Bernstein v. Virgin America, Inc.

Background

The plaintiffs filed an unopposed motion seeking approval of a plan for distributing a class judgment, attorney’s fees and expenses, and service awards for class representatives. The court had entered an amended judgment of $30,976,831.87 on January 24, 2023. With prejudgment and post-judgment interest, the total judgment was $31,637,391.85, called the “Common Fund Judgment” in the opinion.

The judgment concerns successful claims for approximately 1,869 class members. The opinion states that the judgment represents 100% of the losses incurred by class members on those successful claims.

Plan of Allocation

The court applied the requirement that a class-action distribution plan be fair, reasonable, and adequate. Under the plaintiffs’ plan, each class member will receive a share of the net amount remaining after deductions for attorney’s fees, costs, service awards, and the payment to the California Labor & Workforce Development Agency. Each share will be based on the class member’s payroll data.

After the class administrator calculates and reports each payment, class members will have 75 days to submit information or documents challenging the calculation. Checks will remain valid for 120 days, and the administrator will attempt to contact class members who have not cashed their checks after 90 days. Unclaimed funds will go to Legal Aid at Work, which provides legal assistance to workers and working families. The court found a sufficient connection between that organization and the class of employees seeking unpaid wages.

The court concluded that the plan was fair, reasonable, and adequate and approved it.

Attorney’s Fees

The plaintiffs requested $10,441,409 in attorney’s fees, equal to 33% of the Common Fund Judgment. Defendants had agreed to pay $6,395,874.95 in statutory fees under specified California labor and civil-procedure provisions. That payment would be credited against the total fee request, leaving $4,045,534.49 to be paid from the Common Fund Judgment. The court described the effective fee payment as 12.8% of the judgment.

The court found the award reasonable because counsel litigated the case for nearly eight years, handled complex and novel legal issues, faced heavily contested proceedings and an appeal, worked on a contingency basis, and spent more than 7,300 hours on the case. The court also considered counsel’s lodestar—the number of hours worked multiplied by reasonable hourly rates—which was $5,844,319.50. The requested fee produced a 1.79 multiplier, which the court found appropriate. The court approved the fee request.

Expenses

Counsel requested $575,293.38 for litigation expenses from the Common Fund Judgment. The plaintiffs submitted an itemized list and receipts. The defendants would also pay the plaintiffs $40,000 as reimbursement for costs recoverable under the applicable statutes. The court found the expenses reasonable and granted the request.

Service Awards

The plaintiffs requested service awards of $25,000 each for class representatives Julia Bernstein, Esther Garcia, and Lisa Marie Smith. The opinion states that the representatives spent substantial time assisting with documents, discovery, meetings, strategy, mediation, court proceedings, depositions, filings, and communications with class members.

Bernstein spent approximately 150 hours, Garcia approximately 130 hours, and Smith more than 500 hours. The court also considered the benefits to the class and the representatives’ risks. Smith remained employed by Defendant Alaska Airlines, Inc.; the opinion states that Alaska investigated her after her name appeared in the amended complaint and that she feared losing her job because of her participation.

The court found that awards above the typical $5,000 amount were justified, but adjusted the awards to reflect the representatives’ different time commitments and retaliation concerns. It approved $25,000 for Smith and $12,000 each for Bernstein and Garcia.

Disposition

The court’s conclusion states that the plaintiffs’ motion was granted in part and denied in part. The distribution plan, attorney’s fee request, and litigation-expense request were approved, while the requested $25,000 service awards for Bernstein and Garcia were reduced to $12,000 each.