De Leon v. Ricoh USA, Inc.

Background

Augusto De Leon brought a class and representative action against Ricoh USA, Inc., Ricoh Americas Corporation, and IKON Office Solutions, Inc. He alleged California wage-and-hour violations involving compensation, meal and rest breaks, expense reimbursement, sick leave, wage statements, and recordkeeping, as well as violations of the Fair Labor Standards Act (FLSA). De Leon had worked for Ricoh in California as a field service representative and technology service technician from May 2000 through November 2017.

The proposed settlement class covered current and former hourly, non-exempt California employees who held technology service technician, field support representative, or similar positions from May 22, 2014, through November 25, 2019. The class had 991 members. The FLSA collective covered the same people but began on May 22, 2015. One class member opted out, no class member objected, and 12 notice packets were ultimately undeliverable.

Settlement Terms

Ricoh agreed to pay a non-reversionary gross settlement amount of $2.2 million. The agreement allocated $55,000 for participating FLSA collective members, $75,000 to the California Labor and Workforce Development Agency for civil penalties under the Private Attorneys General Act, $10,000 for De Leon's service award, up to $550,000 in attorney fees, $14,305.04 in litigation costs, and $30,000 for settlement administration. The estimated net settlement amount for class members was $1,465,694.96.

Class members' shares were calculated pro rata based on their workweeks during the class period. FLSA payments were distributed under a separate formula, including a $20 payment for eligible members and additional amounts for members who worked more than 10 weeks during the FLSA period. The agreement released covered California wage claims and, for participating FLSA members, covered unpaid-wage claims under the FLSA. De Leon separately agreed to a broader release of claims.

Court's Analysis

The court concluded that the proposed class met the requirements for certification under Federal Rule of Civil Procedure 23, including numerosity, commonality, typicality, adequacy of representation, predominance, and superiority. The court found that the notice was sufficient and granted final certification of the settlement class. It also granted certification of the FLSA collective for settlement purposes.

The court evaluated whether the settlement was fair, adequate, and reasonable. It considered the strengths and risks of the claims, the possibility that individualized issues would defeat class treatment, the settlement amount, the parties' investigation and discovery, counsel's experience, and the class members' reaction. The court found that these considerations supported approval. Although the agreement contained a provision under which Ricoh would not oppose a fee award, the court found no evidence of collusion because the fees were not disproportionate, unawarded fees would return to the class fund, and the parties had exchanged discovery and negotiated through an experienced mediator.

Fees, Costs, and Service Award

The court approved $550,000 in attorney fees, equal to 25 percent of the gross settlement. It used a percentage-of-recovery method and cross-checked the award against the lodestar, a calculation based on reasonable hours multiplied by reasonable hourly rates. The court calculated a lodestar of $504,033 and found the resulting 1.09 multiplier reasonable. However, the court reduced Mr. Clark's billed hours by 20 percent because of duplicative and block-billed entries.

The court reduced the requested litigation costs by $662 because some lodging and meal expenses appeared excessive or insufficiently explained and some anticipated costs were tied to a hearing affected by the COVID-19 pandemic. It awarded $13,643.04 in costs. The court found that De Leon's work and broader release justified a service award but reduced the requested $10,000 to $5,000 because the larger amount exceeded the presumptively reasonable amount and was disproportionate to the average class recovery. The court approved $30,000 for the claims administrator.

Disposition

The court granted the motion for final approval of the class action settlement. It granted in part the motion for attorney fees, litigation costs, and the class representative service award, awarding $550,000 in fees, $13,643.04 in costs, and $5,000 to De Leon. It also awarded $30,000 to the claims administrator and required class counsel to file a post-distribution accounting within 21 days after distributing the settlement funds and paying attorney fees. The order did not decide the underlying wage claims on their merits; it approved the parties' settlement.