1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MARIA T. GONZALEZ, on Behalf of Case No.: 17-CV-1077 JLS (JLB) Herself and All Others Similarly Situated, 12 ORDER GRANTING PLAINTIFF’S Plaintiff, 13 UNOPPOSED MOTIONS FOR v. (1) FINAL APPROVAL OF CLASS 14 ACTION SETTLEMENT; AND EXAMINATION MANAGEMENT 15 (2) ATTORNEYS’ FEES, COSTS, SERVICES, INC., a Nevada Corporation; AND INCENTIVE AWARD 16 LABORATORY CORPORATION OF

AMERICA HOLDINGS, a Delaware 17 (ECF Nos. 74, 75) Corporation; SOKO UNITED CORP., a 18 California Corporation; and DOES 1–10, inclusive, 19 Defendants. 20 21 EXAMINATION MANAGEMENT SERVICES, INC., a Nevada Corporation, 22 Third-Party Plaintiff, 23 v. 24 SOKO UNITED CORP., a California 25 Corporation, 26 Third-Party Defendant.

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28 1 Presently before the Court are Plaintiff Maria T. Gonzalez’s unopposed Motions for 2 (1) Final Approval of Class Action Settlement (“Final Approval Mot.,” ECF No. 74); and 3 (2) Attorneys’ Fees, Costs, and Incentive Award (“Att’y Fee Mot.,” ECF No. 75). The 4 Court conducted a hearing on August 22, 2019. See ECF No. 80. Because the settlement 5 is fundamentally fair, reasonable, and adequate, the Court GRANTS Plaintiff’s unopposed 6 Final Approval Motion. Further, because the requested attorneys’ fees, costs, and incentive 7 award are reasonable, the Court GRANTS Plaintiffs’ Attorney Fee Motion. 8 BACKGROUND 9 This case began when Plaintiff Maria T. Gonzalez filed an action against Laboratory 10 Corporation of America Holdings (“LabCorp”) and Examination Management Services, 11 Inc. (“EMSI”) on May 24, 2017. See generally ECF No. 1 (“Compl.”). Plaintiff alleged 12 Defendants improperly classified her and other phlebotomists as independent contractors. 13 Id. ¶ 1. Plaintiff further alleged that this misclassification caused damages under several 14 provisions of both federal and state law, including damages for failure to pay minimum 15 wage, failure to provide accurate wage statements, and failure to provide timely payment 16 of all wages upon discharge. Id. ¶ 3. 17 On November 10, 2017, EMSI added Soko United Corporation (“Soko”) as a third- 18 party defendant, alleging indemnity-based claims. See generally ECF No. 27. Plaintiff 19 filed a Second Amended Complaint that added Soko as a defendant and alleged that Soko 20 was the joint employer of Plaintiff and the proposed class along with EMSI and LapCorp. 21 See generally ECF No. 29 (“SAC”). 22 On March 7, 2018, the Parties attended a telephonic Early Neutral Evaluation with 23 the Honorable Jill L. Burkhardt; however, the Parties did not agree to settlement terms at 24 that time. See generally ECF No. 52. The Parties attended a mediation conducted by 25 Jeffrey Krivis of First Mediation Corporation on July 5, 2018. Declaration of Aaron M. 26 Olsen in Support of Final Approval Mot. (“Olsen Approval Decl.,” ECF No. 74-2) ¶ 7. 27 Through that mediation, “the Parties were able to reach an outstanding settlement 28 agreement on behalf of Plaintiff and the proposed Class.” Id. 1 On September 21, 2018, the Parties sought preliminary approval from the Court, see 2 generally ECF No. 66, which the Court granted. See generally ECF No. 73. Notice was 3 then provided to all 118 Class Members. Declaration of Elizabeth Kruckenberg 4 (“Kruckenberg Decl.,” ECF No. 74-7) ¶ 5. Three Class Members have opted out of the 5 Settlement, leaving 115 Class Members. Id. ¶ 8. No Class Members have objected to the 6 Settlement. Id. ¶ 9. 7 The Parties are now before the Court to seek the Court’s final approval of their 8 Settlement. See generally ECF No. 74. 9 SETTLEMENT TERMS 10 The Parties have submitted a comprehensive settlement agreement with 11 approximately forty pages of substantive terms. ECF No. 66-2 at 2–46 (“Proposed 12 Settlement Agreement”).1 13 I. Proposed Settlement Class 14 The Proposed Settlement Class is defined to include “all Persons, regardless of 15 specific title, who currently work for, or previously worked for, Soko as a phlebotomist, 16 examiner, and/or PST Specialist who also worked at a LapCorp location pursuant to the 17 Independent Contractor Agreement between Soko and EMSI, and/or the Provider 18 Agreement between EMSI and LapCorp, at any time during the period of May 24, 2013 19 through the date of the Preliminary Approval Order.” Proposed Settlement Agreement 20 ¶ 2.6. According to the Parties’ investigation and available data, this constitutes “one 21 hundred eighteen (118) Class Members.” See id. 22 Three Class Members have excluded themselves from the Settlement, leaving 115 23 Settlement Class Members. Kruckenberg Decl. ¶ 8. None of the remaining 115 Settlement 24 Class Members has objected to the Settlement. See id. ¶ 9. 25 / / / 26 27 28 1 Because both the Proposed Settlement Agreement and Proposed Notice were filed as part of ECF No. 1 II. Proposed Monetary Relief 2 The Proposed Settlement Agreement provides for $700,000 in Gross Settlement 3 Proceeds, Proposed Settlement Agreement ¶ 5.1(a), “used to pay: (1) $175,000 in 4 attorneys’ fees; (2) $5,000 in litigation expenses; (3) $6,500 in administrative expenses; 5 (4) $5,000 for the Class Representative Service Award; (5) $10,000 for payment to the 6 [California Labor and Workforce Development Agency (“LWDA”)] pursuant to [the 7 Private Attorneys General Act (“PAGA”)]; and (6) the remainder $498,500 used to pay the 8 Settlement Class Members (“Net Settlement Proceeds”).” Final Approval Mot. at 6. 9 Each of the 115 Settlement Class Members will receive a portion of the Settlement 10 Fund “based on weeks worked” during the class period. Proposed Settlement Agreement 11 ¶ 5.1(b). Should the Court approve the Proposed Settlement Agreement, each of the 115 12 Settlement Class Members will receive a payout as calculated in the Individual Work 13 Weeks Form with Assumed Payout, attached as Exhibit B to the Decl. of Aaron M. Olsen. 14 See Olsen Approval Decl. Ex. B, ECF No. 74-4. “[I]f a straight average allocation were 15 made, each Settlement Class Member would receive at least $4,334.” Final Approval Mot. 16 at 7 (citing Olsen Approval Decl. ¶ 10). 17 “None of the Settlement Fund will revert to Defendants and, to the extent that any 18 funds remain after the distribution to Settlement Class Members, that amount will be paid 19 in accordance with California Code of Civil Procedure §[ ]384 to the Legal Aid Society of 20 San Diego, a nonprofit organization providing civil legal services to the indigent.” Id. 21 (citing Proposed Settlement Agreement ¶ 5.2; Olsen Approval Decl. ¶ 15). 22 III. Injunctive Relief 23 Those Class Members who continue to work for Defendants will be reclassified as 24 Internal Revenue Service Form W-2 employees. Proposed Settlement Agreement ¶ 5.1(c). 25 Further, Defendants will not require Class Members to arrive at work ten minutes prior to 26 the billable start time, unless such time is compensated in compliance with applicable laws 27 and regulations. Id. 28 / / / 1 MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT 2 I. Class Certification 3 Before granting final approval of a class action settlement agreement, the Court must 4 first determine whether the proposed class can be certified. Amchem Prods. v. Windsor, 5

(1997) (indicating that a district court must apply “undiluted, even 6 heightened, attention [to class certification] in the settlement context” in order to protect 7 absentees). In the present case, the Court previously certified the settlement class for 8 purposes of settlement only. Prelim. Approval Order, ECF No. 73, at 4–10. “No additional 9 facts have come to light to disturb the logic of that Order.” Final Approval Mot. at 8. 10 Accordingly, the Court reaffirms and incorporates by reference its prior analysis under 11 Rules 23(a) and (b)(3) as set forth in its Preliminary Approval Order. See Prelim. Approval 12 Order at 4–10. 13 II. Adequacy of Notice 14 The Court must also determine that the Class received adequate notice. Hanlon v. 15 Chrysler Corp.,

(9th Cir. 1998), overruled on other grounds by Wal- 16 Mart Stores, Inc. v. Dukes,

(2011). “Adequate notice is critical to court 17 approval of a class settlement under Rule 23(e).”

18 In its Preliminary Approval Order, the Court preliminarily approved the Parties’ 19 proposed notice and notice plan. See Prelim. Approval Order at 14–15. As part of her Final 20 Approval Motion, Plaintiff filed the Declaration of Elizabeth Kruckenberg, who is the 21 “Director of Case Management at Phoenix Settlement Administrators (PSA), the Court- 22 appointed Class Action Settlement Administrator.” See generally Kruckenberg Decl; see 23 also id. ¶ 1. In her declaration, Ms. Kruckenberg details the actions taken by PSA to 24 provide notice in accordance with the Notice Plan. See generally id. Having reviewed 25 Ms. Kruckenberg’s declaration, the Court finds that the Settlement Class received adequate 26 notice of the Settlement. 27 / / / 28 / / / 1 III. Fairness of the Settlement 2 The Court must next determine whether the proposed settlement is “fair, reasonable, 3 and adequate” pursuant to Federal Rule of Civil Procedure 23(e)(1)(C). Factors relevant to 4 this determination include: 5 The strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining 6 class action status throughout the trial; the amount offered in 7 settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence 8 of a governmental participant; and the reaction of the class 9 members to the proposed settlement.

10 Hanlon,

. This determination is committed to the sound discretion of the 11 trial judge.

12 In its Preliminary Approval Order, the Court addressed each of the Hanlon factors 13 in turn and found that all of the pertinent factors weighed in favor of approving the 14 Settlement. See Prelim. Approval Order at 10–14. Since then, no Class Member has filed 15 an objection, see Kruckenberg Decl. ¶ 9, and only three Class Members have opted out of 16 the Settlement. Id. ¶ 8. Because no pertinent facts have changed, the Court reaffirms and 17 incorporates by reference its analysis of the Rule 23(e) requirements as set forth in its 18 Preliminary Approval Order. See Prelim. Approval Order at 10–14. Accordingly, the 19 Court finds the settlement to be “fair, reasonable, and adequate” pursuant to Federal Rule 20 of Civil Procedure 23(e). 21 IV. Conclusion 22 Because all of the pertinent factors here weigh in favor of approving the Settlement, 23 the Court GRANTS Plaintiff’s Final Approval Motion. 24 MOTION FOR ATTORNEYS’ FEES, COSTS, AND INCENTIVE AWARD 25 Class Counsel seek one-quarter of the $700,000 Gross Settlement Proceeds, totaling 26 $175,000, as attorneys’ fees; $5,000 as reimbursement for litigation expenses; and $6,500 27 in administrative expenses. Att’y Fee Mot. at 2. In addition, the Proposed Settlement 28 Agreement provides for a $5,000 Class Representative Service Award. Id. Defendants 1 have agreed not to oppose Class Counsel’s application for attorneys’ fees plus documented 2 litigation costs. Id. at 6. The Court addresses each of Class Counsel’s requests in turn. 3 I. Attorneys’ Fees 4 Federal Rule of Civil Procedure 23(h) permits a court to award reasonable attorneys’ 5 fees “authorized by law or by the parties’ agreement.” The Court has discretion to award 6 attorneys’ fees based on “the percentage-of-the-fund method or the lodestar/multiplier 7 approach.” In re Wash. Pub. Power Supply Sys. Sec. Litig.,

, 1295–96 (9th 8 Cir. 1994). The Ninth Circuit has routinely applied the percentage-of-the-fund approach, 9 treating twenty-five percent as the “benchmark.” In re Pac. Enters. Sec. Litig.,

, 378–79 (9th Cir. 1994). Despite this benchmark, district courts have discretion to 11 “[a]djust the benchmark when special circumstances indicate a higher or lower percentage 12 would be appropriate.” Id. at 379. 13 Here, Class Counsel seek up to twenty-five percent of the $700,000 Gross Settlement 14 Proceeds, totaling $175,000. See Att’y Fee Mot. at 2. Nothing in this case requires 15 departure from the standard twenty-five percent award. 16 Class Counsel contend that they have “[a]chieved an [o]utstanding [r]esult” that 17 “provides substantial compensation to Settlement Class Members without the undue 18 burden, delay, and risks of litigation,” id. at 6–7 (emphasis omitted), and that the “Class 19 Members’ lack of objection to the Settlement confirms the adequacy of the settlement 20 amount.” Id. at 13; see also id. at 15. Further, Class Counsel note that they have devoted 21 substantial effort to this case, devoting about 400 hours to securing the Settlement alone. 22 Id. at 13. Class Counsel claim that they are highly skilled and experienced in wage and 23 hour cases such as this and that “[t]heir skill and experience . . . were instrumental to the 24 results achieved for the Settlement Class.” Id. at 14. Further, this litigation was undertaken 25 on a wholly contingent basis, with Class Counsel “knowing that neither class certification 26 nor a successful outcome on the merits was assured.” Id. Finally, the $175,000 requested 27 is less than Class Counsel’s calculated lodestar of $189,745. Id. at 16–18. 28 / / / 1 The Court agrees with Class Counsel that the fee request in the amount of $175,000 2 is reasonable, particularly in light of the favorable results achieved by Class Counsel, the 3 risk Class Counsel assumed by taking this case on contingency, and the award being in line 4 with the lodestar calculation. Accordingly, the Court finds that an award of twenty-five 5 percent of the Gross Settlement Proceeds is reasonable under the circumstances of this 6 case. 7 II. Costs 8 Class Counsel also seeks reimbursement for $5,000 in litigation expenses. See Att’y 9 Fee Mot. at 18–19. California’s Labor Code provides for an award of such costs. See, e.g., 10

, 226(h), 1194(a), 2699(g). 11 “To date, Class Counsel [has] incurred in excess of $5,000 in total out-of-pocket 12 costs and expenses in prosecuting this litigation on behalf of the Settlement Class on a 13 contingent basis.” Att’y Fee Mot. at 18; see also Decl. of Aaron M. Olsen in Support of 14 Att’y Fee Mot. (“Olsen Fee Decl.,” ECF No. 75-2) ¶¶ 48–50. The fees, totaling $5,553.87, 15 were incurred for courier charges, filings fees, postage, printing, meals, mediation services, 16 and research and investigation services. Olsen Fee Decl. ¶ 48. Class Counsel “has not 17 sought reimbursement of certain ‘soft’ costs such as internal phone charges, or similar 18 expenses.”

No objections to these costs have been made. Accordingly, the Court finds 19 that Class Counsel’s litigation expenses are typical and reasonable and approves the 20 requested reimbursement in the amount of $5,000. 21 III. Incentive Awards 22 Finally, Class Counsel seek a Representative Service Award for Plaintiff in the 23 amount of $5,000. Att’y Fee Mot. 19–21. Incentive awards are “fairly typical” 24 discretionary awards “intended to compensate class representatives for work done on 25 behalf of the class, to make up for financial or reputational risk undertaken in bringing the 26 action, and, sometimes, to recognize their willingness to act as a private attorney general.” 27 Rodriguez v. W. Publ’g Corp.,

, 958–59 (9th Cir. 2009) (citations omitted). 28 In deciding whether to give an incentive award, the Court may consider: 1 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties 2 encountered by the class representative; 3) the amount of time 3 and effort spent by the class representative; 4) the duration of the litigation; and 5) the personal benefit (or lack thereof) enjoyed 4 by the class representative as a result of the litigation. 5

6 Van Vranken v. Atl. Richfield Co.,

(N.D. Cal. 1995) (citations 7 omitted). 8 “Here, Plaintiff assumed the risk of serving as the Class Representative knowing the 9 ‘decision could damage’ her ‘prospects with future employment.’” Att’y Fee Mot. at 20 10 (quoting Decl. of Maria T. Gonzalez (“Gonzalez Decl.,” ECF No. 75-6) ¶ 4). She “also 11 spent substantial time and effort in assisting with the litigation and fulfilling her duties as 12 a Class Representative.”

(citing Gonzalez Decl. ¶¶ 5–6). Further, the requested $5,000 13 award is “in-line with those typically awarded and presumptively reasonable.”

at 14 19–20 (citing In re Toys R Us–Del., Inc. Fair & Accurate Credit Transactions Act Litig., 15

(C.D. Cal. 2014); Koz v. Kellogg Co., No. 09-CV-1786-IEG (WMc), 16

, *7–8 (S.D. Cal. Oct. 14, 2010); Aguayo v. Oldenkamp 17 Trucking, No. CIV F-04-6279 AWI LJO,

, *2 (E.D. Cal. Oct. 17, 2006)). 18 Having considered the relevant factors, the Court finds the Representative Service Award 19 of $5,000 to be reasonable. 20 IV. Conclusion 21 For the foregoing reasons, the Court GRANTS Plaintiff’s Attorney Fee Motion. 22 / / / 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 CONCLUSION 2 For the reasons stated above, the Court GRANTS Plaintiff's Motions for Final 3 || Approval of Class Action Settlement (ECF No. 74) and for Attorneys’ Fees, Costs, and 4 || Incentive Award (ECF No. 75). 5 IT IS SO ORDERED. 6 7 Dated: August 27, 2019 □□ g ja Janis L. Sammartino 9 United States District Judge

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