Filed 12/14/18 Orozco v. Pebble Beach Co. CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Plaintiff Daniel Orozco appeals from a judgment granting final approval of his class action settlement with defendant Pebble Beach Company. Plaintiff contends that the trial court abused its discretion when it reduced the request for attorney’s fees. We affirm.

I. Factual and Procedural Background

In September 2014, Joey Cubbage, who was the original class representative, filed a class action complaint alleging that defendant failed to provide accurate wage statements in violation of Labor Code section 226. More specifically, the first cause of action alleged that the wage statements failed to identify pay period dates and the employee identification number and/or the last four digits of the employee’s social security number. Plaintiff also alleged a second cause of action under the Private Attorneys General Act of 2004 for a representative action for civil penalties (Labor Code, § 2698 et seq.). The complaint alleged that the class included all current and former California employees of defendant, who received wages from defendant from September 18, 2013, through the present. Cubbage was represented by the law firms of Diversity Law Group and Polaris Law Group (class counsel).

In March 2015, Cubbage filed a first amended class action complaint. The first cause of action added the allegation that the wage statements also failed to identify the “applicable pay rate and number of hours for ‘OT Premium’ wages.” This complaint alleged that the class also included all current and former California employees of defendant who were paid “ ‘OT Premium’ wages” from defendant from September 18, 2013, through the present.

In June 2015, the parties participated in a full-day of mediation. After further negotiations on subsequent days, the parties entered into an agreement to settle the case.

On September 30, 2015, Cubbage filed a motion for preliminary approval of the class action settlement. A month later, the hearing on the motion was held. Noting that Cubbage had pleaded guilty to felony theft from an elder, was ordered to pay over $500,000 in restitution, and was currently on probation, the trial court found that he was not an appropriate class representative. Class counsel was unaware of Cubbage’s conviction. The trial court also found that the motion failed to include, among other things, the number of class members, a description of the overtime claim, counsel’s hourly rates and number of hours, and authority to support plaintiff’s potential liability for attorney’s fees. The motion was denied without prejudice.

In January 2016, a second amended class action complaint was filed. Sandra Cassidy was added as a class representative. The second amended class action complaint added a cause of action alleging that defendant failed to pay premium compensation at regular rates of pay for missed rest periods in violation of Labor Code section 226.7. This complaint alleged that the class also included all current and former California employees of defendant, who were paid meal premium pay from July 28, 2013, through the present.

About two months later, the parties agreed for purposes of settlement that a third amended complaint would be filed. On April 4, 2016, Cassidy withdrew as a named plaintiff and Daniel Orozco was added as a named plaintiff to act on behalf of the class.

On April 20, 2016, a motion for preliminary approval of a class action settlement was filed. The settlement agreement provided: defendant would create a gross common fund of $750,000; any class member who did not opt out of the settlement would be automatically issued his or her share of the settlement; none of the common fund would revert back to defendant; after payment to the class representative, the California Labor & Workforce Development Agency, and class counsel, the net settlement sum would be divided among approximately 3,000 class members based on the number of wage statements that each received. The settlement agreement also provided “for attorney’s fees up to one-third (33.33%) the total settlement sum, equal to Two Hundred Fifty Thousand Dollars ($250,000.00).” No class members objected to any portion of the class settlement agreement. Following a hearing, the trial court issued an order granting preliminary approval of the settlement.

On September 23, 2016, a motion for final approval of the class action settlement was filed. Class counsel attached declarations to the motion and stated that their rates were $650 per hour and they had spent 380 hours on this case. A month later, the trial court held a hearing on the motion. The trial court stated that it was concerned with the amount of the attorney’s fees and explained that “[t]he hourly rate, this is one that this Court does not . . . award.” Class counsel argued that there were significant risks in this case. He also pointed out: defendant claimed that the wage statement claim was unintentional; the law was against plaintiff on the meal break claim, but defendant agreed to increase the rate of the meal premium thereby significantly benefiting employees; the initial settlement was rejected because the original class representative was inappropriate; the release was significantly limited; and unclaimed funds would be going to the Rural Legal Assistance. Defendant’s counsel agreed that the errors in the wage statements had been rectified, but noted that he had mistakenly told class counsel that defendant had agreed to increase the rate of the meal premium.

The trial court awarded $180,000 in attorney’s fees. The trial court explained: “It’s the totality of the case, the amount of work you put into it, the hours. Looking at the hours that you put into it, frankly, I’m comparing this case with all the other cases that the Court looks at. How many hours it took some of the attorneys to do a particular item compared to what other experienced counsel does. It’s just based on the totality.”

II. Discussion

Plaintiff contends that the trial court abused its discretion when it reduced his request for attorney’s fees.[1]

“We review attorney fee awards on an abuse of discretion standard. ‘The “experienced trial judge is the best judge of the value of professional services rendered in his [or her] court, and while his [or her] judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.” ’ [Citation.]” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 488 (Lafitte).)

Here, the settlement agreement provided that the amount of attorney’s fees would be “up to” $250,000. After reviewing the motion, the trial court concluded that the hourly rate and the number of hours charged by class counsel was excessive. Thus, it reduced the amount of attorney’s fees to $180,000. This court cannot conclude that the trial court’s exercise of discretion was clearly wrong. Accordingly, there was no error.

Plaintiff argues, however, that the trial court erred by failing to follow the holding in Lafitte, supra, 1 Cal.5th 480. We disagree.

Laffitte involved a wage and hour class action settlement in which counsel sought an award of attorney’s fees representing one third of the gross settlement fund. (Laffitte, supra, 1 Cal.5th at p. 487.) One of the class members objected to the proposed settlement, including the amount of attorney’s fees to be awarded. (Ibid.) The trial court overruled the objections and approved the settlement. (Id. at pp. 487-488.) At issue was whether the trial court was permitted “to calculate an attorney fee award from a class action common fund as a percentage of the fund, while using the lodestar-multiplier method as a cross-check of the selected percentage.” (Id. at p. 488.)

The Laffitte court observed: “Two primary methods of determining a reasonable attorney fee in class action litigation have emerged and been elaborated in recent decades. The percentage method calculates the fee as a percentage share of a recovered common fund or the monetary value of plaintiffs’ recovery. The lodestar method, or more accurately the lodestar-multiplier method, calculates the fee ‘by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate. Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative “multiplier” to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented.’ [Citation.]” (Laffitte, supra, 1 Cal.5th at p. 489.) After summarizing the history of the two approaches, the Laffitte court held that “ ‘[t]he percentage of fund method survives in California class action cases, and the trial court did not abuse its discretion in using it, in part, to approve the fee request in this class action.’ We hold further that trial courts have discretion to conduct a lodestar cross-check on a percentage fee, as the court did here; they also retain the discretion to forgo a lodestar cross-check and use other means to evaluate the reasonableness of a requested percentage fee.” (Id. at p. 506.)

Plaintiff’s reliance on Laffitte is misplaced. The Laffitte court did not hold that trial courts are required to use the percentage method in calculating attorney’s fees. Instead, it held that the trial court did not abuse its discretion in using this method when it approved the fee request. (Laffitte, supra, 1 Cal.5th at p. 506.)

Plaintiff also contends that the trial court abused its discretion by failing to allow him to seek a multiplier on the reduced lodestar. When class counsel learned that the trial court intended to reduce the amount of attorney’s fees, he requested that it apply a multiplier to the reduced lodestar and argued that a multiplier of 1.3 was appropriate. Thus, plaintiff was not deprived of the opportunity to seek a multiplier on the reduced lodestar.

III. Disposition

The judgment is affirmed.

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Mihara, J.

WE CONCUR:

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Greenwood, P. J.

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Elia, J.

Orozco v. Pebble Beach Company

H044232