Bautista v. Juul Labs, Inc.

Background

Juul Labs, Inc. oversaw a campaign related to San Francisco’s Proposition C, which would have overturned an ordinance suspending electronic-cigarette sales. Juul hired Long Ying International, Inc. and David Ho to help manage the campaign. Long Ying and Ho hired the named plaintiffs and approximately 365 other workers to perform canvassing, phone banking, and administrative work. The workers were hired as independent contractors.

The plaintiffs alleged that Juul and another defendant were also their legal employers because they exercised control over wages, hours, and working conditions. They alleged violations of California wage laws and the federal Fair Labor Standards Act, including failures involving pay statements, payment for all hours worked, and payment upon discharge. The lawsuit also included claims for penalties under California’s Private Attorneys General Act.

Settlement

After discovery, mediation, and more than two years of litigation, the parties agreed to settle. The settlement class included people hired directly by Long Ying to perform campaign work during the defined class period. The parties ultimately determined that the class had 379 members.

The settlement required defendants to pay a gross fund of $1.75 million. The agreement allocated $400,000 to resolve claims under the Private Attorneys General Act, including $300,000 for California and $100,000 for class members. It allocated $1,500 to resolve participating workers’ claims under the Fair Labor Standards Act and at least $563,000 to class members for claims under California labor law and San Francisco law. The agreement also allowed for attorneys’ fees, settlement-administration costs, and service awards for the named plaintiffs.

Class members received notice by first-class mail and, when available, email. The administrator sent 379 notices; after address searches and re-mailing, only five remained undeliverable. No class member submitted a valid request for exclusion or an objection by the final fairness hearing. The settlement included procedures for distributing payments and potentially sending remaining funds to class members or, under specified conditions, to Open Door Legal, a nonprofit legal-services provider.

Court’s analysis

Under Federal Rule of Civil Procedure 23, the court had to determine whether the settlement was fair, reasonable, and adequate and whether class members received adequate notice. Judge Gilliam considered the strength of the plaintiffs’ claims, the risks and costs of continued litigation, the settlement amount, the discovery completed, counsel’s experience and views, and the class members’ reaction. He found that the settlement amount was within a reasonable range in light of litigation risks and that the notice process satisfied the applicable requirements.

The court also reviewed the requested attorneys’ fees under the common-fund method. Class counsel requested $735,431.51, or 42 percent of the settlement fund. The court found that a fee above the usual 25-percent benchmark was justified by the recovery obtained, the risks undertaken, and counsel’s reported lodestar, which is calculated from reasonable hours multiplied by reasonable hourly rates. But the court concluded that awarding 42 percent would be excessive and awarded 30 percent of the settlement fund, or $525,000.

The court found the requested $14,568.49 in litigation costs reasonable and granted that request. It also granted service awards of $5,000 each to Maria De La Luz Bautista-Perez and Salvadora Correa and $7,000 to Luz Perez Bautista, for a total of $17,000.

Disposition

The court granted Plaintiffs’ motion for final approval of the class action and Private Attorneys General Act settlement. It granted in part and denied in part Plaintiffs’ motion for attorneys’ fees, costs reimbursement, and service payments. The court approved the $1.75 million settlement, $525,000 in attorneys’ fees, $14,568.49 in litigation costs, and the $17,000 in service awards. The parties and settlement administrator were directed to implement the settlement, and the parties were directed to file a short stipulated final judgment within 21 days of the order.