Boddie v. Signature Flight Support Corporation

Background

Mikki Boddie brought a putative class action against Signature Flight Support LLC and related entities, alleging California wage-and-hour violations involving meal periods, rest periods, overtime, minimum wages, final wages, employment records, wage statements, expense reimbursement, and unlawful business practices. She also brought a representative claim for civil penalties under California’s Private Attorneys General Act of 2004 (PAGA). The case was removed to federal court under the Class Action Fairness Act.

After investigating the claims, conducting discovery, reviewing time and payroll records, and preparing a damages model, the parties mediated and reached a settlement. The opinion states that 902 of 945 putative class members—95.5 percent—had signed arbitration agreements containing class-action waivers. The agreement therefore addressed PAGA claims and Boddie’s individual claims, while providing for dismissal of the non-PAGA putative class claims without prejudice and dismissal of Boddie’s individual claims with prejudice.

Settlement Terms

The agreement created a PAGA settlement group consisting of current and former hourly Signature employees who worked during the specified PAGA period. The court was told that the group included approximately 678 employees.

Signature agreed to pay a maximum settlement amount of $560,000 with no reversion. After deductions for administration costs, attorneys’ fees, and litigation costs, the proposed net settlement amount was $353,759.43. Of that amount, $265,319.57—75 percent—would go to California’s Labor and Workforce Development Agency, and $88,439.86—25 percent—would be distributed to affected employees based on their pay periods worked. The average employee payment was estimated at $136.48.

The settlement also required Signature, within 30 days after approval, to modify and distribute its California rest-break policy and post it below each time clock used by hourly California employees. The revised policy stated that rest breaks must be duty-free and, when practicable, occur in the middle of each work period, and clarified that cool-down periods were in addition to rest breaks.

Court’s Review of the Settlement

Because PAGA penalties could otherwise be pursued on behalf of the state, the court was required to review and approve the settlement. The court evaluated the agreement using factors commonly used to assess whether a class settlement is fair, including the strength of the claims, the risks and expense of further litigation, the settlement amount, the discovery completed, counsel’s experience and views, and government participation. It also considered PAGA’s goals of supporting state enforcement, encouraging compliance with California labor laws, and deterring violations.

The court found that five of the six factors favored approval and that the government-participation factor was neutral. The court considered the $560,000 settlement to be 11 percent of the estimated maximum potential recovery of $4,969,791. Although it viewed the injunctive relief as minimal, it found that the monetary and policy-related relief was genuine and meaningful and consistent with PAGA’s public purposes. The court also found that the required notices had been properly provided to the state labor agency.

Attorneys’ Fees and Costs

The agreement allowed a request for attorneys’ fees of up to one-third of the maximum settlement amount, or $186,666.67. Boddie’s counsel requested that amount and reported a lodestar—the total hours multiplied by counsel’s hourly rates—of $162,587.50.

The court explained that 25 percent of a common fund is generally used as a benchmark for attorneys’ fees. It found that counsel had not shown special circumstances supporting an award above that benchmark. The court noted that counsel had worked just under 200 hours and that the case did not appear, based on the record, to have been litigated particularly vigorously. The court therefore awarded $140,000 in attorneys’ fees.

The agreement also allowed up to $16,000 in litigation costs. The court approved $14,363 in costs but rejected projected travel expenses because the approval hearing was held by videoconference.

Disposition

Judge Donna Ryu granted Boddie’s motion for approval of the representative action settlement. The request for attorneys’ fees and costs was granted in part. The opinion does not state that the court decided whether Signature actually committed the alleged wage-and-hour violations.