Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-05449/USCOURTS-cand-3_13-cv-05449-11/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1332 Diversity-Fair Labor Standards Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FEDERICO VILCHIZ VASQUEZ, et al.,

Plaintiffs,

v.

USM INC, et al.,

Defendants.

Case No. 3:13-cv-05449-JD 

ORDER RE MOTIONS FOR FINAL 

SETTLEMENT APPROVAL AND 

ATTORNEYS’ FEES, COSTS AND 

SERVICE AWARDS

Re: Dkt. Nos. 138, 139

This order resolves plaintiffs’ unopposed motions for: (1) final settlement approval and 

certification of a settlement class, and (2) attorneys’ fees, costs, and class representative service 

awards. Dkt. Nos. 138, 139. The Court granted preliminary approval of the proposed settlement 

on April 13, 2015. Dkt. No 134. The Court now grants the motion for final approval and grants in 

part the motion for fees, costs, and service awards. 

BACKGROUND

The key facts are discussed in the Court’s preliminary approval order. Dkt. No. 134. In 

summary, plaintiffs are janitorial employees who worked in Ross Dress for Less and “dd’s 

DISCOUNTS” stores in California from 2009 onward. See Dkt. No. 58. Since 2008, a Ross 

contractor, USM, had lead responsibility for janitorial services and delegated the work to smaller 

subcontractors. Id. ¶ 32. Plaintiffs allege that Ross and USM knowingly underfunded these

janitorial subcontracts, resulting in a host of minimum wage, overtime, and other labor law and 

unfair competition violations. Id. ¶¶ 131, 133. 

The parties have litigated this suit since September 2013. Dkt. No. 1, Ex. A. An initial 

motion to dismiss was denied on January 27, 2014, Dkt. No. 38, and plaintiffs filed for class 

certification on October 24, 2014. Dkt. No. 84-1. After the class certification motion was fully 

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briefed but before the Court had ruled, the parties reached a settlement in principle. Dkt. No. 117. 

In February 2015, the parties moved for preliminary approval of the settlement. Dkt. No. 121. 

After the parties agreed to make specified changes to the form and manner of notice that the Court 

proposed, see Dkt. Nos. 132, 133-1, 133-2, preliminary approval was granted on April 13, 2015. 

Dkt. No. 134. The parties moved for final approval and attorneys’ fees and costs in September

2015, and were heard by the Court on October 7, 2015. Dkt. Nos. 138, 139, 141. At the final 

approval hearing, the Court requested, and the plaintiffs have now submitted, supplemental 

briefing and declarations on the issue of the proposed incentive awards. Dkt. No. 142. 

The proposed final settlement is consistent with the preliminary settlement proposal 

already approved by the Court. See Dkt. No. 121-1, Ho Decl. Exhibit A (“Consent Decree”). 

Under the settlement agreement, defendants will pay $1,000,000 into a non-reversionary 

Settlement Fund, which will serve as the source for payments to Class Members, notice and 

administration costs of up to $125,000, and a Private Attorney General Act (PAGA) payment of 

$5,000 to the State of California. Id. at VII(A). Class members will receive an automatic payment 

of between $50 and $250 (representing up to 20% of the net settlement fund), with additional 

funds distributed to Class Members who submit a timely and valid Claim Form (an additional 30% 

of the net settlement fund, up to an additional $575 per Class Member) and tax reporting and 

employment information substantiating their claim (the remainder of the net settlement fund). The 

maximum amount receivable by any Class Member will be $16,500. Id. at VII(C). Any uncashed 

proceeds from the Settlement Fund will be distributed to several local nonprofits that specialize in 

assisting low-income immigrant workers. Id. at VII(E).

In addition to monetary relief, the settlement requires USM to take concrete steps to ensure 

that janitors employed by its subcontractors receive minimum wage, overtime, workers’ 

compensation, itemized wage statements and notice of their rights under the California Labor

Code. Id. at VIII. Significantly, in addition to Ross being required to revise its master contract 

with USM to properly reflect the terms of Cal. Labor Code § 2810, USM will be held directly 

responsible for reviewing the wage and hour records of its subcontractors and making up any 

shortfall in either minimum wage or overtime pay. Id. at VIII(A). Based on the calculations of 

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their expert, David Breshears, plaintiffs estimate that these behavioral mandates represent a value 

to the class of more than $1.5 million over the next three years alone. Dkt. No. 139 at 2; Dkt. No. 

125 ¶ 3. 

In exchange for this consideration, the class members agree to release defendants from:

any and all claims arising out of the facts as alleged in the Second 

Amended Complaint regarding the provision of Daily Maintenance 

Services at a Ross store in California in connection with the 

provision of a contract or agreement between USM and Ross for the 

provision of Daily Maintenance Services at a Ross store in 

California at any time from September 5, 2009 until February 10, 

2015 including, but not limited to, any claim under any federal, state 

or local statute including, but not limited to the Fair Labor Standards 

Act; the California Business and Professions Code § 17200 et. seq.; 

any provision of the California Labor Code including, but not 

limited to, Labor Code § 2810; and any other federal, state or local 

law or ordinance relating to the payment of wages. 

Dkt. No. 139 at 4; Consent Decree at VI(B).

This release will bind the following individuals, except (with respect to claims for 

individual monetary damages) those who opted out or failed to receive timely notice:

The monetary relief Settlement Class: All persons who have 

provided Daily Maintenance Service at a Ross store in California in 

connection with the performance of a contract or agreement between 

USM and Ross for the provision of janitorial services from 

September 5, 2009 until February 10, 2015, except those who file a

timely request to opt out of and be excluded from the monetary 

relief provisions of the Consent Decree. 

The injunctive relief Settlement Class: All persons currently 

providing Daily Maintenance Service at a Ross store in California in 

connection with the performance of a contract or agreement between 

USM and Ross for the provision of janitorial services. 

Consent Decree at IV(A)-(C).

Plaintiffs report that notice has been provided consistent with the proposed settlement 

agreement and with the requirements of Rule 23(e)(1). Notice was mailed to 1,211 class 

members, out of which 314 notice packets were initially returned as undeliverable. Dkt. No. 139 

at 9. As of the date of the plaintiffs’ motion for final approval, only 171 notice packets remained 

undeliverable. Id. Notice was also distributed through Spanish-language media, a settlement 

website, USM (to current employees), non-profits serving low-wage janitorial workers in 

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California, and by phone to Class Members who had not yet submitted a claim form. Dkt. No. 

139 at 9-10. Except for those who received notice through some other means and filed a timely 

Claim Form, the individuals whose notice packets were returned as undeliverable will not be 

bound by the settlement. Consent Decree at IV(C). 

DISCUSSION

I. FINAL APPROVAL OF CLASS ACTION SETTLEMENT

In the order granting preliminary approval, the Court found that the proposed settlement 

classes satisfied the requirements of Federal Rules of Civil Procedure 23(b)(2) and (b)(3). Dkt. 

No. 134 at 4. The Court also found that the proposed agreement was “fair, adequate, and 

reasonable” in light of the risks faced by the plaintiffs in further litigation. Id. at 4. This case has 

been vigorously defended by USM, and if they proceed to trial, the Court noted that plaintiffs will

continue to face significant risks related to the ascertainability of the proposed classes, the 

reliability of the janitorial subcontractors’ time sheets and other key pieces of evidence, and the 

ability of plaintiffs to substantiate the number of violations subject to the statutory damages 

provision of California Labor Code § 2810(g). Id. at 3. In particular, if defendants were to prevail 

on their interpretation of the applicability of § 2810(g), plaintiffs would only be entitled to 

approximately $1,200,000 in damages -- only marginally more than the $1,000,000 settlement 

fund. Based on these facts, the Court found that plaintiffs had made a reasonable choice in 

seeking to avoid such risks, especially in light of the significant relief afforded by the proposed 

settlement. Id. at 3-4. 

These conclusions hold here at the final approval stage. The proposed settlement provides 

meaningful monetary and non-monetary relief to the settlement class. Each class member is 

guaranteed to receive an average of $728. Dkt. No. 139 at 1. The class members who continue to 

be employed by USM subcontractors will benefit from the non-economic relief provided by the 

Consent Decree, including the requirement that USM monitor its subcontractors for compliance 

and make up any shortfall in wages and overtime. Id. at 1-2. No objections were received during 

the 120-day notice period, and no Class Member has asked to opt out from the Class. Dkt. No. 

139-4 ¶¶ 17-18. Lack of objection from the class members is a substantial factor in favor of final 

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approval. See Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 529 (C.D. Cal. 

2004) (“the absence of a large number of objections to a proposed class action settlement raises a 

strong presumption [that] the terms of a proposed class settlement are favorable to the class 

members”); see also Churchill Vill., L.L.C.v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (listing 

“the reaction of the class members to the proposed settlement” among the “non-exclusive” 

settlement evaluation factors courts are to consider before granting approval). In addition to the

lack of objections during the notice period, no objections were raised at the hearing on the present 

motions. 

Consequently, the Court grants final approval of the proposed settlement, finally certifies 

the injunctive and monetary relief settlement classes as proposed, and appoints Federico Vilchiz 

Vasquez, Jesus Vilchez Vasquez, Ada Cañez, Emigdio Mendez, Candelaria Hurtado, and Evelia 

Martinez as class representatives, and Goldstein, Borgen, Dardarian & Ho, Chavez & Gertler LLP, 

Legal Aid of Marin, and the Stanford Community Law Clinic as class counsel.

II. FINAL APPROVAL OF ATTORNEYS’ FEES AND COSTS

Plaintiffs seek the Court’s approval for payment of $1,102,000 in fees to class counsel, as 

well as reimbursement of actual and expected litigation costs of $198,000. Dkt. No. 138 at 1. 

Reasonable attorney’s fees and costs are allowed under Federal Rule of Civil Procedure 23(h). 

Where, as here, the plaintiff brings California state law claims, the Court looks to the state’s law in 

determining the reasonableness of the fees requested. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 

1047 (9th Cir. 2002). California courts have repeatedly validated the lodestar method as a means 

of determining reasonableness, particularly in circumstances where the fees are to be paid 

separately and not from a common fund. Lealao v. Beneficial Cal., Inc., 82 Cal. App. 4th 19, 26 

(2000) (citing Seranno v. Priest, 20 Cal. 3d 25 (1977)). The lodestar method is particularly useful 

when, as here, the relief obtained includes an injunction whose value will not be reflected in the 

monetary portion of the settlement. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 

1998). 

In this case, plaintiffs note that the $1.1 million in fees represents only 0.46 of class 

counsel’s lodestar to date. Dkt. No. 138 at 1, 6. Although the fee award represents more than 

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50% of the total cash settlement in this case, see Dkt. No. 139 at 3, plaintiffs say that the fee 

recovery only “represents 28.9% of the estimated constructive common fund when taking into 

account the monetary benefit of Defendants’ revised contracts and monitoring to ensure janitorial 

subcontractors are paying minimum wage and agreement to pay minimum wage directly if it is 

found that a subcontractor is not following the law.” Dkt. No. 138 at 17. 

Although somewhat on the high side, the requested fees are tolerable in light of the 

challenges in this case, the fact that the fee award represents a negative multiplier on the billable 

hours actually incurred by plaintiffs’ counsel, see Dkt. No. 138 at 6, and that it will be paid 

separately from, and will not be taken out of, the money due to the plaintiffs. The fee request is 

adequately supported by the calculations plaintiffs have submitted. See Dkt. No. 138-1, 138-2, 

138-3, 138-4. The fee request is approved. 

Plaintiffs’ counsel also seeks $198,000 in costs. Dkt. No. 121 at 8. The request is 

unopposed and is approved. 

III. SERVICE AWARDS

Plaintiffs initially requested so-called “incentive awards” for the named plaintiffs in 

amounts of between $1,000 and $5,000 to “compensate [the] class representatives for work 

undertaken on behalf of class members.” Dkt. No. 138 at 20. In response to concerns expressed 

by the Court at the October 7, 2015 hearing, plaintiffs agreed to submit declarations substantiating 

any unreimbursed expenses incurred by the class representatives. Dkt. No. 141. The declarations 

submitted by the plaintiffs do not detail specific out-of-pocket expenses, but instead state that 

“[a]ll of the class representatives are hourly minimum wage workers and could not work and were 

not compensated when they took time to work on behalf of the class,” and request “reimbursement 

from the Settlement Fund for the time they spent on behalf of the class at the minimum wage 

($9/hour).” Dkt. No. 142 at 1.

The Court, following the Ninth Circuit, has often expressed skepticism of settlements in 

which named plaintiffs do appreciably better than rank-and-file class members; settlements like 

that pose a serious risk of collusive settlements and conflict within the plaintiffs’ side of the case. 

See Myles v. AlliedBarton Sec. Servs., LLC, No. 12-cv-05761-JD, 2014 WL 6065602, at *6 (N.D. 

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Cal. Nov. 12, 2014) (“Absent a particularized showing of expenses incurred or injury suffered by 

[the named plaintiff] (above and beyond those of the other proposed class members), an 

enhancement award is inappropriate.”); Stokes v. Interline Brands, Inc., No. 12-cv-05527-JD, 

2014 WL 5826335, at *6 (N.D. Cal. Nov. 10, 2012). But this is not a hard-and-fast rule, and 

courts in our Circuit may consider additional factors, including the amount of time and effort that 

plaintiffs have expended in pursuing the litigation, in determining whether a service award is 

appropriate. Staton v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003). In light of plaintiffs’ sworn 

representations about the number of unpaid hours that each class representative spent on the case, 

see Dkt. No. 142, the Court grants the plaintiffs’ supplemental request that the claimed hours be 

compensated at a rate of $9 per hour. The Court awards payment, from the Settlement Fund, of 

$540 to Federico Vilchiz Vasquez; $405 to Jesus Vilchez Vasquez; $540 to Ada Cañez; $270 to

Emigdio Mendez; $225 to Candelaria Hurtado; and $108 to Evelia Martinez.

CONCLUSION

The Court grants final approval of class settlement, the requests for attorneys’ fees and

costs, and for additional payments to the named plaintiffs as provided herein. The Clerk is 

requested to close the case and terminate any pending matters.

IT IS SO ORDERED.

Dated: February 16, 2016

________________________

JAMES DONATO

United States District Judge

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