18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 295 members and acted as a deterrent to other California employers. Id . at *52. As to the requested fee award sought by class counsel, the Court found the reduced request of 25% of the settlement fund led to a lodestar cross-check multiplier of 6.24, which was unreasonable. The Court noted that the requested hours and rates were reasonable, but that an award of 25% of the settlement fund would "reward counsel for their services at an extraordinary rate even accounting for the factors customarily used to enhance a lodestar fee." Id . at *53-54. The Court recognized the novel issues in the actions, the substantial monetary recoveries for individual class members, and the high contingent risk presented. Therefore, the Court determined that a modest downward adjustment of the 25% requested was warranted and therefore held that an award of 22% of the settlement fund, or $21,053,146.92, was fair and reasonable. Id . at *56. Accordingly, the Court granted Plaintiffs’ motion for final settlement approval. Editor ’ s Note : At $95 million, the settlement in the Kang litigation was the third highest amount of any wage & hour class action in 2021. Kelley, et al. v. City Of San Diego, 2021 U.S. Dist. LEXIS 23710 (S.D. Cal. Feb. 8, 2021). Plaintiffs, a group of non-exempt City of San Diego employees of the City’s Fire Department, filed a collective action alleging violations of the FLSA. The parties ultimately settled the matter and filed a motion for settlement approval and an request for attorneys’ fees. The Court granted the motion for settlement approval and granted in part the request for attorneys’ fees. The proposed settlement agreement provided $3.4 million, including back overtime of $1,575,000, liquidated damages of $1,575,000, and a payment of $250,000 toward Plaintiffs’ attorneys’ fees and litigation costs. Id . at *6. The Court determined that the case reflected a bona fide dispute between the parties, as the parties disagreed over several of Defendant’s pay practices. The Court opined that the amount set forth in the settlement agreement bore a reasonable relationship to the true settlement value of the claims. Id . at *11. The Court reasoned that given that there were several bona fide disputes, a number of variables could lead to Plaintiffs recovering significantly less than the proposed settlement amount should the case proceed to trial. Accordingly, the Court concluded that the proposed settlement amount was appropriately within the range of possible recovery by Plaintiffs. In addition, the Court determined that the parties would face substantial litigation risk were this action to continue. Id . at *15. The Court noted that the scope of the release provision was narrowly-tailored and met the applicable standards under the FLSA, which weighed in favor of approval of the settlement and there was no evidence that fraud or collusion. Id . at *18-19. Accordingly, the Court ruled that the settlement agreement was fair and reasonable. However, the Court determined that given the significant differences between the attorneys’ fees requested and the lodestar of Plaintiffs’ counsel, the percentage-based amount requested by Plaintiffs should be reduced to the low end of the typical range awarded. The Court thus found that a reasonable fee would be $680,000, or 20% of the gross settlement amount of $3.4 million, plus $19,853 in litigation costs. Id. at *22. Accordingly, the Court granted the motion for settlement approval, and granted in part the award of attorneys’ fees. Lusk, et al. v. Five Guys Enterprises, 2021 U.S. Dist. LEXIS 102881 (E.D. Cal. June 1, 2021). Plaintiff, a fast-food restaurant employee, filed a class action alleging that Defendant violated various provisions of the California Labor Code (“CLC”). The parties ultimately settled the matter and Plaintiff filed a motion for preliminary settlement approval. The Court previously had denied Plaintiff’s motions pursuant to Rule 23(e) for preliminary approval of the settlement and certification of the putative settlement class. In denying the motion this time, the Court concluded that Plaintiff had not provided sufficient information showing that the proposed settlement was likely to be approved as fair, reasonable, and adequate upon certification of the class under Rule 23. The proposed class settlement provided that Defendants would pay $1.2 million to a settlement class of approximately 2,206 persons who worked as hourly, non-exempt employees of Defendants during the class period. In exchange for their payment of this gross settlement amount, Defendants would be fully released from liability for all claims in this lawsuit and any other claims that had been or could have been raised based on the allegations of the action. Pursuant to the proposed agreement, Plaintiff would receive up to $15,000 from the gross settlement amount, and his counsel would receive up to $300,000 for fees and $20,000 for costs as compensation. The gross settlement amount would also provide the third-party claims administrator with up to $30,000 for fees and expenses, and cover a payment of $100,000 in civil penalties under PAGA, of which $75,000 would be awarded to the State of California with the remaining $25,000 reserved for the class. With these amounts deducted, the putative class would be entitled to the remainder of the gross settlement amount.