Case Name: Demayo v. O’Connor Hospital
Case No.: 2015-1-CV-285256

This is a putative employment class action involving a number of alleged wage and hour violations by defendant O’Connor Hospital (“Defendant”). Defendant is a medical complex offering a full range of inpatient and outpatient medical, surgical, and specialty programs in its 358-bed care facility. (First Amended Complaint (“FAC”), ¶ 14.) It has 546 medical physicians and employs over 1,500 staff associates. (Ibid.) Plaintiff was a non exempt hourly employee at O’Connor from 1995 to 2014. (Id. at ¶ 7.)

Plaintiff Edith Demayo (“Plaintiff”) alleges she was forced to work off the clock because defendant did not utilize an immutable timekeeping system to accurately record and pay her for the time she worked. (FAC, ¶ 8.) She alleges that Defendant engaged in a systematic practice of directing employees to unilaterally alter time records (including hers) in a manner that reduced employees’ recorded time, resulting in a failure to pay minimum wages, overtime wages, and missed meal break penalties. (Id. at ¶ 9.) Plaintiff further alleges that Defendant engaged in a uniform practice of “shaving” regular and overtime worked by recording fictitious 30-minute meal breaks in its timekeeping system, and Plaintiff was frequently unable to take a duty-free 10-minute rest break due to the work demands and schedule requirements imposed by Defendant. (Id. at ¶¶ 10-11.)

On October 9, 2015, Plaintiff filed the FAC, asserting claims for (1) failure to pay straight-time and overtime wages; (2) violation of the Unfair Competition Law; (3) failure to pay all wages owed upon termination; (4) failure to provide accurate wage statements; and (5) violation of the Private Attorneys General Act (“PAGA”).

The parties have reached a settlement. On January 23, 2017, the Court granted preliminary approval of the settlement. Plaintiff now moves for final approval of the settlement.

I. Legal Standard

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, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“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, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, 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, supra, 48 Cal.App.4th at p. 1802.)

II. Analysis

The amounts for which final approval of the settlement is sought are as follows. Defendant will pay $650,000. This includes attorneys’ fees of $216,666, litigation costs of $11,904.56, a class representative award of $5,000, class administration fees of $12,000, and $15,000 for the Labor and Workforce Development Agency. (Declaration of Melissa Meade on Behalf of Settlement Administrator (“Meade Decl.”), ¶ 13.)

The settlement administrator, Phoenix Settlement Administrators, mailed notice to class members on January 31, 2017. (Meade Decl., ¶ 7.) Ultimately, three notice packets remained undeliverable with no forwarding address and where no new address could be found through skip-trace. (Id. at ¶ 8.) There have been no objections to the settlement and four requests for exclusion. (Supplemental Declaration of Melissa Meade on Behalf of Settlement Administrator, ¶¶ 9-10.) As of March 18, 2017, there are 838 valid claimants, with an average claimed amount of $464.71 and the highest claimed amount estimated to be $825.54. (Id. at ¶ 5.)

The Court previously found that the proposed settlement is fair and the Court continues to make that finding for purposes of final approval.

Plaintiff seeks a class representative service payment of $5,000. Plaintiff has filed a declaration stating she regularly communicated with Plaintiff’s counsel, made herself available for mediation, and reviewed the settlement agreement. (Declaration of Edith Demayo ISO Plaintiff’s Motion for Final Approval of Class Action Settlement, ¶ 4.) Based on this information, the Court finds the service award is justified and it is approved.

The Court also has an independent right and responsibility to review the requested attorneys’ fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiff’s counsel seeks fees in the amount of $216,666 (1/3 of the total settlement amount). This fee amount is sought under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorneys’ fees from the fund itself. (See City and County of San Francisco v. Sweet (1995) 12 Cal.4th 105, 110-111.) As a cross-check on the reasonableness of the fee award, Plaintiff’s counsel submits that the lodestar for the two firms that worked on the case is $122,957.25. (See Declaration of Alexander I. Dychter ISO Plaintiff’s Motion for Final Approval of Class Action Settlement (“Dychter Decl.”), ¶ 15; see also Declaration of Kyle R. Nordrehaug ISO Plaintiff’s Motion for Final Approval of Class Action Settlement.) The lodestar is based on a combined 214.55 hours at rates ranging from $395 to $750 an hour. (Ibid.) The requested fee amount results in a 1.76 multiplier. The Court finds that this multiplier is justified given the contingent risk and the significant results achieved for the class. (See Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 45-46.) Class counsel also submits that litigation costs of $11,904.56 have been incurred. (Dychter Decl., ¶ 20.) The Court approves the award of $216,666 in attorneys’ fees and $11,904.56 in costs.

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In sum, the motion for final approval of the class action settlement is GRANTED.

The Court will prepare the order.