Estorga v. Santa Clara Valley Transportation Authority

Background

Robert Estorga brought a collective action under the Fair Labor Standards Act (FLSA), alleging that the Santa Clara Valley Transportation Authority (VTA) failed to pay bus operators overtime for travel time at the beginning and end of shifts and between shifts. The court conditionally certified the collective action, and eleven additional individuals opted in. Six other individuals later withdrew.

The parties conducted extensive discovery and filed cross-motions for summary judgment. On January 4, 2019, the court granted in part and denied in part each party’s motion. The ruling granted liability for mid-shift travel time and denied liability for start-end travel time. The parties later negotiated a settlement with the assistance of Magistrate Judge Ryu.

Settlement Terms

The agreement provided for a gross settlement of $25,000. Each plaintiff would receive $500. Plaintiffs still employed by VTA would receive that amount as wages, while former employees would receive it as a lump-sum payment. VTA would pay $19,000 to plaintiffs’ counsel for attorney’s fees and litigation costs. Plaintiffs agreed to dismiss their claims with prejudice after court approval.

The release covered FLSA claims arising from the action, specifically claims concerning start-end and mid-shift travel time. The agreement also included a waiver of rights under Section 1542 of the California Civil Code. If counsel could not locate plaintiffs who had not signed the agreement by the specified deadline, those plaintiffs would be dismissed from the action with prejudice and VTA would not have to pay them the $500 amount.

Court’s Analysis

The court applied the standard requiring approval of an FLSA settlement when it resolves a genuine dispute and is fair and reasonable. The court found a genuine dispute because, although the prior ruling established liability for mid-shift travel time, the parties still disputed the amount of overtime owed and whether some plaintiffs were entitled to damages.

Considering the circumstances as a whole, the court found the settlement fair and reasonable. The case had reached an advanced stage, the parties had completed substantial discovery, and further litigation could have produced a lower recovery or no recovery for some plaintiffs. The release was limited to FLSA claims related to the travel-time allegations rather than all possible employment claims. The court also found no basis to reject the settlement for fraud or collusion, despite the high attorney-fee allocation and a provision under which VTA released claims for fees and costs against the plaintiffs.

Attorney’s Fees and Costs

Because the fees were to be paid separately from the plaintiffs’ settlement payments, the court used the lodestar method, which calculates fees by multiplying reasonable hours by reasonable hourly rates. Counsel reported at least 783.2 hours of work and a lodestar of $355,930. The court found the hours and rates reasonable and approved the requested $19,000 for fees and costs. The court noted that counsel was not seeking reimbursement for $17,426.37 in out-of-pocket expenses and that the requested amount did not reduce the plaintiffs’ payments.

Disposition

The court GRANTED Plaintiffs’ Motion for Approval of Settlement. It ordered the plaintiffs to file a notice of dismissal or a status update no later than January 25, 2021.