Charalambous v. Liberty Mutual Insurance Company
- Edward Chen
- 3:22-cv-00216
- U.S. District Court · Northern District of California
- 6
In Charalambous v. Liberty Mutual Insurance Company, Judge Chen preliminarily approved a class settlement over pandemic-era work-from-home expense claims.
The order affects the proposed class of California-based Liberty Mutual employees who alleged that they were not reimbursed for reasonable and necessary business expenses incurred while working from home during the pandemic, as well as the named plaintiffs, defendants, class counsel, and claims administrator.
What happened
In Charalambous v. Liberty Mutual Insurance Company, employees alleged that Liberty Mutual failed to reimburse reasonable and necessary business expenses incurred while working from home during the pandemic. The claims involved California law concerning expense reimbursement, unfair business practices, and representative claims under California’s Private Attorneys General Act.
The court found that the proposed settlement was reasonably within the range of possible recovery and that discovery showed risks to the employees’ claims, including Liberty Mutual’s provision of calling applications and equipment and the fact that not all employees requested internet-cost reimbursement. The court also found no evidence of collusion, while noting that the proposed $10,000 payments to each class representative were high and would need to be justified.
Judge Chen granted preliminary approval, conditionally certified the settlement class, appointed the class representatives, class counsel, and claims administrator, and authorized notice to class members. The court set a final approval and fairness hearing for August 22, 2024.
The detailed version
- Charalambous v. Liberty Mutual Insurance Company · No. 3:22-cv-00216
- Edward Chen
- Mar. 15, 2024
Background
Plaintiffs Alex Charalambous and Brian Pullen sought preliminary approval of a class and representative action settlement. They alleged that Liberty Mutual Insurance Company and other defendants failed to reimburse California-based Liberty Mutual employees for reasonable and necessary business expenses incurred while working from home during the pandemic. The claims arose under California Labor Code section 2802, California’s unfair-competition law, and the Private Attorneys General Act.
Court’s evaluation of the proposed settlement
The court found that the proposed settlement class met the requirements for certification under Federal Rule of Civil Procedure 23 for settlement purposes only. The court also found that the settlement fell within a reasonable range and appeared presumptively valid. The parties estimated that each class member would receive approximately $56 per work month before fees and costs and approximately $33.50 per month afterward, assuming the court approved the requested fees and costs. The court stated that the proposed settlement represented 77.3% of the plaintiffs’ higher estimate of potential recovery at trial and that the net settlement amount represented 46.3% of that recovery figure.
The court identified litigation risks that supported settlement. During discovery, plaintiffs learned that Liberty Mutual provided Microsoft Teams for internet calling, supplied equipment such as laptops, monitors, and headsets, and did not receive internet-cost reimbursement requests from all employees even though employees purportedly could have submitted them. Plaintiffs’ counsel also learned that Liberty Mutual did not require employees to set aside space exclusively for business use.
The court found no evidence of collusion or sacrificing the class’s interests. It noted that the settlement resulted from mediation before retired judge Lisa Cole and that the settlement was non-reversionary. The agreement allowed class counsel to seek up to 33.3% of the settlement fund in fees, although counsel represented that it intended to request 30%. The court stated that the agreement did not prevent defendants from opposing the requested fee amount.
Service awards and notice
The settlement provided for a $10,000 service award to each class representative, for a total of $20,000. The court stated that these awards were at the high end of incentive awards and required plaintiffs to justify them at the final approval hearing. The court reserved the right to reduce the awards.
The court found that the proposed class notice, as modified by the parties’ addendum, adequately addressed the court’s concerns. The modifications included sending notice by email when available in addition to postal mail, submitting email-notice language for court review, emphasizing on the first page that class members could receive money, and sending reminders about uncashed checks. The court found that the notice adequately explained the action, the certified class, the claims and defenses, the right to appear through an attorney, the process for requesting exclusion, and the binding effect of a class judgment.
Order
The court granted preliminary approval of the settlement. It conditionally certified the proposed settlement class, appointed Alex Charalambous and Brian Pullen as class representatives, appointed Clapp & Lauinger LLP as class counsel, and appointed ILYM Group, Inc. as claims administrator. The parties and claims administrator were authorized and directed to mail the class notice under the settlement as modified by the addendum. The court set a final approval and fairness hearing for August 22, 2024, at 1:30 p.m.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.