Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-02716/USCOURTS-cand-3_08-cv-02716-5/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ROBERT NAVARRO,

Plaintiff,

 v.

SERVISAIR,

Defendant. /

No. C 08-02716 MHP

MEMORANDUM & ORDER

Re: Motion for Final Approval of Class

Action Settlement and Attorneys’ Fees and

Costs

Plaintiff Robert Navarro (“plaintiff”) filed this class action alleging that his employer,

defendant Servisair, LLC (“defendant”), violated numerous California wage and hour laws. Docket

No. 40 (Mot. to Am. Compl.), Exh. A (First Am. Compl. (FAC)) at 1. The parties reached a

settlement which the court preliminarily approved on October 13, 2009. Docket No. 76 (Order). 

Now before the court are plaintiff’s unopposed motion for final approval of settlement and

unopposed motion for the award of attorneys’ fees and costs, including an incentive award on behalf

of plaintiff. Having considered the parties’ arguments and submissions and for the reasons set forth

below, the court enters the following memorandum and order.

BACKGROUND

Plaintiff alleges that defendant fails to compensate employees for all hours worked; fails to

provide proper meal breaks; fails to pay overtime; and fails to furnish accurate wage statements. 

FAC at 1. The proposed class consists of 1972 individuals employed by defendant as ramp agents,

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fuelers, cargo agents and cabin cleaners working at several California airports during the class

period. Docket No. 80 (Kramer Dec.), Exh. A (Settlement Agreement) ¶¶ 6 & 7. 

The parties have attended mediations and engaged in meaningful discovery. Kramer Dec.

¶ 3. Multiple depositions were taken and nearly 25,000 pages of employment related documents

were exchanged. Id. Based on shared information and arm’s length bargaining, the parties now

agree upon the terms of a settlement of this action. Id. 

Under the terms of this proposed Settlement Agreement, class members will receive a

$900,000.00 common fund. Recovery for each class member will equal approximately $5.00 per

week worked during the class period. Kramer Dec. ¶ 6. Multiplying the number of work weeks

claimed by the class members (82,666.59) by the approximate $5.00 per week compensation unit of

the settlement produces an actual class recovery of approximately $413,332.95 (averaging about

$567.00 per participating class member). See Docket No. 83 (Staples Dec.) ¶ 9. The parties agreed

that an incentive award of $10,000.00, to compensate the class representative for his time and effort,

and an administration fee of $32,000.00, to pay the claims administrator, will be paid out of the

common fund. Kramer Dec., Exh. A ¶ 32; Staples Dec. ¶ 13. Class counsel has also requested

$10,000 in costs and $270,000.00 in attorneys’ fees which represents roughly a 30% contingency fee

of the total common fund. Kramer Dec., Exh. A ¶ 32. 

Defendant will retain a substantial portion of the common fund through reversion. The

summation of the actual class claims ($413,332.95) and proposed incentive award ($10,000.00),

claims administration fee ($32,000.00), attorneys’ fees ($270,000.00) and costs ($10,000.00) equals

a $735,332.95 draw on the total $900,000.00 common fund. Assuming there is no reduction to the

incentive award or the attorneys’ fees, defendant will retain at least $164,667.05. 

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LEGAL STANDARD

I. Final Settlement Approval

In deciding whether to approve a settlement, the court must determine if the settlement terms

are “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). The court’s inquiry into a consensual

agreement negotiated by the parties should seek only to ensure that the settlement is fair, reasonable

and adequate and not the result of fraud, over-reaching or collusion. Officers for Justice v. Civil

Serv. Comm’n of S.F., 688 F.2d 615, 625 (9th Cir. 1982).

II. Attorneys’ Fees and Costs

Federal Rule of Civil Procedure 23(h) allows the court to award reasonable attorneys’ fees

and costs according to the agreement of the parties. Fed. R. Civ. P. 23(h). “[W]hether the attorneys’

fees come from a common fund or are otherwise paid, the district court must exercise its inherent

authority to assure that the amount and mode of payment . . . are fair and proper.” Zucker v.

Occidental Petroleum Corp., 192 F.3d 1323, 1328 (9th Cir. 1999). When attorneys' fees are to be

paid from a common settlement fund, “the relationship between plaintiffs and their attorneys turns

adversarial” and “the district court must assume the role of fiduciary for the class plaintiffs.” 

WPPSSSL, 19 F.3d at 1302. It thus becomes crucial for the court to scrutinize the attorneys’ request

in light of their role in the litigation. 

In common fund cases, the district court has the discretion to use either a percentage-of-therecovery method or lodestar method to calculate reasonable attorneys’ fees. In re Wash. Pub. Power

Supply Sys. Sec. Litig., 19 F.3d 1291, 1296 (9th Cir. 1994) (“WPPSSSL”). Under the percentage-ofthe-recovery method, the attorneys’ fees are calculated as a percentage of the common fund, with

25% established as the benchmark in the Ninth Circuit. Hanlon v. Chrysler Corp., 150 F.3d 1011,

1029 (9th Cir. 1998). Under the lodestar method, the lodestar amount is calculated by multiplying

the number of hours reasonably expended by counsel by a reasonable hourly rate. Id. at 1029 (citing

Blum v. Stenson, 465 U.S. 886, 897 (1984)). The lodestar may then be adjusted up or down by an

appropriate multiplier, based on factors not subsumed in the initial calculation of the lodestar. See

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Purdue v. Kenny A., No. 08-970, ___ S. Ct. ____, 2010 WL 1558980, at *7 (Apr. 21, 2010). 

Importantly, “[t]he party seeking an award of fees should submit evidence supporting the hours

worked and rates claimed” and the court may reduce the award where documentation is inadequate. 

Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).

In light of criticisms of the lodestar method, including concerns that the method “exacerbates

the problem of ‘cheap settlements’ ” and “ ‘facilitates the ability of defendants and the plaintiff’s

attorneys to arrange collusive settlements that exchange a low recovery for a high fee award,’ ”

Lealao v. Beneficial Cal., Inc., 82 Cal. App. 4th 19, 30 (2000) (citations omitted), many federal

courts have indicated a preference for the percentage-of-the-recovery method. Id. at 30-31. The

Ninth Circuit has indicated approval of the use of that method even in cases lacking a distinct,

traditional common fund. See Wing v. Asarco Inc., 114 F.3d 986, 989-90 (9th Cir. 1997). In Wing,

the Ninth Circuit held that the district court had not abused its discretion when it estimated the

settlement value, “[p]articularly in light of the parties’ agreement as to value.” Id. at 990.

DISCUSSION

I. Final Settlement Approval

Under the factors enumerated in Officers for Justice, the general terms of the Settlement

Agreement before the court are fair, adequate and reasonable. First, the reaction of the class

members to the proposed settlement was positive. The claims administrator has currently received

729 valid and timely claims out of the total 1972 ascertainable class members who were sent notice. 

Staples Dec. ¶ 9. The timely and valid claims represent 36.97% of the class members and 59.59% of

the total claimable weeks worked by the class. Id. Considering this substantial response, the lack of

any objectors and that only three class members requested to be excluded from the settlement, the

result is very positive. The transient nature of many wage workers and the fear of participating in a

lawsuit against an employer make it difficult to secure a high participation rate in wage and hour

cases. Despite these challenges, class counsel has produced a settlement which reflects a

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commendable response rate. Second, class counsel believes that the $5.00 per week compensation

scheme is reasonable based on their experience with settlements in similar cases. Kramer Dec. ¶ 6. 

Class counsel has adequate experience with similar wage and hour cases to give credibility to such a

determination. Kramer Dec. ¶ 2. 

II. Award for Attorneys’ Fees, Costs and Incentive Payment

As the court has discretion to use either the lodestar method or the percentage-of-therecovery method to determine the reasonableness of attorneys’ fees, both methods are analyzed

below and cross-checked against each other.

A. Lodestar Method

The calculation of class counsel’s lodestar represents a reasonable rate multiplied by a

reasonable extent of time. The requested rates of $350.00 for Jennifer Kramer, $325.00 for Arlo

Uriarte, $250.00 for Judith Wiederhorn and $100.00 for Johanna Perez (paralegal) are reasonable

and reflect their relative experience in prosecuting wage and hour cases. Kramer Dec. ¶¶ 2 & 7;

Docket No. 79 (Uriarte Dec.) ¶¶ 2 & 5. This court has previously found the rates of Jennifer Kramer

Legal, APC to be reasonable. Docket No. 63 (Order). The rates of Liberation Law Group, PC are

comparable and also reasonable. Uriarte Dec. ¶ 5. Class counsel provided detailed

contemporaneous time records of the time they spent on this action. Kramer Dec., Exh. C & E;

Uriarte Dec., Exh. 1. According to these records, 267.7 hours were expended on this action by

Kramer Legal and 273 hours by Liberation Law Group. Kramer Dec. ¶ 18; Uriarte Dec. ¶ 5. 

Applying these hours to Class counsel’s reasonable rates, the total lodestar for class counsel equals

$149,891.45 ($84,531.70 for Kramer Legal and $65,359.75 for Liberation Law Group). 

B. Percentage Method

The percentage recovery requested by class counsel, 30%, is not reasonable and must be

reduced for three reasons. First, the 30% award unjustifiably varies from the 25% “benchmark” set

by the Ninth Circuit. See, e.g., Vizcaino, 290 F.3d at 1048. Class counsel has not provided specific

justification for why the benchmark should not be applied. Although there are factors that counsel

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in favor of a percentage greater than 30 %, including the substantial response rate of the class

members, an average recovery of more than $500 per class member and the fact that the favorable

settlement terms were reached despite potential preemption defenses under the Airline Deregulation

Act and the Railway Labor Act, Kramer Dec. ¶ 3, there are also factors that would justify a

downward departure from the benchmark, such as the rapidity of the settlement and the lack of

extensive motion practice, see In re Twinlab Corp. Sec. Litig., 187 F. Supp. 2d 80, 88 (E.D.N.Y.

2003) (awarding 12% fee considering lack of extensive motion practice, appeals or discovery). The

parties here reached this settlement relatively quickly without litigating any motions for summary

judgment or class certification. On balance, considering all the circumstances surrounding this

action, a 25% fee consistent with the Ninth Circuit benchmark would be more appropriate than the

requested 30% award. 

Second, regardless of the percentage awarded, the $900,000.00 recovery is not the proper

amount from which a percentage should be calculated. This $900,000.00 common fund does not

represent either the actual or potential recovery made available to the class. Even if 100% of the

ascertainable class members had filed timely and valid claims, the total recovery including the

requested incentive awards and administration costs would not exceed approximately $736,108.15

(138,821.63 total claimable weeks times approximately $5.00 plus $32,000.00 for administration

and $10,000.00 for the incentive award). See Staples Dec. ¶ 9 (noting the “total” number of weeks). 

Because the settlement terms include a provision for reversion to defendant, the $900,000.00

common fund has an artificial pad of $163,891.85 ($900,000.00 minus $736,108.15 for 100% class

participation). It would be collusive to award class counsel a percentage of any recovery above the

$736,108.15 potential recovery because the excess would be guaranteed to revert to defendant

regardless of class participation. 

Third, any award of attorneys’ fees granted must take into account that class counsel has

already been compensated for fees incurred in bringing their motion to remand. The court has

previously awarded class counsel $3,190.90 in attorneys’ fees and $117.85 in costs incurred in

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bringing a motion to remand. Kramer Dec. ¶ 7 n.1. Class counsel cannot be paid twice for the same

work. 

Factoring the previously awarded attorneys’ fees into the percentage-of-the-recovery method,

a reasonable attorneys’ fee award would be $180,836.14 (25% of the $736,108.15 potential recovery

made available to the class minus the previously awarded $3,190.90). This award, when crosschecked against the lodestar measure, requires a multiplier of 1.21 ($180,836.34 divided by

$149,891.45 lodestar). The Ninth Circuit has expressed general approval of multipliers between 1.0

and 4.0 in common fund cases. See Vizcaino 290 F.3d at 1051 n.6. The multiplier in this case is

justified given the relative risk class counsel carried in accepting a contingency fee case.

C. Costs

Class counsel’s costs of $10,913.58 ($3,299.59 minus the previously awarded $117.85 for

Kramer Legal and $7,731.84 for Liberation Law Group) are reasonable. These costs are reasonably

proportionate to the lodestar when compared to similar settlements. See Tarlecki v. bebe Stores,

Inc., No. CV-05-1777, 2009 WL 3720872, at *6 (N.D. Cal. Nov. 3, 2009) (Patel, J.) (awarding

$30,000.00 in costs in conjunction with attorneys’ fees of $200,000.00).

D. Incentive Award

A $10,000.00 incentive award to plaintiff Navarro is reasonable. In this district, a $5,000

payment is presumptively reasonable. See Hopson v. Hanesbrands Inc., No. CV-08-0844, 2009 WL

928133, at *10 (N.D. Cal. Apr. 3, 2009) (LaPorte, Mag. J.). An employee who lends his name to a

lawsuit against a current or former employer is placed in a financially vulnerable position. Plaintiffs

who take on this risk for the genuine enforcement of wage and hour provisions should be

encouraged. Further, when individual plaintiffs faithfully execute their duties as a class

representative, they should be rewarded. Here, Navarro spent a significant amount of time faithfully

attending depositions, mediations and meetings with other class members. Uriarte Dec. ¶ 11. Based

on this active participation, an incentive award of $10,000.00 is reasonable. 

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CONCLUSION

Accordingly, because the terms of the settlement are fair, reasonable and adequate, plaintiff’s

motion for final approval of the settlement is GRANTED. Plaintiff’s motion for attorneys’ fees,

costs and an incentive award is also GRANTED. Class counsel is awarded attorneys’ fees in the

amount of $180,836.14 and costs of $10,913.58. An incentive award of $10,000.00 is awarded to

plaintiff Navarro for his role as class representative.

IT IS SO ORDERED.

Dated: April 26, 2010 

MARILYN HALL PATEL

United States District Court Judge

Northern District of California

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