Case Name: Shannon Sanchez v. American Para Professional Systems, Inc., et al.
Case No.: 17-CV-306751

This is a putative class action alleging misclassification of employees as independent contractors by defendants American Para Professional Systems, Inc. and A.P.P.S. of California. The parties have reached a settlement, which the Court preliminarily approved on July 13, 2018. The factual and procedural background of the action and the Court’s analysis of the settlement and settlement class are set forth in that order.

Plaintiff now moves for final approval of the settlement and approval of her attorney fees, costs, and enhancement award. Plaintiff’s motion is unopposed.

I. Legal Standard for Approving a Class Action Settlement

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)

In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through 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.

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.)

The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.)

The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)

II. Terms and Administration of the Settlement

The non-reversionary $1,100,000 settlement includes a $11,250 payment to the California Labor and Workforce Development Agency associated with plaintiff’s PAGA claim (seventy-five percent of the $15,000 allocated to PAGA penalties). Attorney fees of up to $366,630 (approximately one-third of the gross settlement), litigation costs not to exceed $10,000, and administration costs estimated at $25,000 will also be paid from the gross settlement, in addition to the employer and employee share of payroll taxes. The named plaintiff will seek an enhancement award of $15,000. The parties agree that 25 percent of the payments to class members shall be deemed wages and the remainder of the payments shall be treated as expenses, penalties, and interest for tax purposes.

The net settlement, approximately $672,120, will be distributed to class members pro rata based on their Qualifying Paramedical Examinations during the class period. Class members will not be required to submit a claim to receive their payments. If a class member fails to cash his or her settlement check within 120 days of mailing, the associated funds will be deposited with the Department of Industrial Relations Unclaimed Wages fund in the class member’s name.

Class members who do not opt out of the settlement will release all claims, including unknown claims, “for any type of relief arising out of a Settlement Class Member’s work as an independent paramedical examiner … for alleged or actual (a) misclassification as an independent contractor …; (b) failure to provide required meal and/or rest periods …; (c) failure to provide adequate or accurate wage statements …; (d) failure to pay all wages in a timely manner upon termination of employment …; (e) unpaid business expenses …; (f) civil penalties under [PAGA]; (g) unfair competition … and claims based on the applicable Wage Orders;” derivative claims for civil penalties and other forms of relief; and “(k) to the extent not covered by the above, any claims that were pled or could have reasonably been pled in the Litigation.”

The notice process has now been completed. There were no objections and only two requests for exclusion from the class. Of 594 notice packets, 23 were re-mailed to updated addresses and 6 were ultimately undeliverable. Plaintiff estimates that the average class member payment will be $1,131.51.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiff’s claims. It finds no reason to deviate from this finding now, especially considering that there are no objections. The Court consequently finds that the settlement is fair and reasonable for purposes of final approval.

III. Attorney Fees, Costs, and Incentive Award

Plaintiff seeks a fee award of $366,630, or 1/3 of the gross settlement, which is not an uncommon contingency fee allocation. This award is facially reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney fees from the fund itself. Plaintiff also provides a lodestar figure of $199,575, based on 291.2 hours spent on the case by attorneys with billing rates of $600 to $700 per hour. The fee request results in a reasonable multiplier of 1.84. As a cross-check, the lodestar supports the 1/3 percentage fee requested, particularly given the lack of objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (Cal. 2016) 1 Cal.5th 480, 488, 503-504 [trial court did not abuse its discretion in approving fee award of 1/3 of the common fund, cross-checked against a lodestar resulting in a multiplier of 2.03 to 2.13].)

Plaintiff also requests $8,339.59 in costs, below the $10,000 estimate provided at preliminary approval. The costs are reasonable based on the summaries provided and are approved. The $25,000 in administrative costs are also approved.

Finally, plaintiff requests a service award of $15,000. To support her request, she submits a declaration in which she describes her efforts on the case. The Court finds that the class representative is entitled to an enhancement award and the amount requested is reasonable.

IV. Conclusion and Order

Plaintiff’s motion for final approval is GRANTED.

The following class is certified for settlement purposes:

All Persons in California who signed one or more independent contractor agreements either for themselves or for their benefit directly with APPS or A.P.P.S of California and performed at least one paramedical examination at any time during the Class Period (from February 28, 2013 through preliminary approval).

Excluded from the class are the two individuals who filed timely requests for exclusion.

The Court will prepare the order.