Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-01405/USCOURTS-caed-2_15-cv-01405-3/pdf.json

Parties Involved:
Genuine Parts Company
Defendant
Sean Mar
Plaintiff
Napa Auto Parts
Defendant

Document Text:

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

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SEAN MAR, individually and on behalf 

of others similarly situated, and on 

behalf of the general public,

Plaintiff,

v.

GENUINE PARTS COMPANY and 

NAPA AUTO PARTS,

Defendants.

No. 2:15-cv-01405-MCE-AC

MEMORANDUM AND ORDER

Before the Court is Plaintiff Sean Mar’s Unopposed Motion for Settlement 

Approval. ECF No. 29. Plaintiff and Defendants Genuine Parts Co. and NAPA Auto 

Parts have agreed to settle Plaintiff’s claims made under the Fair Labor Standards Act 

(“FLSA”). Under that settlement, Defendants are to pay $775,000 plus the cost of 

settlement administration and the employer’s share of payroll taxes incurred on that

award. Furthermore, one third of that amount, as well as $7,225.90 in litigation 

expenses, is to be awarded to Plaintiff’s counsel as attorney’s fees. These attorney’s 

fees are unreasonably high, rendering the settlement not sufficiently fair and reasonable 

to be approved by the Court. Accordingly, Plaintiff’s motion is DENIED.

///

///

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 1 of 7
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

FACTUAL AND LEGAL BACKGROUND

Plaintiff Sean Mar brought this suit on behalf of himself and all those similarly 

situated against Genuine Parts Co. and NAPA Auto Parts on the basis that Executive 

Management Trainees (“EMTs”) were misclassified as non-exempt, and were therefore 

denied statutory protections and wages afforded to hourly employees. After negotiations 

before a mediator, the parties agreed on a settlement under the Fair Labor Standards 

Act, 29 U.S.C. § 216(b). An employee may settle and waive claims under the FLSA if 

the parties present to a district court a proposed settlement agreement, and the district 

court enters a judgment approving the settlement. Lynn's Food Stores, Inc. v. United 

States, 679 F.2d 1350, 1353 (11th Cir. 1982). The FLSA also requires that class 

members opt into any settlement. See 29 U.S.C. § 216(b) (“No employee shall be a 

party plaintiff to any such action unless he gives his consent in writing to become such a 

party and such consent is filed in the court in which such action is brought.”). Ninety-four 

of Defendants’ 100 EMTs opted into the settlement.

Under the terms of the agreement, Defendants are to pay $775,000, disbursed 

among the 94 opt-in class members. Attorney’s fees would be paid in the amount of 

33.3% of this $775,000 ($258,333.33). The remaining funds would be apportioned such 

that each of the 94 EMTs would receive $5,236.07. Named Plaintiff Mar would receive 

an enhancement of $7,500 for his time and effort in bringing the case. Similarly, three 

pre-settlement opt-ins would receive enhancements of $2,500. NAPA also agreed to reclassify EMTs as non-exempt going forward.

Before approving an FLSA settlement, the court must scrutinize it to determine if it 

is “a fair and reasonable resolution of a bona fide dispute.” Lynn's Food Stores, 

679 F.2d at 1354–1355. If the settlement reflects a reasonable compromise over issues 

that are actually in dispute, the Court may approve the settlement “to promote the policy 

of encouraging settlement of litigation.” Id. at 1354. “Where a proposed settlement of 

FLSA claims includes the payment of attorney's fees, the court must also assess the 

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 2 of 7
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

reasonableness of the fee award.” Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 

336 (S.D.N.Y. 2012); accord Selk v. Pioneers Mem’l Healthcare Dist., 159 F. Supp. 3d 

1164, 1180 (S.D. Cal. 2016).

In the Ninth Circuit, 25% is considered the “benchmark” for determining whether 

attorney’s fees are reasonable when they are based on a percentage of the award. See

In re Bluetooth Headset Prods. Liability Litig., 654 F.3d 935, 942 (9th Cir. 2011) 

(“[C]ourts typically calculate 25% of the fund as the “benchmark” for a reasonable fee 

award.”). “[H]owever, such 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). 

Fees as high as 33.3% have also been awarded. See, e.g., Barbosa v. Cargill Meat 

Sols. Corp., 297 F.R.D. 431, 448 (E.D. Cal. 2013) (collecting six Eastern District of 

California cases where 33.3% was approved in support of the proposition that “[t]he 

typical range of acceptable attorneys’ fees in the Ninth Circuit is 20 percent to 33.3 

percent of the total settlement value”). If attorney’s fees deviate from the 25% 

benchmark, “it must be made clear by the district court how it arrives at the figure 

ultimately awarded.” Graulty, 886 F.2d at 272; see also Gribble v. Cool Transps. Inc., 

No. CV 06-04863 GAF (SHx), 2008 WL 5281665, at *11 (C.D. Cal. Dec. 15, 2008) 

(applying Graulty in an FLSA case).

When analyzing a proposed settlement, the settlement is considered as a whole 

and the Court does not “have the ability to ‘delete, modify or substitute certain 

provisions.’” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (quoting 

Officers for Justice v. Civil Serv. Comm’n, 668 F.2d 615, 630 (9th Cir. 1982)). “The 

settlement must stand or fall in its entirety.” Id.; see also Selk v. Pioneers Mem. 

Healthcare Dist., 159 F. Supp. 3d 1164, 1177 (S.D. Cal. 2016) (quoting Hanlon’s 

“entirety” language in the FLSA context).

///

///

///

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 3 of 7
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

ANALYSIS

In this case, the parties have provided little evidence to determine whether a bona 

fide dispute exists between Plaintiff and Defendants. Almost all of the motions made to 

this Court were by stipulation and the only adversarial documents are the Complaint, 

ECF No. 1, and the Answer, ECF No. 5. In the Answer, though, Defendants assert that 

several white-collar exemptions to the FLSA apply to EMTs and that therefore EMTs 

were not misclassified as exempt. Answer, at 29–29. The Court finds this disagreement 

over the application of the FLSA to EMTs sufficient to establish the existence of a bona 

fide dispute, making settlement of Plaintiff’s claims appropriate. See Officers for Justice 

v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982) (“The district court’s role in 

evaluating a proposed settlement . . . must be limited to the extent necessary to reach a 

reasoned judgment that the agreement is not the product of fraud or overreach by, or 

collusion between, the negotiating parties . . . .”)

Though the total award secured by Plaintiff’s counsel on behalf of Plaintiff and the 

other EMTs who opted into the settlement might be fair and reasonable, the attorney’s 

fees are too high for the Court to approve the settlement. Plaintiff’s counsel seeks an 

award of 33.3% of the fund secured on behalf of the FLSA class, a significant upward 

departure from the 25% benchmark for attorney’s fees in the Ninth Circuit and outside 

the ordinary range of 20%–30%.

Plaintiff justifies the high award of attorney’s fees in part based on comparison to 

a lodestar analysis. See Unopposed Mot. for Settlement Approval, at 25–26. While it is 

appropriate for courts to use the lodestar as a cross-check on the reasonableness of 

attorney’s fees, see Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002), the 

hourly rates provided by Plaintiff’s counsel fall outside the norms for the Eastern District 

of California and therefore do no support an award of 33.3%. In making his lodestar 

cross-check, Plaintiff’s counsel used a rate of $650 per hour for his work as principal of 

his firm, $350 and $400 per hour for associates, $200 per hour for law clerks and legal 

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 4 of 7
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

assistants, and $150 per hour for administrative support. Decl. of Bryan J. Schwartz, 

ECF No. 29-1, ¶¶ 15, 18. In the Eastern District of California, these rates are well above 

the usually accepted rates. See, e.g., Millan v. Cascade Water Servs., Inc., No. 1:12-cv01821-AWI-EPG, 2016 WL 3077710, at *12 (E.D. Cal. Jun. 2, 2016) (rejecting $725 per 

hour for a partner and $610 per hour for an associate in favor of $375 per hour and $325

per hour, respectively); Ontiveros v. Zamora, 303 F.R.D. 356, 373–74 (E.D. Cal. 2014) 

(rejecting $650 per hour and $495 per hour for partners and between $325 per hour and 

$425 per hour for associates in favor of $400 per hour for partners and $175 per hour for 

associates); Khanna v. Intercon Sec. Sys., Inc., No. 2:09-CV-2214 KJM EFB, 2014 WL 

1379861, at *15 (E.D. Cal. Apr. 8, 2014) (approving $300 per hour for partners, $200 per 

hour for associates, and $100 per hour for legal assistants); Adoma v. Univ. of Phoenix, 

Inc., 913 F. Supp. 2d 964, 984 (E.D. Cal. 2012) (approving $425 per hour for principals); 

Murillo v. Pac. Gas & Elec. Co., No. CIV. 2:08-1974 WBS GGH, 2010 WL 2889728, at 

*11 (E.D. Cal. Jul. 21, 2010) ($300 per hour for a principal).

Plaintiff fails to provide any explanation for why such high fees are appropriate in 

this particular case. He generally avers that his firm engaged in “exhaustive research” 

and “substantial written discovery” of “thousands of pages of documents,” Decl. of Bryan 

J. Schwartz, ¶ 2, but few motions were filed with the Court and the parties arrived at the 

settlement after only one full day of negotiations.1 Furthermore, Plaintiff provides no 

evidence that this case was exceptionally difficult or novel. Plaintiff’s counsel does 

provide, though, cases in other districts where his proffered rates were accepted by 

courts. Id. ¶ 15(c). But those cases have little bearing on the reasonableness of 

attorney’s fees in this district. See Chalmers v. City of Los Angeles, 796 F.2d 1205, 

1210–11 (9th Cir. 1986) (“[T]he district court should be guided by the rate prevailing in 

the community for similar work performed by attorneys of comparable skill, experience, 

and reputation.” (emphasis added) (citing Blum v. Stenson, 465 U.S. 886, 895 n.11 

 1 Plaintiff’s counsel’s claim of “several additional months of arms’-length negotiations” to arrive at 

the full settlement document, Decl. of Bryan J. Schwartz, ¶ 4, is similarly lacking in specifics.

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 5 of 7
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

(1983))). Based on the record before the Court, rates of $425 per hour for principals and 

$225 per hour for associates are more appropriate in this case. And applying these 

rates to the hours worked by Plaintiff’s counsel, Plaintiff’s lodestar argument for

departure from the 25% benchmark in favor of a 33.3% award of attorney’s fees 

becomes wholly unavailing.

This leaves only Plaintiff’s arguments (1) that the high attorney’s fees award is 

reasonable because the 94 class members opted into the class and (2) that Defendants’ 

agreement to pay the employer’s share of payroll taxes on the payout and to reclassify 

the EMTs renders the fees “far less than the one-third of the real value of the relief 

obtained.” Unopposed Mot. for Settlement Approval, at 18. First, though the 94 class 

members opting into the settlement is a factor in favor of approving the settlement, it 

alone does not justify an award of 33.3%. Second, payment of the employer’s share of 

payroll taxes only modestly increases the monetary value of the settlement and Plaintiff 

fails to provide any estimate of the value of the injunctive relief obtained that would allow 

the Court to determine the “real value” of the award. Thus, Plaintiff has not shown that 

the attorney’s fees are sufficiently fair and reasonable, and the settlement must be 

rejected.2

///

///

///

///

///

///

///

 2 Given Plaintiff’s relatively bare arguments in favor of accepting the proposed attorney’s fees, 

Plaintiff appears to rely mainly on an assertion that, unlike in a Rule 23 class settlement, an FLSA 

settlement incurs “no similar obligation to review the fee award.” Unopposed Mot. for Settlement Approval, 

at 18–19. This argument is belied by the very text of the FLSA: “The Court . . . shall, in addition to any 

judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the 

defendant, and costs of the action.” 29 U.S.C. § 216(b) (emphasis added).

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 6 of 7
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 provided above, Plaintiff’s Unopposed Motion for Settlement 

Approval, ECF No. 29, is DENIED.

IT IS SO ORDERED.

Dated: January 5, 2017

Case 2:15-cv-01405-MCE-AC Document 36 Filed 01/06/17 Page 7 of 7