlement Class of counsel’s intent to request 30% of
23 the Gross Settlement Amount in fees. See Doc. No. 92-4 at 17. There have been no
24 objections to the Settlement, signaling the Settlement Class’s approval of counsel’s fee
25 request. See Doc. No. 93-1 at 3. Class Counsel has very capably represented the Settlement
26 Class on a contingency fee basis throughout the litigation. Doc. No. 86-2 at 11.
27 Comparing the requested fee to awards in similar cases, particularly those in which
28 the settlement fund was less than $10 million, further confirms the reasonableness of a 30%
1 fee award in this case. The Court therefore finds Class Counsel’s requested 30% fee award
2 is “in line with attorneys’ fees approved in other wage and hour class actions in the Ninth
3 Circuit,” supporting its reasonableness. Espinosa v. Cal. College of San Diego, Inc., Case
4 No. 17-cv-744-MMA (BLM), 2018 WL 1705955, at **10-11 (approving 30% fee request);
5 see also Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 450-51 (E.D. Cal. 2013)
6 (collecting cases with fee awards of 30% or higher).
7 Finally, the lodestar cross-check also supports a 30% fee award in this case. See
8 Vizcaino, 290 F.3d at 1050 (“Calculation of the lodestar … provides a check on the
9 reasonableness of the percentage award.”). The lodestar is calculated by applying a
10 reasonable hourly rate to the number of hours Class Counsel has reasonably billed to the
11 case. See Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 265 (N.D. Cal. 2015).
12 Here, Class Counsel represents that as of June 1, 2021 (i.e., approximately one week
13 before the Fairness Hearing), they had expended 532 hours working on the litigation, at a
14 lodestar amount of $274,393.50. Doc. No. 93 at 5. Class Counsel further represents that
15 to account for additional future work performed related to final approval and settlement
16 administration, they anticipate that another $15,000 - $20,000 will be added to their
17 lodestar. Id. The Court has reviewed Class Counsel’s rates and finds them to be reasonable.
18 Doc. No. 86-2 at 9-10. Further, considering the complexity of the action, the significant
19 discovery undertaken, and Class Counsel’s preparation for mediation and settlement –
20 including by consulting with experts to guide the damages assessments and appropriate
21 calculations of each Settlement Class member’s share of the Settlement Funds – the Court
22
23
24
6 See, e.g., Bower v. Cycle Gear, No. 14-cv-02712-HSG, 2016 WL 4439875, at * 7 (N. D. Cal. Aug. 23,
25 2016) (approving 30% fee request in employment class/collective action that settled for $1.9 million);
Loeza v. JP Morgan Chase Bank NA, No. 3:13-cv-00095-L-BGS, 2018 WL 3140501, at *3 (S.D. Cal.
26 June 27, 2018) (approving 30% fee request in hybrid class/collective action that settled for $950,000);
Jones v. Canon Bus. Solutions, Inc., No. CV12-07195 JAK (JEMx), 2014 WL 12772083, at *10 (C. D.
27 Cal. Sept. 2, 2014) (approving 30% fee request in wage-and-hour class action that settled for $4.4 million
and noting that fee awards of 30-40% are common in such actions where the recovery is under $10
28
1 finds that the amount of time billed is also reasonable. See Doc. No. 86-1 at 11-12; see
2 also generally Doc. No. 92-3.
3 “[T]o account for the risk Class Counsel assumes when they take on a contingent-
4 fee case,” courts also often apply a “multiplier” to the lodestar. Bellinghausen, 306 F.R.D.
5 at 265. For complex class actions, a multiplier between 1 and 4 is “generally appropriate.”
6 Id. Class Counsel’s requested fee results in a lodestar multiplier of between 1.5 and 1.61
7 (depending upon whether the estimates for future work are included), which is comfortably
8 within this range. Doc. No. 93 at 5. Therefore, the lodestar cross-check supports a finding
9 that Class Counsel’s requested fee is reasonable.
10 For the foregoing reasons, the Court finds that Class Counsel’s request for attorney
11 fees of $442,500, or 30% of the Gross Settlement Amount, is fair and reasonable.
12 B. Litigation Costs
13 Attorneys compensated from a common fund are entitled to recover their reasonable
14 litigation costs. See Bellinghausen, 306 F.R.D. at 265. Class Counsel represent that they
15 have incurred $47,438.82 in costs to date for postage, photocopying, local and out-of-state
16 travel, and other office-related costs over the course of this litigation, in addition to fees
17 paid to expert witnesses and the mediator. Doc. No. 86-2 at 14, 18-19; Doc. No. 93 at 6.
18 The Court has reviewed counsel’s billings and finds these expenditures were reasonable
19 and necessary. Accordingly, the Court orders that Class Counsel be reimbursed for its
20 reasonable litigation costs from the Settlement Funds in an amount not to exceed
21 $55,000.00.
22 C. Class Representative Incentive Awards
23 Plaintiffs seek the Court’s approval of the following incentive awards from the
24 Settlement Funds: $7,500 to named plaintiff Monica Smith; $5,000 to opt-in plaintiff
25 Christa Fox; and $2,500 to named plaintiff Erika Sierra. Doc. No. 86-1 at 22. Counsel
26 relates that Ms. Smith, Ms. Sierra and Ms. Fox expended “considerable” time and effort in
27 making the settlement possible. Id. Ms. Fox participated in multiple interviews, provided
28 documents to counsel, and diligently worked to support counsel’s efforts in pursuing the
1 case, reaching the settlement, and seeking the Court’s approval of that settlement. Id. at
2 22-23. Ms. Sierra and Ms. Smith provided the same assistance, and willingly undertook
3 the role of class representatives after being advised of the responsibilities that such role
4 would encompass. Id.
5 “[I]ncentive awards that are intended to compensate class representatives for work
6 undertaken on behalf of a class ‘are fairly typical in class action cases.’” In re Online
7 DVD-Rental Antitrust Litig., 779 F.3d 934, 943 (9th Cir. 2015). Such awards, however,
8 are discretionary. See id. Here, the Court finds the requested incentive awards are
9 reasonable and appropriate. Relative to both the overall settlement amount and the average
10 recovery for members of the Settlement Class, the proposed awards are “well within the
11 usual norms of ‘modest compensation’ paid to class representatives for services performed
12 in the class action.” Id. (citation omitted). The proposed awards will fairly compensate
13 Ms. Smith, Ms. Sierra, and Ms. Fox for their assistance to class counsel and their efforts
14 on behalf of the Settlement Class. Therefore, the Court approves the requested incentive
15 awards and orders that such awards be paid from the Settlement Funds.
16 D. Settlement Administration Costs
17 Finally, plaintiffs request payment from the Settlement Funds to the claims
18 administrator, Simpluris, Inc. (“Simpluris”). Doc. No. 86-1 at 19-20. The Court has
19 reviewed Ms. Butler’s declaration detailing the work performed by Simpluris, in which she
20 describes the work performed to date, including printing and mailing the notice, assisting
21 members of the Settlement Class with questions about the settlement, investigating any
22 notices returned as undeliverable, and receiving and processing requests for exclusion.
23 Doc. No. 92-4 at 4-5. According to Ms. Butler’s declaration, the total past and anticipated
24 future costs for settlement administration are $9,900. Id. at 7; see also Doc. No. 93 at 6.
25 The Court finds that these costs are reasonable and necessarily incurred, and therefore
26 approves the request for settlement administration costs in the amount of $9,900 be paid
27 from the Settlement Funds.
28 ///
1 CONCLUSION AND ORDER
2 For the reasons stated above, the Court finds the Settlement fair, reasonable and
3 adequate, and a reasonable compromise of disputed FLSA claims. The Court further
4 ORDERS as follows:
5 1. The Court certifies, for settlement purposes, a class defined as:
6 All current and former employees who, between February 21, 2013 and
7 February 18, 2021, worked for Kaiser Foundation Hospitals at its San
Diego, California location, with the job title of Customer Support
8 Specialist, Wellness Specialist, or Telemedicine Specialist, in job codes
9 20005, 50278, and 20186, and did not timely file a request for exclusion
from the class.
10
2. Those members who validly requested to opt out of the settlement are excluded
11
from the Class.
12
3. The Court designates this action, for settlement purposes, as a collective action
13
on behalf of a Collective defined as:
14
15 All current and former employees who, between December 21, 2014
and February 18, 2021, worked for Kaiser Foundation Hospitals at its
16 San Diego, California location, with the job title of Customer Support
17 Specialist, Wellness Specialist, or Telemedicine Specialist, in job codes
20005, 50278, and 20186, and who timely submitted an opt-in consent
18 form.
19
4. The Court appoints Monica Smith and Erika Sierra as representatives of the
20
Settlement Class for the purpose of entering into and implementing the
21
Settlement Agreement.
22
5. The Court appoints Finkelstein & Krinsk, LLP and Sommers Schwartz, P.C.
23
jointly as counsel for the Settlement Class for the purpose of entering into and
24
implementing the Agreement.
25
6. Court GRANTS plaintiffs’ unopposed Motion for Final Approval of
26
Class/Collective Action Settlement [Doc. No. 92].
27
///
28
1 7. The Court approves the Second Amended Class and Collective Action Settlement
2 Agreement and Release of Claims [Doc. No. 92-2] and all of its terms in their
3 entirety, which are hereby incorporated as part of this Order.
4 8. Simpluris, Inc. shall execute the distribution of proceeds pursuant to the terms of
5 the parties’ Settlement Agreement.
6 9. The Court GRANTS plaintiffs’ unopposed Motion for Attorneys’ Fees,
7 Litigation Costs, Class Representative Incentive Awards, and Settlement
8 Administration Expenses [Doc. No. 86].
9 10. Class Counsel shall be paid $442,500.00 from the Settlement Funds as attorneys’
10 fees.
11 11. Class Counsel shall be reimbursed up to $55,000.00 from the Settlement Funds
12 for reasonable and necessary litigation costs. If Class Counsel’s costs are less
13 than $55,000.00, the difference shall be distributed to the members of the
14 Settlement Class in accordance with the Settlement Agreement.
15 12. For her efforts on behalf of the Settlement Class, Monica Smith shall be paid
16 $7,500.00 from the Settlement Funds.
17 13. For her efforts on behalf of the Settlement Class, Erika Sierra shall be paid
18 $2,500.00 from the Settlement Funds.
19 14. For her efforts on behalf of the Settlement Class, Christa Fox shall be paid
20 $5,000.00 from the Settlement Funds.
21 15. Simpluris, Inc. shall be paid $9,900.00 from the Settlement Funds for settlement
22 administration costs.
23 16. The Court retains continuing jurisdiction over this settlement solely for the
24 purposes of enforcing the agreement, addressing settlement administration
25 matters, and addressing such post-judgment matters as may be appropriate under
26 applicable law.
27 ///
28 ///
1 17.After settlement administration and distribution of funds have been completed,
2 and no later than June 15, 2022, the parties shall file a report with this Court
3 certifying compliance with the terms of the Agreement and this Order and
4 Judgment.
5 18.Judgment is hereby entered on the terms set forth above. The Clerk of the Court
6 shall close this case.
7 || IT IS SO ORDERED.
8 Dated: June 15, 2021 te ae )
9 Mfficae _———_
10 Hori. Karen S. Crawford
United States Magistrate Judge
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