Aldapa v. Fowler Packing Company Inc. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 BEATRIZ ALDAPA, et al., No. 1:15-cv-00420-ADA-SAB 12 Plaintiffs, ORDER GRANTING PLAINTIFFS’ UNOPPOSED MOTION FOR 13 v. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 14 FOWLER PACKING CO., INC., et al., (ECF No. 278) 15 Defendants. 16 17 I. 18 Factual and Procedural Background 19 This wage-and-hour class action lawsuit proceeds on Plaintiffs’ First Amended Complaint 20 (hereinafter “FAC”) filed on October 20, 2016. (ECF No. 129.) Plaintiffs are a group of 21 approximately 20,500 seasonal agricultural workers alleging a variety of state and federal labor 22 law violations against Defendants between March 17, 2011 and January 1, 2019. (ECF No. 278 23 at 11–12.) Defendant Fowler Packing is a commercial grower, packer, and shipper of various 24 fruits, and Defendant Ag Force is a farm labor contractor. (ECF No. 145 at 23.) Defendant 25 Fowler Marketing International is responsible for marketing and selling the crops that Fowler 26 Packing owns and that Ag Force employees harvest. (Id.) 27 The FAC alleges twelve claims: (1) violations of the Migrant and Seasonal Agricultural 28 Worker Protection Act, 29 U.S.C. § 1801, et seq., for failing to pay all wages due or provide 1 necessary tools; (2) failure to compensate for rest breaks in accordance with California Labor 2 Code section 226.7 and Wage Order 14; (3) failure to pay all wages due under the employment 3 contract by requiring off-the-clock work and allowing the use of “ghost workers;” (4) failure to 4 pay overtime, as required by state law; (5) failure to pay the minimum wage, in violation of 5 California Labor Code section 1194; (6) failure to pay waiting time penalties in violation of 6 California Labor Code section 203; (7) failure to provide necessary tools or reimburse for tools in 7 violation of California Labor Code section 2802; (8) violations of California Business and 8 Professions Code section 17200 by underpaying workers, failing to provide rest periods, and 9 retaining the benefits of the labor without reasonable compensation; (9) violations of California 10 Labor Code section 226 by failing to keep accurate records or provide accurate statements to the 11 employees; (10) failure to record and/or pay for travel time and wait time, in violation of 12 California Labor Code section 1194 and 29 U.S.C. § 1801, et seq.; (11) failure to reimburse for 13 vehicle expenses, in violation of California Labor Code section 2802; and (12) failure to provide 14 meal periods and keep accurate records of meal periods in violation of Wage Order 14 and 29 15 U.S.C. § 1801, et seq. (ECF No. 129 at 17–26.) 16 On February 16, 2018, the Court certified the following seven subclasses to represent 17 claims in the FAC: 18 1. Piece Rate Rest Period Subclass 19 All individuals who were employed by Defendants as a non-exempt “field worker” or agricultural worker from March 17, 2011 to 20 present, and were compensated on a piece rate basis. 21 2. Unpaid Travel Time Subclass 22 All individuals who were employed by Defendants as a non-exempt “field worker” or agricultural worker from March 17, 2011 to 23 present, and worked at two or more fields in one day. 24 3. Vehicle Expense Subclass 25 All individuals who were employed by Defendants as a non-exempt “field worker” or agricultural worker from March 17, 2011 to 26 present, worked at two or more fields in one day, and drove their own car between fields. 27 /// 28 1 4. Meal Period Subclass 2 All individuals who were employed by Defendants as a non-exempt “field worker” or agricultural worker from March 17, 2011 to 3 present, for whom no meal period was recorded on at least one day in which the employee worked more than five hours. 4 5. Tools Subclass 5 All individuals who were employed by Defendants as a non-exempt 6 “field worker” or agricultural worker from March 17, 2011 to present who purchased gloves, files, oil, safety glasses, shears, clippers, 7 scissors, sheaths, or replacement parts for their work for Defendants. 8 6. Unpaid Work Subclass 9 All individuals who were employed by Defendants as a non-exempt “field worker” or agricultural worker from March 17, 2011 to present 10 who were required to arrive before their shift or perform duties after their shift, or wait for fruit to dry before beginning work. 11 7. Inaccurate Wage Statement Subclass 12 All individuals who were employed at any of the Defendants 13 between March 17, 2012 and present as non-exempt field or agricultural workers for the Defendants. 14 15 (ECF No. 185 at 60–61.) Subsequently, on February 16, 2018, the Court approved the proposed 16 content and distribution of the parties’ stipulated class notice. (ECF No. 190 at 4–5.) Since that 17 time, the parties have engaged in extensive discovery and attended three private mediations, the 18 second of which produced a settlement agreement. (ECF No. 278 at 13–14; Declaration of Mario 19 Martinez (hereinafter “Martinez Decl.) ¶ 50.) 20 Under the agreement, Defendants will pay a total amount of $7,875,000. (ECF No. 278 at 21 16; Class Action Settlement Agreement (hereinafter “Settlement Agreement”) ¶ 37.) After 22 subtracting class counsel fees of $2,625,000 (a fee rate of 33 1/3%), class counsel costs of 23 $500,000, estimated claims administration fees of $120,000, and class representative 24 enhancements of $20,000 ($10,000 for each named plaintiff), the net settlement amount to be 25 distributed to class members will total $4,610,000. (ECF No. 278 at 16–17; Settlement 26 Agreement ¶ 45.) The Settlement Administrator will distribute the net settlement amount to class 27 members on a pro rata basis depending on the number of weeks each class member worked 28 during the March 17, 2011 to January 1, 2019 class period. (ECF No. 278 at 12, 17; Settlement 1 Agreement ¶ 45(1)(a).) Ninety days following the initial distribution, the Class Administrator 2 will re-distribute any unclaimed funds to those class members who claimed their portion of the 3 initial distribution. (ECF No. 278 at 17; Settlement Agreement ¶ 45(1)(c).) Depending on the 4 amount remaining after the initial redistribution, the Class Administrator will either conduct a 5 second re-distribution or will allocate the funds as cy pres, providing 50 percent of the remaining 6 amount to the Central California Food Bank and 50 percent to the Binational Center for the 7 Development of Oaxacan Indigenous Communities. (ECF No. 278 at 17–18; Settlement 8 Agreement ¶ 45(1)(c).) 9 Plaintiffs filed an unopposed motion for preliminary approval of the class action 10 settlement on August 4, 2022. (ECF No. 278.) They ask that the Court: (1) grant preliminary 11 approval of the proposed settlement; (2) approve the proposed notice program and forms; (3) 12 confirm the appointment of Plaintiffs Beatriz Aldapa and Elmer Avalos as class representatives; 13 (4) confirm the appointment of Mario Martínez and Edgar Aguilasocho of Martínez Aguilasocho 14 Law, Inc. and Ira Gottlieb and Erica Deutsch of Bush Gottlieb as settlement class counsel;1 (5) 15 confirm the appointment of CPT Group as settlement administrator; (6) set deadlines for mailing 16 settlement documents or objecting to the settlement;2 and (7) schedule a final approval hearing of 17 the class settlement. (Id. at 12.) 18 II. 19 Legal Standard 20 “Courts have long recognized that settlement class actions present unique due process 21 concerns for absent class members.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 22 946 (9th Cir. 2011) (citations and internal quotations omitted). To protect the rights of absent 23 class members, the Federal Rules of Civil Procedure require district courts to approve all class 24 action settlements “only after a hearing and on finding that it is fair, reasonable, and adequate.” 25 Fed. R. Civ. P. 23(e)(2); Bluetooth, 654 F.3d at 946. 26 1 This order will not address Plaintiffs’ third and fourth requests because the Court has previously found that the named plaintiffs and class counsel will adequately protect the interests of the subclasses. (See ECF No. 185 at 61.) 27 2 The parties do not include a request for a deadline to opt out of the settlement because class members have already been provided such an opportunity. (ECF No. 278 at 17 (citing Low v. Trump Univ., LLC, 881 F.3d 1111, 1121 (9th 28 Cir. 2018).) The Magistrate Judge approved the opt-out notice on March 18, 2016. (ECF No. 62.) 1 Review of a proposed class action settlement ordinarily involves two phases. See David 2 F. Herr, Annotated Manual for Complex Litigation § 21.632 (4th ed. 2022). First, the court must 3 conduct a preliminary fairness evaluation and, if applicable, consider class certification. Id. If 4 the court makes a preliminary determination that the settlement terms are fair, reasonable, and 5 adequate, the parties must then send a notice to the class members containing the details of the 6 proposed settlement and the date of the final approval hearing. Id. Second, the court holds a final 7 approval hearing to determine whether to approve the settlement. Id.; see also Narouz v. Charter 8 Commc’ns, Inc., 591 F.3d 1261, 1267 (9th Cir. 2010). 9 This order addresses the first phase – preliminary approval of a class action settlement. 10 “At this preliminary approval stage, the court need only determine whether the proposed 11 settlement is within the range of possible approval.” Ross v. Bar None Enters., Inc., No. 2:13-cv- 12 00234-KJM-KJN, 2014 WL 4109592, at *9 (E.D. Cal. Aug. 19, 2014) (citations and internal 13 quotations omitted). Federal Rule of Civil Procedure 23 does not explicitly provide for such a 14 procedure, but federal courts generally find preliminary approval appropriate if the proposed 15 settlement “appears to be the product of serious, informed, non-collusive negotiations, has no 16 obvious deficiencies, does not improperly grant preferential treatment to class representatives or 17 segments of the class, and falls with the range of possible approval.” Lounibos v. Keypoint Gov’t 18 Sols. Inc., No. 12-cv-00636-JST, 2014 WL 558675, at *5 (N.D. Cal. Feb. 10, 2014) (quoting In re 19 Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007)); 4 William B. 20 Rubenstein, Newberg and Rubenstein on Class Actions § 13:13 (6th ed. 2022). In other words, 21 preliminary approval of a settlement is contingent on both a procedural and substantive 22 assessment of the proposed terms. See In re Tableware Antitrust Litig., 484 F. Supp. 2d at 1079. 23 A district court reviewing a proposed settlement is not, however, to “reach any ultimate 24 conclusions on the contested issues of fact and law which underlie the merits of the dispute.” 25 Chem. Bank v. City of Seattle, 955 F.2d 1268, 1291 (9th Cir. 1992). 26 A. Procedural Fairness 27 The Court’s first inquiry is to determine whether the parties arrived at their settlement 28 through arm’s length bargaining, rather than collusion or fraud. Millan v. Cascade Water Servs., 1 Inc., 310 F.R.D. 593, 613 (E.D. Cal. 2015). A settlement is presumed fair if it “follow[s] 2 sufficient discovery and genuine arms-length negotiations.” Adoma v. Univ. of Phx., Inc., 913 F. 3 Supp. 2d 964, 977 (E.D. Cal. 2012) (quoting Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 4 221 F.R.D. 523, 528 (C.D. Cal. 2004)). “Participation in mediation prior to settlement ‘tends to 5 support the conclusion that the settlement process was not collusive.’” Millan, 310 F.R.D. at 613 6 (quoting Palacios v. Penny Newman Grain, Inc., No. 1:14-cv-01804-KJM, 2015 WL 4078135, at 7 *8 (N.D. Cal. Nov. 21, 2012)). 8 Plaintiffs represent that both the discovery and settlement negotiations in this matter have 9 been robust. The parties first participated in a full-day mediation in 2016. (Martinez Decl. ¶ 50.) 10 They conducted a subsequent full-day mediation in November 2018. (Id.) While these 11 mediations did not result in a settlement, both mediators remained involved in ongoing settlement 12 discussions. (Id.) The instant settlement agreement is the result of a third full-day mediation that 13 occurred on February 2, 2022. (Id.) Plaintiffs contend that all three mediators who assisted in 14 resolving this matter are well-respected in the area of class action employment law. (Id.) 15 Additionally, extensive discovery has informed the negotiating process. Plaintiffs state 16 that Defendants “have produced over 500,000 pages of raw data, including pay and time records, 17 employment policies, invoices, and other documents related to the several causes of action in this 18 case.” (Id. ¶ 51.) Defendants have also provided “4,191,536 rows of electronic data covering 19 2,229,1188 [sic] workdays and over 479,600 paychecks issued to workers during the class 20 period.” (Id.) Plaintiffs deposed Defendants’ Rule 30(b)(6) witnesses and three expert witnesses, 21 and Defendants deposed 17 class members and two expert witnesses. (Id.) The experts produced 22 reports and rebuttals, upon which the parties relied during settlement negotiations. (Id.) 23 Plaintiffs’ counsel, who have “a great deal of experience litigating and evaluating class action 24 cases,” contend that the proposed settlement is fair, reasonable, adequate, and in the best interests 25 of the settlement class. (Id. ¶¶ 51–52; Declaration of Ira Gottlieb (hereinafter “Gottlieb Decl.”) ¶¶ 26 3–7.) Based on these representations, the Court agrees that the settlement agreement is the 27 product of genuine, informed, and arms-length negotiations. 28 /// 1 B. Substantive Fairness 2 i. Adequacy of the settlement amount 3 To evaluate the fairness of a settlement award, courts generally consider a number of 4 factors: “(1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and likely 5 duration of further litigation; (3) the risk of maintaining class action status throughout the trial; 6 (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the 7 proceedings; (6) the experience and views of counsel; (7) the presence of a governmental 8 participant; and (8) the reaction of the class members to the proposed settlement.” Churchill 9 Village, L.L.C. v. Gen. Elec., 361 F.3d 566, 575–76 (9th Cir. 2004). “It is well-settled law that a 10 cash settlement amounting to only a fraction of the potential recovery does not per se render the 11 settlement inadequate or unfair.” Officers for Just. v. Civil Serv. Comm’n of San Francisco, 688 12 F.2d 615, 628 (9th Cir. 1982). To evaluate the adequacy of a proposed settlement, “courts 13 primarily consider plaintiffs’ expected recovery balanced against the value of the settlement 14 offer.” In re Tableware Antitrust Litig., 484 F. Supp. 2d at 1080. 15 The proposed settlement in this case is for a total amount of $7,875,000, with $4,610,000 16 going to the settlement class. (ECF No. 278 at 16–17; Settlement Agreement ¶¶ 37, 45(5).) 17 Plaintiffs estimate that their claims are worth between $16,541,382 and $22,915,231, not 18 including attorneys’ fees and costs. (ECF No. 278 at 23; Martinez Decl. ¶ 17.) This amount does 19 not include an alleged $14,936,512 in rest break premium payments under California Labor Code 20 section 226.7 that is subject to risk based on a separate pending suit in the Eastern District. (ECF 21 No. 278 at 23, n.4; Martinez Decl. ¶ 17, n.2.) It also does not include the statutory penalties and 22 damages that Plaintiffs estimate could push the total recovery over $100 million. (ECF No. 278 23 at 23, 43; Martinez Decl. ¶ 17.) Plaintiffs calculate that the proposed settlement represents 24 between 34% and 47% of the entire amount they believe Defendants owe the class in wages and 25 interest. (ECF No. 278 at 23; Martinez Decl. ¶ 17.) That number is not, however, entirely 26 accurate because it divides the total settlement amount, including attorneys’ fees, by an estimated 27 possible recovery that does not include attorneys’ fees. The Court finds that the actual proposed 28 class recovery amount of $4,610,000 represents between 20% and 28% of the estimated wages 1 and interest recovery amount. If the Court were to include the alleged $14,936,512 in rest break 2 premium payments as part of the estimated recovery amount, the actual class recovery would 3 represent between 12% and 15% of that entire amount. 4 Plaintiffs provide a number of explanations why the discounted settlement amount is 5 appropriate in this case. Their assessment divides the claims into two categories: “records-based 6 claims” – those based on a direct assessment of records that Defendants provided in discovery – 7 and “survey-based claims” – those based on a random sample survey that Plaintiffs’ experts 8 conducted among the class members. (See ECF No. 278 at 24.) The “records-based claims” 9 include the rest period claim, the meal period claim, and the unpaid travel time claim. (Id.) The 10 “survey-based claims” include the unpaid non-productive time claim, the unpaid off-the-clock 11 work claim, the vehicle mileage reimbursement claim, and the tool reimbursement claim. (Id.) 12 Separately, Plaintiffs discuss the risks associated with their claims to penalties that, they allege, 13 would push the recovery in this case above $100 million. (See id. at 41–43.) 14 1. Records-based claims 15 The rest period claim represents the largest risk in the “records-based claims” category. 16 The risk is so large, in fact, that Plaintiffs do not include any of the estimated $14,936,512 17 recovery for that claim in their calculation of the adequacy of the settlement in this case. 18 (Martinez Decl. ¶ 17, n.2.) The reason for this stems from a separate proceeding brought by 19 Defendants that is pending in the Eastern District under the name Fowler Packing, Co. v. David 20 Lanier, No. 1:16-cv-00106-DAD-SAB. (ECF No. 278 at 28.) The facts of that case are 21 convoluted, but the essence of Defendants’ argument is that the California law permitting 22 Plaintiffs to sue for lost rest period wages violates equal protection. See Fowler Packing Co, Inc. 23 v. Lanier, 844 F.3d 809, 813–14 (9th Cir. 2016). The Ninth Circuit has expressed agreement with 24 that argument, holding that the law does not pass rational basis review. Id. at 816. The Court 25 agrees with Plaintiffs that the posture of the Lanier case subjects their rest period claims to 26 significant risk. 27 Additionally, Plaintiffs contend that their meal period claims are subject to risk because 28 experts for each side have come to differing conclusions after assessing the relevant data. (ECF 1 No. 278 at 31; Martinez Decl. ¶ 31.) Specifically, Defendants’ experts have alleged numerous 2 errors in Plaintiffs’ experts’ analysis and have calculated that Plaintiffs have overstated meal 3 break premium damages by 66.9%. (ECF No. 278 at 31, n.6; Martinez Decl. ¶ 49.) 4 While neither party disputes the amount of the final “records-based claim” – unpaid travel 5 time damages – Plaintiffs note that the $34,425 amount in controversy is modest compared to the 6 other claims. (ECF No. 278 at 31, n.7.) 7 2. Survey-based claims 8 Plaintiffs hired experts to conduct and analyze a random statistical survey of settlement 9 class members. (Id. at 33; Martinez Decl. ¶ 33.) Defendants have hired experts of their own who 10 “challenge virtually every aspect” of Plaintiffs’ experts’ survey “from piloting and methodology, 11 to execution and results.” (ECF No. 278 at 41; Martinez Decl. ¶ 47.) While Plaintiffs express 12 confidence in the accuracy of the survey results, they acknowledge that a trial would subject their 13 claims to a “battle of experts” with no guarantee of success. (ECF No. 278 at 41; Martinez Decl. 14 ¶ 47.) They also note that, while random surveys have been “validated by peer review,” they 15 remain “highly litigated” in courts. (ECF No. 278 at 41; Martinez Decl. ¶ 47.) 16 3. Penalties 17 The disagreement between the parties on the issue of penalties is immense. While 18 Plaintiffs estimate penalties above $100 million, Defendants assert that flaws in both Plaintiffs’ 19 “records-based claims” calculations and Plaintiffs’ random survey, among other factors, make it 20 possible that the settlement class would be entitled to a far smaller amount in penalties, if any. 21 (ECF No. 278 at 42; Martinez Decl. ¶ 49.) Additionally, Defendants argue that, depending on the 22 outcome of the Lanier case, Plaintiffs may not be entitled to any waiting time penalties at all. 23 (ECF No. 278 at 42; Martinez Decl. ¶ 49.) 24 4. Conclusion 25 At the outset, the Court agrees it is reasonable to analyze the adequacy of the settlement 26 amount without reference to either the rest period claims or penalty claims. As discussed above, 27 the Lanier case subjects the rest period claims to significant risk. Additionally, the chasm 28 between the parties’ estimation of penalties indicates that they would be subject to intensive 1 litigation with uncertain results. Therefore, the Court finds it appropriate to assess the proposed 2 class recovery amount of $4,610,000 as representing between 20% and 28% of the estimated 3 wages and interest recovery amount. This estimated recovery is not out of line with other class 4 action settlements. See, e.g., Marquez Amaro v. Gerawan Farming, Inc., No. 1:14-cv-00147- 5 DAD-SAB, 2019 WL 3772804, *4–*5 (E.D. Cal. Aug. 8, 2019) (approving a settlement of 6 approximately 20 percent as preliminarily fair); Villegas v. J.P. Morgan Chase & Co., No. 09- 7 00261 SBA (EMC), 2012 WL 5878390, at *6 (N.D. Cal. Nov. 21, 2012) (approving a settlement 8 of approximately 15 percent as preliminarily fair). Plaintiffs have also detailed a number of risks 9 – including proof issues, varying expert opinions, and possible defenses – that make full recovery 10 in this case far from certain. Additionally, this case is already almost seven years old, and the 11 parties have engaged in extensive discovery and settlement negotiations. Further litigation will 12 likely be complex, expensive, and time consuming. (See Gottlieb Decl. ¶ 4; Martinez Decl. ¶ 4.) 13 Finally, class counsel have significant experience litigating class action lawsuits. (See Gottlieb 14 Decl. ¶¶ 8–11; Martinez Decl. ¶¶ 58–61.) 15 Considering all the information that Plaintiffs have provided in their motion for 16 preliminary approval, the Court concludes that the proposed settlement amount is substantively 17 fair, reasonable, and adequate. 18 ii. Attorneys’ fees and costs 19 When a negotiated class action settlement includes an award of attorneys’ fees, “courts 20 have an independent obligation to ensure that the award, like the settlement itself, is reasonable, 21 even if the parties have already agreed to an amount.” Bluetooth, 654 F.3d at 941; see also 22 Zucker v. Occidental Petrol. Corp., 192 F.3d 1323, 1328–29 (9th Cir. 1999). Where, as here, fees 23 are to be paid from a common fund, the relationship between the class members and class counsel 24 “turns adversarial.” In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291, 1302 (9th Cir. 25 1994). As a result, the court must assume a fiduciary role for the class members in evaluating a 26 request for an award of attorney fees from the common fund. Id.; Rodriguez v. W. Publ’g Corp., 27 563 F.3d 948, 968 (9th Cir. 2009). 28 /// 1 Courts in the Ninth Circuit have the discretion to choose from two methods for 2 determining attorneys’ fees in cases like this: the “percentage of the fund” method and the 3 “lodestar” method. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (2002) (citation omitted). 4 “Reasonableness is the goal, and mechanical or formulaic application of either method, where it 5 yields an unreasonable result, can be an abuse of discretion.” In re Coordinated Pretrial Procs. 6 in Petrol. Prods. Antitrust Litig., 109 F.3d 602, 607 (9th Cir. 1997). 7 Under the percentage of the fund method, courts may award class counsel a percentage of 8 the common fund recovered for the class. Bluetooth, 654 F.3d at 942. In the Ninth Circuit, a 9 twenty-five percent award is the “benchmark,” but courts may adjust this figure if the record 10 shows “special circumstances justifying a departure.” Id. (quoting Six (6) Mexican Workers v. 11 Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990)). Such special circumstances might 12 include achieving exceptional results for the class, undertaking extremely risky litigation, 13 generating benefits for the class beyond the cash settlement fund, or handling the case on a 14 contingency basis. See In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 954–55 (9th Cir. 15 2015). When departing from the twenty-five percent benchmark, courts must provide an 16 explanation. Powers v. Eichen, 229 F.3d 1249, 1256–57 (9th Cir. 2000) 17 The lodestar method requires courts to multiply the number of hours the prevailing party 18 reasonably spent litigating the case by a reasonable hourly rate for counsel. Bluetooth, 654 F.3d 19 at 941. The result of such a computation is a presumptively reasonable fee. See Gonzalez v. City 20 of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). 21 The Ninth Circuit has recommended that district courts apply one method but cross-check 22 the appropriateness of the determined amount by employing the other as well. See Bluetooth, 654 23 F.3d at 944. This diligence is particularly important “where the plaintiff has achieved ‘only 24 limited success,’ [and] counting all hours expended on the litigation – even those reasonably 25 spent – may produce an ‘excessive amount . . . .’” Id. at 942 (quoting Hensley v. Eckerhart, 461 26 U.S. 424, 436 (1983). 27 Separate from a fee award, “[t]here is no doubt that an attorney who has created a 28 common fund for the benefit of the class is entitled to reimbursement of reasonable litigation 1 expenses from that fund.” Ontiveros v. Zamora, 303 F.R.D. 356, 375 (E.D. Cal. 2014) (citation 2 and internal quotations omitted). 3 Here, class counsel will seek $500,000 in costs. (ECF No. 278 at 16; Settlement 4 Agreement ¶ 45(3).) Additionally, class counsel will seek attorneys’ fees not to exceed one-third 5 of the total settlement amount, or $2,625,000. (ECF No. 278 at 16; Settlement Agreement ¶ 6 45(3).) The amount requested here exceeds the Ninth Circuit benchmark but is still within the 7 typical range of acceptable attorneys’ fees. See Morales v. Stevco, Inc., No. 1:09-cv-00704 AWI 8 JLT, 2011 WL 5511767, at *12 (“The typical range of acceptable attorneys’ fees in the Ninth 9 Circuit is 20% to 33 1/3% of the total settlement value, with 25% considered the benchmark.”). 10 Given the length of time this case has been pending, the extensive discovery and use of experts, 11 the numerous mediations, and the fact that the maximum request for attorneys’ fees falls within 12 the typical range for awards in the Ninth Circuit, the Court approves class counsel’s requests for 13 attorneys’ fees and costs on a preliminary basis. Nevertheless, the Court will require more 14 information from class counsel prior to final approval of attorneys’ fees in order to justify 15 departing from the benchmark. See Uschold v. NSMG Shared Servs., LLC, 333 F.R.D. 157, 174 16 (N.D. Cal. 2019) (“In support of an increase above the 25 percent benchmark, Plaintiffs must 17 submit evidence – declarations, billing summaries, etc. – from which the Court could determine 18 an appropriate lodestar figure to cross-check the amount requested.”). Therefore, prior to the 19 final approval hearing, class counsel shall file a formal motion for attorneys’ fees and costs – 20 including declarations, detailed billing records, and an itemized list of costs. This will permit the 21 Court to assess the reasonableness of the requested costs and cross check the requested attorneys’ 22 fees with a lodestar amount based on the submission of class counsel. It will also allow class 23 members an opportunity to object to the attorneys’ fees and costs, as required by Rule 23(h). See 24 In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 993–94 (9th Cir. 2010). 25 iii. Incentive payment 26 “Incentive awards are fairly typical in class action cases.” Rodriguez, 563 F.3d at 958. 27 Nevertheless, “district courts must be vigilant in scrutinizing all incentive awards to determine 28 whether they destroy the adequacy of the class representatives.” Radcliffe v. Experian Info. Sols. 1 Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). For example, a conflict may arise between class 2 representatives and unnamed class members when there is a significant disparity between the 3 incentive awards and the distribution to the unnamed class members, or when incentive payments 4 are conditioned on a named plaintiff’s acceptance of a settlement agreement. Id. at 1165. In 5 assessing the appropriateness of an incentive payment, courts should consider “the actions the 6 plaintiff has taken to protect the interests of the class, the degree to which the class has benefitted 7 from those actions, . . . the amount of time and effort the plaintiff expended in pursuing the 8 litigation . . . and reasonabl[e] fear[s of] workplace retaliation.” Staton v. Boeing Co, 327 F.3d 9 938, 977 (9th Cir. 2003) (quoting Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)). 10 The proposed settlement agreement states that the two named plaintiffs will seek a total of 11 $20,000, up to $10,000 each, as an incentive award. (ECF No. 278-1 at 41; Settlement 12 Agreement ¶ 45(2).) Class counsel assert this amount is reasonable given the named plaintiffs’ 13 “time, effort, and expense incurred in coming forward to litigate this case on behalf of all Class 14 Members.” (Martinez Decl. ¶ 62.) The “significant time and efforts” the named plaintiffs’ 15 expended on this case included, “providing information to Class Counsel regarding the nature of 16 their claims, consulting with Class Counsel on multiple telephone calls, regularly discussing the 17 status of their case with counsel by telephone and in person, and providing information to other 18 Class Members regarding the status of the certified class action.” (Id.) The incentive award also 19 accounts for certain risks that the named plaintiffs incurred in litigating this matter. These risks 20 included the possibility of paying legal fees to Defendants if the class did not prevail at trial, and 21 the risk of losing employment opportunities based on their involvement in this litigation. (Id. ¶¶ 22 63–64.) Class counsel insist that none of the other class members assumed these particular risks. 23 (Id.) Finally, by signing the settlement agreement, the named plaintiffs assumed a risk that they 24 would not receive any incentive payment: the settlement agreement states, “In the event that the 25 Court reduces or does not approve the requested Class Representative Enhancements, Plaintiffs 26 shall not have the right to revoke the Settlement, and it will remain binding.” (Settlement 27 Agreement ¶ 45(2).) 28 /// 1 The total proposed incentive amount of $20,000 represents .25 percent of the total 2 settlement amount of $7,875,000. Under the net settlement amount of $4,610,000, each of the 3 20,500 class members will receive an average payment of about $225. The amount of the 4 proposed incentive award, and the disparity between the award and the average class member 5 payment, is not out of line with other incentive awards that courts in this circuit have granted. 6 See, e.g., Marquez Amaro, 2019 WL 3772804, at *6–*7 (approving $20,000 in total incentive 7 awards, representing .4 percent of the overall settlement amount, and collecting cases approving 8 of similar incentive awards in the Eastern District of California); see also In re Online DVD- 9 Rental Antitrust Litig., 779 F.3d 934, 940, 942–43 (approving incentive award of $5,000 to eight 10 named plaintiffs, constituting .14 percent of the total settlement amount, where unnamed 11 plaintiffs received only $12 each). 12 Apart from these calculations, the Court notes several other factors indicating that the 13 proposed incentive payments are reasonable. First, the named plaintiffs have assisted in this 14 litigation for almost seven years. Second, the settlement agreement does not condition payment of 15 the incentive award on acceptance of the settlement. Third, and most significantly, the risk of 16 losing future employment opportunities is acute in a case like this, where the named plaintiffs 17 work on a wage and hour basis harvesting crops in a small community. The Court, therefore, 18 finds that this incentive award is reasonable at the preliminary approval stage and that the amount 19 does not call into question the adequacy of the named plaintiffs’ representation of the class. Prior 20 to the final approval hearing, Plaintiffs shall provide the Court evidence of the specific amount of 21 time the named plaintiffs spent on this litigation, the particular risks and burdens each named 22 plaintiff carried as a result of bringing this action, and the particular benefits the named plaintiffs 23 provided to class counsel and the class as a whole throughout the litigation. See Marquez Amaro, 24 2019 WL 3772804, at *7. 25 iv. Release of claims 26 The settlement agreement defines “Released Claims” as: 27 [A]ny and all claims, debts, liabilities, demands, obligations, penalties, guarantees, costs, expenses, damages, attorney’s fees, 28 action or causes of action of whatever kind or nature, whether known 1 or unknown, contingent or accrued, that are alleged, related to or that reasonably could have arisen out of the same facts alleged in the 2 Action. This Release shall include, without limitation, claims that were raised, or that reasonably could have been raised, under any 3 applicable Wage Order (in effect during the Class Period and as subsequently amended) and California Labor Code provisions, 4 including Labor Code sections 201, 201.5, 200, 202, 203, 205.5, 218.5, 221, 223, 226, 226.2, 226.7, 1194, 1197, 2802, California 5 Business and Professions Code sections 17200, 17203, and 17204 based on alleged violations of these Labor Code provisions, or under 6 the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. § 1801 et seq. The period of the Released Claims shall extend 7 through January 1, 2019. The Parties agree that the judgment, and release of claims provided herein, shall have res judicata effect. The 8 definition of Released Claims shall not be limited in any way by the possibility that Plaintiffs or Settlement Class Members may discover 9 new facts or legal theories or legal arguments not alleged in the operative pleadings in the Action but which might serve as an 10 alternative basis for pursuing the same claims, causes of action, or legal theories of relief falling within the definition of Released 11 Claims. Class Counsel also fully releases, indemnifies, and discharges Released Parties from any and all claims, debts, liabilities, 12 demands, obligations, guarantees, costs, expenses, attorney’s fees, damages, actions or causes of actions which arise from or relate to 13 any dispute or claim between or among Class Counsel, including over any claim to any fees, costs, or expenses, and the Settlement 14 shall constitute and may be pled by the Released Parties, as a complete and total defense to any such dispute or claim. 15 (Settlement Agreement ¶ 20.) This release applies to the unnamed members of the settlement 16 class, (see id. ¶ 38.), and it is reasonable because it is limited to claims related to this action. Cf. 17 Bond v. Ferguson Enter., Inc., No. 1:09-cv-01662-OWW-MJS, 2011 WL 284962, at *7 (E.D. 18 Cal. Jan. 25, 2011). The fact that the release prohibits the named plaintiffs from pursuing any 19 other claims against Defendants, whether related to the claims in this case or not, (Settlement 20 Agreement ¶ 39), is not inherently unreasonable. In fact, the release specific to the named 21 plaintiffs constitutes another burden of litigation justifying the amount of their incentive awards. 22 See Bautista v. Harvest Mgmt. Sub LLC, No. CV 12-10004 FMO (CWx), 2013 WL 12125768, at 23 *16 (C.D. Cal. Oct. 16, 2013). 24 C. Proposed Class Notice and Administration 25 1. Adequacy of class notice 26 Upon a finding that preliminary approval of a class action settlement is warranted, courts 27 “must direct notice in a reasonable manner to all class members who would be bound by the 28 1 proposal . . . .” Fed. R. Civ. P. 23(e)(1)(B). For classes certified under Federal Rule of Civil 2 Procedure 23(b)(3) – like the subclasses in this case, (see ECF No. 185 at 61.) – the “notice must 3 clearly and concisely state in plain, easily understood language: (i) the nature of the action; (ii) 4 the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class 5 member may enter an appearance through an attorney if the member so desires; (v) that the court 6 will exclude from the class any member who requests exclusion; (vi) the time and manner for 7 requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 8 23(c)(3).” Fed. R. Civ. P. 23(c)(2)(B). The purpose of this notice is to provide class members an 9 opportunity to investigate the terms of the settlement and voice objections. See Churchill Village, 10 L.L.C., 361 F.3d at 575. 11 The proposed notice is sufficient to satisfy the standards of Rule 23(c)(2)(B). It contains a 12 concise and understandable summary of the action, subclasses, and claims. (ECF No. 278-1 at 13 55–56.) It also contains a breakdown of the settlement and the method by which the Settlement 14 Administrator will calculate individual claims. (Id. at 56–59.) Additionally, the notice describes 15 the method by which class members can object to the proposed settlement and explains that class 16 members may appear through an attorney. (Id. at 57, 59.) While the notice does not permit class 17 members to request exclusion, the parties have previously provided class members an opportunity 18 to opt-out. (See ECF No. 278 at 17.) Finally, the notice provides details about the binding nature 19 of the settlement. (ECF No. 278-1 at 57–58.) 20 The notice does, however, contain a small number of non-substantive errors. The Court 21 orders Plaintiffs to make the following corrections before sending the notice to class members: 22 1. Page 1: The proper case number for this action is now 1:15-cv-00420-ADA-SAB. 23 This should be reflected in two places: (i) in the notice heading, and (ii) in the first 24 paragraph under the heading, “What is this Case About?” 25 2. Page 6: In the final paragraph on the page, the notice should state that the final 26 approval hearing will take place in “Courtroom 1, 8th Floor.” 27 /// 28 /// 1 3. Page 7: In the second to last paragraph, the notice should state that individuals are 2 able to view publicly available filings in “the Clerk’s Office, 1st Floor.” This 3 should replace the words, “Courtroom 9, 6th Floor.” 4 The Court also finds the proposed notice distribution to be appropriate. Plaintiffs suggest 5 that Defendants will provide settlement class data to the Settlement Administrator and class 6 counsel within ten calendar days of the issuance of this order. (ECF No. 278-3 at 5; Settlement 7 Agreement ¶ 5.) The Settlement Administrator will then mail notice packets to the settlement 8 class within fourteen calendar days of receiving the settlement class data. (ECF No. 278-3 at 5.) 9 Finally, Plaintiffs propose that class members may file objections to the proposed settlement 10 within sixty calendar days of the postmark date of the notice packet. (Id.) 11 2. Adequacy of CPT Group to act as Settlement Administrator 12 The parties propose CPT Group, Inc. to serve as Settlement Administrator. They contend 13 that CPT Group is an appropriate choice because it has experience administering wage and hour 14 farmworker class action settlements. (Martinez Decl. ¶ 56.) Additionally, the parties have 15 provided a breakdown of the estimated costs and fees associated with the administration of the 16 settlement. (ECF 278-1 at 62–64.) CPT Group estimates that the total cost will be $115,100.56 17 but has offered a discounted flat fee of $90,000. (Id. at 62.) Nevertheless, the parties have agreed 18 to set aside $120,000 of the total settlement amount to account for any unforeseen costs. 19 (Martinez Decl. ¶ 56.) If any part of this amount ends up unused, the Settlement Administrator 20 will redistribute it to the class members. (Id.) Given CPT Group’s experience with administering 21 class action settlements like the one at issue in this case, the Court will approve it as Settlement 22 Administrator. The Court also finds that the parties have prudently set aside extra money for 23 unforeseen expenses and have set up a reasonable redistribution plan for any unused funds. 24 Accordingly, 25 1. Plaintiffs’ motion for preliminary approval of class action settlement, (ECF No. 26 278), is granted; 27 2. The proposed settlement detailed in this order is approved on a preliminary basis 28 as fair and adequate and the product of serious, informed, and arms-length 1 negotiations between the parties; 2 3. The proposed notice and claim form are approved because they conform with 3 Federal Rule of Civil Procedure 23, with the exception of the following non- 4 substantive changes, as noted in this order: 5 a. Page 1: The proper case number for this action is now 1:15-cv- 6 00420-ADA-SAB. This should be reflected in two places: (i) in the 7 notice heading, and (ii) in the first paragraph under the heading, 8 “What is this Case About?” 9 b. Page 6: In the final paragraph on the page, the notice should state 10 that the final approval hearing will take place in “Courtroom 1, 8th 11 Floor.” 12 c. Page 7: In the second to last paragraph, the notice should state that 13 individuals are able to view publicly available filings in “the 14 Clerk’s Office, 1st Floor.” This should replace the words, 15 “Courtroom 9, 6th Floor.” 16 4. CPT Group, Inc. is approved as Settlement Administrator; 17 5. The following settlement implementation schedule is adopted: 18 a. Defendants shall provide settlement class data to the Settlement 19 Administrator and class counsel no later than ten (10) days after the date of 20 signature on this order; 21 b. The Settlement Administrator shall mail the notice of class action 22 settlement to all class members no later than fourteen (14) days after 23 receiving settlement class data from Defendants; 24 c. Plaintiffs shall file a motion for attorneys’ fees and costs and for the class 25 representatives’ enhancement payments no later than thirty (30) days after 26 the date of signature on this order; 27 d. Class members shall postmark objections to the proposed settlement no 28 later than sixty (60) days after the postmarked date on the notice of the 1 class action settlement; 2 e. Plaintiffs shall file a motion for final approval of the proposed settlement, 3 in accordance with Local Rule 230, no later than thirty (30) days before the 4 final approval hearing; 5 f. The Settlement Administrator shall provide declarations of due diligence 6 and a report on any objections to the Court and class counsel no later than 7 thirty (30) days before the final approval hearing; 8 g. The final approval hearing shall take place on May 15, 2023, at 1:30 p.m. 9 in Courtroom 1 before the undersigned. 10 11 12 | TIS SO ORDERED. 13 Dated: _ January 11, 2023 4 UNITED fTATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19