District Judge Confronts Multiple Issues In Reaching Fee Award.
U.S. District Judge Susan Ilston in Ridgeway v. Wal-Mart Stores, Inc., Case No. 08-cv-05221-SI (N.D. Cal. Sept. 14, 2017 Doc. #606) confronted numerous issues in deciding the appropriate award to class counsel in a truck driver employee class action case against Wal-Mart for wage hour violations, with a judgment producing a $60.8 million common fund available for distribution to class members. Eventually, as we detail below, District Judge Ilston awarded $15,200,002.90, 25% of the common fund, although she did an analysis under both the fee-shifting statute (California Labor Code section 1194(a)) and the common fund doctrine.
As an overview, District Judge Ilston characterized this as a “hybrid action,” involving potential fee recovery under a specific fee-shifting statute and the common fund doctrine. Class counsel wanted a fee recovery of $20,266,670.50 (one-third of the common fund), while Wal-Mart argued that no more than $2,831,149.09 should be awarded—quite a discrepancy.
On the Labor Code fee-shifting front, she found that the hourly rates requested were acceptable, decided to make no reductions for vague time entries, and did not reduce for block billed entries under the circumstances. District Judge Ilston also found that 64% time billing by higher level partners was appropriate for the case, determined that most of the time on lost or abandoned claims were interrelated to successful claims (doing a minor reduction for meal break claims), and put an imprimatur on continuing education work which aided class counsel in their work. However, she did make reduction for these items: (1) 30% reduction in travel time for class counsel from mainly Fresno to the San Francisco court venue; (2) a 5% across-the-board reduction proposed by class counsel for redundant work, plus a little more too [HINT TO PRACTITIONERS—class counsel was wise to propose this reduction even though they did not have to, the district judge accepting this as overall reasonable in nature]; and (3) no allowance for class counsel’s legislative lobbying efforts. That brought the lodestar request down to $6,491,662.12 (down from the requested $7,320,454.75). Class counsel requested a 2.71 positive multiplier and Wal-Mart advocated zero. After agreeing that contingent risk, results obtained (each class member would likely get around $70,000), complexity, and preclusion of employment factors tilted in favor of a positive multiplier, District Judge Ilston granted a 2.0 positive multiplier, for a total statutory-fee award of $12,983,324.25.
That shifted things to fee recovery under the common fund doctrine. She acknowledged that the Ninth Circuit has a 25% presumptive percentage-of-recovery award in common fund cases, although this had not been adopted conclusively by California state courts (given that diversity law applied). Plaintiff asked for one-third, but District Judge Ilston decided to go with the 25% benchmark. So, that meant that the total fee award based on the 25% was $15,200,002.90, with an offset allowed for the prior $12,983,324.25 statutory fee award, such that an additional $2,216,678.65 was added through the common fund doctrine. When all the math is done, $15,200,002.90 is the result, plus some additional costs and litigation expenses.
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