Fuapau v. LHOIST North America of Arizona, Inc.

Background

The plaintiffs were current and former non-exempt employees of Lhoist who worked at its Natividad Plant in Salinas, California. They alleged 11 California-law claims involving unpaid overtime, unpaid nondiscretionary safety bonuses, unpaid shift premiums, missed meal and rest periods, inaccurate wage statements and payroll records, untimely wage payments, and unreimbursed work-related cellphone expenses.

After discovery and two mediation sessions, the parties accepted a mediator’s proposal and entered a class and representative action settlement. The court had previously granted preliminary approval and conditionally certified the settlement class. The plaintiffs then requested final approval of the settlement and an award of attorneys’ fees and costs. Lhoist did not oppose the request.

Settlement Terms and Notice

The settlement created a non-reversionary $320,000 common fund. The fund was to pay attorneys’ fees of up to $80,000, litigation costs of up to $25,000, estimated claims-administration costs of $6,250, and a payment resolving claims under the Private Attorneys General Act. The opinion states that 75% of the PAGA payment would go to the Labor and Workforce Development Agency and 25% would go to class members. The remaining net settlement amount would be distributed among participating class members based on the length of time they worked for Lhoist during the class period.

The class consisted of all current and former non-exempt Lhoist employees who worked in California at any time from October 20, 2017, through November 15, 2021. There were 116 class members. The settlement administrator mailed notice to all 116, and every notice was successfully delivered. No class member objected or requested exclusion.

Court’s Analysis

Under Federal Rule of Civil Procedure 23, a class settlement requires court approval. The court must determine whether the settlement is fair, reasonable, and adequate, including whether the class representatives and counsel adequately represented the class, whether the settlement was negotiated at arm’s length, whether the relief was adequate, and whether class members were treated equitably.

The court concluded that the Rule 23 requirements for final class certification were satisfied. It found that the notice method was reasonably calculated to inform class members and was the best practicable notice under the circumstances.

The court considered the risks of continued litigation, the settlement amount, the discovery completed, the class members’ reaction, the requested attorneys’ fees, the absence of collusion, and class counsel’s experience and views. It found that the settlement provided an immediate recovery while avoiding the risks and costs of further litigation. The court noted that the gross settlement was approximately 11.65% of Lhoist’s estimated maximum potential liability and that the net settlement was approximately 8% of that estimate. The estimated average recovery was $1,706.08 per class member.

The court also found no signs that the settlement shortchanged the class through collusion. Although the parties agreed that a fee request would not exceed one-third of the gross settlement, counsel requested $80,000, or 25% of the gross fund. The court found no provision requiring Lhoist to pay fees separately from the class fund and no provision allowing unpaid fees or other funds to revert to Lhoist.

Attorneys’ Fees and Costs

The court approved the requested $80,000 attorneys’ fee award under the percentage-of-the-fund method, using a lodestar calculation as a cross-check. It found the requested hourly rates reasonable for the attorneys’ experience and the local market. Counsel had billed approximately 314.5 hours, and the court found the time reasonably spent. The lodestar calculation was $197,407.50, making the $80,000 award less than half that amount.

The court also approved $15,845.29 in litigation costs. Both the attorneys’ fees and costs were to be paid from, and not in addition to, the $320,000 settlement fund.

Disposition

Judge Virginia K. Demarchi granted final approval of the settlement and granted the motion for attorneys’ fees and costs. The order directed the parties and claims administrator to carry out the settlement, approved the class definition and distribution plan, and approved the release of the covered wage-and-hour and PAGA claims for participating class members. Uncashed settlement checks remaining after 180 days were to be sent to Watsonville Law Center as a cy pres beneficiary, subject to the court’s approval of a post-distribution accounting. The order stated that the settlement was not an admission by Lhoist of liability or wrongdoing and reserved the court’s continuing jurisdiction to supervise implementation of the settlement.