The court in Adoma v. University of Phoenix, Inc., No. CIV. S-10-0059 LKK/GGH, 2010 WL 3431804 (E.D. Cal. Aug. 31, 2010 (slip op.) held that even where plaintiff’s proposed method of “reconstructing records of hours worked . . . will be imperfect”, plaintiffs may rely on “a few representative inquiries whose results will be extrapolated to the class.” Read the rest of this entry »
In a positive development for both plaintiffs and defendants, a bill establishing an expedited jury trial procedure has sailed through the California Legislature. The Wall Street Journal Law Blog and The Recorder reported today that Assembly Bill No. 2284 was approved by the legislature on a unanimous vote. The bill, entitled the Expedited Jury Trials Act, was introduced by Assembly Member Noreen Evans (D-Santa Rosa). It calls for the establishment of strealined jury trials in civil cases, where the parties stipulate to them. Some of the highlights:
I’m in trial the week of August 22, 2010. I’ll continue updating the latest case law developments and jury verdicts, but the updates will be more abbreviated.
Best,
Charles
In an unusual move, plaintiffs in Arrendondo v. Delano Farms Company, No. CV F 09-1247 LJO DLB, 2010 WL 3212000 (E.D. Cal. Aug. 10, 2010), sought and were granted a temporary restraining order. Plaintiffs filed an Application pursuant to Fed. R. Civ. P. 65 requesting a Temporary Restraining Order (“TRO”) against defendant Delano Farms Company to restrain potential retaliation and threats to witnesses and putative class members by defendant. The Application was supported by declarations of three witnesses and potential class members who heard threats by a supervisor of Delano Farms as well as declarations from Jessica Arciniega and Thomas P. Lynch, attorneys representing plaintiffs, and Aida Sotelo, a paralegal who investigated the threats. Read the rest of this entry »
Image by Eric Chan
In an unreported opinion, Wolfson v. Tukatech, Inc., 2010 WL 3170521 (Cal. Ct. App. 2d Dist. Aug. 12, 2010), the Second District Court of Appeal considered whether a new trial was correctly ordered after plaintiff’s attorney argued to the jury about plaintiff’s right to recover for his future wages. The Court of Appeal affirmed the new trial order because the “record supports the trial court’s finding that Wolfson’s trial counsel committed prejudicial misconduct when arguing to the jury about Wolfson’s right to recover for his future wages”.
The court held that the plaintiff’s attorney misstated the law by “repeatedly argu[ing] unauthorized instructions whose flaws should have been obvious, even after repeated objections to those instructions were sustained”; thus, the court held “that the trial court did not abuse its broad discretion by finding that misconduct occurred.” Read the rest of this entry »
Judge Jeffrey S. White approved a wage and hour class action settlement of a non-reversionary $1.8 million, inclusive of $520,000 in attorneys fees, in Ozga v. U.S. Remodelers, Inc., No. C 09-05112 JSW, 2010 WL 3186971 (N.D. Cal. Aug. 9, 2010).
Plaintiff filed a class action in the Alameda Superior Court on February 17, 2009, alleging that Defendant U.S. Remodelers Inc. violated the California Labor Code and violated California Industrial Welfare Commission Wage Orders by: (1) requiring its Installer employees to work substantial amounts of time without compensation; (2) regularly failing to provide Installers with meal and rest periods; and (3) refusing to reimburse expenses that Installers incurred in the performance of their work duties, including travel expenses and equipment costs.
Defendant removed the action to this Court, and Plaintiff subsequently moved to remand. But before the hearing on the motion to remand, the parties reached a settlement, which was facilitated, in part, by a mediation that occurred on October 1, 2009, before Michael Loeb. The parties also engaged in some discovery, and Class Counsel interviewed a number of Settlement Class members.
The Court finds that the terms of the Settlement are fair, adequate and reasonable. As noted, the settlement was reached after the parties engaged in discovery, conducted a meditation, and continued to engage in arms-length negotiations. The parties agreed to a Settlement payment of $1,800,000.00, none of which will revert to the Defendant. The overall reaction to the settlement has been positive. The Claims Administrator has received 156 claim forms from the 270 Class Members. (Id., ¶¶ 20-21.) Neither the Claims Administrator nor the Court received any objections to the Settlement. No Class Member appeared at the final approval hearing to object. According to the Claims Administrator, assuming the Court were to grant in full Plaintiff’s motion for attorneys’ fees and costs and service awards, approximately $1,108,917.72 would be available to distribute Class Members who submitted timely claim forms, for an average award of just over $7,000. (Id. ¶¶ 16-18.)
The Court approved costs to be paid to the Claims Administrator of $10,000.00 from the Settlement Fund.
Attorneys Fees, Costs, and Service Awards
Plaintiff brought an unopposed fee application, seeking $600,000.00 in attorneys’ fees, $11,274.89 in costs, and $10,000.00 in service awards to him and to class member Boris Moskovich.
Plaintiff’s counsel sought an award of attorneys’ fees based on the percentage method, asking for 33 1/3% of the Settlement Fund. The court agreed to depart from the 25% benchmark. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (noting that 25% is benchmark and “usual” range of awards is 20-30%); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 1998) (stating that 25% is benchmark). But the court would not vary from the benchmark to the degree requested by counsel.
The Court concludes that counsel did achieve an excellent result for the class, that the reaction to the settlement has been overwhelmingly positive, and that Plaintiff faced significant risk in prosecuting this case given the uncertain state of California law in similar wage and hour cases. The Court also recognizes that other courts have awarded settlement fees of up to 33 1/3% in such cases. However, the parties reached this settlement quickly and did not engage in any motion practice. See, e.g., Navarro v. Servisair, 2010 WL 1729538 (N.D. Cal. Apr. 27, 2010) (finding that proposed award of 30% of settlement fund unjustifiably departed from benchmark based in part on speed with which parties reached a settlement). Moreover, the requested percentage would amount to award that is more than double the fees actually incurred by counsel. Compare Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010) (awarding 33 1/3% of settlement fund which was “significantly less” than asserted lodestar).
Thus the court found that an award of $520,000.00 was reasonable.
The court found counsels’ requests for costs in the amount of $11,274.89 reasonable.
The court also approved service awards in the amount of $10,000.00 for the lead plaintiff and for a class member.
Magistrate Judge Edward M. Chen (whose confirmation to the Northern District of California bench has unfortunately been stalled for far too long) approved the class settlement and attorney fee application in Stuart v. RadioShack Corp., 2010 WL 3155645, No. C-07-4499 EMC (N.D. Cal. Aug. 9, 2010).
This class action was initiated in state court in June 2007, alleging that RadioShack had improperly failed to reimburse its employees for expenses they incurred in using their personal vehicles to perform inter-company transfers (“ICSTs”). Plaintiffs claimed for reimbursement pursuant to California Labor Code § 2802 and for a violation of California Business & Professions Code. Subsequently Plaintiffs added a claim for recovery of penalties under the California Labor Code Private Attorneys General Act (“PAGA”). The case was removed in August 2007. And in February 2009, Judge Chen granted the motion for class certification, certifying a class consisting of “all persons employed by RadioShack within the State of California, at any time from June 3, 2003, to the present, who drove their personal vehicles to and from RadioShack stores to carry out ICSTs and who were not reimbursed for mileage.” On October 1, 2009–nine days before trial was scheduled to begin–the parties reached a settlement.
Under the Settlement Agreement, RadioShack will pay a total of $4.5 million for the release by the class, as an all-inclusive sum (proceeds to be distributed to the class, attorney’s fees and litigation expenses, costs of claim administration, incentive payments to the class representatives, and the PAGA award to the state), without reversion of any of the $4.5 million to RadioShack.
After attorney’s fees, litigation expenses, costs of claim administration, incentive payments, and the PAGA award to the state have been deducted from the $4.5 million, the remainder for distribution to the class members and/or donation to charity is $2,796,563.31.
Each class member’s award “depends on the number of weeks that the class member worked.”
The Court found that, importantly, “the amount available to the class after deductions for, e.g., fees and costs–i.e., $2,796,563.31–is not far off what the class might be awarded if it were to prevail on the merits after a trial.” Id. *4.
Plaintiffs’ counsel asked for an award of $1.5 million (i.e., one-third of the total settlement amount), plus litigation expenses which total $78,436.69.
The Court has reviewed the expenses and determined that they are reasonable. The Court notes that the sum is not excessive given that this litigation has been ongoing for more than three years.
Attorneys Fees Application
The attorneys presented a fee application claiming $1.5 million as a lodestar for fees–excluding work performed in preparing for final approval and any post-judgment work that may be needed. The $1.5 million sum represents 2,116.69 hours of work over a period of more than three years, at hourly rates of the billing attorneys ranging from $600 to $1,000.
After reviewing the billing records submitted by counsel as well as the declarations regarding the hourly rates of counsel, the court found that the number of hours was reasonable given the length of the lawsuit and the vigorous disputes over the course of the litigation (e.g., regarding RadioShack’s defense that it had no duty to reimburse until an employee made a request for reimbursement).
The court did express some “concerns about the $1,000 hourly rate” claimed by one of the attorneys. ”Based on the Court’s experience, this is an inordinately large hourly rate, even if the Court were to assume that [the attorney] has fifty years of experience.” But the Court concluded that “given the 2,116.69 hours incurred, the average hourly rate for a fee award of $1.5 million total is $708, an amount that the Court deems appropriate, particularly when no multiplier is being sought on top of the lodestar.”
Compared to the percentage of the fund, the court noted that “the total settlement amount to be paid by RadioShack (with no possibility of reversion), the fee award represents one-third of the settlement amount.” The court found that this was “well within the range of percentages which courts have upheld as reasonable in other class action lawsuits.”
The court also approved an incentive award of $5,000 for each of the two class representatives, for a total of $10,000. The Court concluded that the incentive payments were appropriate and reasonable. ”Although the class representatives did not enter this litigation until late in the proceedings, due consideration must be given to the fact that they were willing and ready to go to trial.” The court noted that if the “class representatives had asked for a larger sum, the Court might well have reached a different conclusion, but the $5,000 sought for each representative was viewed as “relatively modest.”
In a 3-0 opinion, the Second District held that while California state courts do not apply the FAA vactur provisions, because of the choice of law provision in the arbitration agreement, the trial judge was required to utilize the vacatur provisions of the FAA in passing on the amended petition to vacate the partial arbitration awards.
In Countrywide Financial Corp. v. Bundy, — Cal.Rptr.3d —-, 2010 WL 3064481 (Cal. Ct. App. 2d Dist. August 06, 2010), Defendants, Thomas Bundy, Misty Sanchez, Kevin Prevost and David Godina, appealed from an order vacating partial arbitration awards against plaintiffs, Countrywide Financial Corporation and Full Spectrum Lending, Inc.
The underlying case involved two arbitrations that were ultimately consolidated. The Bundy-Sanchez-Prevost arbitration demand sought classwide arbitration of claims for unpaid wages including incentive compensation, waiting penalties, costs and attorney fees pursuant to Labor Code section 200 et seq., Business and Professions Code section 17200 et seq., and common law principles. The Godina arbitration demand alleged many of the same matters in terms of plaintiffs’ operations.
The arbitrator issued partial arbitration awards in favor of defendant. Judge Elizabeth A. White vacated the partial arbitration awards on the ground the arbitrator committed a number of legal errors. The Second District concluded that because of the unambiguous choice of law language in the agreements to arbitrate, “we must apply the vacatur provisions applicable before a United States District Court in a case subject to the Federal Arbitration Act. (9 U.S.C. § 1 et seq.)” Applying the vacatur provisions of the Federal Arbitration Act, the Court of Appeal reversed, finding “no grounds permitted the partial awards to be vacated.”
The Court expressed doubt regarding whether the “manifest disregard of the law standard” survives Hall Street Associates L.L.C., but it chose to evaluate the interim awards under both title 9 United States Code section 10(a)(4) and the manifest disregard of the law test. ; the course chosen by the Supreme Court in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at page —- [130 S.Ct. at page 1768].” The Court described the manifest disregard standard as follows:
The first element is the arbitrator must know the governing rule of law and refuse to apply it or ignore it. The second element is that the law ignored by the arbitrator is well-defined, explicit, and clearly applicable to the case.
Presiding Justice Paul A. Turner wrote the opinion. Hon. Sandy R. Kriegler and Hon. Richard M. Mosk concurred.
Defendants and appellants were represented by Caryl L. Boies, Sigrid S. McCawley and Lauren E. Fleischer of Boies, Schiller & Flexner.
Plaintiffs and Respondents were represented by Andrew M. Paley, Gregg A. Fisch and Jennifer Sloane Abramowitz of Seyfarth Shaw.
This next case highlights the difficulty of successfully eliminating a wage and hour class action in California at the demurrer stage. After 3 bites at the apple, the trial judge in Gutierrez v. California Commerce Club, Inc., 2010 WL 2991875 (Cal. Ct. App. 2d Dist. August 02, 2010) (not reported) sustained without leave to amend the defendant California Commerce Club, Inc.’s (“Club”) demurrer to plaintiff’s third amended complaint on the ground the plaintiffs had failed to show the existence of a class, and dismissed the action as to all representative claims. In a 3-0 opinion, Justice Jeffrey J. Johnson, writing for the Second District Court of Appeal, reversed the trial court’s order.
Putative class representatives Sergio Gutierrez and Hector Salazar filed the operative third amended class action complaint against the Club, alleging, among other things, that they and other similarly situated members of the putative class were injured by the Club’s unlawful policy and practice of denying meal and rest breaks to certain hourly, non-union employees.
The Court of Appeal held that “In this action, as in the vast majority of wage and hour disputes, class suitability should not be determined on demurrer.”
Plaintiffs alleged that, pursuant to a Club policy or practice, they and similarly situated hourly, non-union employees have been denied meal and rest breaks to which they are legally entitled, or compensation therefor. The Court reasoned that “[o]n these allegations, it is clear that the Club liability, if any, to the class as a whole, can be determined by reviewing a single or set of facts common to all.” Id. *6. The Court wrote:
We return again to and rely upon the well-established principle, that “only in mass tort actions (or other actions equally unsuited to class action treatment) [should] class suitability … be determined at the pleading stage. In other cases, particularly those involving wage and hour claims, [such as the instant action,] class suitability should not be determined by demurrer.” ( Prince, supra, 118 Cal.App.4th at p. 1325, italics added; see also Tarkington, supra, 172 Cal.App.4th at p. 1512.). Id.
We will reverse the order dismissing the action following the sustaining without leave to amend of the demurrer to the TAC based on the trial court’s finding that the pleading failed “to allege facts sufficient to show the existence of a class.” It was premature for the trial court to make determinations pertaining to class suitability on demurrer. The allegations of the operative complaint are sufficient to move the action beyond the pleading stage.
Id. *6.
The appeal was taken from an order of Judge Aurelio Munoz of the Superior Court of Los Angeles County. (Judge Munoz is a retired judge of the L.A. Sup. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.). Matthew J. Matern and Thomas S. Campbell appeared for Plaintiffs and Appellants. Anna Segobia Master and Jennifer Rappoport appeared for Defendant and Respondent.
California Trade Secrets California Class Action Law California Insurance Law
