2014-00171159-CU-OE

Tarek Kamal vs. Schools Financial Credit Union

Nature of Proceeding: Motion for Final Approval of Class Action Settlement

Filed By: Aiwazian, Edwin

Plaintiff Terek Kamal et al.’s unopposed Motion for Final Approval of Class Action settlement is tentatively granted pending the final fairness hearing to be held on this date. (Code of Civil Procedure § 382, California Rules of Court, Rule 3.769.)

On December 19, 2017, the Court preliminarily approved the class action settlement in this case.

The settlement involves both cases No. 2014-171159 Kamal v. Schools Financial Credit Union and No. 2016-191441 Martin v. Schools Financial Credit Union. (See Item 6 on this calendar) It is the same class of persons in both cases, and there is only one settlement amount.

In this wage and hour action, Plaintiffs alleged, among other things, that Defendants committed numerous wage and hour violations, failed to pay overtime, failed to pay minimum wage, failed to provide proper meal and rest periods, failed to timely pay associated premium pay, failed to timely pay

wages and associated waiting time penalties, failed to provide compliant wage statements, failed to maintain accurate payroll records, and failed to provide reimbursements for necessary business expenses. Plaintiff also alleged violations of Bus. & Prof. Code § 17200, and also sought penalties under PAGA. Defendant has denied, and continues to deny, any liability or wrongdoing of any kind associated with any of the allegations, and further denies that the actions is appropriate for class treatment or representative adjudication for any purpose other than for settlement.

Pursuant to the proposed settlement, Defendants have agreed to pay a gross settlement amount of $750,000 to resolve the Released Claims of the class members who do not opt out. No portion shall revert to the defendant.

The Settlement Class will be provisionally certified as “All individuals who are or were employed by Schools Financial Credit Union in California in a non-exempt position at any point from November 2, 2010 to February 27, 2017.” There are approximately 478 individual class members. Settlement Class members who do not opt out will receive payments on a pro rata basis according to the number of weeks a class member worked during the relevant period. The settlement also includes class representative’s payments to Tarek Kamal, Vanessa Martin and Mathew Garcia in an amount of $7,500 each.

The trial court has broad discretion to determine whether a proposed settlement in a class action is fair. (Rebney v. Wells Fargo Bank (1990) 220 Cal. App. 3rd 1117, 1138.)

The Court finds that the court-appointed Settlement Administrator, Simpluris, has taken all necessary steps to effectuate the notice and settlement administration process, as set forth in the Court’s Preliminary Approval Order entered December 19, 2017. Ultimately only 4 notice packets out of the original 478 notice packets sent remained undeliverable. No objections to the Settlement have been submitted to the Settlement Administrator. Three timely and valid requests for exclusion has been submitted to the Settlement Administrator.

Plaintiffs now seek to finalize the settlement including the following:

(1) The Settlement Sum of $750,000 represents a fair, adequate, and reasonable resolution of this cases, given the risks inherent in litigating class and representative claims through certification proceedings, trial, and/or appeals. The Net Settlement Fund (from the total of $750,000) of approximately $366,500.00 will be fully distributed to the Settlement Class Members who have not submitted a timely and valid request for exclusion. The highest Individual

Payment Amount is currently estimated to be $1,827.29 and the average Individual payment amount is currently estimated to be $763.27.

(2) Attorneys fees in the amount of $285,000.00 shall be paid to Lawyers for Justice, PC (“Settlement Class Counsel”), representing thirty-eight percent (38%) of the Settlement Sum, which is reasonable and justified on a percentage-basis and also

based on a lodestar cross-check;

The Court finds that the requested attorneys fees are reasonable. Settlement Class Counsel is experienced in wage-and-hour class action litigation and used that experience to obtain a good result for the Settlement Class. The skill that Settlement Class Counsel has shown, along with the results obtained, justify the requested Attorneys’ Fees and reimbursement of Litigation Costs, considering the amounts requested, the work performed, and the risks incurred.

Plaintiffs entered into a contingency-fee agreement with Settlement Class Counsel, and the representation of the Settlement Class provided by Settlement Class Counsel has been wholly contingent. Settlement Class Counsel took on the cases without knowing whether any recovery would be obtained. Settlement Class Counsel has invested 592.95 hours of time to obtain relief on behalf of Plaintiffs and the Settlement Class.

“The ultimate goal… is the award of a ‘reasonable’ fee to compensate counsel for their efforts, irrespective of the method of calculation.” Consumer Privacy Cases (2009) 175 Cal.App,4th 545, 557-58 (quoting Apple Computer, Inc. v. Superior Court, supra, 126 Cal.App,4th at 1270). Trial courts have “wide latitude” in assessing the value of attorneys’ fees and their decisions will “‘not be disturbed on appeal absent a manifest abuse of discretion.'” Lealao v. Beneficial Cal., Inc. (2000) 82 Cal.App.4tii 19, 41; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (The “experienced trial judge is the best judge of the value of professional services rendered in his court[.]”); Cellphone Termination Fee Cases (2009) 180 Cal.App.4tii 1110,1118. Where the amount of a settlement is a “certain easily calculable sum of money,” California courts may calculate attorneys’ fees as a reasonable percentage of the settlement created, Weil and Brown, California Practice Guide. Civil Procedure Before Trial, Chapter 14, section 14:145; Dunk, supra, 48 Cal,App,4th at 1808, The percentage-of-the-benefit approach is preferred in class and representative actions because “it better approximates, the workings of the marketplace than the lodestar approach.” Lealao, supra, 82 Cal.App,4th at 49

California and federal courts have long recognized that an appropriate method for determining the award of attorneys’ fees is based on a percentage of the total value of benefits made available to class members by the settlement. Boeing Co. v. Van Gemert (1980) 444 U.S. 472, 478; Paul, Johnson. Alston & Hunt v. Graulty (9th Cir. 1989) 886 F.2d 268, 272; Vincent v. Hughes Air West, Inc. (9th Cir. 1977) 557 F.2d 759, 769; Serrano v. Priest (1977) 20 Cal.3d 25 34. The purpose of this equitable doctrine is to spread litigation costs proportionally among all the beneficiaries so that the active beneficiary does not bear the entire burden alone. See Vincent, supra, 557 F.2d at 769.

While the percentage-of-the-benefit approach is endorsed as the better approximation of the workings of the marketplace than the lodestar approach, courts may also use the lodestar method to “cross-check” the results of the other. See Laffitte, supra, 1 Cal.5th at 505 (explaining that “[a] lodestar cross-check is simply a quantitative method for bringing a measure of the time spent by counsel into the trial court’s reasonableness determination”); see also, e.g., Vizcaino,

290 F.3d at 1050 (“[W]hile the primary basis of the fee award remains the percentage method, the lodestar may provide a useful perspective on the reasonableness of a given percentage award.”). Importantly, “the lodestar calculation . . . does not override

the trial court’s primary determination of the fee as a percentage” of the settlement fund and “does not impose an absolute maximum or minimum on the potential fee award.” Laffitte, supra, 1 Cal.5th at 505. The lodestar is calculated based on reasonable hours at reasonable prevailing hourly rates for the attorneys. Ketchum, supra, 24 Cal,4th at 1131-32. Under California law, counsel is entitled to compensation for every hour reasonably spent on the matter. Id at 1133.

Class Counsel’s reasonable hourly rate of $600 when multiplied with the number of hours spent, is approximately $355,000, considerably more than the $285,000 being awarded.

In Camden I Condominium Association, Inc. v. Dunkel, the court identified twelve factors to be considered in determining whether fee awards are reasonable: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill required to perform the legal services properly; (4) the preclusion of other employment by the attorney due to the acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitation imposed by the client or the circumstances; (8) the amount involved and results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Camden I Condominium Association, Inc. v. Dunkel (11th Cur. 1991) 946 F.2d 768,772.

Viewing all the above factors together, the requested fees are reasonable.

(3) Payment in the amount of $35,000.00 to Settlement Class Counsel for reimbursement of litigation costs and expenses. The Settlement provides for reimbursement of Litigation Costs of up to $35,000. As set forth in the Declaration of Edwin Aiwazian, Settlement Class Counsel has incurred a total of $49,863.65 in Litigation Costs.'” This amount was reasonable and necessary in the prosecution of this matter and to obtain a Settlement.” Accordingly, the Court awards reimbursement of Litigation Costs in the amount of $35,000 to Settlement Class Counsel.

(4) Payment of $11,000.00 to the Settlement Administrator, Simpluris, Inc. (“Simpluris”), for Settlement Administration Costs;

As set forth in the accompanying Declaration of Norman Alcantara, the total costs incurred and to be incurred by Simpluris for the notice and settlement administration process are $11,000. The costs incurred and to be incurred include, but are not limited to, expenses for formatting, printing, and mailing the Notice Packet to the Settlement Class Members; performing skip-trace searches; re-mailing the Notice Packet to any updated addresses located; receiving,

reviewing, and processing requests for exclusion and objections; resolving any disputes regarding the Qualifying Work Weeks credited to Settlement Class Members; handling inquiries from Settlement Class Members regarding the Settlement; calculating Individual Payment Amounts and preparing the associated tax forms; and transmitting payments, among other things.

(5) Service Awards in the amount of $7,500 each to Plaintiffs Tarek Kamal, Vanessa Martin, and Mathew Garcia (for a combined amount of $22,500) for their time and effort in representing the Settlement Class. These payments are reasonable to compensate Plaintiffs for the time and effort that they expended on behalf of the

Settlement Class.

(6) Allocation of the penalties under the Private Attorneys General Act of 2004, as required by California Labor Code section 2698, et seq., in the amount of $40,000.00, of which seventy-five percent (75%), or $30,000, will be paid to the California Labor and Workforce Development Agency and twenty-five percent (25%), or $10,000, will be a part of the Net Settlement Fund for distribution to the Settlement Class Members who do not opt out of the Settlement.

The trial court has broad discretion to determine whether a class action settlement is fair and reasonable. Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 52. To determine whether the settlement is fair and reasonable, courts 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. Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794,1801. “The list of factors is not exclusive and the court is free to engage in a balancing and weighing of the factors depending on the circumstances of each case.” Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224,245.

“Due regard should be given to what is otherwise a private consensual agreement between the parties.” Dunk, supra, 48 CaI.App.4th at 1801. The proponent of the settlement has the burden to show that it is fair and reasonable. Wershba, supra, 91 Cal.App.4th at 245. At the final approval stage, a presumption of fairness
exists where, as here: “(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.” Dunk, supra, 48 Cal.App.4th at 1802. In reviewing a class settlement, the court need not reach any ultimate conclusions on the issues of fact and law that underlie the merits of the dispute. 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1146,
The inquiry is not whether the settlement agreement is the best one that class members could have possibly obtained, but whether the settlement taken as a whole is “fair, adequate, and reasonable.” Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 55. A settlement need not obtain 100 percent of the damages sought in order to be fair, reasonable, and ultimately, meaningful. Wershba, supra, 91 Cal.App,4th at 251. Even if the proposed settlement affords relief that is substantially narrower than it would be if the lawsuit was to be successfully

litigated, that 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 prolonged litigation. Id. The Court orders the final approval of the class action settlement under these principals.

The Court will sign the proposed order.