Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01116/USCOURTS-casd-3_10-cv-01116-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1446 Petition for Removal

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

CHARLES SMITH, HECTOR CASAS, and 

BARRY NEWMANN, individually and on 

behalf of all other similarly situated, 

Plaintiffs, 

vs. 

CRST VAN EXPEDITED, INC., et al., 

Defendants. 

CASE NO. 10-CV-1116- lEG (WMC) 

ORDER: 

1. 	 GRANTING MOTION FOR 

FINAL APPROVAL OF 

CLASS ACTION 

SETTLEMENT AND 

AWARD OF INCENTIVE 

PAYMENTS TO CLASS 

REPRESENTATIVES 

[Doc. No. 88] 

2. 	 GRANTING MOTION FOR 

ATTORNEYS' FEES AND 

COSTS. 

[Doc. No. 81] 

Presently before the Court are Plaintiffs' motion for final settlement approval and incentive 

payments to class representatives, [Doc. No. 88], and Plaintiffs' motion for attorneys' fees and 

costs. [Doc. No. 81.] For the reasons stated below, both motions are GRANTED. 

BACKGROUND 

This is a class action by truck drivers against their employer, CRST Van Expedited, Inc. 

("CRST"), for failure to pay minimum wages during certain stages ofthe company's driver training 

program and related violations ofCalifornia Business and Professions Code Section 17200. [See, e.g., 

Doc. No.1, Ex. A (original complaint).] The class is represented by Charles Smith, Hector Casas, 

and Barry Newmann (collectively, the "Class Representatives"). Three portions ofCRST' straining 

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program, (l) truck driver training school; (2) orientation; and (3) over-the-road training, pertain to the 

claims alleged as follows: 

1. 	 Truck driver training school: Certain drivers, referred to as Contract Student Drivers, 

were required to attend an 8 month truck driving school with the option ofdoing so at 

CRST's expense if they signed Driver Employment Contracts. Under the Driver 

Employment Contracts, ifthose drivers did not remain employed with CRS T for a full 

8 months, they would be obligated to pay CRST $3,950. This amount was ostensibly 

to repay the cost of the program, but was in fact $2,450 more than the cost of the 

program, and thus Plaintiffs allege the obligation to pay constituted an unenforceable 

penalty. 

2. 	 Orientation: All drivers were required to attend orientation, for which no compensation 

was paid. Plaintiffs allege they were entitled to California and federal minimum wage 

for the roughly 29 hours spent in this orientation. 

3. 	 Over-the-road training: Certain drivers were required to participate in over-the-road 

training, for which they received a flat $50 per day rate for 28 days. Plaintiffs allege 

this rate failed to meet the California and federal minimum wage. 

After nearly three years litigating these claims, the parties agreed to a proposed settlement, 

[see Doc. No. 76-4 at 12-108 (Joint Stipulation of Settlement and Release of Class Action) (the 

"settlement")], which the Court preliminarily approved on April 23, 2012. [Doc. No. 78.] For 

settlement purposes, 1 the Court certified the following class divided into subclasses: 

Persons who resided in the State ofCalifornia at the time oftheir date of hire 

and who worked as truck drivers for CRST Van Expedited, Inc. between November 5, 

2005 and April 23, 2012. These persons are divided into the following subclasses: 

Subclass 1-Contract Student Drivers [Drivers who attended truck driver 

training school at CRST's expense] who worked for CRST for more than 8 months, or 

who have a current balance that CRST contends is still owed for training expenses 

which is less than $500; 

Subclass 2 - Contract Student Drivers who have a current balance of $500 or 

more, which CRST contends is still owed for their training expenses, or who are 

employed by CRST as ofthe date of Preliminary Approval Date, but have not 

completed the 8 months required by their Driver Employment Contacts; and 

Subclass 3 - Drivers who were not Contract Student Drivers [Drivers who (a) 

paid for their own truck driver training school, (b) who pre-paid CRST for the cost of 

truck driver training school, or (c) who already had their Commercial Driver's License 

when they started work for CRST and did not attend truck driver training school]. 

As consideration for the release of all claims expressly and derivatively asserted in this 

action, the settlement provides the class with a total financial benefit in excess of $11 ,600,000. 

1 Having reviewed this class definition again, the Court hereby adopts its prior analysis 

and finds the requirements ofFed. R. Civ. P. 23 met for final settlement approval. [See Doc. No. 78.] 

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This includes a non-reversionary $2,625,000 cash payout and over $9,000,00 in outstanding debt 

under the Driver Employment Contracts that CRST agrees to relieve. In addition to the financial 

benefits of the settlement, CRST has agreed to significant changes to its policies and training 

program that will benefit its employees going forward, including a full disclosure form provided to 

employees prior to enrollment in the training program, temporary employee status for drivers 

when tested by the Department of Motor Vehicles, payment for drivers during orientation going 

forward, payment by a split mile basis rather than $50 per day for over-the-road training going 

forward, and a $250 bonus going forward for all drivers who remain employed eight months after 

completion ofthe training program. [See Doc. No. 88-5.] 

DISCUSSION 

I. Final Approval of the Settlement 

Voluntary conciliation and settlement are the preferred means of dispute resolution in 

complex class action litigation. Officers for Justice v. Civil Service Com 'n ofCity and County of 

San Francisco, 688 F.2d 615,625 (9th Cir. 1982). And though, "[u]nlike the settlement of most 

private civil actions, class actions may be settled only with the approval of the district court," "the 

court's intrusion upon what is otherwise a private consensual agreement negotiated between the 

parties to a lawsuit must be limited." Id at 623,625; see also Fed. R. Civ. P. 23(e). Courts are not 

"to reach any ultimate conclusions on the contested issues of fact and law which underlie the 

merits ofthe dispute," nor is "[t]he proposed settlement 0 to be judged against a hypothetical or 

speculative measure of what might have been achieved by the negotiators." Id. Rather, "a district 

court's only role in reviewing the substance of[a] settlement is to ensure that it is 'fair, adequate, 

and free of collusion.'" Lane v. Facebook, _F.3d-, 2012 WL 4125857, at *3 (9th Cir. Sept. 20, 

2012) (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). 

In making this appraisal, courts have "broad discretion" to consider a range of factors such 

as "the strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further 

litigation; the risk of maintaining class action status throughout the trial; the amount offered in 

settlement; the extent ofdiscovery completed and the stage of the proceedings; the experience and 

views of counsel; the presence of a governmental participant; and the reaction ofthe class 

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members to the proposed settlement." ld. (citing Torrisi v. Tucson Elec. Power Co., 8 FJd 1370, 

1375 (9th Cir.1993)). "The relative importance to be attached to any factor will depend upon and 

be dictated by the nature ofthe claim(s) advanced, the type(s) ofrelief sought, and the unique facts 

and circumstances presented by each individual case." Officers/or Justice, 688 Fold at 625. 

Here, the Court finds the proposed settlement fair, adequate, and free of collusion. As 

discussed more fully below, the settlement is the product of arms-length negotiations by 

experienced counsel before a respected mediator, reached after and in light ofyears of litigation 

and ample discovery into the asserted claims, and provides the class with both a substantial cash 

recovery as well as significant debt relief, which together amount to over $11,600,000 in 

ascertainable financial value. Moreover, the reaction ofthe class has been overwhelmingly 

positive and the lone objection is without merit.2 

A. Strengths and Risks of the Case and Value of the Settlement 

This case was initiated in November 2009, has progressed through several amended 

pleadings which revised and expanded claims, and Plaintiffs maintain they have developed a 

strong case. [Doc. No. 88-1.] Defendant disagrees and, should the case not settle, has committed 

to vigorously contesting the asserted claims. [Doc. No. 92.] But both parties acknowledge the 

significant risks and costs presented by further litigation and thus avoided by this reasonable 

compromise. Settlement was reached at the class certification stage with much ofthe case still to 

be litigated and thus prevents the likely expense, complexity, and duration of, inter alia, full 

discovery, summary judgment, expert reports, trial, and subsequent appeals. Numerous significant 

issues remain in dispute, including, e.g., whether California or federal minimum wage laws apply, 

whether the claims are amenable to class wide proof, whether common issue predominate, and the 

measure and extent of damages. Not only expensive, going forward despite the many complex 

issues still in dispute risks further exposure and uncertainty for Defendant as well as impairment or 

delay ofrelief to the class. 

Against these considerations, the parties have agreed to a settlement with a total financial 

2 The lone objection to the settlement, that of James Cole, was found meritless and 

denied as detailed in a prior order ofthe Court. [Doc. No. 98.] 

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value of over $11,600,000, which results in individual payouts to claimants in subclasses 1 and 2 

equating to over 180% and 140% of estimated damages, respectively. [See Doc. No. 88-5 at 4-5.] 

And subclass 2 receives a payout of over 35% of estimated damages as well as total subclass relief 

ofover $9,000,000 in debt, which equates to at least another $500 in value to each member of 

subclass 2. This is an extremely favorable result given the considerable challenges the class faces 

should litigation continue. Moreover, the settlement avoids the risks of extreme results on either 

end, i. e., complete or no recovery. Thus, it is plainly reasonable for the parties at this stage to find 

that the actual recovery realized and risks avoided here outweigh the opportunity to pursue 

potentially more favorable results through full adjudication. These factors support approval. See 

Officers for Justice, 688 F.2d at 625 (settlement is necessarily "an amalgam of delicate balancing, 

gross approximations and rough justice."); Facebook, _F.3d-, 2012 WL 4125857, at *3 ("the 

question whether a settlement is fundamentally fair ... is different from the question whether the 

settlement is perfect in the estimation of the reviewing court."). 

B. Endorsement of Experienced Counsel 

Class counsel attest to decades of experience litigating class actions, including similar 

labor and overtime litigation as well as a range ofother complex matters. [See Doc. No. 81-1 

(Declaration of A. Mark Pope); Doc. No. 81-5 (Declaration ofDouglas J. Campion).] Given their 

extensive experience and understanding of the strengths and weaknesses of cases such as this, 

class counsel's endorsement weighs in favor of final approval. See Singer v. Beckon Dickinson 

and Co., 2010 WL 2196104, at *6 (S.D. Cal. June 1,2010). 

C. Reaction of the Class 

The reaction of the class has been almost entirely positive. Of the over 7,000 class 

members noticed, 3,069 have submitted claims and only ten have opted out. [See Doc. No. 88-7, 

Ex. F (list ofindividuals who have opted-out).] Only a single class member objected, which 

objection the Court overruled as meritless. [See Doc. No. 98.] The small percentage of opt-outs 

and objectors strongly supports the fairness of the settlement. Cf McPhail v. First Command 

Financial Planning, Inc., 2009 WL 938841, at *3 (S.D. Cal. March 30, 2009) ("If only a small 

number of objections are received, that fact can be viewed as indicative of the adequacy ofthe 

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settlement.") (internal citations omitted). 

D. No Suggestion Of Collusion 

No aspect of the settlement suggests collusion. Rather it was reached after conference 

before the Honorable William J. McCurine and three full days of mediation before the Honorable 

Leo S. Papas (Ret.), [see Doc. 88~5 (Declaration ofA. Mark Pope)], and neither the requested 

attorneys' fees nor the requested incentive awards appear unreasonable, [see infra]. Nor has even 

the lone objector suggested collusion. Much to the contrary, the circumstances and extent of the 

parties' negotiations suggest fundamental fairness and thus weigh in favor of approval. 

In light ofthe foregoing reasons, the Court finds the settlement fair, adequate, and free of 

collusion, and thus GRANTS final approval ofthe settlement. 

II. Attorneys' Fees 

This action asserts California claims premised on diversity jurisdiction, and thus the Court 

applies California law to determine both the right to and method for calculating fees. See 

Mangold, 67 F.3d at 1478. Under California law, the primary method for determining the amount 

ofreasonable attorneys' fees is the lodestar method, which mUltiplies the number of hours 

reasonably expended by a reasonable hourly rate with the court increasing or decreasing that 

amount by applying a positive or negative multiplier based on, among other factors, the quality of 

representation, the novelty and complexity ofthe issues, the results obtained, and the contingent 

risk presented. In re Consumer Privacy Cases, 175 Cal.App.4th 545, 556-57 (2009). But in cases 

such as this, where the class benefit can be monetized with a reasonable degree of certainty, a 

percentage ofthe benefit approach may be used. Id. at 557-58 (citing Lealao v. Beneficial 

California, Inc., 82 Cal.App.4th 19,26-27 (2000)). 

Under the percentage method, California has recognized that most fee awards based on 

either a lodestar or percentage calculation are 33 percent and has endorsed the federal benchmark 

of25 percent. In re Consumer Privacy Cases, 175 Cal.App.4th at 556 n. 13. As to the settlement 

fund amount: " ... The total fund could be used to measure whether the portion allocated to the 

class and to attorney fees is reasonable." Id. at 553-54 (citing Manual for Complex Litigation (4th 

ed. 2008) § 21.71, p. 525). Always, "[t]he ultimate goal is to award a reasonable fee." See 

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Hartless v. Clorox, 273 F.R.D. 630, 645 (S.D. Cal. 2011). 

Here, the settlement confers a total financial benefit to the class in excess of $11 ,600,000, 

including both a non-reversionary cash payment of $2,625,000 and over $9,000,000 in 

reimbursement/debt relief for those class member that CRST claims owed payment pursuant to 

Driver Employment Contracts (i.e., for not working a full 8 months after truck driver training 

school). Additionally, the settlement confers non-financial benefits, including CRST's agreement 

to contact credit reporting agencies to remove record ofdebt relieved by the settlement, and 

substantial changes to CRST's training program that will benefit drivers going forward. 

In light ofthe results achieved, the requested fees appear reasonable. The settlement 

provides for, and class counsel here seeks, an award of $875,000 in fees which constitutes 33 113 

% of the cash payment butonly 7.5 % ofthe total $11,650,000 financial value ofthe settlement. 

These percentages compare favorably with both California (33%) and federal (25%) benchmarks. 

The requested fee compares well with a lodestar cross-check as well. Applying class counsel's 

hourly rates ranging from $150 to $450, which fall within if not below typical rates for attorneys 

of comparable experience, the total lodestar totals $586,916.50. [See, e.g., Doc. No. 81-3 at 78 

(summary class counsel hourly rates and hours expended).] An approximately 1.510destar 

multiplier results in the $875,000 requested fee. This appears reasonable given the risks borne by 

counsel proceeding on contingency, the duration and complexity of the case, as well as the 

substantial benefit realized for the class. See Singer, 2010 WL 2196104, at *8 (awarding 33 113% 

in wage and hour class action); Ingalls v. Hallmark Mktg. Corp., 08cv4342 (C.D. Cal. Oct. 16, 

2009) (awarding 33.33% fee on a $5.6 million wage and hour class action); Birch v. Office Depot, 

Inc., Case No. 06cv1690 (S.D. Cal. Sept. 28, 2007) (awarding a 40% fee on a $16 million wage 

and hour class action); Rippee v. Boston Mkt. Corp., Case No. 05cv1359 (S.D. Cal. Oct. 10,2006) 

(awarding a 40% fee on a $3.75 million wage and hour class action). 

So, too, the requested costs appear reasonable. The settlement provides for not more than 

$35,000 in attorney costs as well as reasonable costs for notice and claims administration. Class 

counsel seek $29,160.32 in attorney costs and $86,500 in claims administration costs. [See Doc. 

No. 88.] These amounts are within that contemplated by the settlement, have been endorsed by 

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experienced counsel and claims administration consultants involved in this case, and are thus 

presumed reasonable. [See id.] Further, nothing suggests the contrary. See In re Media Vision 

Tech. Sec. LiUg., 913 F. Supp. 1362, 1366 (N.D. Cal. 1996) (costs and expenses incurred by 

experience counsel in creating or preserving a common fund presumed reasonable); see also In re 

Immune Response Sec. Litig., 497 F. Supp. 2d 1166, 1177-78 (S.D. Cal. 2007) (finding such costs 

and expenses "necessary" to class action litigation). 

Thus, the Court hereby GRANTS Plaintiffs' requested fees and costs. 

III. Incentive Payments to Class Representatives 

Each of the three Class Representatives seeks an incentive payment of $15,000 for their 

service in prosecuting this action on behalf of the class. [See Doc. No. 88-1 at 20.] "The criteria 

courts may consider in determining whether to make an incentive award include: 1) the risk to the 

class representative in commencing suit, both financial and otherwise; 2) the notoriety and 

personal difficulties encountered by the class representative; 3) the amount oftime and effort spent 

by the class representative; 4) the duration ofthe litigation and; 5) the personal benefit (or lack 

thereof) enjoyed by the class representative as a result of the litigation." Van Vranken v. Atlantic 

Richfield Co., 901 F.Supp. 294, 299 (N.D. Cal.l995) (citations omitted). 

Here, all of these factors weigh in favor ofthe awards sought. This employment class 

action risked and continues to risk the Class Representatives' reputations and future employability 

in the field. It also exposed them to the possibility ofjoint and several liability for counterclaims. 

See Martin v. AmeriPride Services, Inc., 2011 WL 2313604 (S.D. CaL 2011) (acknowledging 

professional and legal risks posed to employees participating as class representatives in 

employment class actions). Further, each representative was active in assisting class counsel in a 

wide variety ofrespects from initiating the case, participating in conferences among opposing 

counsel, as well as investigators and other retained consultants, providing factual background and 

support, analyzing employment and training manuals, pay stubs, CRST document productions, and 

the contracts in dispute, and communicating with class counsel regularly in regard to the claims, 

defenses, and legal strategy in the case. Casas and Newmann attended the settlement conference 

before Judge McCurine and the first mediation session before Judge Papas. Smith was unable to 

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attend in person because ofhealth issues, but made himself available for consultation by telephone 

as needed. [See Doc. Nos. 88-2,88-3,88-4 (Declarations of Smith, Casas, and Newmann, 

respectively).] This record of active involvement despite the risks posed supports approval of 

incentive awards. Van Vranken, 901 F.Supp. at 300. 

Moreover, the amount ofthe incentive payments requested, $15,000, is well within the 

range awarded in similar cases. See Singer, 2010 WL 2196104, at *9 ($25,000 incentive award); 

Martin, 2011 WL 2313604 ($18,500 incentive award); Brotherton v. Cleveland, 141 F.Supp.2d 

907,913-14 (S.D. Ohio 2001) ($50,000 incentive award); Van Vranken, 901 F.Supp. at 300 

($50,000 incentive award). 

Thus, the Court hereby GRANTS the requested class representative incentive awards. 

CONCLUSION 

For the foregoing reasons, the Court hereby: 

• GRANTS final settlement approval; 

• GRANTS Plaintiffs' requests for class representative incentive awards; 

• GRANTS Plaintiffs' motion for attorneys' fees and costs. 

IT IS SO ORDERED. 

DATED: January 14, 2013 

IRMA 

~f.~~ E. GONZALEZ 7J 

United States District Judge 

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