Case Name: Sandra Estrada v. OS Restaurant Services, LLC, et al.
Case No.: 16-CV-293249

This is a putative wage and hour class action by employees of defendant OS Restaurant Services, LLC. The parties have reached a settlement, which the Court preliminarily approved on December 4, 2017. Plaintiff now moves for (1) final approval of the settlement and (2) approval of her attorney fees, costs, and enhancement award.

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, Administration, and Fairness of the Settlement

The non-reversionary $350,000 settlement encompasses the wage statement claims asserted in plaintiff’s Third Amended Complaint (“TAC”); the meal and rest period claims alleged in the Second Amended Complaint were dismissed without prejudice. The settlement includes a $7,500 payment to the California Labor and Workforce Development Agency associated with plaintiff’s PAGA claim (seventy-five percent of the $10,000 allocated to PAGA penalties). Attorney fees of up to $116,666.66 (one-third of the gross settlement), litigation costs estimated at $10,000, and administration costs of approximately $30,000 will also be paid from the gross settlement. The named plaintiff will seek an enhancement award of $5,000.

The net settlement will be distributed to class members pro rata based on their pay periods worked during the class period. All of the individual settlement payments will be deemed penalties for tax purposes. Class members will not be required to submit a claim to receive their payments. Funds associated with checks uncashed after 180 days will be deposited with the Department of Industrial Relations Unpaid Wage Fund.

Class members who do not opt out of the settlement will release claims “asserted in, and/or arising out of or relating to, the [TAC], together with any claims which could have been asserted in the [TAC] based on the facts alleged therein, including but not limited to all claims for deficient and inaccurate wage statements under any theory of law….”

The notice process has now been completed. There were no objections and 18 requests for exclusion from the class. Of 2,464 notice packets, 240 were re-mailed to updated addresses and 177 were ultimately undeliverable. Given these results, the claims administrator estimates that the average settlement award will be $73.93 and the maximum award will be $198.82.

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 Enhancement Award

Plaintiff seeks a fee award of $116,666.66, 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 $78,640, based on 162.4 hours expended on the case by attorneys with billing rates ranging from $350 to $600 per hour. The lodestar results in a reasonable multiplier of 1.48. As a cross-check, the lodestar information supports the 1/3 percentage fee requested, particularly where there are no objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 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 $8,652.95 in litigation costs, below the $10,000 estimate that was provided at preliminary approval. The costs appear reasonable and are approved.

The administrative costs were estimated at $30,000. The administrator filed a declaration stating that its incurred and future expenses will total precisely this amount, without stating the costs incurred thus far or providing a specific estimate of future costs. Based on its experience overseeing similar settlements and giving little weight to the administrator’s conclusory declaration, the Court finds the $30,000 requested to be excessive. The Court will approve $20,000 in administrative fees on the record before it, with the $10,000 balance to be distributed to the class. Any request for additional fees must be supported by a more detailed and specific declaration by the administrator.

Finally, plaintiff Sandra Estrada requests a $5,000 service award. To support her request, she submits a declaration describing her efforts on this action and estimating that she spent 30 hours 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 subject to the reduction in administrative fees stated above.

The following class, excluding those individuals who submitted timely requests for exclusion, is certified for settlement purposes:

All current and former non-exempt employees employed by OS Restaurant Services, LLC in California from March 28, 2015 through August 15, 2017.

The Court will prepare the order.