Dixon v. Cushman & Wakefield Western, Inc.

Background

Plaintiffs alleged that Cushman & Wakefield Western, Inc. misclassified appraisers and senior appraisers as exempt employees and therefore denied them guaranteed wages, overtime compensation, meal and rest breaks, accurate wage statements, and other protections under California wage-and-hour law and the Fair Labor Standards Act (FLSA), the federal wage statute.

The parties reached a global settlement covering three related cases, which were combined into one amended complaint for settlement purposes. The settlement covered a California class and FLSA collective groups involving appraisers, senior appraisers, junior appraisers, and associate appraisers during specified periods. The court had previously granted conditional certification for settlement purposes.

Settlement Terms and Notice

The settlement provided for a maximum common fund of $4.9 million. Based on the claims submitted, the actual fund was $3,876,130.59, of which $2,110,797.25 was allocated to individual settlement payments. Defendants were also expected to pay $107,203.12 in payroll taxes. The settlement allocated individual payments between wages and non-wages, with different formulas for California class members and FLSA participants.

The agreement included a $26,666.67 allocation for penalties under California’s Private Attorneys General Act, with $20,000 designated for the California Labor and Workforce Development Agency. It also provided for attorneys’ fees, litigation costs, settlement-administration costs, and proposed incentive awards. Certain uncashed checks would be transferred to California’s unclaimed-property system, held in counsel’s trust account, or distributed to the National Employment Law Project as a charitable recipient for unclaimed funds.

The settlement administrator mailed 475 notice packets. Four people ultimately did not receive any form of notice. There were no objections or opt-outs from California class members, and the eligible non-California collective members could not object or opt out under the agreement. The court found the notice adequate and granted final certification of the FLSA collective for settlement purposes.

Final Settlement Approval

The court evaluated whether the settlement was fair, adequate, and reasonable. It considered the strength of Plaintiffs’ claims, the risks and costs of continued litigation, the settlement amount, the investigation and discovery completed, counsel’s experience, government notice, and the class members’ reaction.

The court noted that Plaintiffs faced risks involving class certification, proving the amount of overtime worked, further discovery, summary judgment, trial, and a possible appeal. It found that the settlement provided immediate payments and fairly addressed those risks. The court also examined the settlement for possible collusion because it was reached before final class certification. Although the agreement contained two warning signs—an arrangement concerning fees and a provision allowing attorneys’ fees to be paid separately from class funds—the court found no collusion and concluded that the settlement resulted from arms-length negotiations.

The court approved the proposed distribution of certain uncashed checks to the National Employment Law Project, finding that the organization’s nationwide work aligned with the interests of the affected non-California workers. The court then granted final approval of the class and FLSA collective settlement.

Attorneys’ Fees, Costs, and Incentive Awards

The settlement agreement allowed Plaintiffs’ counsel to seek up to one-third of the maximum fund, or $1,633,333.33. The court found that a 30 percent award, rather than the requested 33 percent, was reasonable. It relied on the size of the fund, the lack of objections, the results obtained, and a comparison with counsel’s reported lodestar—the number of reasonable hours multiplied by reasonable hourly rates.

The court awarded $1,470,000 in attorneys’ fees. It also awarded $60,000 in litigation costs and $20,000 in settlement-administration costs, for $80,000 in combined costs.

The named representatives, Dixon and Seltz, had requested $10,000 each. The court found that each had contributed enough to justify an award but reduced the amount to $5,000 each because $10,000 exceeded the amount generally presumed reasonable in the Ninth Circuit. The court denied incentive awards to the six declarants because their reported work was limited and similar, and paying them for declarations supporting certification could create inappropriate incentives.

Disposition

Judge Corley granted Plaintiffs’ motion for final approval of the class action settlement. She granted in part and denied in part Plaintiffs’ motion for attorneys’ fees, costs, and incentive awards. The court awarded $1,470,000 in attorneys’ fees, $60,000 in litigation costs, $20,000 in settlement-administration costs, and $5,000 for each class representative. The order also required class counsel to file a post-distribution accounting within 21 days after distributing the settlement funds and paying attorneys’ fees.