Case Name: Servando Velasco Perez v. California Drywall Co., et al.
Case No.: 16-CV-299728

This is a putative wage and hour class action by employees of defendant California Drywall Co., alleging failure to provide itemized wage statements in compliance with the Labor Code. The parties have reached a settlement, which the Court preliminarily approved on August 3, 2017. Plaintiff now moves for final approval of the settlement and approval of his attorney fees, costs, and enhancement award. His 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 Settlement

The terms of the settlement are as follows. The $85,000 non-reversionary settlement includes a $3,750 payment to the California Labor and Workforce Development Agency associated with plaintiff’s PAGA claim (seventy-five percent of the $5,000 allocated to PAGA penalties). Attorney fees of up to $28,333.33 (one-third of the gross settlement), litigation costs estimated at $10,000, and administration costs capped at $5,750 will also be paid from the gross settlement. The named plaintiff will seek an enhancement award of $2,500.

The remaining net settlement of approximately $34,666.67 will be distributed to class members pro rata based on the number of manually generated checks received by each class member during the class period. Class members will not be required to submit a claim to receive their payments. Checks uncashed after 180 days will be deposited with the State of California 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 any and all claims, etc. “that are alleged in, or that could have been alleged in, Plaintiffs’ notice letters to the LWDA (submitted on or about January 17 and July 5, 2016), the Complaint (filed September 9, 2016), [sic.] arising out of the alleged failure to provide itemized wage statements to individuals whom Defendant paid their wages with a manually generated check ….”

The notice process has now been completed. There were no objections to the settlement and no requests for exclusion from the class. Of 670 notice packets mailed, 32 were re-mailed to updated addresses located through skip tracing and 6 were ultimately undeliverable. The claims administrator estimates that the average class member payment will be $62.69, with a minimum payment of $35.85 and a maximum payment of $286.80.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiffs’ 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 $28,333.33, 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 reports that 109.3 hours were expended by attorneys with billing rates of $650 per hour, resulting in a lodestar figure of $71,045. The fee request is thus substantially below the lodestar figure in this case. As a cross-check, the lodestar supports the 1/3 percentage fee requested, particularly given that there are no 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 $2,017.19 in litigation costs, well below the $10,000 estimate that was provided at preliminary approval. The costs are reasonable based on the summary provided by plaintiffs. Plaintiff’s request for $5,750 in administrative costs is also approved.

Finally, the named plaintiff requests a service award of $2,500. To support this request, he submits a declaration describing his efforts on the case and indicating that he spent approximately 20 hours meeting with his attorneys and providing them with documents and information. The Court finds that the class representative is entitled to a service 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 individuals who worked for Defendant in California at any time from September 9, 2015, through the date of the Court’s preliminary approval of the class action settlement, and who received their wages through a manually generated check.

The Court will prepare the order.