Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-00438/USCOURTS-caed-2_04-cv-00438-8/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Employment Discrimination

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In their brief in support of their motion to certify 1

the class, plaintiffs corrected the spelling of “Fagundes,” which

had previously been spelled “Fegundes.” 

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

VICKI WEST and WENDY FAGUNDES,

individually and on behalf of

others similarly situated,

NO. CIV. S-04-0438 WBS GGH

Plaintiffs,

v. MEMORANDUM AND ORDER RE: 

MOTION FOR FINAL APPROVAL OF 

CLASS ACTION SETTLEMENT, AWARD

OF ATTORNEYS’ FEES AND COSTS,

AND ADDITIONAL COMPENSATION TO

NAMED PLAINTIFFS

CIRCLE K STORES, INC.,

Defendant.

----oo0oo----

Plaintiffs Vicki West and Wendy Fagundes sought to 1

bring a class action suit against defendant Circle K Stores, Inc.

for alleged violations of the California Labor Code sections

226.7, 227.3, and California’s Unfair Competition Law (“UCL”),

Cal. Bus. & Prof. Code §§ 17200-17210. On June 13, 2006, this

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court entered an order preliminarily approving the settlement

reached by the parties. Presently before the court are

plaintiffs’ applications for final approval of the class action

settlement, attorneys’ fees and costs, and additional

compensation for named plaintiffs. For the following reasons,

the court will grant final approval of the settlement, attorneys’

fees and costs, and additional compensation.

I. Factual and Procedural Background

On March 3, 2004, plaintiffs filed a class action

complaint claiming that defendant failed to pay (1) overtime

wages, (2) administrative leave wages, and (3) accrued but unused

vacation wages, all in violation of state law. (Compl. ¶ 17.) 

On July 15, 2005, this court granted in part plaintiffs’ motion

to amend their complaint. (July 15, 2005 Order at 2-3.) The

amendments dropped some of the claims of one proposed subclass

(managers) and added Wendy Fagundes as a named plaintiff,

representing an additional class of employees claiming that

defendant failed to pay meal and break wages. (Id. at 3-4.)

On March 20, 2006, plaintiffs moved to certify two

distinct classes based on their remaining claims: (1) a “meal

period class” defined as “all hourly store employees employed by

defendant in California since October 1, 2000, who did not

receive off-duty meal periods” and (2) a “vacation class” defined

as “all employees employed in California by defendant at any time

since March 3, 2000, who forfeited accrued but unused vacation

under defendant’s vacation policy.” (Pl.’s Mot. for Class Cert.

1.) However, before the court could hear that motion, the

parties attended a day long mediation with Justice Richard Neal

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(retired) where they agreed to settlement terms. 

The court preliminarily approved this settlement in an

order issued on June 13, 2006, and provisionally certified the

two classes for the purpose of settlement. The court

additionally appointed Vicki West as the representative of the

vacation class, Wendy Fagundes as the representative of the meal

period class, the law firm of McInerney & Jones as lead counsel,

and Rosenthal & Company, LLC as the claims administrator. The

court also approved the class claim form, the exclusion form, and

the notice of settlement with minor modifications as to

scheduling, and directed the claims administrator to send copies

of these three documents to all identifiable class members within

thirty days of the order’s issuance. The court is unaware of any

relevant factual or legal developments that would alter its

previous analysis, and plaintiffs’ counsel represented at oral

argument that he did not encounter any such change. Finally, the

court set the Final Fairness Hearing on October 16, 2006, at 1:30

p.m. After conducting the fairness hearing and carefully

considering the settlement terms, the court now addresses whether

the proposed settlement is fair, reasonable, and adequate, such

that it should be approved by the court; whether a judgment as

provided in the stipulation should be entered for final approval

of the settlement; and whether class counsel’s applications for

attorneys’ fees and costs, as well as additional compensation for

named plaintiffs, should be granted.

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4

II. Discussion

A. Legal Standard

The Ninth Circuit has declared that a strong judicial

policy favors settlement of class actions. Class Plaintiffs v.

City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). “There is

an overriding public interest in settling and quieting

litigation” that is “particularly true in class action suits.”

Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir.

1976). Nevertheless, where “parties reach a settlement agreement

prior to class certification, courts must peruse the proposed

compromise to ratify both the propriety of the certification and

the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d

938, 952 (9th Cir. 2003). Having conducted the first inquiry

regarding the propriety of certification, the “‘court must

carefully consider “whether a proposed settlement is

fundamentally fair, adequate, and reasonable,’ recognizing that

‘[i]t is the settlement taken as a whole, rather than the

individual component parts, that must be examined for overall

fairness . . . .’” Id. at 952 (quoting Hanlon v. Chrysler Corp.,

150 F.3d 1011, 1026 (9th Cir. 1998)); see also Fed. R. Civ. P.

23(e). 

At the fairness hearing, the court should entertain any

objections by putative class members to: (1) the treatment of

this litigation as a class action and/or (2) the terms of the

settlement. Diaz v. Trust Territory of Pac. Islands, 876 F.2d

1401, 1408 (9th Cir. 1989) (holding that prior to approving the

dismissal or compromise of claims containing class allegations,

district courts must, pursuant to Rule 23(e), hold a hearing to

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“inquire into the terms and circumstances of any dismissal or

compromise to ensure that it is not collusive or prejudicial”). 

Following the fairness hearing, the court will make a final

determination as to whether the parties should be allowed to

settle the class action pursuant to the terms agreed upon. Nat’l

Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525

(C.D. Cal. 2004).

In determining whether the terms of the parties’

settlement are fair, adequate, and reasonable, the court must

balance several factors, including: 

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 of discovery completed and the stage of the

proceedings; the experience and views of counsel; the

presence of a governmental participant; and the

reaction of the class members to the proposed

settlement. 

Hanlon, 150 F.3d at 1026. But see Molski v. Gleich, 318 F.3d

937, 953-54 (9th Cir. 2003) (noting that a district court need

only consider some of these factors--namely those designed to

protect absentees).

A. Terms of the Settlement Agreement

The key terms of the stipulation and settlement are as

follows:

1. Class Definitions: the meal period class is defined as “All

hourly employees employed by Circle K Stores, Inc. in the

state of California from October 1, 2000 through the date

the Court grants preliminary approval of this Settlement.” 

The vacation class is defined as “All employees employed by

Circle K Stores, Inc. in the state of California from March

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3, 2000 through the date the Court grants preliminary

approval of this Settlement who did not have all their 

accrued but unused vacation carried forward from year to

year.” The agreement excludes from the class employees of

franchises who do/did not actually work for defendant Circle

K Stores, Inc. (June 1, 2006 Jones Decl. Ex. A (Joint Stip.

of Settlement & Release (“Settlement”) ¶ 6).)

2. Settlement Amount: Defendant agrees to a “total payout”

settlement of five million dollars ($5,000,000). Of this

amount, three million eight hundred thousand dollars

($3,800,000) is allocated to the meal period class and one

million two hundred thousand dollars ($1,200,000) is

allocated to the vacation class. (Id. ¶ 16.)

3. Deductions: attorneys’ fees (up to 30%), plaintiffs’ costs

(up to $25,000), “service payments” to the class

representatives (up to $15,000 each), and claims

administration costs (up to $150,000) will be deducted from

defendant’s total liability of $5,000,000. With the

exception of the service payments, the meal period class

will bear 76% of these costs and fees; the vacation class

will bear the remainder. (Id. ¶ 15(d).)

4. Award Allocations: Meal period class members who file timely

claims will receive a proportionate share of the $3,800,000

class settlement amount, minus costs, fees, and service

payments. A member’s share will be based on the number of

weeks she worked for defendant during the class period and

this number will be determined based on the total number of

days worked divided by seven. (Id. ¶ 15(d)(i)(a).) The

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parties estimate that this approach will at a minimum yield

an $8 per week payment for each class member, resulting in

payments in excess of $2,600 for employees that worked

throughout the entire class period. (P. & A. in Supp. of

Mot. for Prelim. Approv. 8.) Vacation class members who

file timely claims will likewise receive a proportionate

share of the $1,200,000 class settlement amount, minus

costs, fees, and service payments. After all claims are

filed, the vacation class award will be divided by the

number of claimed vacation hours, yielding a per hour

payment. (June 1, 2006 Jones Decl. Ex. A Settlement ¶

15(d)(i)(b)).) The parties anticipate that this will result

in at least a $13 per hour payment for employees who, on

average, were making $7 per hour. (P. & A. in Supp. of Mot.

for Prelim. Approval 8-9.) 

5. Claims Procedures: Members of each class will receive two

forms sent out by the Claims Administrator, Rosenthal &

Company LLC. (June 1, 2006 Jones Decl. Ex. A Settlement ¶¶

15(d)(ix), 22(h)).) One will be a preprinted Class Claims

Form that, based on defendant’s records, will establish

either the number of weeks worked (for meal period class

members) or the number of vacation days owed (for vacation

class members). (Id. ¶ 15(d)(ix)(a)-(b).) Class members

will also receive a Request for Exclusion Form that will

advise them on how to opt out of the class action

settlement. (Id.) These forms will be sent, along with a

notice announcement detailing the history of this litigation

and further explaining the terms of the settlement, no more

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than twenty (20) days from the date of this order. (Id. ¶

18(c).) Class members will have sixty (60) days from the

date that notice is mailed to submit a claim and forty-five

(45) days to opt out. (June 1, 2006 Jones Decl. Ex. D

(Proposed Notice).) Payments to class claimants will be

mailed by the claims administrator within twenty (20) days

of the final approval of the settlement. (Id. Ex. A

(Settlement ¶ 20).)

6. Release: Class members who do not opt out of the class

action, even if they do not file a claim, are forever barred

from bringing claims for failure to provide meal or rest

breaks from October 1, 2000, until this settlement is

finally approved, and from bringing claims for failure to

annually carry over accrued but unused vacation from March

3, 2000, until this settlement is finally approved. Id. Ex.

D (Proposed Notice).) The release does not cover employees

who did not actually work for defendant, but rather worked

for a franchisee. Additionally, the release does not apply

to claims arising after December 2003 against ConocoPhillips

(which sold defendant Circle K Stores, Inc. through a stock

sale in December 2003 and absorbed some of defendant’s

existing employees through “migration”). (Id.; Apr. 7, 2006

Jones Decl. Ex. F (Prince Dep. 74:8-75:3).)

B. Factor Analysis

1. Strength of the Plaintiff’s Case

Counsel for both parties have been actively engaged in

this litigation for over two years and have diligently pursued

the necessary discovery. Certain aspects of plaintiffs’ case

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were quite strong. From deposition testimony, it was clear that

defendant had not carried forward accrued but unusued vacation

from year to year for a large number of employees. (Application

for Final Approval of Settlement 6.) Moreover, defendant

acknowledged that it had a blanket policy of preventing employees

from taking meal periods because of the “nature of the work” in

the convenience store industry. (Id.) Defendant has since

changed its policy and now allows off-duty meal periods when more

than one employee works on a given shift. (Id.) 

2. Risk, Expense, Complexity, and Likely Duration of

Further Litigation

Despite having significantly developed the facts in the

case, both sides faced significant uncertainty because the claims

(in particular the meal period class claim) encompass unsettled

legal issues. The complexity and duration of further litigation

was likely to be considerable. There were over 10,000 potential

class members in this case. Completing discovery (in particular,

depositions) in a case with such a large class would have been

extremely costly. Additionally, plaintiffs were proceeding

against a large and sophisticated defendant, who vigorously

defended its position until settlement was reached. (See Apr. 3,

2006 Def.’s Opp’n to Mot. for Class Cert.; Def.’s Objections to

Request for Judicial Notice; May 31, 2006 Stip. & Proposed Order

for Prelim. Approval of Settlement.) The hotly-contested nature

of this case prior to settlement further indicates that

plaintiffs’ counsel assumed some degree of risk by proceeding

with this litigation. These circumstances and attendant risks

favor settlement. Hanlon, 150 F.3d at 1026. 

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3. Risk of Maintaining Class Action Status Throughout

the Trial

Further, it was not clear that the classes would remain

intact if trial proceeded. The California Supreme Court is

currently resolving a split amongst California Courts of Appeal

that would affect the outcome of the case--namely, whether the

remedy provided by Labor Code § 226.7 should be considered a wage

or a penalty. See Murphy v. Kenneth Cole Prods., Inc., 134 Cal.

App. 4th 728, 751 (2005), review granted and opinion superceded

by Murphy v. Kenneth Cole Prods., Inc., 40 Cal. Rptr. 3d 750

(2006). If the California Supreme Court determines that the

remedy under this labor code section is appropriately considered

a penalty, a one-year statute of limitations would apply to the

meal break class, which would cut the length of the class period

in half. It is additionally unclear whether the remedy provided

by California Business & Professions Code § 17203 provides a

remedy that is a wage or a penalty. Cortez v. Purolator Air

Filtration Prods. Co., 23 Cal.4th 163, 173 (2000). The

resolution of this question would also affect what statute of

limitations is applied to the claims in this case. (See Feb. 14,

2006 Order re: Motion for Summ. J. 4-7.) Further, the court has

previously noted that defendant raised persuasive arguments

regarding the commonality and typicality of the meal period

class. (June 13, 2006 Order 7-12.) Thus, the settlement ensures

that a more inclusive meal period class will obtain relief than

may otherwise be the case, which counsels for settlement.

4. Amount Offered in Settlement

The total amount agreed to in the settlement is a

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This number is somewhat in dispute, and may yet 2

increase by approximately 12,296.09 weeks. (Jones Decl. Ex. G

(John Keane Decl. ¶ 17).)

11

“total payout” of $5,000,000, regardless of how many claims are

ultimately received. Subtracting the attorneys’ fees, litigation

costs, enhancement awards, and administrative costs, the net

result is that the meal period class would be compensated with

$2,712,884.30 and the vacation class would be compensated with

$846,437.20. (Charles A. Jones Decl. ¶ 6.) The meal period

class members with timely and valid claims contend that they

worked approximately 197,468.64 weeks without meal periods, 2

which means that each claimant in this class stands to receive

between $12.93 and $13.73 for omitted meal breaks per week of

work. (Id. ¶ 8.) This means, in turn, that the average member

of this class would receive between $3,845.64 and $4,083.58. 

(Id.) The members of the vacation class will receive between

$15.00 and $17.74, depending on how the claim administrator

resolves disputes regarding work weeks, for every hour of

vacation forfeited. (Id. ¶ 9.) The net recovery for plaintiffs

is greater than originally anticipated, and is therefore greater

than the amount plaintiffs were informed they would receive in

the notice. (Jones Decl. Ex. B (Class Notice); Application for

Final Approval of Settlement 9; Application for Attorneys’ Fees &

Costs 14.) Thus, because plaintiffs are ensured compensation for

the injury they suffered, and the rate of compensation appears to

be fair and reasonable, this factor weighs in favor of approving

the settlement.

5. Extent of Discovery Completed and the Stage of the

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Proceedings

The complaint in this case was filed in March, 2004,

and has been actively litigated since that time. During

discovery, plaintiffs served on defendant thirty-nine

interrogatories, seventy-four requests for production of

documents, and fifteen requests for admissions. (Pls.’

Application for Final Approval of Settlement 4.) Defendant

produced more than 2,000 pages of documents in response to these

discovery requests. (Id.) Defendant served on plaintiffs eighty

requests for production of documents and twenty-seven

interrogatories. (Id.) Finally, eight depositions have been

conducted to date--plaintiffs deposed several of defendant’s

employees and defendant’s designated expert, while defendant

deposed both of the proposed class representatives. (Id.) Thus,

substantial discovery had been conducted at the time the parties

agreed to settle the case; additionally, the court had ruled on a

motion for partial summary judgment and was considering a motion

to certify the class. The advanced stage of the proceedings

suggests that the parties had carefully investigated the claims

before reaching resolution. Thus, this factor weighs in favor of

approving the settlement. 

6. Experience and Views of Counsel

The law firm of McInerney & Jones, counsel for

plaintiffs in this action, has previously represented plaintiffs

in more than thirty class actions over the past sixteen years,

all of which involved labor and employment law. (June 1, 2006

Jones Decl. ¶ 4.) ) Many of these class actions have involved

interpretation of California’s labor code. (Id.) In fact,

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McInerney & Jones represent class action plaintiffs exclusively.

(Application for Final Approval of Settlement 2.) McInerney &

Jones has also settled more than fifteen class actions related to

wage and hour disputes. (June 1, 2006 Jones Decl. ¶ 4.) 

Additionally, counsel in this case have tried more than ten class

actions involving overtime pay through certification, and have

lost certification in a few instances. (Pls.’ Application for

Final Approval of Settlement 3.) Thus, counsel are familiar with

the attendant risks of representing plaintiffs in class action

suits. (Id.) 

Moreover, plaintiffs’ counsel have indicated that they

are pleased with the result obtained in this settlement, and that

they believe it is fair and reasonable. With regard to class

action settlements, the opinions of counsel should be given

considerable weight both because of counsel’s familiarity with

this litigation and previous experience with cases such as these. 

In re Wash. Public Power Supply System Sec. Litig., 720 F. Supp.

1379, 1392 (D. Ariz. 1989) (citing Officers for Justice v. Civil

Service Com’n of City and County of S.F., 688 F.2d 615, 625 (9th

Cir. 1982). The court has observed that the litigation has been

appropriately characterized by aggressive and capable advocacy on

both sides. As in the case of In re Washington, “[t]here is

likewise every reason to conclude that settlement negotiations

were vigorously conducted at arms’ length and without any

suggestion of undue influence.” Id. at 1392. Thus, this factor

supports approval of the settlement agreement.

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7. Presence of a Governmental Participant

This factor is irrelevant to the court’s analysis, as

no governmental entity participated in this class action.

8. Reaction of the Class Members to the Proposed

Settlement

Notice of the proposed settlement was mailed to each of

the potential members of the settlement classes, along with a

claim form and a request for exclusion form. (Oct. 2, 2006 Jones

Decl. Ex. B, E, & F.) The notice complied with Federal Rule of

Civil Procedure 23(e). It informed potential class members what

the minimum amount of money was that they could expect to receive

under the settlement, how settlement awards would be calculated,

how to dispute defendant’s data regarding work week hours, the

procedure for objecting more generally or excluding oneself

altogether from the settlement, the amount of fees and costs that

would be paid out of the settlement, and the date of the final

approval hearing. (Id. Ex. B.) 

The deadline for objecting to the settlement was August

21, 2006, and class members did not file any objections to the

terms of the settlement, the amount of fees and costs sought, or

the service payments to the named plaintiffs. (Oct. 2, 2006

Jones Decl. ¶ 3; Keane Decl. ¶ 15.) Moreover, the settlement

underestimated the amount of relief plaintiffs would obtain and

overestimated the amount of attorneys’ fees that counsel

ultimately sought. (Application for Final Approval of Settlement

9-10.) In particular, the notice informed plaintiffs of the

upper bound of attorneys’ fees, and plaintiffs’ counsel are now

requesting $250,000 less in attorneys’ fees. (Jones Decl. Ex. B

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Although not one of the factors the court must 3

consider, an additional consideration favoring settlement is

that, after this lawsuit was filed, defendant changed some of its

employment practices regarding the issues involved in this

litigation. Notably, defendant has created a new policy allowing

off-duty meal periods when multiple employees are working on a

particular shift. (Pls.’ Application for Final Approval of

Settlement 6.) Defendant has also corrected its practices by

allowing employees to carry forward their accrued but unused

vacation from year to year. (Oct. 19, 2006 Charles A. Jones

Decl. ¶ 8.) 

15

(Class Notice).) The lack of objections to the settlement is

perhaps the most significant factor weighing in favor of

settlement. 

3

C. Award of Attorneys’ Fees

Federal Rule of Civil Procedure 23(h) provides that

“[i]n an action certified as a class action, the court may award

reasonable attorneys’ fees and nontaxable costs authorized by law

or by agreement of the parties . . . .” “In assessing attorneys’

fees, courts typically apply either the percentage-of-recovery

method or the lodestar method. The percentage-of-recovery method

is generally favored in common fund cases because it allows

courts to award fees from the fund in a manner that rewards

counsel for success and penalizes it for failure.” In re Rite

Aid Corp. Sec. Litig., 396 F.3d 294, 300 (3rd Cir. 2005)

(quotations and citation omitted). 

The Ninth Circuit has noted that, in class actions,

“fee awards range from 20 percent to 30 percent of the fund

created.” Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268,

272 (9th Cir. 1989). The court additionally noted with approval

“that one court has concluded that the ‘bench mark’ percentage

for the fee award should be 25 percent.” Id. That percentage

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may be adjusted in either direction “to account for any unusual

circumstances involved in this case.” Id. (emphasis added). 

“Courts may observe the following factors when determining

whether the benchmark percentage should be adjusted: (1) the

result obtained for the class; (2) the effort expended by

counsel; (3) counsel’s experience; (4) counsel’s skill; (5) the

complexity of the issues; (6) the risks of non-payment assumed by

counsel; (7) the reaction of the class; and (8) comparison with

counsel’s loadstar.” In re Heritage Bond Litig., No. 02-1475,

2005 WL 1594403, at *18 (C.D. Cal. 2005) (citations omitted). 

The proposed settlement appropriately takes a

percentage-of-recovery approach to calculate fees. Although the

settlement allows for thirty percent of the settlement fund to be

awarded as attorneys’ fees, plaintiffs’ counsel requests twentyfive percent of the fund. There are no unusual circumstances

here that would justify a downward departure from this benchmark

amount. 

On the contrary, an application of the factors noted

above demonstrates that the award is eminently reasonable. These

factors overlap with the factors the court has already considered

in evaluating the settlement itself, and the court has previously

noted that factors one, three, five, six, and seven counsel in

favor of approval of the settlement. With regard to the second

factor, the effort expended by counsel in this case was

considerable. Plaintiffs filed a motion to amend the complaint,

which was opposed by defendants, and defendants filed a motion

for summary judgment against the meal period claims, the

resolution of which turned upon complex and divergent appellate

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opinions regarding state law. (See Feb. 14, 2006 Order re:

Motion for Summ. J. 6-7.) Plaintiffs prevailed on both of these

motions. Moreover, as to factor four, counsel’s skill has been

adequately demonstrated by their success in this litigation. 

Thus, these two factors suggest that the amount of attorneys’

fees requested is appropriate.

The final factor is whether the amount counsel requests

is consistent with what the lodestar amount would be. 

Plaintiffs’ counsel has submitted a declaration indicating that

he estimates he has spent 1,674 hours on this case over the

course of two and a half years, and that he anticipates he will

spend at least sixty more hours “resolving claim disputes,

talking with class members and the claims administrator about pay

outs, finalizing the claims administration process and the

allocation of taxes, and providing a final accounting to the

court.” (Oct. 19, 2005 Jones Decl. ¶ 5.) Given that counsel

seeks $1,225,000 in attorneys’ fees, this means that the

settlement compensates counsel at an hourly rate of approximately

$706. There are three attorneys at the firm that has represented

plaintiffs in this action. To date, Mr. Jones’ rate has been

approximately $450 an hour, and the same billing rate applies for

another attorney at his firm, Kelly McInerney. (Id.) The

billing rate for the lead attorney at the firm, Kevin J.

McInerney, is in excess of $700 an hour. (Id.) Mr. Jones worked

approximately seventy percent of the hours expended on this case,

Ms. McInerney worked approximately twenty percent of those hours,

and Mr. McInerney is responsible for the remainder of the work

(ten percent of the total hours). Thus, the lodestar calculation

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indicates that counsel is being compensated at rate elevated from

his normal rate of pay, but not to an egregiously high level. 

Additionally, to the extent the hours expended are attributable

to Mr. McInerney, the lodestar calculation is consistent with Mr.

McInerney’s standard billing rate.

Significantly, counsel simply seeks the benchmark

percentage rate set by the Ninth Circuit. Although the

percentage calculation is not a perfect approximation of what a

lodestar calculation would be, excess compensation to this degree

is not an “unusual circumstance” that would justify a downward

departure from the benchmark. Paul, Johnson, Alston, & Hunt, 886

F.2d at 272. Additionally, not all of the factors must be met to

justify a fee award, and the rest of the factors clearly weigh in

favor of granting a fee award of this amount. In sum, the factor

analysis weighs in favor of granting plaintiffs’ counsel twentyfive percent of the common fund for their attorneys’ fees, and

the court will therefore allow the award in the amount requested. 

D. Costs

“There is no doubt that an attorney who has created a

common fund for the benefit of the class is entitled to

reimbursement of reasonable litigation expenses from that fund.”

In re Heritage Bond Litig., 2005 WL 1594403, at *23 (quoting In

re Gen. Instruments Sec. Litig., 209 F. Supp. 2d 423, 434 (E.D.

Pa. 2001) (omitting citations and alterations)). Class counsel

has submitted its itemized costs relating to travel, mailing

expenses, mediation, depositions/transcriptions, legal research,

photocopies, filings, court call, and facsimiles. (Oct. 2, 2006

Jones Decl. Ex. D.) The court finds that these are reasonable

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litigation expenses that warrant compensation.

Additionally, the claims administrator, Rosenthal &

Company, LLC, applies for costs incurred in administering the

settlement in the amount of $145,536.25. Rosenthal & Company has

incurred $96,836.25 in costs to date, and anticipates that it

will yet incur an additional $48,700 in administrative costs

pertaining to the settlement. (Jones Decl. Ex. G (Keane Decl. ¶

18.) These additional costs will involve processing claims that

are late, deficient, or disputed, sending denial letters, issuing

checks, completing tax returns, and issuing tax documents. (Id.) 

Because this relief could not be dispersed to the class without

the efforts of the class administrator, and the amount requested

appears reasonable given the size of the class, the court will

award reimbursement for expenses incurred to the claims

administrator. 

E. Enhancement Award for Class Representatives

The settlement proposes a $15,000 “enhancement award”

for each named plaintiff. The court recognizes that “a class

representative is entitled to some compensation for the expense

he or she incurred on behalf of the class lest individuals find

insufficient inducement to lend their names and services to the

class action.” In re Oracle Secs. Litig., No. C-90-0931, 1994 WL

502054, at *1 (N.D. Cal. June 18, 1994) (citing In re Continental

Ill. Secs. Litig., 962 F.2d 566, 571 (7th Cir. 1992)). “Such

payments, however, must be reasonable in light of applicable

circumstances, and not ‘unfair’ to other class members.” Smith

v. Tower Loan of Miss., Inc., 216 F.R.D. 338, 368 (S.D. Miss.

2003) (citation omitted); see also In re Oracle Secs. Litig.,

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1994 WL 502054 at *1 (reducing requested payment of $2,500 to

$500 for spending “between two and five hours undergoing

depositions and . . . respond[ing] to a few narrow document

discovery requests”).

The proposed payment is not particularly unfair to

other class members, given that it will not significantly reduce

the amount of settlement funds available to the rest of the

class. None of the class members have objected to the amount of

additional compensation sought by the named plaintiffs. Notably,

Fagundes, who remains in the employ of defendant’s franchisee,

may have risked retaliation by her employer. The same, however,

cannot be said for West, who left Circle K in 2003.

West and Fagundes have subordinated their individual

claims to serve as named plaintiffs in this class action. 

Plaintiffs’ counsel explains that Fagundes could have brought a

claim against defendant for between $11,896.80 and $14,871, but

is limited to recovery of between $3,800 and $4,000 under the

terms of the settlement. (Application for Additional

Compensation for Named Plaintiffs 3.) West has devoted over one

hundred hours to assist counsel with this case, and Fagundes

estimates that she has spent eighty hours assisting counsel. 

(Jones Decl. Ex I (West Decl. ¶ 2); Ex. H (Fagundes Decl. ¶ 2).) 

Moreover, other courts have awarded comparable service

payments to named plaintiffs. In re Domestic Air Transp., 148

F.R.D. 297, 357-58 (N.D. Ga. 1993) (awarding $142,500 total to

class representatives out of $50 million fund); In re Dun &

Bradstreet, 130 F.R.D. 366, 373-74 (S.D. Ohio 1990) (awarding

$215,000 to several class representatives out of an $18 million

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fund). Given the amount of time that named plaintiffs have

invested in this case, and the fact that Fagundes risked

retaliation from her employer, the court finds plaintiffs’

enhancement payments of $15,000 each to be reasonable. 

III. Conclusion

Based on the foregoing, the court approves the

settlement set forth in the Settlement Agreement and finds that

the settlement is fair, reasonable, adequate, and in the best

interest of the settlement classes. In view of the diligent

efforts of counsel in a complex area of law and the favorable

outcome obtained for class members, the court finds an award of

twenty-five percent (25%) of the $5,000,000 common fund, to be an

appropriate amount for attorneys’ fees. The court also finds

that the costs requested by counsel are reasonable and fair. 

Consummation of the settlement in accordance with the terms and

provisions of the Settlement Agreement is therefore approved, and

the definitions provided in the Settlement Agreement shall apply

to the terms used herein. The Settlement Agreement shall be

binding upon all members of the class who did not timely elect to

be excluded from the classes. 

IT IS THEREFORE ORDERED that plaintiffs’ motion for

final approval of settlement be, and the same hereby is, GRANTED. 

IT IS FURTHER ORDERED that:

(1) for the purpose of this settlement, as described in

the court’s order of June 12, 2006, good cause exists to certify

two settlement classes of plaintiffs: (a) All hourly employees

employed by Circle K Stores, Inc. in the state of California from

October 1, 2000 through the date the Court grants preliminary

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approval of this Settlement; and (b) All employees employed by

Circle K Stores, Inc. in the state of California from March 3,

2000 through the date the Court grants preliminary approval of

this Settlement who did not have all their accrued but unused

vacation carried forward from year to year. The court reaffirms

its order certifying the classes, including its findings that:

(a) the settlement classes are so numerous as to

make joinder of all class members impracticable.

(b) there are common questions of law and fact as

to each settlement class.

(c) named plaintiffs’ claims are typical of the

claims of the members of the settlement classes.

(c) plaintiffs and class counsel will fairly and

adequately represent and protect the interests of settlement

classes, and have done so by entering into this Settlement

Agreement. 

(d) questions of law and fact common to the

members of each settlement class predominate over any questions

affecting any individual member, and a class action is the

superior method for pursuing the claims at issue here.

(2) the notice given to the classes of the settlement

as described in the Settlement Agreement and the court’s order of

June 12, 2006, constituted the best notice practicable under the

circumstances. The Notice program provided due and adequate

notice of these proceedings and of the matters set forth in the

notice, including the settlement set forth in the Settlement

Agreement, to all persons and entities entitled to such notice,

and said notice fully satisfied the requirements of due process

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and applicable law. The court further finds that the mailing of

the notice of settlement to the putative class members was

properly administered by Rosenthal & Company, LLC, pursuant to

court order.

(3) defendant shall pay the total sum of $5,000,000 to 

a gross settlement fund to be distributed in a manner more fully

set forth below and as described in the court’s June 12, 2006

order. This sum shall not be decreased or increased in any

respect and shall represent the total consideration to be paid by

defendant in connection with the settlement. Defendant shall

have no further liability for costs, expenses, interest, attorney

fees, or for any other charge, expense, or liability. 

(4) as detailed below, the following payments shall be 

made from the settlement fund: payment of attorneys’ fees and

costs, payment of an enhancement award to the class

representatives, and payment of costs and administrative fees to

the claims administrator, Rosenthal & Company. Once all of the

above payments have been made, all amounts remaining in the

settlement fund shall be distributed to the class members who

timely filed valid claim forms as described in the Settlement

Agreement at ¶ 15 and by the court’s June 12, 2006 preliminary

approval order.

(5) plaintiffs’ applications for attorneys’ fees in 

the amount of $1,225,000, litigation costs in the amount of

$15,142.39, and administrative costs in the amount of $145,536.25

be, and the same hereby are, GRANTED, provided that seventy-six

percent (76%) of the award for fees and costs shall be paid from

the gross settlement fund for the meal period class, and twentyCase 2:04-cv-00438-WBS-GGH Document 117 Filed 10/20/06 Page 23 of 27
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four percent (24%) of the award shall be paid from the gross

settlement fund for the vacation class. 

(6) named plaintiffs Vicki West and Wendy Fagundes be,

and the same hereby are, awarded additional compensation in the

amount of $15,000 each, with the condition that West’s

compensation shall be paid from the gross settlement fund for the

vacation class, and Fagundes’ compensation shall be paid from the

gross settlement fund for the meal period class. 

(7) the claims administrator, Rosenthal & Company,

shall calculate the amount of each class members’ settlement

check within fifteen (15) days of the entry of this order and

provide an accounting to both plaintiffs’ and defendant’s

counsel. The distribution and mailing of settlement awards will

take place as provided in the Settlement Agreement at ¶ 15. 

Specifically, the claims administrator shall cause the settlement

awards to be mailed to the class members who timely submitted

valid claim forms within twenty (20) calendar days following the

court’s final approval of the settlement. At the same time the

claims administrator causes the settlement awards to be mailed to

the class members, the claims administrator shall also cause the

attorneys’ fees and costs awarded by this court to be mailed to

class counsel, the administrative costs awarded to the claims

administrator to be paid to Rosenthal & Company, and the

enhancement awards ordered by the court to be mailed to the class

representatives, Vicki West and Wendy Fagundes.

(8) proof of the payments outlined in the paragraphs

above will be filed with the court by the claims administrator

and provided to plaintiffs’ and defendant’s counsel. Within ten

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days after proof of payment has been filed with the court by the

claims administrator, the parties shall execute and file a

proposed final judgment and dismissal of this action.

(9) any settlement checks returned as undeliverable or

not cashed after ninety (90) days will be voided. Undeliverable

or uncashed checks will be governed by ¶ 20 of the Settlement

Agreement. Any residue remaining after all payments have been

made shall be governed by ¶ 15(h) of the Settlement Agreement.

(10) with respect to any class members who file

untimely claims, the court hereby finds that those claims shall

not be allowed and that the claims administrator may notify them

accordingly.

(11) as detailed in the release set forth in the

Settlement Agreement and accompanying the notice to the class,

entry of this Final Approval Order does hereby and is deemed to

dismiss this action on the merits and with prejudice and shall

constitute a full release and discharge by the respective classes

and each member of those classes on behalf of himself/herself,

and each of his/her descendants, dependants, heirs, executors,

administrators, assigns, successors, agents and attorneys, of

defendants or their present and former affiliated companies,

agents, servants, attorneys, subsidiaries, affiliates,

stockholders, heirs, executors, representatives, successors, or

assigns (the “Releasees”), as to any individual or class claim

that was asserted in this action, as well as any meal period

claims, rest period claims, claims pertaining to forfeited

vacation time, or other claims arising out of the events, acts,

facts, transactions, occurrences, representations, or omissions

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alleged in the First Amended Complaint in this action (“Released

Claims”), from the beginning of the respective class periods

through the date the court enters this Final Approval Order.

(12) upon satisfaction of all payments and obligations 

hereunder, the court finds that each and every class member,

including the class representatives, and all successors in

interest shall be permanently enjoined and forever barred from

prosecuting any and all Released Claims against the Releasees or

any related entity or individual. Thus, subject to and in

accordance with the Settlement Agreement, even if plaintiffs

and/or the class members, or any of them, may hereafter discover

facts in addition to or different from those which they now know

or believe to be true with respect to the subject matter of

Released Claims, the plaintiffs and each class member shall be

deemed to have, and by operation of the judgment in this case,

shall have fully, finally, and forever settled and released any

and all claims raised in this action, or any of the other

Released Claims, whether known or unknown, suspected or

unsuspected, contingent or non-contingent, whether or not

concealed or hidden, which now exist, as set forth in the

Settlement Agreement.

(13) neither the fact of settlement, nor the Settlement 

Agreement (or any other mediation or settlement-related documents

or data), nor any of the negotiations or proceedings connected

with the settlement, nor any act performed or document executed

pursuant to or in furtherance of the settlement, shall be

construed as an admission or evidence of the truth of the

allegations in this action, or of any liability, fault, or

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wrongdoing of any kind. 

(14) the court enjoins all class members (unless and 

until the class member has submitted a timely and valid Request

for Exclusion Form) from filing or prosecuting any claims, suits

or administrative proceedings (including but not limited to

claims with the California DLSE) regarding claims to be released

by the settlement.

(15) this order for final approval of the settlement

agreement is intended to effectuate the settlement reached by the

parties and more fully described in the Settlement Agreement.

(16) the court retains jurisdiction over this matter

and over all parties to this litigation, including all members of

the classes. The court will have continuing jurisdiction over

this matter until all obligations outlined in the Settlement

Agreement have been complied with and thereafter if any issues

pertaining to this case and/or settlement arise.

(17) in the event the settlement does not become

effective in accordance with the terms of the Settlement

Agreement, this order shall be vacated.

DATED: October 19, 2006

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