Koeppen v. Carvana, LLC

Background

Ronell Koeppen alleged that Carvana, LLC violated the California Labor Code and California Business and Professions Code. The allegations concerned unpaid minimum and overtime wages, meal- and rest-period premiums, untimely wage payments, waiting-time penalties, inaccurate wage statements, inadequate payroll records, unreimbursed business expenses, unfair business practices, and penalties under California’s Private Attorneys General Act. Carvana denied liability and denied that Koeppen or class members were entitled to relief.

The proposed class consisted of current and former hourly-paid or non-exempt employees who worked for Carvana in California from December 16, 2016, through January 1, 2024. The Court had previously granted preliminary approval and certified the class for settlement purposes.

Settlement terms and notice

Carvana agreed to pay a non-reversionary gross settlement amount of $1,050,000. The settlement deducted $367,500 in attorneys’ fees, $11,870.29 in litigation costs, a service award, and $11,000 in settlement-administration costs. The Court estimated that $652,129.71 would remain for participating class members, with each payment based on the member’s number of qualifying workweeks. No part of the settlement was allocated to the PAGA claim.

The settlement administrator mailed notice to 1,540 identified class members and emailed notice to 1,534 of them. After address searches and re-mailing, 45 mailed notices remained undeliverable, and 31 emails bounced back. One class member requested exclusion, and no written objections were received. The Court found the notice plan adequate under Federal Rule of Civil Procedure 23.

Final approval of the settlement

The Court evaluated whether the settlement was fair, adequate, and reasonable under Rule 23. It considered the strength of the claims, the risks and costs of continued litigation, the settlement amount, the investigation and information exchanged by the parties, counsel’s experience, and the class members’ response. The Court concluded that these factors supported approval because continued litigation could be lengthy, costly, and uncertain, while the settlement provided class members with an immediate recovery.

Because the parties reached the agreement before final class certification, the Court also examined warning signs of possible collusion. Although the agreement included a provision under which Carvana would not oppose the requested attorneys’ fees, and the requested fee percentage was higher than the usual benchmark, the Court found no collusion. The agreement was non-reversionary, and the Court concluded that the settlement resulted from arms-length negotiations and adequately benefited the class.

PAGA claim

The parties stipulated to dismissal of the PAGA claim without prejudice under Federal Rule of Civil Procedure 41(a)(1)(ii). The Court had reviewed and approved that dismissal on July 19, 2024, and therefore performed no separate PAGA settlement analysis in this order.

Attorneys’ fees, costs, and service award

The Court granted the requested attorneys’ fees of $367,500, equal to 35 percent of the settlement fund. It found that the percentage-of-recovery method and a lodestar cross-check supported the award. The Court also approved $11,870.29 in documented litigation costs and $11,000 in settlement-administration costs.

Koeppen requested a $7,500 service or incentive award. The Court found that an award was justified but reduced it to $5,000. The Court cited the award’s size compared with the average class-member recovery, the early settlement, and the absence of evidence that Koeppen was deposed or attended mediation. The Court also considered that Koeppen released broader claims as the class representative than other class members.

Disposition

The Court granted the motion for final approval of the $1,050,000 class action settlement. It also granted the motion for attorneys’ fees and costs and awarded $367,500 in fees, $11,870.29 in litigation costs, $11,000 in settlement-administration costs, and a $5,000 service award to Koeppen. The parties were ordered to file a proposed judgment by August 29, 2024, and class counsel was required to provide a post-distribution accounting under the district’s settlement procedures.