Hermosillo v. Davey Tree Surgery Company

Background

Plaintiffs’ counsel filed an unopposed motion for attorneys’ fees and costs after the parties reached a settlement involving the plaintiffs’ claim under California’s Private Attorneys General Act (PAGA). The settlement created a $1,200,000 fund in exchange for releasing the affected employees’ PAGA claim. After deducting fees, individual payments to the named plaintiffs, litigation costs, and settlement-administration expenses, 75 percent of the net settlement was to go to the California Labor and Workforce Development Agency and 25 percent to 2,573 affected employees.

The complaint had also asserted six proposed class claims concerning wages and hours. The court had previously compelled arbitration of those claims on a class-wide basis rather than an individual basis and stayed the PAGA claim. The parties later settled the PAGA claim and the named plaintiffs’ individual wage-and-hour claims, but did not settle the proposed class claims. The settlement dismissed those six claims without prejudice, leaving the affected employees to pursue their wage-and-hour claims on their own.

Fee request and analysis

Counsel requested $400,000 in fees, equal to 33.3 percent of the settlement fund and approximately 1.63 times counsel’s asserted lodestar of $244,915. A lodestar is generally calculated by multiplying the reasonable hours spent on litigation by a reasonable hourly rate. The court used the percentage-of-recovery method and cross-checked the result against the lodestar method.

The court concluded that 25 percent of the settlement fund was appropriate, producing $300,000 in fees and an approximately 1.22 lodestar multiplier. The court considered the result achieved for the affected employees, counsel’s litigation skills, the risks counsel assumed, and the lodestar cross-check. It found the PAGA settlement reasonable, but concluded that counsel’s effective abandonment of the six wage-and-hour claims after more than three and a half years did not support an upward departure from the 25 percent benchmark. The court also noted that much of counsel’s substantive work concerned the dismissed wage-and-hour claims rather than the settled PAGA claim.

Counsel separately requested reimbursement of $13,107.28 in litigation expenses, including $11,000 for counsel’s share of mediation costs, as well as filing fees, postage, service costs, document-acquisition costs, and transportation. The court reviewed the submitted invoices and receipts and found the requested expenses reasonable.

Ruling

Judge Lucy H. Koh granted in part Plaintiffs’ Counsel’s motion for attorneys’ fees and costs. The court ordered that $300,000 in fees and $13,107.28 in expenses be paid to Plaintiffs’ Counsel from the settlement fund.