Stonehocker v. Kindred Healthcare Operating, LLC

Background

Sarah Stonehocker brought a putative class action alleging that Kindred Healthcare Operating LLC’s productivity standards caused her and other workers to perform unpaid off-the-clock work. The amended claims included failure to pay all wages owed, failure to pay wages when due, and unfair business practices under California law. For settlement purposes, Stonehocker later added several related defendants and claims concerning wage statements, meal and rest periods, employment records, California’s Unfair Competition Law, and penalties under California’s Private Attorneys General Act.

The defendants denied the allegations. The court had denied an early summary-judgment motion asserting that Stonehocker’s claims were barred by an earlier settlement and judgment. The parties later reached a settlement with the assistance of a mediator, before final class certification.

Settlement Terms and Class

The settlement created a $1,995,000 common fund, without an admission of liability. The fund covered attorney’s fees and costs, notice and administration expenses, a service award, and a $130,000 payment under the Private Attorneys General Act. Of the PAGA payment, $97,500 was allocated to the California Labor and Workforce Development Agency and $32,500 to covered individuals based on their PAGA pay periods.

The settlement class consisted of all persons employed by one or more defendants as non-exempt skilled clinicians at a skilled nursing facility in California at any time from February 14, 2015, through September 1, 2020. The court found that the class met the requirements for certification, including sufficient size, common questions, typical claims, adequate representation, predominance of common issues, and superiority of the class-action process.

After deductions, approximately $1,326,609.82 remained for participating class members. Payments were based on each person’s share of the total class pay periods. The opinion states that 2,263 people were in the class, three timely opted out, and 2,260 participated. No objections were filed. Notice reached approximately 99.5% of the class. No settlement funds would return to the defendants. Any remaining funds would go to the First Responders Children’s Foundation Covid-19 Emergency Response Fund, with the specified portions benefiting clinicians at skilled nursing facilities in California and elsewhere.

Final Settlement Approval

The court found the settlement fair, reasonable, and adequate. It considered the disputed liability, the risks and expense of continued litigation, the possibility of appeal, the extensive litigation and information exchange already completed, counsel’s experience, the absence of evidence of collusion or self-dealing, the distribution method, and the overwhelmingly positive class response. The court granted final approval of the settlement, confirmed the class representative and class counsel, certified the settlement class, and approved the cy pres recipient.

Attorney’s Fees, Costs, and Service Award

Class counsel requested $665,000 in fees, or approximately 33% of the settlement fund, and up to $15,000 in litigation costs. The court applied a 25% benchmark to the common fund and awarded $498,750 in attorney’s fees. The court also adjusted counsel’s lodestar—the hours reasonably worked multiplied by a reasonable hourly rate—from the submitted calculation of $274,440 to $243,780 by excluding time attributed to a companion case, reducing unspecified post-fee-motion time, and applying a lower rate to travel time.

The court reduced the requested litigation costs of $14,343.70 by $2,203.52 attributed to the companion case and awarded $12,140.18. It awarded Stonehocker a $5,000 incentive award based on her work for the class, including responding to discovery, producing documents, communicating with counsel, and accepting the risks of litigation.

Disposition

The motion for final approval of the class settlement was granted. The motion for attorney’s fees, costs, and service awards was granted in part. Class counsel received $498,750 in fees and $12,140.18 in costs, and Stonehocker received a $5,000 incentive award. The court entered final judgment according to the settlement and retained jurisdiction over its interpretation, administration, implementation, effectuation, and enforcement.