Ayala v. Valley First Credit Union ( 2024 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 10 KARLA AYALA, an individual, on behalf of Case No. 1:22-cv-00657-HBK herself and all other similarly situated, 11 ORDER GRANTING JOINT STIPULATION TO Plaintiff, ALLOW PERCENTAGE OF RECOVERY 12 METHOD TO LIMITED EXTENT v. 13 (Doc. No. 29) VALLEY FIRST CREDIT UNION, 14 Defendant. 15 16 17 Pending before the Court is the parties’ joint stipulation to modify settlement agreement and 18 release; or, alternatively, allow percentage of recovery notwithstanding the settlement agreement. (Doc. 19 No. 29). On November 8, 2023, the Court granted preliminary approval of the class action settlement. 20 (Doc. No. 25). The Court noted class counsel’s estimate that attorneys’ fees would not exceed $36,000, 21 which would equate to 30% of the Settlement Fund. (Id. at 14). The Court found the estimated fees to be 22 within the acceptable range, but expressly reserved ruling on proposed counsel’s attorneys’ fees until the 23 motion for attorneys’ fees is filed. (Id.). 24 As an initial matter, the Court denies the parties’ request to modify the preliminary approval of the 25 class action settlement, as it is only preliminary. The deadline set for Plaintiff to file any final approval 26 motion, and any motion for attorneys’ fees and costs, has not yet passed. (Id. at 19 (noting any motion 27 should be filed no later than 28 days before the hearing regarding final certification of the class and final 28 approval of the settlement on March 7, 2024)). eI II IIE III III IEE II OSE EIEIO 1 That said, the notice of pending class action and proposed settlement included notification that 2 | Defendant has agreed not to oppose counsel’s motion for fees up to $50,000, and the estimated fees will 3 not exceed $36,000, which represents 30% of the Settlement Fund Value of $120,000. (Doc. No. 27 at 6). 4 | The “modification” proposed by the parties does not change the amount estimated for attorney fees; and, 5 || in fact, the parties’ joint stipulation indicates class counsel will now seek $30,000 which represents only 6 | 25% of the Settlement Fund Value. (Doc. No. 29 at 2). Considering this notification, and the agreement 7 || between the parties to allow for percentage of recovery method, the Court will grant the alternative request 8 | to consider a percentage of recovery method of calculating class counsel’s attorney fees to the limited 9 | extent set forth herein. Specifically, even when the parties have agreed on an amount, the court must 10 award only reasonable attorneys’ fees. See In re Bluetooth Headset, 654 F.3d 935, 941 (9th Cir. 2011); 11 see also Brisenio v. Henderson, 998 F.3d 1014 (9th Cir. 2021) (in both pre- and post- certification 12 | settlements, the court must “examine whether the attorneys’ fees arrangement shortchanges the class”). 13 | Courts also generally conduct a lodestar cross-check in evaluating the reasonableness of a percentage 14 | recovery of acommon fund. See In re Bluetooth Headset, 654 F.3d 94 (district courts are encouraged to 15 | cross-check the two fee-calculation methods against one another). Thus, regardless of the parties’ request 16 | to allow a percentage of recovery method, Plaintiff must still file supplemental evidence in support of any 17 | forthcoming request for attorneys’ fees and costs, including attorney billing records for the Court to fully 18 | evaluate the reasonableness of the request. Nothing contained in this Order shall be construed as 19 | approving $30,000 as reasonable attorney fees. 20 ACCORDINGLY, it is hereby ORDERED: 21 The parties’ Joint Stipulation to Modify Settlement Agreement and Release; or Alternatively 22 | Allow Percentage of Recovery Notwithstanding the Settlement Agreement (Doc. No. 29) is GRANTED to 23 | the limited extent that the Court will allow a percentage of recovery notwithstanding the settlement 24 | agreement when determining reasonable attorney fees. *> | Dated: __Jamuary 9, 2024 Wiha. Mh. Bareh fackte 26 HELENA M. BARCH-KUCHTA UNITED STATES MAGISTRATE JUDGE 27 28