Moreno v. Capital Building Maintenance & Cleaning Services, Inc.

Background

Efren Moreno sued Capital Building Maintenance & Cleaning Services, Inc. in a proposed class and collective action. He alleged that the company improperly calculated overtime using a reduced regular pay rate instead of the rate set by the union contract. He also alleged that the company’s timekeeping system rounded work time into half-hour intervals, resulting in workers not being paid for all hours worked, and that overtime wage statements did not list the regular pay rate.

The claims included alleged violations of the Fair Labor Standards Act, California wage laws, California’s Unfair Competition Law, and California’s Private Attorneys General Act. The proposed California class covered certain hourly employees who received two wage statements, one of which allegedly failed to list the union-designated regular rate. The proposed Fair Labor Standards Act group covered certain hourly employees who worked more than 40 hours in a workweek and received those wage statements.

The parties reached a settlement after discovery and mediation. The court had previously granted preliminary approval and conditionally certified the proposed class and Fair Labor Standards Act group. The final approval motions concerned whether notice was effective, how class members responded, and whether the requested fees and costs were reasonable.

Final Settlement Approval

The court found that the notice process was adequate. Phoenix Class Action Administrative Solutions mailed notices to all class and group members at their updated addresses. No notices were returned as undeliverable. Of 25 potential Fair Labor Standards Act group members, 19 submitted forms joining the group, a 76% response rate. One class member requested exclusion, and neither the court nor the claims administrator received any objections.

Considering these facts and its earlier review, the court found that the settlement agreement was fair, adequate, and reasonable. It granted Moreno’s motion for final approval of the class action settlement.

Fees, Costs, and Incentive Award

Class counsel requested $108,322.50 in attorneys’ fees, equal to approximately one-third of the $325,000 settlement fund. The court concluded that the request was justified by the fund’s relatively small size, the risks of further litigation—including preemption and arbitration defenses—the successful notice process, the lack of objections, and the results achieved for the class. The court noted that Fair Labor Standards Act group members were entitled to receive the full amount of the overtime wages allegedly owed under the settlement.

The court also used a lodestar cross-check, which compares the requested fee with the value of the lawyers’ reported time. Counsel reported 463.6 hours and a lodestar of $340,090. The court found that the reported hours were not plainly unreasonable and that the requested rates were within the range used in similar wage-and-hour cases, although it did not decide that each exact requested rate was reasonable. The requested fee was approximately 32% of the lodestar, which the court described as a substantial negative multiplier supporting the reasonableness of the negotiated fee.

At the hearing, counsel confirmed costs of $7,000 for the plaintiff’s share of mediation expenses, $663.29 for research services, and $23.75 for mailing fees. The court found those costs reasonable. It also approved Moreno’s unopposed $5,000 incentive award, finding that amount presumptively reasonable in the Northern District of California.

Disposition

The court granted the motion for final approval and the motion for attorneys’ fees, costs, and incentive award. It awarded class counsel $108,322.50 in fees and $7,687.04 in costs, and awarded Moreno $5,000. The order required class counsel to file a post-distribution accounting within 21 days after distributing the settlement funds and paying the attorneys’ fees. The court approved the settlement and related awards; it did not decide the underlying wage claims on their merits.