DiMercurio v. Equilon Enterprises LLC

Background

The plaintiffs were operators at an oil refinery owned and operated by Equilon Enterprises LLC, referred to in the opinion as Shell. They alleged that Shell’s standby practices violated California wage-and-hour laws, California’s Unfair Competition Law, and the Private Attorneys General Act. The claims included alleged failures to pay reporting-time wages, pay all wages due at termination, provide accurate wage statements, and pay civil penalties.

Shell required operators to remain available for designated 12-hour standby shifts in addition to regular 12-hour shifts. Each day included two 1.5-hour standby periods. Operators had to remain reachable by phone and, if called in, had to arrive at the refinery within two hours. Operators were not paid if they were not called in.

The court certified a class in August 2021. After three settlement conferences, document production, depositions, and class certification proceedings, the parties reached a settlement. The court preliminarily approved a revised settlement and directed that notice be sent to the class.

Settlement Terms and Notice

The certified class consisted of operators who worked at Shell’s refinery in Martinez, California, and were scheduled for standby at any time from June 4, 2015, through January 31, 2020. The settlement also included two waiting-time-penalty subclasses covering specified employment separations between June 4, 2016, and January 31, 2020.

Equilon must pay $3.6 million into a settlement fund within 30 days of final approval. After approved deductions, the remaining amount will be distributed to class members on a pro rata basis based on the number of days they were assigned one or more standby shifts. The settlement is non-reversionary. Any checks remaining uncashed after 120 days from mailing must be sent to the California Unclaimed Properties Fund to be held in the class member’s name.

Notice packets were mailed to all 341 class members. One packet was returned and then resent after an address search. Six class members disputed the number of standby shifts attributed to them, but all disputes were denied after investigation. No objections or requests for exclusion were received.

Final Settlement Approval

Under Federal Rule of Civil Procedure 23, a class-action settlement must be fair, adequate, and reasonable. The court considered the strength of the plaintiffs’ claims, the risks and expense of continued litigation, the settlement amount, the investigation completed, counsel’s experience and views, government participation, and the class members’ reactions.

The court found that continued litigation presented risks, including difficulty proving damages because Shell lacked an official mechanism for tracking traded, activated, or otherwise noncompensable standby shifts. The estimated total exposure was $8.55 million, while the $3.6 million settlement fund represented about 37 percent of that estimate. Class members were expected to receive an average of approximately $6,661.86, with estimated payments ranging from approximately $129.46 to $19,288.95.

The court also reviewed potential signs of improper coordination between class counsel and the defendant. Although the requested fee percentage was one potential warning sign, the court found no improper coordination because the fee request was below counsel’s lodestar, the settlement provided significant payments to class members, fees came from the common fund, and the agreement was non-reversionary. The court concluded that the settlement resulted from good-faith, arms-length negotiations rather than improper coordination.

The court changed the treatment of unclaimed funds from the parties’ proposed recipient, the East Bay Community Law Center, to the California Unclaimed Properties Fund. The parties agreed to that change because the case involved unpaid wages and class-member recovery was considerable.

Private Attorneys General Act Settlement

The court separately reviewed the settlement of the Private Attorneys General Act claim because that claim could otherwise be brought by California’s labor agency. The settlement allocated $37,500 to the state and $12,500 collectively to the affected employees. The court relied on its earlier analysis because no changed facts affected the preliminary approval.

Fees, Costs, and Incentive Awards

The settlement allowed class counsel to seek up to one-third of the gross settlement fund, or $1.2 million. The court approved the requested $1.2 million attorney’s-fee award. It found the award reasonable under both the percentage-of-recovery method and a cross-check using the lodestar method, which multiplies reasonable hours by reasonable hourly rates.

Counsel reported a lodestar of $1,809,105 for 3,579.6 hours of work by two firms. The requested $1.2 million fee was approximately 67 percent of that lodestar. The court also awarded $44,617.98 in litigation costs and $11,500 in settlement-administration costs, for combined costs of $56,117.98.

The four class representatives—Marco DiMercurio, Charles Gaeth, John Langlitz, and Malcolm Synigal—each spent approximately 60 hours working on the case, including providing documents, participating in depositions, preparing declarations, and attending settlement conferences. The court awarded each representative $7,500, for a total of $30,000.

Disposition

The court granted the plaintiffs’ motion for final approval of the class-action settlement and granted the plaintiffs’ motion for attorney’s fees and costs. It awarded $1.2 million in attorney’s fees, $56,117.98 in combined litigation and settlement-administration costs, and $30,000 in incentive awards. The court held the order in abeyance for 90 days to allow state or federal agencies to object under the Class Action Fairness Act. If no objections were received, the order would become final under the parties’ stipulation. The order disposed of docket numbers 242 and 244.