Case No.: 1-12-CV-221688

This is a class action for unpaid overtime wages. The operative Second Amended Complaint (“SAC”) is brought by plaintiffs Susan Gallagher (“Gallagher”) and Erika Boatman (“Boatman”) (collectively “Plaintiffs”) against defendant Legacy Partners, Inc. (“Defendant”), a company that provides commercial and residential real estate services. Plaintiffs allege that Defendant employs and improperly classifies “Property Managers” and “Assistant Property Manages” as exempt from overtime pay. Gallagher brings only individual claims as to her employment as a Property Manager. Boatman brings this action on behalf of herself and a “California Class” defined as all individuals who are or were employed by Defendant in California as Assistant Property Managers and who were classified as exempt from overtime wages at any time during the period of four years prior to the filing of the instant action. The SAC also defines a “California Labor Subclass” of all members of the California Class who are or were employed by Defendant as Assistant Property Managers and who were classified as exempt at any time during the period of three years prior to the filing of the Complaint. The SAC asserts three causes of action for: (1) unlawful business practices (by Gallagher and Boatman and the California Class); (2) failure to pay overtime compensation (by Boatman and the California Labor Subclass); and (3) failure to pay wages when due (by Boatman and the California Labor Subclass).

On December 13, 2013, the Court granted Plaintiffs’ motion for preliminary approval of class action settlement, class representative service award, attorney’s fees and costs, and claims administration fees. The Court also conditionally certified a settlement class that consists of “all individuals [sic] employees employed by Defendant as Assistant Property Managers in California at any time between April 2, 2008 and April 30, 2013.”

Under the terms of the Settlement Agreement, in exchange for a full release of claims alleged in the SAC related to wage and hour claims during the class period, Defendant will pay a $75,000 into a “Gross Common Fund” that will consist of cash payments to claimants, a class representative award not to exceed $4,000, litigation costs not to exceed $7,000, attorney’s fees not to exceed $18,750, and claims administration fees not to exceed $10,000. Settlement class members will receive a settlement payment based upon workweeks for that individual during the class period, with half allocated to the settlement class member’s wage claims, and the other half allocated to non-wage claims (e.g., penalties and interest). This is a non-reversionary settlement, and any residue will be paid to the California Labor Workforce Development Agency as a cy pres beneficiary. Defendant also agrees to make a separate payment of $15,000 to Gallagher in final settlement of her individual claims.

Plaintiffs now move for final approval of class action settlement and for an award of $18,750.00 in attorney’s fees and $7,000 in litigation expenses.

“The well-recognized factors that the trial court should consider in evaluating the reasonableness of a class action settlement agreement include ‘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.’ [Citations.] This list ‘is not exhaustive and should be tailored to each case.’ [Citation.]” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128.) “[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. [Citation.]” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.)

Here, the settlement is entitled to a presumption of fairness, as it reached through arm’s-length bargaining after formal mediation and exchange of information and investigation in connection with the litigation, and counsel is experienced in similar litigation, as demonstrated by the firm’s resume. Regarding the Class’s response to the settlement, 11 of the 24 Class Members (47.83%) submitted timely claims that represent 848 of the 1,683 workweeks of the class (50.39%), and there was only one request to opt out (Kelly Schuster) and no objections to the settlement.

“Although [t]here is usually an initial presumption of fairness when a proposed class settlement … was negotiated at arm’s length by counsel for the class, … it is clear that the court should not give rubber-stamp approval. Rather, to protect the interests of absent class members, the court 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. To make this determination, the factual record before the … court must be sufficiently developed… . The proposed settlement cannot be judged without reference to the strength of plaintiffs’ claims. The most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement. The court must stop short of the detailed and thorough investigation that it would undertake if it were actually trying the case, but nonetheless it must eschew any rubber stamp approval in favor of an independent evaluation.” (Kullar, supra, 168 Cal.App.4th at p. 130, internal citations and quotation marks omitted.)

As the Court previously found on preliminary approval, there are inherent difficulties in successfully litigating overtime claims, particularly in the class action context where it may be difficult to prove that common issues of law and fact will predominate over individual inquiries on the job duties of each class member. According to Plaintiffs’ counsel, Norman Blumenthal, class counsel received class data from which they calculated that Defendant was subject to an estimated damage claim of $30,371 for the unpaid overtime for the 24 Assistant Property Managers, and waiting time penalties of $115,000. Thus, the $75,000 Gross Common Fund is more than the estimated damages to the class and constitutes 51% of the estimated maximum of all damages and penalties combined. “A settlement need not obtain 100 percent of the damages sought in order to be fair and reasonable. [Citations.] Compromise is inherent and necessary in the settlement process. Thus, even if ‘the relief afforded by the proposed settlement is substantially narrower than it would be if the suits were to be successfully litigated,’ this is no bar to a class settlement because ‘the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding litigation.’ [Citation.]” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 250.) The Court once again finds the settlement amount, balanced against the difficulties of prevailing on the merits and the estimated damages, is entitled to preliminary approval.

The Court also approves the $18,750.00 in proposed attorney’s fees. The award, which is one quarter of the total settlement amount, is reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney’s fees from the fund itself. (See City and County of San Francisco v. Sweet (1995) 12 Cal.4th 105, 110-111.) Furthermore, Mr. Blumenthal submits billing records for a lodestar cross-check, showing a total lodestar of $46,319.75, which far exceeds the requested fee award. Mr. Blumenthal also requests $7,000 for litigation expenses, and this request is supported by billing records showing actual litigation expenses totaling $7,052.88. The Court approves the expense request as well.

Plaintiffs also seek a service award of $4,000 for Boatman. “‘[C]riteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. [Citations.]’ [Citation.] These ‘incentive awards’ to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. [Citation.]” (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395.) The service award was previously supported by Boatman’s declaration indicating the amount of time and effort spent by her as class representative. The Court approves the service award.

The $10,000 in claims administration expenses is supported by the Declaration of Bernella Osterlund of Gilardi & Co.

For all these reasons, the motion for final approval is GRANTED.