CALIFORNIA CLASS ACTION LAW

Tag: Litigation

California Class Action Law on Holiday This Week

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I am traveling this week, so California Class Action Law will be updated less frequently.  I’ll resume daily updates next week, October 26, 2010.

Cheers!
Charles Jung

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Second District Finds Actual Controversy in Declaratory Judgment Action Between Two Former Co-Counsel Relating to Distribution of Attorneys Fees

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In a dispute over the distribution of attorneys fees between two former co-counsel in a class action lawsuit, the Court of Appeal for the Second District reversed a trial court’s denial of relief in a declaratory action.  Leonard Carder, LLP v. Patten, Faith & Sandford, No. B221940, — Cal.Rptr.3d —-, 2010 WL 3961275 (Cal. Ct. App. 2d Dist. Oct. 12, 2010).

Plaintiff and appellant Leonard Carder, LLP filed a declaratory relief action against his former co-counsel Patten, Faith & Sandford (Patten) regarding the distribution of attorney fees awarded in a stipulated judgment in a class action lawsuit.  Id. *1.  The trial court entered a judgment denying all relief to Leonard Carder on the basis the complaint did not present a case or controversy and that jurisdiction had been reserved with the judge who approved the class action settlement.  Id. The Second District reversed, holding that the complaint did articulate a justiciable case or controversy, and the class action court specifically declined to retain exclusive jurisdiction over the distribution of attorney fees.  Id.

Background

Leonard Carder and Patten were appointed class counsel in an action tried in 2004 before the Honorable Howard J. Schwab, with the bulk of the work on behalf of the plaintiff class performed by Leonard Carder.  Id. The plaintiff class was determined to be entitled to an award of approximately $14.4 million.  A loadstar chart in support of the motion for attorneys fees  showed 11,414 hours worked by Leonard Carder and 673 by Patten.  Id. The loadstar chart justified total fees of $10,879,272 for Leonard Carder and $373,040 for Patten.  Id. Judge Highberger signed the parties’ stipulation to reasonable attorney fees and costs in the total amount of $12,475,000 to be paid within 45 days to Leonard Carder “as trustees for distribution to all counsel in accordance with the approved stipulation.” Id. The final provision in the stipulated judgment was that “[t]his court shall retain jurisdiction over the parties to enforce the terms of this Stipulated Judgment.”  Id. *2. Judge Highberger orally stated that if there were unresolved issues regarding distribution of the fees, “you’ll find some other forum to resolve them. They don’t automatically come to me as a matter of exclusive jurisdiction.”  Id. All counsel expressed agreement with the court’s statement regarding exclusive jurisdiction.  Id. Read the rest of this entry »

Judge Lucy H. Koh Invalidates 38 “Opt-Out” Forms, Grants Curative Notice, and Orders Defendants to Show Cause Why They Should Not be Sanctioned Pursuant to Rule 11

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Issuing a robust opinion in a putative wage and hour class and FLSA collective action, Judge Lucy H. Koh invalidated opt-out forms solicited by defendants, granted plaintiff’s request for a curative notice at defendants’ expense, and ordered defendants to show cause why they should not be sanctioned pursuant to Rule 11.  Li v. A Perfect Day Franchise, Inc., No. 10-CV-01189-LHK, 2010 WL 3835596 (N.D. Cal. Sept. 29, 2010).  The court concluded that based on the record, it appeared likely that “the opt-out forms submitted by Defendants on September 7, 2010 were fraudulently created after the September 2, 2010 hearing on the underlying motions.”  Id. *11.  The court admonished that “Defendants will not be permitted to defraud this Court by submitting false testimony.” Id. *12.

Background

Named plaintiffs are former workers for A Perfect Day Franchise, Inc., which owns and operates spas. Id. *1. Named plaintiffs describe themselves and the majority of the putative class as being native Chinese speakers, with limited English proficiency and little or no formal education. Id. Plaintiffs claim that they paid for a massage training course offered by an entity related to Perfect Day, the Minjian Hand Healing Institute.  Id. Plaintiffs allege they paid for the course based on promises, contained in advertisements for the training program, that they would be employed by Perfect Day and would earn a minimum income once it was completed, but that these promises were not honored by Perfect Day, and that Perfect Day has miscategorized them as independent contractors rather than employees. Id. Read the rest of this entry »

Northern District Grants Final Approval of $3.5 Million Class Action Settlement, Reducing Requested Attorneys Fees to 25% From Requested 30%, and Granting $20,000 Enhancement Awards to Each Representative Plaintiff

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The Northern District of California granted final approval of a settlement in a meal and rest break class action in Ross v. US Bank National Association, No. C 07-02951 SI, 2010 WL 3833922 (N.D. Cal. Sept. 29, 2010).  The complaint was filed on behalf of all hourly employees who worked at a California U.S. Bank in-store branch.  See Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Preliminary Approval of Class Action Settlement (“MPA”) at 1.  Plaintiffs alleged that they and other hourly paid employees have not been provided a legally compliant meal and rest period on Sundays and worked off the clock pre and post shift and during their meal breaks. Id. The parties settled the case, and the settlement agreement provides for the payment of compensation to each Participating Class Member based on his or her total workweeks in a Class position during a certain period.  Ross, 2010 WL 3833922, *1.   The court approved a non-reversionary settlement of $3,500,000 for approximately 3,300 settlement class members.  MPA at 2.

Attorneys’ Fees and Costs

Plaintiffs’ counsel sought an award of 30% of the settlement fund,  $1,050,000.00, as attorneys’ fees.  Ross, 2010 WL 3833922, *1.   Plaintiffs estimate that the total time spent litigating this case, including time overseeing claims administration, will be approximately 2647.7 hours.  Id. Plaintiffs’ counsel listed hourly rates ranging from $185 an hour to $650 an hour.  MPA at 14.  The court reduced the award to 25%: Read the rest of this entry »

Eastern District Denies First to File Transfer of Class Action

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The United States District Court for the Eastern District of California denied defendant employer’s motion to transfer pursuant to the “first-to file” rule.  Wilkie v. Gentiva Health Services, Inc., Civ. No. 10-1451 FCD/GGH, 2010 WL 3703060 (E.D. Cal. Sept. 16, 2010) (slip op.).  Plaintiff filed a putative nation-and California-wide class action/collective action against plaintiff’s former employer Gentiva for alleged violations of the Federal Labor and Standards Act (“FLSA”) and the California Labor Code § 201 et seq. for: (1) misclassification as exempt from overtime pay and failure to pay overtime; (2) willful failure to pay wages due within the time specified by the Code; (3) violation of California Wage Order No. 4 for knowingly and intentionally failing to provide timely, accurate, itemized wage statements including request for an injunction and damages; (4) failure to give proper rest and meal breaks; and (5) violation of California’s Business & Professions Code § 17200 et seq.  Id. *1

A prior FLSA collective action and New York and North Carolina state law class action against Gentiva was filed in the United States District Court for the Eastern District of New York, entitled Rindfleisch, et al. v. Gentiva Health Services, Inc., No. CV10-2111 (E.D.N.Y.) (“Rindfleisch”). Defendant moved to transfer plaintiff’s complaint under the “first-to-file rule,” on the ground plaintiff’s claims are the subject of the Rindfleisch action. Plaintiff opposed the motion, arguing the parties and claims are not substantially similar in the two actions and other equitable factors militate against transfer under the first-to-file rule.  Id. The court denied Gentiva’s motion.  Id. Read the rest of this entry »

Central District Orders Pre-Certification Disclosure of Name and Contact Information for Putative Class Members, Finding that Such Disclosure Was “Common Practice” in Class Actions

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The Central District granted plaintiff’s motion to compel disclosure of the name and contact information (full name, last known addresses and telephone numbers) for class members of a putative class action for unpaid commission wages.  Celia Alvarez, et al. v. The Hyatt Regency Long Beach, et al., CV 09-04791-GAF (VBKx).  According to the court, the class was defined as all non-exempt employees for the period commencing May 7, 2005.  (Thank you to Radhika Sainath for alerting me to the decision.)

Defendants contended that the information was not relevant for class certification and invaded the privacy rights of the putative class.  Plaintiffs offered to enter into a protective order and offer that the information be given to a third party who would send the class members an opt-out letter.  Defendant rejected these proposal. Read the rest of this entry »

Northern District Holds That No Aiding and Abetting Liability Exists Under UCL

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The Northern District of California granted a motion to strike aiding and abetting allegations from a class action complaint.  Toy v. Triwire Engineering Solutions, Inc.,  No. C 10-1929 SI, 2010 WL 3448535 (N.D. Cal. Sept. 1, 2010) (slip op.).

Background

Plaintiff Jason Toy filed a putative class action in state court against defendants TriWire Engineering Solutions, Inc., Comcast Corporation, and Comcast Cable Communications Management LLC, alleging that TriWire and Comcast employed Toy as a cable technician to install, disconnect, and upgrade cable television and computer services for consumers throughout California.  Id. *1.  Plaintiff contended he was not exempt from overtime requirements, and was not paid overtime in accordance with the law. Id. Read the rest of this entry »

Central District Certifies ERISA Class

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Judge Stephen V. Wilson of the Central District of California certified an ERISA class in Tibble, et al. v. Edison International, et al., No. CV 07-5359 SVW (AGRx), 2009 WL 6764541 (C.D. Cal. June 30, 2009).  Plaintiffs brought a class action pursuant to ERISA § 502(a)(2) & (3) to recover for alleged breaches of fiduciary duties with respect to the Edison 401(k) Savings Plan (the “Plan”).

Plaintiffs allege that certain defendants breached their fiduciary duties to the Plan by (1) engaging in prohibited transactions in violation of ERISA § 406; (2) breach of the duty of loyalty in violation of ERISA § 404(a)(1) (A); (3) breach of the duty of prudence in violation of ERISA § 404(a)(1)(B); and (4) violation of the terms of the Plan documents in violation of ERISA § 404(a)(1)(D). (SAC ¶ 105.)

Plaintiffs sought certification of the following class: Read the rest of this entry »

Plaintiffs in Wage & Hour Class Action Granted Temporary Restraining Order

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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 atemporary 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 »

Northern District Approves 28.9% Fee Award in Wage and Hour Class Action Settlement

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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.

By CHARLES H. JUNG