Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-03962/USCOURTS-cand-4_13-cv-03962-12/pdf.json

Parties Involved:
Emeritus Corporation
Defendant
Arville Winans
Plaintiff

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ARVILLE WINANS,

Plaintiff,

v.

EMERITUS CORPORATION,

Defendant.

Case No. 13-cv-03962-HSG 

ORDER GRANTING MOTION FOR 

FINAL APPROVAL OF CLASS 

ACTION SETTLEMENT AND MOTION 

FOR ATTORNEYS’ FEES, COSTS, AND 

SERVICE AWARDS

Re: Dkt. Nos. 102, 103

Pending before the Court are two motions filed by Plaintiffs Arville Winans, by and 

through his guardian ad litem, and Ruby Richardson, in her capacity as trustee to the Wilma F.

Fritz Trust. Plaintiffs move for (1) final approval of the parties’ proposed class action settlement, 

Dkt. No. 102, and (2) an award of attorneys’ fees, costs, and named plaintiff incentive payments, 

Dkt. No. 103. The Court held a final fairness hearing on both motions on December 17, 2015. 

Dkt. No. 127. For the reasons stated below and at the hearing, the Court GRANTS both motions.

I. BACKGROUND

A. Litigation History

Plaintiffs filed this action in Alameda County Superior Court on July 29, 2013. Dkt. No. 

1-1. Defendant Emeritus Corp.1removed the action to federal court on August 27, 2013. Dkt. No. 

1. Plaintiffs filed the operative Second Amended Class Action Complaint (“SAC”) on April 15, 

2015. Dkt. No. 93. 

The following allegations are taken from the SAC. Defendant owns and operates assisted 

living facilities. Id. ¶ 13. Plaintiffs are current and former residents of Defendant’s assisted living 

 

1 After the case was filed, Emeritus was acquired through merger by Brookdale Senior Living, Inc. 

Dkt. No. 93 ¶ 12.

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facilities. Id. ¶¶ 9-10. When residents move in, and periodically thereafter, Defendant conducts 

“wE Care” assessments to determine the care needs of residents. Id. ¶ 3. Defendant represented 

to potential residents, their family members, and the general public that the wE Care assessments 

were used to assign each resident a “Level of Care”—which impacted the price charged to 

residents for the promised care—and to determine facility staffing. Id. ¶¶ 3-4. Plaintiffs allege 

that such representations were misleading because, in actuality, staffing—and therefore the level 

of resident care—was based on labor budgets and profit objectives. Id. ¶ 5. Plaintiffs further 

allege that they would not have agreed to live at Defendant’s facilities, and would not have paid 

new resident fees and monthly charges to Defendant, if they had known the truth about the staffing

procedures. Id. ¶ 7. On the basis of these factual allegations, Plaintiffs assert claims under the 

California Consumers Legal Remedies Act and the California Financial Elder Abuse statute. Id.

¶¶ 85-114.

The parties settled the case on March 11, 2015 after participating in mediation. Dkt. No. 

102 at 5. On June 5, 2015, the Court granted preliminary approval of the settlement, provisionally 

certified a settlement class, and directed notice to class members through mail, media publication, 

and website posting. Dkt. No. 99. Notice was completed on June 30, 2015. Dkt. No. 108 ¶¶ 4-6. 

Based on an objection dated July 31, 2015, the parties determined that residents whose 

move-in dates preceded the date Defendant took over operations of their facility (“Carry Over 

Residents”) should be included in the settlement. Dkt. No. 116-2, Minnick Decl. ¶¶ 4-5. The 

parties further agreed to slight modifications to the amount of the overall settlement fund and the 

request for attorneys’ fees, so that the average minimum payment to class members would not be 

affected by the expansion of the class. Dkt. No. 116-2, Healey Decl. ¶¶ 3-4. At a hearing on 

September 25, 2015, the Court directed further notice to the Carry Over Residents, Dkt. No. 117, 

which notice was completed on October 9, 2015, Dkt. No. 122-1 ¶ 3.

Notice was mailed to a total of 21,277 class members. See Dkt. No. 122-1 ¶ 2; Dkt. No. 

116-2, Wyatt Decl. ¶ 3. 25 of those class members—or 0.12%—opted out of the settlement. 

Additionally, two substantive objections, including the objection regarding the Carry Over 

Residents, were submitted. Dkt. Nos. 114, 115.

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B. Settlement Agreement

The proposed settlement will dispose of all of Plaintiffs’ claims against Defendant. Dkt. 

No. 104, Ex. 1 (“Settlement Agreement”). The Settlement Agreement defines the class as: 

Plaintiffs and all similarly situated persons who resided at one of the 

California assisted living facilities owned and/or operated by 

Defendants under the Emeritus name from July 29, 2009 through 

and including May 15, 2015 (the “Class Period”), and who 

contracted with Emeritus for services for which Emeritus was paid 

money. 

Id. at 5. Under the terms of the Settlement Agreement, Defendant will (1) pay $13,500,000;2(2) 

completely phase out the wE Care assessment system by December 31, 2015; and (3) issue a 

written directive to each assisted living community it owns or operates in California to not make 

affirmative representations to prospective residents that the wE Care system is used to determine 

facility staffing. Id. at 21-25. In exchange, settlement class members will release all claims 

“arising out of or relating to statements, representations, or failures to disclose made prior to May 

15, 2015 . . . regarding the . . . advertising, marketing, promotion, or use of wE Care . . . in 

connection with evaluating residents and setting facility staffing.” Id. at 19. The Settlement 

Agreement further clarifies that the released claims “shall not include any claims for personal 

injuries, emotional distress or bodily harm.” Id.

Settlement class members are not required to submit a claim; rather, they will be entitled to 

a pro rata payment based on the amount of move-in fees and initial monthly rent they paid.3 Id. at 

24. A class member, or his/her legal successor, may make a distribution request if the settlement 

administrator is unable to locate his/her current address. Id. at 7. If the settlement administrator is 

unable to locate a class member, his/her payment will be allocated back into the settlement fund. 

Id. at 24. A reserve fund of $45,000 will be carved out of the settlement fund for the payment of 

 

2

The Settlement Agreement filed on the docket reflects a total payment amount of $13,000,000. 

See Settlement Agreement at 10. After the parties agreed to include the Carry Over Residents in 

the settlement class, the parties further agreed to increase the gross settlement payment to 

$13,500,000. Dkt. No. 116-2, Healey Decl. ¶ 3.

3

Specifically, the “Settlement Payment Percentage” is calculated by adding the move-in fee paid 

and the initial monthly rent paid, and dividing that amount by the total move-in fees and initial 

rent payments made by all settlement class members. Settlement Agreement at 24.

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late-submitted distribution requests. Id. at 9. Any portion of the reserve fund that is not claimed, 

and any settlement checks that are not timely cashed, will be paid to the cy pres recipient, the 

Institute on Aging. Dkt. No. 129 (“Supp. Brief”) at 1.

C. Objections To The Settlement

Two substantive objections to the proposed class action settlement were timely filed.4 

First, William Finch submitted a notice of objection dated July 31, 2015. Dkt. No. 114. Mr. Finch 

“object[s] to the settlement to the extent it excludes me, and others like me.” Id. Based on Mr. 

Finch’s objection, the parties revised the settlement to expand the class and increase the total cash 

settlement amount. See Dkt. No. 116 (“Final Approval Reply”) at 9-10. At the hearing on 

September 25, 2015, the Court ordered additional notice and time for objections based on the 

revised settlement agreement. See Dkt. No. 117.

Second, Kate Wilkins submitted an objection dated August 4, 2015. Dkt. No. 115. Ms. 

Wilkins objects to several aspects of the proposed settlement agreement, including the adequacy of 

notice, amount of the settlement, appropriateness for class action treatment, cy pres payment, and 

amount of requested attorneys’ fees. Id. The merits of Ms. Wilkins’ objection are addressed 

below.

II. DISCUSSION

A. Motion for Final Approval of Class Action Settlement

1. Legal Standard

“The claims, issues, or defenses of a certified class may be settled . . . only with the court’s 

approval.” Fed. R. Civ. P. 23(e). The Court may finally approve a class settlement “only after a 

hearing and on finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). To 

assess whether a proposed settlement comports with Rule 23(e), a district court must “determine 

whether a proposed settlement is fundamentally fair, adequate, and reasonable.” Hanlon v. 

 

4 As noted at the hearing, the Court finds that the objection letter submitted by David H. Brands is 

without substance because it does not address the merits of this particular settlement. See Dkt. No. 

125. Additionally, the parties confirmed at the hearing that the letter submitted to the Court by 

Brian P. Klinker is a distribution request, and that the parties forwarded Mr. Klinker’s letter to the 

settlement administrator to ensure that he would be included in the settlement. See Dkt. No. 121. 

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Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). “[T]he decision to approve or reject a 

settlement is committed to the sound discretion of the trial judge.” Id. When making this 

decision, courts consider the following factors: 

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. 

Id. In addition, “[a]dequate notice is critical to court approval of a class settlement under Rule 

23(e).” Id. at 1025. 

2. Adequacy of Notice

Rule 23(c)(2)(B) requires “the best notice that is practicable under the circumstances, 

including individual notice to all members who can be identified through reasonable effort.” The 

notice must “clearly and concisely state in plain, easily understood language” the nature of the 

action, the class definition, the class claims, class members’ right to exclude themselves from the 

class, and the binding effect of any class judgment. Fed. R. Civ. P. 23(c)(2)(B). Additionally, 

before granting final approval of a proposed class settlement, a court must “direct notice in a 

reasonable manner to all class members who would be bound by the proposal.” Id. 23(e)(1). 

While Rule 23 requires that “reasonable effort” be made to reach all class members, it does not 

require that each individual actually receive notice. See Rannis v. Recchia, 380 F. App’x 646, 650 

(9th Cir. 2010). 

The Court previously approved the notice and notice plan proposed by the parties. Dkt. 

No. 99 ¶ 14. Additionally, the Court directed notice to the Carry Over Residents after the 

expansion of the settlement class based on Mr. Finch’s objection. See Dkt. No. 117. In 

accordance with the Court’s orders, the settlement administrator mailed the approved notice to 

21,277 individuals, published the notice in USA Today, and posted the notice online. Of the 3,070 

notice packets returned as undeliverable, 1,511 were re-mailed to updated addresses located by the 

settlement administrator. Dkt. No. 122-1 ¶ 4. 

In her objection, Ms. Wilkins argues that the class notice was misleading because it failed 

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to inform recipients that Defendant is now owned by Brookdale Senior Living, Inc. Dkt. No. 115 

at 2. The Court finds that such information was not necessary to provide adequate notice. 

Moreover, Brookdale’s acquisition of Emeritus is public knowledge. See SAC ¶ 12.

Ms. Wilkins also appears to argue that the class notice was deficient because it did not 

identify the proposed cy pres recipient. Dkt. No. 115 at 4-5. While Ninth Circuit authority makes 

clear that the parties must identify the proposed cy pres recipient for the Court to evaluate, see 

infra, no such authority establishes that a specific cy pres recipient must be identified in the class 

notice. In the absence of Ninth Circuit case law directly on point, the Court finds persuasive the 

Third Circuit’s holding that the “failure to identify the cy pres recipients [to class members in the 

class notice] is not a due process violation.” In re Baby Prods. Antitrust Litig., 708 F.3d 163, 180 

(3d Cir. 2013); see also Zeisel v. Diamond Foods, Inc., No. 10-cv-01192-JSW, 2012 WL 

4902970, at *2 (N.D. Cal. Oct. 16, 2012) (approving settlement where parties did not identify cy 

pres recipient in class notice).

In light of the above, the Court finds that the notice and notice procedures used here 

complied with the requirements of Rule 23(e). 

3. Fairness, Adequacy, and Reasonableness of Settlement

Having found the notice procedures adequate, the Court next considers whether the

settlement as a whole comports with Rule 23(e).

a. Strength of Plaintiff’s Case and Risk of Continued Litigation

Approval of a class settlement is appropriate when plaintiffs must overcome “significant 

barriers” to make their case. Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D. 

Cal. 2010). Courts “may presume that through negotiation, the Parties, counsel, and mediator 

arrived at a reasonable range of settlement by considering Plaintiff’s likelihood of recovery.” 

Garner v. State Farm Mut. Auto. Ins. Co., No. 08-cv-1365-CW, 2010 WL 1687832, at *9 (N.D. 

Cal. Apr. 22, 2010). Additionally, difficulties and risks in litigating weigh in favor of approving a 

class settlement. Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009). “Generally, 

unless the settlement is clearly inadequate, its acceptance and approval are preferable to lengthy 

and expensive litigation with uncertain results.” Ching v. Siemens Indus., Inc., No. 11-cv-04838-

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MEJ, 2014 WL 2926210, at *4 (N.D. Cal. June 27, 2014) (internal quotation marks omitted).

While Plaintiffs maintain that they would be likely to prevail on the merits of their case, 

they face substantial challenges in continued litigation. First, it is not clear that Plaintiffs could 

successfully maintain class certification throughout the litigation. Defendant argues that 

Plaintiffs’ claims require individualized consideration of care services provided to each resident. 

If individualized issues pervade the factual analysis such that no common questions of law or fact 

exist, class certification cannot be maintained. See Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 

2541, 2556-57 (2011).

Second, even if Plaintiffs successfully certified a class, they would face obstacles to prove 

both liability and damages. As to liability, Defendant argues that Plaintiffs cannot show reliance 

because the decision to live at Defendant’s facilities was impacted by a variety of factors aside 

from the wE Care assessments. As to damages, Defendant argues that any recovery by Plaintiffs 

must be reduced by the value of the care actually received. The Court agrees that Plaintiffs faced 

substantial risks to succeeding on the merits of their claims.

Finally, even if Plaintiffs prevailed, this litigation likely would have taken years to 

complete. Given the advanced age of many of the class members, any delay to recovery presents 

heightened concerns.

The Court finds that these factors weigh in favor of settlement.

b. Settlement Amount

This factor “is generally considered the most important, because the critical component of 

any settlement is the amount of relief obtained by the class.” Bayat v. Bank of the W., No. 13-cv02376-EMC, 2015 WL 1744342, at *4 (N.D. Cal. Apr. 15, 2015). Because “the interests of class 

members and class counsel nearly always diverge, courts must remain alert to the possibility that 

some class counsel may urge a class settlement at a low figure or on a less-than-optimal basis in 

exchange for red-carpet treatment on fees.” In re HP Inkjet Printer Litig., 716 F.3d 1173, 1178 

(9th Cir. 2013) (internal quotation marks omitted).

Plaintiffs calculate that the gross settlement amount represents approximately 33.2% of the 

“maximum projected ‘hard damages’ at trial,” which in turn means that the net settlement amount 

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represents approximately 21.7% of the maximum recovery. Dkt. No. 102 (“Mot.”) at 12.5 

Additionally, Plaintiffs estimate that the individual payments will range from 20-40% of each 

class member’s maximum damages, id. at 13, and the projected average payment will be over 

$500, Final Approval Reply at 3. “It is well-settled law that a cash settlement amounting to only a 

fraction of the potential recovery does not per se render the settlement inadequate or unfair.” In re 

Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000). Based on the facts in the record 

and the parties’ arguments at the final fairness hearing, the Court finds that the settlement is within 

the range of reasonableness in light of the risks and costs of litigation. See Gaudin v. Saxon 

Mortg. Servs., Inc., No. 11-cv-01663-JST, 2015 WL 7454183, at *6 (N.D. Cal. Nov. 23, 2015) 

(granting final approval of a net settlement amount representing 13.6% of the plaintiffs’ estimated 

maximum recovery at trial); Stovall-Gusman v. Granger, Inc., No. 13-cv-02540-HSG, 2015 WL 

3776765, at *4 (N.D. Cal. June 17, 2015) (granting final approval of a net settlement amount 

representing 7.3% of the plaintiffs’ estimated maximum recovery at trial). 

Additionally, only a small portion—if any—of the gross settlement amount will be paid to 

the parties’ proposed cy pres recipient, the Institute on Aging. The organizational mission of the 

Institute on Aging is to “enhance the quality of life for adults as they age by enabling them to 

maintain their health, well-being, independence, and participation in the community.” Dkt. No. 

129-1 ¶ 9. The Institute runs an Elder Abuse Prevention Program aimed at protecting elders from 

potential financial abuse and consumer protection violations in Northern California. Id. The 

Court finds that the required “driving nexus between the plaintiff class and the cy pres 

beneficiaries” exists here. Nachshin v. AOL, LLC, 663 F.3d 1034, 1038 (9th Cir. 2011). 

Accordingly, this factor weighs in favor of approval. 

c. Stage of Proceedings

“This factor evaluates whether the parties have sufficient information to make an informed 

decision about settlement.” Larsen v. Trader Joe’s Co., No 11-cv-05188-WHO, 2014 WL 

 

5

These percentages are based on the original gross settlement amount of $13 million and the class 

exclusive of the Carry Over Residents. The parties confirmed at the final fairness hearing on 

December 17, 2015 that the revised settlement amount and class scope maintained these rough 

percentages.

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3404531, at *5 (N.D. Cal. July 11, 2014) (internal quotation marks omitted). “In the context of 

class action settlements, as long as the parties have sufficient information to make an informed 

decision about settlement, formal discovery is not a necessary ticket to the bargaining table.” 

Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 257 (N.D. Cal. 2015) (internal quotation 

marks omitted). “Rather, the court’s focus is on whether the parties carefully investigated the 

claims before reaching a resolution.” Id. (internal quotation marks omitted).

Here, prior to reaching a settlement, Plaintiffs engaged in extensive motion practice, 

substantial investigation, and informal and formal discovery. Dkt. No. 104, Healey Decl. ¶¶ 12-

13. Plaintiffs reviewed tens of thousands of pages of documents related to the action, conducted 

interviews, responded to formal discovery requests, and defended a deposition of Plaintiff 

Winans’ guardian ad litem. Id. 

The Court finds that Plaintiffs had an adequate understanding of the merits of their case 

before settlement negotiations began. Accordingly, this factor weighs in favor of approval.

d. Experience and Views of Counsel

“Parties represented by competent counsel are better positioned than courts to produce a 

settlement that fairly reflects each party’s expected outcome in litigation.” In re Pac. Enters. Sec. 

Litig., 47 F.3d 373, 378 (9th Cir. 1995). The Court has previously evaluated class counsel’s 

qualifications and experience and concluded that counsel is qualified to represent the class’ 

interests in this action. Dkt. No. 99 ¶ 5. The Court notes, however, that courts have taken 

divergent views as to the weight to accord counsel’s opinions. Compare Carter v. Anderson 

Merchandisers, LP, 2010 WL 1946784, at *8 (C.D. Cal. May 11, 2010) (“Counsel’s opinion is 

accorded considerable weight.”), with Chun-Hoon, 716 F. Supp. 2d at 852 (“[T]his court is 

reluctant to put much stock in counsel’s pronouncements, as parties to class actions and their 

counsel often have pecuniary interests in seeing the settlement approved.”). The Court finds that 

this factor tilts in favor of approval, even though the Court affords only modest weight to the 

views of counsel.

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e. Reaction of Class Members

“It is established that the absence of a large number of objections to a proposed class action 

settlement raises a strong presumption that the terms of a proposed class settlement action are 

favorable to the class members.” In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036, 1043 (N.D. 

Cal. 2008). A small number of objections to and opt-outs from a settlement “presents at least 

some objective positive commentary as to its fairness.” Hanlon, 150 F.3d at 1027.

Here, the overwhelming majority of settlement class members reacted favorably to the 

proposed settlement. Of the 21,277 class members who were mailed notice, only 25 opted out of 

the settlement. Dkt. No. 122-1 ¶ 4. Moreover, only two substantive objections were filed, one of 

which—Mr. Finch’s objection regarding the inclusion of Carry Over Residents in the settlement 

class—has been fully resolved. The remaining objection submitted by Ms. Wilkins asserts three 

arguments against approval of the settlement.

First, Ms. Wilkins contends that that the allegations in the complaint “trigger minimum 

penalties of $1,000 or $5,000,” and protests that the average settlement payment of $450 is 

therefore “paltry.” Dkt. No. 115 at 1. However, only $1,000 in statutory damages is available as a 

matter of right to prevailing parties, and some courts have construed that amount to be shared 

amongst all class members. See Delarosa v. Boiron, Inc., 275 F.R.D. 582, 593 (C.D. Cal. 2011).

A court may award up to $5,000 per class member in additional damages under the CLRA, but 

any such award is purely discretionary. Cal. Civ. Code § 1780(b). Additionally, Ms. Wilkins 

does not appear to have taken into account the above-described risks of protracted litigation when 

she assessed the reasonableness of the average settlement payment. 

Second, Ms. Wilkins contends that the Court should not certify a class for settlement 

purposes because “[t]he principal wrongs identified in the lawsuit relate to the companies’ failure 

to provide individualized care to residents; instead staffing levels were devised to make a profit 

rather than based on individual residents’ care needs.” Dkt. No. 115 at 2. As a result, she argues, 

individual issues predominate. Plaintiffs argue in their reply brief that Ms. Wilkins 

misunderstands the “primary damage relief sought” in this case, which is “the recovery of initial 

rent payments and rental deposits . . . that residents would not have paid but for Defendants’ 

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actionable conduct.” Dkt. No. 116 at 3. In other words, the damages stem from class members’ 

reliance on Defendant’s uniform misrepresentations, not individualized deviations from promised 

levels of care. Plaintiffs further contend that the Settlement Agreement preserves class members’ 

ability to bring claims based on individualized issues, such as neglect or abuse. Id. at 2-3. The 

Court finds that the settlement class is properly certified here.

Third, Ms. Wilkins argues that the parties must identify the cy pres recipient. Dkt. No. 115 

at 4-5. Ms. Wilkins correctly notes that the Ninth Circuit has directed courts to carefully review 

pre-certification settlements to ensure that cy pres distributions are “tethered to the nature of the 

lawsuit and the interests of the silent class members.” Dennis v. Kellogg Co., 697 F.3d 858, 867 

(9th Cir. 2012) (internal quotation marks omitted). To enable the Court to conduct this review, the 

parties must identify the cy pres recipient. Id. While the Court agrees with Ms. Wilkins on this 

point, the parties have mooted this objection by identifying the Institute on Aging as the cy pres 

recipient in the supplemental briefing submitted to the Court. See Dkt. No. 129.

The Court finds that this factor weighs in favor of approval. Although Ms. Wilkins makes 

reasoned arguments in her objection, they ultimately fail. Additionally, the overwhelming 

majority of the class did not object to or opt out of the settlement.

* * *

After considering and weighing all of the above factors, the Court finds that the proposed 

class action settlement is fair, adequate, and reasonable, and that the settlement class members 

received adequate notice. Accordingly, Plaintiffs’ motion for final approval of class action 

settlement is granted.

B. Attorneys’ Fees and Costs

1. Legal Standard

“In a certified class action, the court may award reasonable attorney’s fees and nontaxable 

costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Because 

California law governed the claim here, it also governs the award of attorneys’ fees. See Vizcaino 

v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). 

Under California law, “the award of attorney fees is proper . . . if (1) plaintiffs’ action has 

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resulted in the enforcement of an important right affecting the public interest, (2) a significant 

benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large 

class of persons and (3) the necessity and financial burden of private enforcement are such as to 

make the award appropriate.” Press v. Lucky Stores, Inc., 34 Cal. 3d 311, 317-18 (1983) (internal 

quotation marks omitted). Moreover, certain provisions of the CLRA mandate payment of 

attorneys’ fees to successful plaintiffs. See Cal. Civ. Code § 1780(e). Based on these criteria, and 

the parties’ agreement, the Court finds that class counsel is entitled to attorneys’ fees.

Additionally, class counsel is entitled to “recover as part of the award of attorney’s fees 

those out-of-pocket expenses that would normally be charged to a fee paying client.” Harris v. 

Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (internal quotation marks omitted). 

2. Class Counsel’s Request for Fees 

Under California law, courts have the power to award reasonable attorneys’ fees and costs 

where, as here, a litigant proceeding in a representative capacity secures a “substantial benefit” for 

a class of persons. Serrano v. Priest, 20 Cal. 3d 25, 38 (1977). The two primary methods for 

determining reasonable fees in the class action settlement context are the “lodestar/multiplier” 

method and the “percentage of recovery” method. See Wershba v. Apple Comput., Inc., 91 Cal. 

App. 4th 224, 254 (2001); accord Hanlon, 150 F.3d at 1029.

The Court first considers the lodestar method. The first step in the lodestar analysis is to 

multiply the number of hours counsel reasonably expended on the litigation by a reasonable 

hourly billing rate. See Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 579 (2004); Hanlon, 

150 F.3d at 1029. Once this raw lodestar figure is determined, the Court may apply a multiplier to 

the lodestar if warranted after the consideration of certain enhancement factors like (1) the results 

obtained; (2) the novelty and difficulty of the questions involved; (3) the requisite legal skill 

necessary to litigate the case; (4) the preclusion of other employment due to acceptance of the 

case; and (5) whether the fee is fixed or contingent. See Serrano, 20 Cal. 3d at 48.

Here, class counsel calculated total lodestar fees of $2,686,519.75 based on 5,106.9 total 

hours worked as of September 18, 2015. Dkt. No. 116-1 at 1. The Court has reviewed class

counsel’s time records and billing reports, and finds that the number of hours devoted to this case 

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was reasonable. The Court further finds that the billing rates used by class counsel to calculate the 

lodestar are reasonable and in line with prevailing rates in this district for personnel of comparable 

experience, skill, and reputation. 

Furthermore, the Court finds that the Serrano enhancement factors support the requested 

1.36 lodestar multiplier. Class counsel achieved significant benefits for the settlement class 

members. As detailed above, the amount of the settlement is substantial in light of the risks of 

continued litigation. Moreover, class counsel secured important nonmonetary benefits for the 

class members. See Vizcaino, 290 F.3d at 1049 (“Incidental or non-monetary benefits conferred 

by the litigation are a relevant circumstance [in determining fee awards].”). Defendant has agreed 

to completely phase out the wE Care assessment program and cease all alleged misrepresentations 

concerning its use. The Court finds that the injunctive relief encompassed in the Settlement 

Agreement carries a substantial value above and beyond the value of the cash class members will 

be paid.

As described above, this case involved complex issues of both fact and law that presented 

significant risks. Despite those risks, class counsel prosecuted this case on a contingent basis, 

agreeing to advance all necessary expenses and knowing that they would only receive a fee if there 

were a recovery. Dkt. No. 104, Stebner Decl. ¶ 13. Moreover, class counsel had to forego other 

work in order to devote the requisite amount of time, resources, and energy to handle this 

demanding matter. See id. ¶ 10. Given Defendant’s vigorous opposition, class counsel’s skills 

and experience were essential to obtaining a settlement. 

Finally, the Court finds that the reasonableness and propriety of the requested fee award 

are confirmed by a cross-check based on the percentage of the gross settlement amount obtained. 

The agreed-upon fee here represents approximately 27.2% of the cash value of the settlement. 

While this percentage is slightly above the “benchmark” percentage of 25% applied in the Ninth 

Circuit, the Court finds that it is reasonable in light of the additional nonmonetary benefits secured 

by class counsel and the other enhancement factors considered above. 

The Court finds that the requested attorneys’ fees of $3,667,065.82 are fair, reasonable, 

and justified. Accordingly, the Court grants Plaintiffs’ motion for attorneys’ fees. 

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3. Class Counsel’s Request for Costs 

Class counsel originally sought reimbursement of $121,243.09 in “litigation expenses 

necessary for the investigation, prosecution, and settlement of this action.” Dkt. No. 103 at 20. 

After being prompted by the Court at the December 17, 2015 final fairness hearing, class counsel 

submitted itemized cost records. See Dkt. Nos. 128-128-4. The Court has thoroughly reviewed 

the submitted records, which evidence reasonable costs incurred as follows: $3,807.15 by Denton 

US; $18,809.59 by Janssen Malloy; $3,465.40 by the Law Offices of Michael D. Thamer; 

$37,948.56 by Stebner & Associates; and $23,617.55 by the Arns Law Firm. Id. Because 

Schneider Wallace Cottrell Konecky Wotkyns did not submit supplemental cost records, the Court 

assumes that it maintains its original request for $35,074.16 in costs. See Dkt. No. 104, Wallace 

Decl. ¶¶ 32-36 & Exs. D-E. The Court finds these itemized costs to be reasonable and accordingly 

awards class counsel total costs of $122,722.41.

4. Plaintiffs’ Incentive Award

“[N]amed plaintiffs . . . are eligible for reasonable incentive payments.” Staton v. Boeing 

Co., 327 F.3d 938, 977 (9th Cir. 2003). The district court must evaluate a plaintiff’s incentive 

award using “relevant factors includ[ing] the actions the plaintiff has taken to protect the interests 

of the class, the degree to which the class has benefitted from those actions, . . . [and] the amount 

of time and effort the plaintiff expended in pursuing the litigation . . . .” Id. at 977 (internal 

quotation marks omitted). In the Ninth Circuit, a $5,000 incentive award is “consistent with the 

amount courts typically award as incentive payments.” In re Toys-R-Us Del., Inc. FACTA Litig., 

295 F.R.D. 438, 470 (C.D. Cal. 2014); Harris v. Vector Mktg. Corp., No. 08-cv-05198-EMC, 

2012 WL 381202, at *7 (N.D. Cal. Feb. 6, 2012) (“Several courts in this District have indicated 

that incentive payments of $10,000 or $25,000 are quite high and/or that, as a general matter, 

$5,000 is a reasonable amount.”).

Plaintiffs request a service award of $7,500 to Plaintiff Winans, by and through his 

guardian ad litem, Renee Moulton, and a service award of $3,500 to Plaintiff Ruby Richardson as 

trustee of the Wilma F. Fritz Trust. Dkt. No. 103 at 20. These awards represent 0.05% and 0.03% 

of the gross settlement value, respectively. Plaintiffs subjected themselves to public attention and 

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potential retaliation by acting as named plaintiffs. Moreover, they assisted in drafting the 

complaint and responding to discovery. See Dkt. No. 104, Stebner Decl. ¶ 31. Finally, Ms. 

Moulton, acting as guardian ad litem, prepared and appeared for deposition, and participated in 

settlement discussions. Id. In light of Plaintiffs’ service to the class, the Court finds that the 

requested service awards are fair and reasonable.

III. CONCLUSION

For the foregoing reasons, the Court orders as follows:

1. The Court grants final approval of the proposed settlement and plan of 

administration.

2. The Court awards class counsel $3,667,065.82 in attorneys’ fees.

3. The Court awards class counsel $122,722.41 in costs.

4. The Court grants service awards of $7,500 to Plaintiff Winans, by and through his 

guardian ad litem, Renee Moulton, and $3,500 to Plaintiff Richardson, as trustee of 

the Wilma F. Fritz Trust.

5. The class members who requested to opt out of the settlement are excluded from 

the class.

6. This action is hereby dismissed with prejudice, with each side to bear its own 

attorneys’ fees and costs, except as provided in the Settlement Agreement. 

7. The parties shall file a proposed judgment within three days of the date of this 

Order.

IT IS SO ORDERED.

Dated:

HAYWOOD S. GILLIAM, JR.

United States District Judge

1/11/2016

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