Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00815/USCOURTS-cand-3_15-cv-00815-21/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 05:704 Labor Litigation

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MOUANG SAECHAO, individually and

on behalf of all others similarly situated, 

Plaintiff,

 v.

LANDRYS, INC., a Delaware corporation,

and McCORMICK & SCHMICK

RESTAURANT CORP., a Delaware

corporation, 

Defendants. /

No. C 15-00815 WHA

ORDER GRANTING FINAL

APPROVAL OF CLASS

SETTLEMENT AND AWARDING

ATTORNEY’S FEES

INTRODUCTION

In this wage-and-hour class action, plaintiff moves for final approval of a class

settlement agreement, approval of an incentive award for the lead plaintiff, and an award of

attorney’s fees and costs to class counsel. For the reasons stated below, final approval of the

settlement is GRANTED, the incentive award is GRANTED, the request for attorney’s fees and

costs is GRANTED IN PART AND DENIED IN PART. Additionally a dispute relating to fees and

costs is referred to a magistrate judge for mediation.

STATEMENT

The background of this action is set forth in prior orders (Dkt. Nos. 98, 139). Plaintiff

Mouang Saechao asserts various claims for wage-and-hour violations against defendant

McCormick & Schmick Restaurant Corp., which operated Spenger’s Fresh Fish Grotto, a

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 1 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

restaurant in Berkeley. An order certified five classes, each with a different claim against

McCormick & Schmick. 

After a full and contentious discovery period, including the retention of an economics

expert to conduct an extensive damages study, the parties attended three settlement conferences

before Magistrate Judge Joseph C. Spero and reached a classwide settlement agreement. An

order granted preliminary approval of the settlement.

Briefly, the settlement requires McCormick & Schmick to establish a non-reversionary

settlement fund of $500,000 dollars, from which shall be deducted attorney’s fees, costs, an

incentive award to Saechao, a payment of $9,000 to the California Labor & Workforce

Development Agency pursuant to the Private Attorneys General Act (with $3,000 to be paid to

PAGA-eligible class members), and payroll taxes. The remaining funds are to be distributed to

class members based on their pro rata shares of three categories of alleged injuries.

No objections to the settlement have been filed or received by counsel, the Court, or the

class administrator. Two class members opted out of the settlement (Simpluris Decl. ¶¶ 11–12). 

The settlement agreement provides for an average cash payment of more than one thousand

dollars per class member (with a range from three dollars to more than six thousand dollars and

a median of almost six hundred fifty dollars) after all of the deductions identified above (id.

¶ 13). The classwide release is limited to the certified claims.

Saechao now moves for final approval of the class settlement. Class counsel also moves

for (1) $150,000 in attorney’s fees, (2) $50,000 in costs, and (3) $500 as an incentive payment

for Saechao. 

Any award of attorney’s fees and costs is subject to a dispute between class counsel and

her former law firm, Phillips, Erlewine, Given & Carlin LLP, which all agree holds a lien

covering a portion of the attorney’s fees. PEG&C filed a notice of this lien in September 2015

(Dkt. No. 48). When Saechao moved for class certification in January 2016 and sought to name

Attorneys Cari Cohorn (formerly of PEG&C) and Katharine Chao (who had no relationship to

PEG&C) as class counsel, neither she nor her counsel made any mention of the lien or of

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 2 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

PEG&C. The order certifying the class named Attorneys Cohorn and Chao as class counsel,

with Cohorn to serve as lead counsel. 

PEG&C commenced the initial investigation into Saechao’s claims and represented

Saechao when she initially filed the action. Our class counsel, Attorney Cari Cohorn, then a

partner at PEG&C, began working on the instant case, but left her position at the firm soon after

it was filed. Attorney Cohorn entered into a joint prosecution agreement with PEG&C that

allocated the work and any award of attorney’s fees and costs between Attorney Cohorn and

PEG&C. Attorney Cohorn and PEG&C had a falling out relating to her disassociation as a

partner, and in September 2015, Saechao discharged PEG&C as counsel. When Saechao

moved for class certification, Attorney Cohorn (and another sole practitioner Attorney

Katharine Chao) sought to be appointed class counsel. No mention was made of PEG&C. 

PEG&C contends that Attorney Cohorn breached the joint prosecution agreement, and contends

it is entitled to damages from that breach as well as quantum meruit as to the award of fees and

costs herein.

Attorney Cohorn asks the Court to exercise ancillary jurisdiction over the fee dispute,

while PEG&C argues the dispute belongs in state court. This order follows full briefing and

oral argument.

ANALYSIS

1. THE SETTLEMENT AGREEMENT IS FAIR, REASONABLE, AND ADEQUATE.

To win final approval, a class settlement must be fair, reasonable, and adequate. FRCP

23(e)(2); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).

This settlement is grounded in a $500,000 cash payout, to be allocated among class

members after certain deductions. That cash payment represents approximately one third of the

total available recovery if the case proceeded to trial (before the deductions for any fees or

costs). As stated in the order granting preliminary approval of the settlement, the class faced

significant uncertainty in the strength of its claims, and the discount on the total available

recovery is reasonable in light of that risk. 

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 3 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Two members of the class opted out, and no class member filed any objections

following preliminary approval of the settlement, further underscoring the fairness of this

settlement agreement. At the hearing on the instant motion for final approval, the Court gave an

opportunity for any class member to raise any issue relating to the settlement, even though no

class members filed objections. No class member appeared. 

This order finds the settlement is fair, reasonable, and adequate.

2. INCENTIVE AWARD.

Saechao seeks an incentive award of $500 to be paid from the settlement agreement. 

Saechao dedicated more than forty hours to this litigation, including preparing for and attending

a two-day deposition and several lengthy settlement conferences. Additionally, she incurred

more than three hundred dollars in costs in connection with her participation in this action. 

Even after receiving the incentive award, Saechao will not receive the largest award among the

class members. This order holds that an incentive award of $500 for Saechao is appropriate.

3. ATTORNEY’S FEES AND COSTS.

Despite the settlement agreement and defendant’s acquiescence to the attorney’s fees

sought, a court must still ensure that the attorney's fees and costs awarded are “fair, reasonable,

and adequate.” See Staton v. Boeing, Co., 327 F.3d 938, 963–64 (9th Cir. 2003). Common

fund fees, as we have here, are consistent with the “American Rule” (i.e., that each party pays

for its own litigation expenses), and “a litigant or lawyer who recovers from the common fund

for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee

from the fund as a whole.” Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980).

District courts in this circuit may use two different approaches to gauge the

reasonableness of a requested fee award under the traditional common-fund approach. The first

is the lodestar method, whereby a reasonable number of hours is multiplied by a reasonable

hourly rate. The lodestar may include a risk multiplier to enhance the fees under certain

circumstances, in which a court considers “the quality of the representation, the benefit obtained

for the class, the complexity and novelty of the issues presented, and the risk of nonpayment.” 

Hanlon, 150 F.3d at 1026. Our court of appeals, however, also allows a calculation based upon

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 4 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

a percentage of the common fund. See Staton, 327 F.3d at 967–68. The benchmark percentage

is 25 percent. See Hanlon, 150 F.3d at 1026. Here, the requested $150,000 in attorney’s fees

equals approximately 30 percent of the total settlement fund. It also represents 32 percent of

class counsel’s claimed lodestar (without including the lodestar for work performed by

PEG&C) (Cohorn Decl. ¶ 21). 

Counsel also requests an award of costs of $50,000, to be paid from the settlement fund. 

Attorneys Cohorn and Chao each filed declarations detailing their expenses, for a total of

$60,408.61 (again, not including costs incurred by PEG&C). The bulk of counsel’s expenses

constituted fees for the class expert, whose report was relied upon both in class certification and

in settlement. After expert fees, the next greatest expense was the cost of a court reporter and

expedited transcripts for depositions. Class counsel is not entitled to recover costs for expedited

transcripts or other costs incurred solely for their convenience, but even after deducting such

expenses, the total costs still exceed the recovery requested. 

This case did not go to trial, it did not concern exceptionally complex issues, and the

results obtained herein, while reasonable in light of the litigation risk, are not exceptional. 

Notably, the settlement agreement recovered approximately one third of the best-case scenario

recovery at trial, but it also did not win any injunctive relief concerning McCormick &

Schmick’s meal-period and rest-break policies. Moreover, as the details of the dispute between

Attorney Cohorn and PEG&C demonstrate, it appears there was some duplication of efforts in

the prosecution of this case. 

Nevertheless, the Court acknowledges that counsel undertook significant work and

costs, in excess of the amount sought to be recovered. Thus, although this order finds that no

departure from the benchmark of 25 percent of the fund is warranted, it finds that an award of

$125,000 in fees and $50,000 in costs is reasonable. The class settlement administrator shall

not, however, distribute any funds on account of fees or costs until all other disbursements have

been made as required by the settlement agreement and this order.

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 5 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

4. DISPUTE WITH PLAINTIFF’S PRIOR COUNSEL.

Class counsel does not dispute that PEG&C is entitled to a share of the fees and costs

recovered herein, they simply disagree with PEG&C about the amount. Both sides agree that

the lien dispute and the claim for breach of the joint prosecution agreement are intertwined and

should be adjudicated together. They disagree as to whether the dispute should be heard here or

in state court — class counsel wants the issues heard here in federal court, while PEG&C wants

to pursue them separately in state court.

At oral argument on this motion, class counsel and PEG&C both agreed to be referred to

mediation by a magistrate judge here in federal court. A separate order will refer class counsel

and PEG&C to a magistrate judge for mediation. 

PEG&C asks that the award of fees and costs be paid into a trust to be maintained until

the amount of the lien can be resolved. By SEPTEMBER 1, PEG&C should make a formal

motion, noticed on the normal 35-day calendar addressing that issue.

The Court will retain jurisdiction over the fee dispute until mediation has concluded and

PEG&C’s motion to have the fees and costs paid into trust is resolved, but it declines to

exercise ancillary jurisdiction beyond that point. Although adjudication of this fee dispute will

depend in part on the facts herein, nothing about the resolution of this class action depends on

the resolution of the fee dispute. That is, the amount of the award of attorney’s fees has already

been determined (above), and nothing about this dispute will inhibit the class members from

receiving their respective portions of the settlement fund. 

When class counsel (Cari Cohorn) sought her appointment, she should have informed

the Court of the full extent of her encumbrance with this potential fee dispute, for such an

encumbrance might reasonably have been expected to moderate her willingness to invest time

on behalf of the class. PEG&C’s filing the notice of lien on the docket herein was insufficient

to alert the Court to the full extent of the issue. This was a major oversight on Attorney

Cohorn’s part. Nevertheless, it does not appear that the class suffered prejudice as a result.

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 6 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

CONCLUSION

For the reasons stated above, the motion for final approval of the class settlement is

GRANTED. An incentive award of $500 for Saechao is GRANTED. Attorney’s fees in the

amount of $125,000 and costs in the amount of $50,000 shall be awarded to class counsel. The

disbursement for fees and costs shall not be paid until all class members have received what

they are entitled to receive, and there is no further work to be done. An order referring the

dispute over attorney’s fees to a magistrate judge will follow.

By SEPTEMBER 1, PEG&C shall file a formal motion, noticed on the 35-day calendar,

seeking to have the award of fees and costs held in trust pending resolution of the lien.

Also by SEPTEMBER 1, the parties shall submit a stipulated form of judgment that

specifically identifies the individuals who are subject to the judgment herein as well as those

class members that are not subject to the judgment because notice could not be delivered.

IT IS SO ORDERED.

Dated: August 19, 2016. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:15-cv-00815-WHA Document 149 Filed 08/19/16 Page 7 of 7