Bailey v. Kinder Morgan G.P., Inc.

Background

Steven M. Bailey sued Kinder Morgan G.P., Inc., and other defendants over alleged violations of California wage-and-hour laws. The complaint alleged that the defendants required Pipeline Operators and Pipeline Controllers to work 12-hour shifts while remaining at their stations, failed to provide required meal and rest breaks or the required additional pay for missed breaks, failed to pay all wages timely, failed to record meal periods correctly, and issued incomplete or inaccurate wage statements. Bailey also asserted claims under the California Private Attorneys General Act and California Business and Professions Code section 17200 et seq.

The settlement class covered current and former nonexempt employees who worked as Pipeline Operators or Pipeline Controllers in California between May 2, 2014, and the preliminary approval date at the listed facilities. The agreement divided the class into an “Operator 12” subclass and a “Remaining Class Members” subclass.

Settlement Terms and Notice

The total settlement amount was $800,000. Two hundred forty-five participating class members claimed the entire settlement fund. After deductions, 90% of the remaining amount was allocated to the Operator 12 subclass and 10% to the Remaining Class Members subclass. Payments were based on each class member’s workweeks. The estimated average gross payment was $2,116.33, and the estimated highest gross payment was $5,647.01.

Notice packets were mailed to all 256 eligible class members. After an error was found in the original notice, revised packets were sent. One packet was returned. The court found the notice adequate. Three class members objected, and 11 opted out.

Final Settlement Approval

The court applied Federal Rule of Civil Procedure 23, which governs class actions, and required the settlement to be fair, reasonable, and adequate. It found that Bailey and class counsel adequately represented the class, the settlement was negotiated at arm’s length with an experienced mediator, and the relief was adequate in light of the risks, expense, complexity, and possible delay of continued litigation.

The court noted that the $800,000 settlement represented about 12% of the defendants’ estimated maximum potential exposure of approximately $7.2 million. Although the recovery percentage was on the lower end, the court found the amount acceptable because continued litigation carried risks, including the possibility of losing and the risk that the class might be decertified. The court also found that distributing payments according to workweeks reasonably reflected the claims and the difficulty of proving the precise number of missed breaks.

The court rejected the objections. Two objectors believed each employee should receive approximately $35,000 for meal and rest break claims. The court found that their calculations reflected estimated maximum liability rather than a guaranteed recovery and raised doubts because they were based only on wage statements. The third objector stated that the compensation for missed rest periods was unfair. The court concluded that the settlement was reasonable and adequate in light of the litigation risks and approved the settlement in full.

Attorneys’ Fees and Costs

The court approved class counsel’s request for $240,000 in attorneys’ fees, equal to 30% of the settlement fund, and $7,586.62 in litigation costs. The court considered the results achieved, litigation risks, counsel’s skill and quality of work, the contingent nature of the representation, the class’s reaction, awards in similar cases, and a comparison with the lodestar method. The lodestar is a fee calculation based on reasonable hours multiplied by reasonable hourly rates.

Counsel billed a combined $156,390 under the lodestar calculation. The requested $240,000 fee represented a multiplier of approximately 1.54 times the lodestar, which the court found acceptable. The court also approved $14,000 in claims-administration costs, even though the settlement agreement had estimated those costs at $9,500, because the administrator explained that the earlier estimate did not account for redistributing funds from uncashed checks.

Service Award and Disposition

The court approved a $10,000 service award to Bailey. It relied on his participation in the litigation, including providing documents, conferring with counsel, assisting with discovery, attending a day-long mediation, reviewing the settlement, and agreeing to a general release. The court also considered that he was the sole named plaintiff and that the award represented 1.25% of the settlement fund.

The court GRANTED the motion for final approval of the class action settlement and GRANTED the motion for attorneys’ fees. It approved payment of $240,000 in attorneys’ fees, $7,586.62 in litigation costs, $14,000 in claims-administration costs, and $10,000 as Bailey’s service award. The court ordered the defendants to fund the settlement and the administrator to make the approved payments. Bailey and all class members were bound by the settlement’s release provisions. The court retained jurisdiction to administer and enforce the agreement, and the action was DISMISSED on the merits and with prejudice, subject to that continuing jurisdiction.