Camilo v. Ozuna

Background

Rodrigo Camilo, Alvaro Camilo, Ricardo Sanchez, and Jose Lopez brought a combined class action and collective action against Severo C. Ozuna and Don Vito Ozuna Food Corporation. They alleged violations of California wage-and-hour laws and the federal Fair Labor Standards Act (FLSA). The alleged violations included removing work hours from paychecks, failing to pay minimum wages, failing to pay all overtime or paying overtime at the regular rate, providing inaccurate paystubs, and failing to provide legally required meal and rest breaks.

The parties agreed to a non-reverting settlement funded by $375,000. The proposed allocation included up to $112,500 in attorneys’ fees, up to $10,000 in litigation expenses, no more than $15,000 in settlement-administration costs, $20,000 total in service awards for the four named plaintiffs, and $217,500 for class members. The net fund was to be distributed based on qualifying workweeks, with 67% allocated to California-law claims and 33% to FLSA claims. Unclaimed settlement money was to be paid to the Katherine & George Alexander Community Law Center as a charitable, or cy pres, award.

Class Certification and Notice

The court granted final certification of a California-law class under Rule 23. The class consisted of people employed or formerly employed by the defendants as non-exempt hourly employees involved in tortilla and chip manufacturing between May 14, 2014, and March 19, 2019, who alleged the California-law violations described in claims two through seven of the complaint.

The court also granted final certification of an FLSA collective action. That group consisted of people employed or formerly employed by the defendants as non-exempt hourly employees involved in tortilla and chip manufacturing from May 14, 2015, through March 19, 2019, who alleged the FLSA violation described in claim one of the complaint. The court relied on its earlier finding that the employees were similarly situated because they were allegedly subject to the same wage-and-hour practices and policies.

The court found that notice was reasonably calculated to reach class members and was the best available under the circumstances. Notices in English and Spanish were mailed, returned notices were followed up using an address database, and reminder notices were sent. Of 163 notice packets, only one ultimately remained undeliverable without a forwarding address. No one requested exclusion from the Rule 23 class, 61 of 107 eligible FLSA members opted in, and no objections were received.

Settlement Approval

The court found the settlement fair, adequate, and reasonable under Rule 23, and a fair and reasonable resolution of a genuine dispute under the FLSA. The court considered the risks and costs of continued litigation, the amount offered, the stage of the case, the parties’ information exchange and review of payroll records, counsel’s experience, and the class members’ response.

The court noted that the plaintiffs estimated their possible recovery at about $2 million, while the defendants’ records and other litigation risks could have resulted in a substantially smaller recovery. The $375,000 settlement represented 75% of the defendants’ estimated $500,000 potential liability at trial. The court concluded that receiving settlement payments sooner was preferable to continuing litigation despite the possibility that a trial could produce a larger recovery.

The court also examined potential signs of collusion or conflicts involving attorneys’ fees. It noted that the agreement contained a “clear sailing” provision under which the defendants would not oppose the fee request, and that the requested fees would have been about 52% of the amount distributed to class members. The court nevertheless found no sufficient basis to conclude that the settlement resulted from collusion or counsel’s self-interest. A neutral mediator had participated, and the court found that the settlement adequately addressed the class members’ claims.

Fees, Costs, and Service Awards

The court granted in part class counsel’s request for attorneys’ fees, costs, and service awards. Counsel requested $112,500, or 30% of the common settlement fund. The court explained that the usual benchmark in the Ninth Circuit for common-fund settlements is 25%, and it found that counsel had not shown special circumstances justifying a higher award. The case settled within six months of filing, involved little or no formal discovery or substantive litigation, and included briefing and factual inconsistencies that required supplementation. A lodestar cross-check also supported the lower percentage.

The court awarded $93,750 in attorneys’ fees, equal to 25% of the settlement fund, rather than the requested $112,500. It granted the request for $7,776.63 in litigation costs. It also approved $15,000 for CPT Group, Inc., the claims administrator. Finally, it granted service awards of $5,000 each to Rodrigo Camilo, Alvaro Camilo, Ricardo Sanchez, and Jose Lopez.

Disposition

The court granted the plaintiffs’ motion for final approval of the settlement. It granted in part the motion for attorneys’ fees, costs, and service awards, awarding the amounts specified above. The parties were directed to file a stipulation for dismissal promptly after completing the approved settlement terms. The order was signed by Virginia K. Demarchi, United States Magistrate Judge.