Judge: Stephen I. Goorvitch, Case: 19STCV28802, Date: 2024-01-16 Tentative Ruling

Case Number: 19STCV28802    Hearing Date: January 16, 2024    Dept: 39

Zaleka Turner, et al. v. Shipt, Inc., et al.

Case No. 19STCV28802

Motion for Final Approval of Class Action Settlement

Motion for Attorneys’ Fees and Service Awards

            Plaintiffs Zaleka Turner and Lauren Kiktavi (collectively, “Plaintiffs”) filed the instant case against Shipt, Inc. and Target Corporation (collectively, “Defendants”).  Plaintiffs asserted a claim under the Labor Code Private Attorney General Act of 2004 (“PAGA”), as well as class action claims for alleged wage and hour violations.  The parties reached a settlement.  However, one of Plaintiffs’ attorneys (who also represented plaintiffs in related cases) and the Labor and Workforce Development Agency, Department of Industrial Relations, Division of Labor Standards Enforcement (the “LWDA”) objected to the settlement.  The Court rejected the settlement.  (See Court’s Order, dated May 8, 2023.)  The initial settlement amount was $6,268,000, and the parties allocated one-third of this amount—or $2,068,440—to attorneys’ fees.  (Ibid.)  After expenses and service awards, the State would receive only $500,000, and the class of approximately 78,000 members would receive only $3,531,560.  (Ibid.) 

The parties participated in a mandatory settlement conference with the Honorable Ruth A. Kwan, Superior Court Judge, over two sessions, following which they reached a new settlement for a higher amount that would resolve four cases: (1) Zaleka Turner v. Shipt, Inc., Case Number 19STCV28802, (2) Sander v. Shipt, Inc., Case Number RG19031481 in the Alameda County Superior Court, (3) Cho v. Shipt, Inc., Case No. RG200083342 in the Alameda County Superior Court, and (4) Green v. Shipt Inc., Case Number 20STCV01001 in the Los Angeles County Superior Court.  The plaintiffs’ lawyers on all four cases have been designated as “Settlement Class Counsel.”  (See Court’s Order, dated October 9, 2023.)  The class is comprised of $118,628 class members.  (See Declaration of Denise Islas, ¶ 6.)    

The Court granted preliminary approval of the settlement on October 9, 2023.  The total settlement amount is $14.5 million.  The settlement administrator’s expenses are $229,979.  (See id., ¶ 15.)  Plaintiffs’ counsel’s costs are $59,748.26.  (See ibid.)  The PAGA penalty is $1,160,000, of which the State of California will receive $870,000.  Plaintiffs’ counsel—which includes lawyers for all four cases—are requesting a contingency fee of one-third of the total settlement amount, which is $4,833,333.  Plaintiffs also request a service award of $12,500 for each of the six named plaintiffs.  The class members will receive the remaining amount, which is $8,231,939.74 (assuming the Court approves all of the requested deductions/expenditures). 

On October 18, 2023, notices were emailed to the class members for whom there was a valid email address available.  (See Declaration of Denise Islas, ¶ 8.)  All other class members were notified by first class mail.  (Id., ¶¶ 9-10.)  Following this process, only 109 notices were determined to be “undeliverable,” which manes that 99.91% of all class members received notice.  (Id., ¶ 10.)  The settlement administrator received 341 valid requests for exclusion from the settlement.  (Id., ¶ 17.)  The settlement administrator received two written objections, one of which “does not meet the criteria for a valid objection.”  (Id., ¶ 18.)  The Court has reviewed and considered the two objections.  The first objection does not address the terms of the settlement but instead argues that “[t]o take the word of the Shipt organization for the amount of hours would be a grave injustice” and notes that “[m]ost of these orders pay an average about $6.00 and gas is $5.00 . . . .”  The second objection does not meet the criteria for a valid objection, but argues that “$14,000,000 cannot fairly compensate 120,000 shoppers for all the items brought forth in this settlement . . . .” and challenges the requested service awards to the named plaintiffs.  This shopper was free to opt-out of the settlement and pursue her own case, though the Court agrees with her criticism of the service awards (and had planned to reduce these awards even before reading her objection).  The Court notes that the vast majority of the class members do not object to the proposed settlement, which is persuasive.    

The Court previously approved the settlement amount and PAGA penalty.  The requested settlement administrator expenses fall within the range previously approved by the Court (under $300,000).  The settlement administrator has provided a declaration describing her work to date, and included in her request the anticipated future costs of calculating, issuing, and mailing the settlement checks.  (See Declaration of Denise Islas, ¶ 20.)  The Court does not require additional detail to approve the request of $229,979, as Ms. Islas provides sufficient detail concerning her work; this amount is less than what the Court previously approved; and the requested amount is commensurate with what the Court would expect for a class action with this many members.

Plaintiffs’ counsel seek reimbursement of costs of $59,748.26.  The attorneys have provided declarations and underlying records summarizing these costs as follows:

1.  Costs in Turner v. Shipt, Inc.         $34,657.41     (Declaration of Shannon Liss-Riordan, ¶ 36.)

2.  Costs in Sander v. Shipt, Inc.        $8,317.14       (Declaration of Lonnie C. Blanchard, ¶ 38.)

3.  Costs in Sander v. Shipt, Inc.        $10,091.63     (Declaration of Peter R. Dion-Kindem, ¶ 12.)

3.  Costs in Green v. Shipt, Inc.          $5,649.79       (Declaration of Kyle Nordehaug, ¶ 19.) 

4.  Costs in Cho v. Shipt, Inc.             $1,032.29       (Declaration of Steven G. Tidrick, ¶ 21.)

5.  Total:                                             $59,748.26

Based upon the foregoing, the Court approves reimbursement of costs of $59,748.26, as reflected on the settlement administrator’s spreadsheet.

            Plaintiffs’ counsel and the settlement administrator seek a reserve fund of $200,000.  The Court approves this reserve fund on the condition that any additional costs must be approved by the Court (which may be done by way of ex parte application with five days’ notice).  If the funds are not used, they shall be distributed to the class members without further order of the Court. 

            Plaintiffs’ counsel seek service awards of $12,500 for each named plaintiff.  The Court agrees that the named plaintiffs are entitled to additional funds for acting as named plaintiffs.  However, the Court finds that the requested amounts are too high.  The Court approves service awards of $5,000 for each named plaintiff.   

            Plaintiffs’ counsel seek a contingency fee of one-third of the settlement amount, which is $4,833,333.  The Court notes at the outset that this settlement resolves not just the instant case, but three other cases, and Plaintiffs’ attorneys from all four cases have been included as “Settlement Class Counsel.”  Thus, even though the request for attorneys’ fees has increased since the prior motion, so too has the size of the class and the number of attorneys who must be compensated for their work.  However, as the Court previously advised Plaintiffs’ counsel, the fee award is based upon a lodestar analysis, not a simple contingency. 

The determination of reasonable amount of attorney fees is within the sound discretion of trial courts. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) “The determination of what constitutes a reasonable fee generally ‘begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate….’”  (Ibid.)  “[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award….”  (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 154.)  In setting the hourly rate for an attorney fees award, courts are entitled to consider the rate of “‘fees customarily charged by that attorney and others in the community for similar work.’”  (Bihun v. AT&T Information Systems, Inc. (1993) 13 Cal. App. 4th 976, 997, overruled on other grounds by Lakin v. Watkins Associated Indus. (1993) 6 Cal. 4th 644, 664.)  The burden is on the party seeking attorney fees to prove reasonableness of the fees.  (Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal. App. 4th 603, 615.)

The Court has broad discretion in determining the amount of a reasonable attorney’s fee award which will not be overturned absent a “manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence.”  (Bernardi v. County of Monterey (2008) 167 Cal. App. 4th 1379, 1393-94.)  The Court need not explain its calculation of the amount of attorney’s fees awarded in detail; identifying the factors considered in arriving at the amount will suffice. (Ventura v. ABM Industries Inc. (2012) 212 Cal.App.4th 258, 274-75.)

The Court has reviewed and considered the declarations from the attorneys who handled all four cases.  Based upon the lodestar analysis, Plaintiffs’ counsel claim a total of $2,334,775.15 in attorneys’ fees.      

A.        Turner v. Shipt, Inc. ($560,675)

Shannon Liss-Riordan seeks a total of $560,675 in attorneys’ fees based upon the following: (1) Shannon Liss-Riordan for 390 hours at a billing rate of $950 per hour; (2) Adelaide Pagano for 80 hours at a billing rate of $600 per hour; and (3) Associates and staff for the remaining hours at billing rates between $225 and $450 per hour.  (Declaration of Shannon Liss-Riordan, ¶ 37.)  However, these amounts include estimated future hours on this case.  (Ibid.)  In general, the Court does not include future estimates in the lodestar amount.  In this case, however, it is clear that Ms. Liss-Riordan has assumed the role of lead counsel in finalizing and effectuating the settlement.  Therefore, the Court will approve these hours. 

B.        Sander v. Shipt, Inc. ($1,415,018.75)

Lonnie C. Blanchard III seeks a total of $667,387.50 in attorneys’ fees based upon having spent 721.5 hours at a billing rate of $925 per hour.  (Declaration of Lonnie C. Blanchard III, ¶¶ 33, 35.)  Peter R. Dion-Kindem seeks a total of $747,631.25 based upon 808.25 hours at a billing rate of $925 per hour.  (Declaration of Peter R. Dion-Kindem, ¶¶ 8-9.)  These amounts do not include estimates for future work.  (Declaration of Lonnie C. Blanchard III, ¶ 33; Declaration of Peter R. Dion-Kindem, ¶ 8.)            

C.        Green v. Shipt, Inc. ($272,085.50)

Kyle Nordrehaug’s firm seeks a total of $272,085.50 in attorneys’ fees based upon having spent 331 hours at billing rates between $450 and $995 per hour.  (Declaration of Kyle Nordehaug, ¶ 6.)  This amount does not include estimates for future work.  (Id., Exhs. 2 & 3.)      

D.        Cho v. Shipt, Inc. ($37,488.40)

            Plaintiffs’ counsel seek a total of $37,488.40 based upon: (1) Steven G. Tidrick having spent 18.7 hours at an hourly rate of $973 per hour, and (2) Joel B. Young having spent 22.1 hours at an hourly rate of $873 per hour.  (See Declaration of Steven G. Tidrick, ¶ 8.)  This does not include estimates for future work.  (Id., ¶ 8(a) & (b).)   

            E.         Additional Counsel ($49,487.50)

            Jeffrey D. Holmes was co-counsel on three of the four cases.  (Declaration of Jeffrey D. Holmes, ¶ 1.)  He seeks a total of $49,487.50 based upon having spent 53.5 hours at a billing rate of $925 per hour.  (Id., ¶¶ 9-10.)  This does not include estimates for future work.  (Id., ¶ 11.) 

            F.         Total Lodestar ($2,334,755.15)

            In total, Plaintiffs’ counsel seek a total of $2,334,755.15 based upon the requested hours and billing rates for work performed as of the dates of their declarations.  In terms of assessing the reasonableness of the claimed hours and billing rates, the Court has some concerns.  The partner billing rates of $925 to $995 are slightly high, even acknowledging the attorneys’ experience and the expertise required to handle a case of this nature.  The staffing of some cases and the entries on some billing records suggest some (though not excessive) inefficiencies.  The Court gave some consideration to reducing the lodestar to account for these issues, but declines to do so.  The billing rates are high but not excessively so, and the billing records do not reflect excessive inefficiencies.  The Court will address these issues in determining whether to award a multiplier and, if so, how much to award.    

            G.        Multiplier

Once the Court has determined an appropriate lodestar figure, the Court can determine whether that figure should be adjusted with a positive or negative multiplier.  (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 997.)  “Whether a multiplier or demultiplier is appropriate is based on several factors, including (1) the risks presented by the litigation; (2) the novelty and difficulty of the legal and factual issues involved; (3) the results obtained on behalf of the plaintiff; and (4) the skill exhibited by counsel.  (In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 556.)  “The ‘results obtained’ factor can properly be used to enhance a lodestar calculation where [1] an exceptional effort produced [2] an exceptional benefit.”  (Graham v. DaimlerChrysler Corp. (2005) 34 Cal.4th 553, 582, numerical alterations added.)

Plaintiffs seek a total of $4,833,333, of which only $2,334,755.15 is supported by the lodestar.  That means that Plaintiffs seek an additional $2,498,577.85, which is equivalent to a multiplier of 1.07. 

THE COURT HAS NO TENTATIVE ORDER ON THE ISSUE WHETHER TO AWARD A MULTIPLIER AND, IF SO, HOW MUCH TO AWARD.

CONCLUSION AND ORDER

            Based upon the foregoing, the Court grants Plaintiffs’ motions for final approval of the settlement and for attorneys’ fees.  The Court authorizes the following expenditures as reflected in this order:

            1.         Settlement administrator costs of $229,979

            2.         Plaintiffs’ counsel’s costs of $59,748.26

            3.         A reserve fund of $200,000.  This may not be spent without further order of the Court.  The unused funds shall be distributed to the class members.

            4.         A PAGA penalty of $1,160,000, of which $870,000 shall be paid to the LWDA.

            5.         Service awards of $5,000 for each named plaintiff.

            6.         Attorneys’ fees of $__________.

            7.         The remaining amounts shall be distributed to the class members. 

            8.         The Court orders Plaintiffs’ counsel to file proof of compliance with this order on or before _____, 2024.  The Court issues an Order to Show Cause why this case should not be dismissed.  The hearing shall be held on _________, 2024, at 8:30 a.m.

            9.         Ms. Shannon Liss-Riordan shall provide notice and file proof of such with the Court.