Manzo v. McDonald's Restaurants of California, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GENNIFER MANZO, Case No. 1:20-cv-1175-HBK 12 Plaintiff, ORDER DIRECTING PLAINTIFF TO SUPPLEMENT MOTION FOR 13 v. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 14 MCDONALD’S RESTAURANTS OF CALIFORNIA, INC., a corporation, AND (Doc. No. 15) 15 DOES 1 through 50, inclusive, 16 Defendants. 17 18 19 Pending before the Court is Plaintiff Gennifer Manzo’s unopposed Motion for Preliminary 20 Approval of Class Action and Private Attorneys General Act Settlement. (Doc. No. 15). 21 In evaluating a class action settlement, a court must determine, inter alia, whether the 22 plaintiff’s claims are typical of those of the class and whether the plaintiff can adequately 23 represent the class. Fed. R. Civ. P. 23(a)(3)-(4); Rodriguez v. Hayes, 591 F.3d 1105, 1124 (9th 24 Cir. 2010). (See also Doc. No. 15 at 9). The purpose of these requirements is to ensure that “the 25 interest of the named representative aligns with the interests of the class.” Torres v. Mercer 26 Canyons Inc., 835 F.3d 1125, 1141 (9th Cir. 2016) (citation omitted). Key to this inquiry is 27 confirmation that the plaintiff is a member of the class. E.g., Amchem Prod., Inc. v. Windsor, 521 28 U.S. 591, 625-26 (1997) (class membership required for adequacy determination under Rule 1 23(a)(4)); Campbell v. Facebook Inc., 315 F.R.D. 250, 263 (N.D. Cal. 2016) (citing General 2 Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 156 (1982)) (class membership required for 3 adequacy determination under Rule 23(a)(3)). 4 The proposed settlement in this action applies to the following class members: 5 (1) The “June 2, 2020 Settlement Subclass” consists of all California non-exempt employees who received wage statements that 6 included daily, weekly, or seventh day premium overtime and/or MQI True Up wages at any time from June 2, 2020 through the 7 Preliminary Approval Date (“June 2, 2020 Subclass Class Period”) and who were subject to the class settlement reached in 8 Sanchez v. McDonald's Restaurants of Cal., Inc., Los Angeles County Superior Court Case No. BC499888. 9 and 10 (2) The “April 6, 2019 Settlement Subclass” consists of all 11 California non-exempt employees who received wage statements that included daily, weekly, or seventh day premium overtime 12 and/or MQI True Up wages at any time from April 6, 2019 through the Preliminary Approval Date (“April 6, 2019 Subclass 13 Class Period”), and who were not subject to the class settlement reached in Sanchez v. McDonald's Restaurants of Cal., Inc., Los 14 Angeles County Superior Court Case No. BC499888. 15 (Doc. No. 15 at 4-5). 16 In support of her Motion for Preliminary Approval, Plaintiff states she was employed by 17 Defendant from August 2014 to June 2020. (Doc. No. 15-6 at 3 ¶ 4). She does not state whether 18 she was subject to the class settlement reached in Sanchez v. McDonald's Restaurants of Cal., 19 Inc., Los Angeles County Superior Court Case No. BC499888. (See id. at 3-4). Nor does she 20 state whether she received a wage statement on or after June 2, 2020 or, if she was not a Sanchez 21 class member, on or after April 6, 2019, that “included daily, weekly, or seventh day premium 22 overtime and/or MQI True Up wages.” (See id.). Thus, based on the current record, the Court is 23 unable to determine whether Plaintiff is a member of the class. 24 When a settlement is reached before formal class certification, as occurred here, 25 settlement approval requires a “higher standard of fairness” than that demanded by Rule 23 more 26 generally. Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012) (quoting Hanlon v. Chrysler 27 Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). This “more exacting review” of pre-certification 28 settlements “is required to ensure that the class representatives and their counsel do not receive a 1 disproportionate benefit at the expense of the unnamed plaintiffs who class counsel had a duty to 2 represent.” Rodriguez v. Danell Custom Harvesting, LLC, 293 F. Supp. 3d 1117, 1131 (E.D. Cal. 3 2018) (internal quotations and citations omitted). 4 Rule 23 permits a court to award “reasonable attorney’s fees . . . that are authorized by 5 law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Even when the parties have agreed on 6 an amount, the court must award only reasonable attorney’s fees. In re Bluetooth Headset, 654 7 F.3d 935, 941 (9th Cir. 2011); see also Briseño v. Henderson, 998 F.3d 1014 (9th Cir. 2021) (in 8 both pre- and post-certification settlements, court must “examine whether the attorneys’ fees 9 arrangement shortchanges the class”). The “fundamental principle” is that fee awards out of 10 common funds must be “reasonable under the circumstances.” In re Wash. Pub. Power Supply 11 Sys. Sec. Litig., 19 F.3d 1291, 1295 (9th Cir. 1994) (quoting Florida v. Dunne, 915 F.2d 542, 545 12 (9th Cir. 1990)). 13 Under a percentage-of-the fund calculation, 25% of a common fund is the benchmark 14 for an attorneys’ fees award. See, e.g., In re Bluetooth Headset, 654 F.3d at 942. However, 15 “courts may adjust this figure upwards or downwards if the record shows special circumstances 16 justifying a departure.” Ontiveros v. Zamora, 303 F.R.D. 356, 372 (E.D. Cal. 2014) (internal 17 quotation marks omitted) (citing id.). Courts generally conduct a lodestar cross-check in 18 evaluating the reasonableness of a percentage recovery of a common fund. See In re Bluetooth 19 Headset, 654 F.3d at 942 (district courts are encouraged to cross-check the two fee-calculation 20 methods against one another). 21 Plaintiff’s counsel requests an attorney’s fees award of 33% and costs of up to $30,000. 22 (Doc. No. 15 at 34-35 § G). Circumstances justifying these amounts “are not readily apparent to 23 the Court” given that this action was settled within a year of filing, without formal discovery, and 24 without any motion practice. See Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 458 25 (E.D. Cal. 2013) (when case settled within a year of filing, without formal discovery, and without 26 any motion practice, rejecting 33% request in favor of 25% at preliminary approval, and noting 27 possibility of departure at final approval). Plaintiff’s counsel provides no factual detail regarding 28 the work performed and no estimates of the lodestar. As such, the Court cannot make even a 1 rough cross-check and is unable to fairly evaluate Plaintiff’s request for attorney’s fees and costs. 2 See Alberto v. GMRI, Inc., 252 F.R.D. 652, 667–69 (E.D. Cal. 2008). 3 Plaintiff cites various cases that ultimately awarded fee awards at or in excess of the 4 percentage requested here. Even a brief review of the cases cited, however, provides ample 5 information to distinguish them from the present one. In Wren, for example, plaintiff filed an 6 amended consolidated complaint, successfully moved to conditionally certify FLSA opt-in classes 7 and opposed decertification, moved for class certification, opposed summary judgment, and 8 attended two mediation sessions. Wren v. RGIS Inventory Specialists, 2011 WL 1230826, at *1-4 9 (N.D. Cal. Apr. 1, 2011). Likewise, in Boyd, plaintiff filed two amended complaints, an FLSA 10 notice motion, and a class certification motion. Boyd v. Bank of Am. Corp., 2014 WL 6473804, at 11 *1-2, (C.D. Cal. No. 18, 2014). In Stuart, plaintiff obtained class certification, “filed various 12 briefs relating to potential defenses,” and made initial submissions in the run up to trial. Stuart v. 13 Radioshack Corp., 2010 WL 3155645 at *1 (N.D. Cal. Aug. 9, 2010). Thus, the mere fact that in 14 other wage and hour cases courts have awarded upwards of 33% of the fund as attorney’s fees 15 does not provide sufficient support for Plaintiff’s request, even at this stage. 16 Lastly, at preliminary approval the Court must consider whether the settlement 17 “improperly grant[s] preferential treatment to class representatives or segments of the class.” 18 Rodriguez, 293 F.Supp.3d at 1132 (citations omitted). Here, Plaintiff requests an incentive award 19 of up to $10,000. (Doc. No. 15 at 32 § F). Again, given the short duration of this case and lack 20 of formal discovery, the grounds for this request are not readily apparent. See id. at 1134 (where 21 plaintiffs requesting $7,500 awards stated they took personal risk in serving as representative and 22 each devoted approximately 50 to 60 hours to action, court found $3,500 reasonable at 23 preliminary approval). Though Plaintiff cites cases in which courts made comparable incentive 24 awards, her request is unsupported by factual detail regarding her contributions to this action. 25 (See Doc. No. 15-6 at 3-4 ¶¶ 7-9). 26 Plaintiff has indicated that she intends to provide further factual support and briefing 27 regarding attorney’s fees, costs, and the incentive award in advance of final approval. (Doc. Nos. 28 15 at 19; 15-6 at 4 ¶ 9). However, the Court finds that in the interest of efficiency, prompt 1 | supplemental evidentiary submissions addressing each of the issues identified here are 2 | appropriate. 3 Accordingly, it is ORDERED: 4 1. Within 14 days of the date of this order, Plaintiff shall submit additional evidence 5 clarifying Plaintiff's class member status. 6 2. Within 14 days of the date of this order, Plaintiff shall file supplemental evidence in 7 support of the request for attorney’s fees and costs. This supplemental evidence may, 8 but is not required to, include attorney billing records. 9 3. Within 14 days of the date of this order, Plaintiff shall file supplemental evidence in 10 support of the request for the incentive award to Plaintiff. 11 '? | Dated: _ December 16, 2021 Wile. Th fareh Zack 13 HELENA M. BARCH-KUCHTA 4 UNITED STATES MAGISTRATE JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28