Phillips v. C&K Market

Background

This wage-and-hour class action was filed on February 21, 2025. The parties reached a conditional settlement four months later. The proposed settlement created a $750,000 fund for 750 class members. The court granted preliminary approval after requiring additional briefing and changes to the class notice, including a shorter notice and email and electronic opt-out options.

The parties exchanged informal discovery, including data showing more than 90% compliance with meal-break requirements and ten employee declarations addressing meal-break, rest-break, off-the-clock, and reimbursement claims. Counsel also explained that the Reporting Time claim faced problems because the complaint did not allege the correct labor-code section, creating concerns about whether a private lawsuit could be brought on that claim.

The administrator mailed notice on March 16, 2026. Eleven notices were initially returned as undeliverable, after which the administrator used address searches and re-mailed them. The administrator later emailed notice to 456 class members for whom it had email addresses. No objections were filed, and no objectors appeared at the final approval hearing. The administrator also stated that it would search for updated contact information for people whose checks went uncashed and send additional notice by email and text when possible.

Final Approval of Settlement

Under Federal Rule of Civil Procedure 23, a class settlement must be fair, reasonable, and adequate. The court relied on its prior finding that the settlement was fair and adequate in light of the risks, costs, and delay of continued litigation. The court also considered the discovery supporting the defendants’ high compliance position, the arm’s-length negotiations, the absence of any return of settlement funds to the defendant, the court’s control over attorney fees, and the formula distributing payments according to class members’ workweeks.

The court found that the notice was reasonably calculated to inform class members about the action, settlement terms, rights to object or opt out, the release of claims, and the final approval hearing. It concluded that no developments since preliminary approval undermined the settlement’s fairness. The court therefore granted final approval of the class action settlement, found the notice compliant with Rule 23(c), directed payment to class members under the settlement agreement, and directed payment to Phoenix Class Action Administration Solutions for administration services.

Attorney Fees, Costs, and Service Award

Plaintiffs sought $262,500 in attorney fees, approximately 35% of the settlement fund, supported by a lodestar of $138,640 for 180.4 hours. The court explained that 25% of a common fund is the usual benchmark in the Ninth Circuit. It found no special circumstances supporting an upward departure because the settlement was reached after about four months, counsel did not face substantial litigation risk or burden, and the settlement produced a recovery of only about 3% to 5% of counsel’s estimate of the claims’ value.

The court also expressed concerns about counsel’s pleading error, inadequate initial support for the settlement, delays involving email notice, and counsel’s lack of preparation at the final approval hearing. Because the court could not yet assess the ultimate rate at which class members would claim their funds, it deferred ruling on Plaintiffs’ motion for attorney fees until after distribution is complete.

The court granted Plaintiffs’ motion for costs, which sought $13,500 primarily for mediation and court-reporting expenses. Plaintiffs had requested a $20,000 service award for lead plaintiff Eric Allen Phillips. The court found that the circumstances supported a $5,000 award, not the requested amount, and therefore granted lead plaintiff Mr. Phillips a $5,000 service award.

Disposition

Judge Edward M. Chen granted final approval of the class action settlement; found the class notice compliant with Rule 23(c); directed payments to class members and the administrator; granted the motion for costs; granted a $5,000 service award to the lead plaintiff; and deferred ruling on attorney fees until after distribution. A post-distribution accounting status conference was set for September 29, 2026.