Laguna v. Coverall: Ninth Circuit Issues Class Action Attorney Fee Decision

In Laguna v. Coverall North America, Inc., ___ F.3d ___ (9th Cir. June 3, 2014), the Ninth Circuit affirmed a district court's approval of a pre-certification class action settlement in an independent contractor wage and hour action. The Ninth Circuit held as follows:

The district court did not abuse its discretion in awarding fees based on the lodestar method because the lodestar method is most appropriate where the relief sought is “primarily injunctive in nature,” and a fee-shifting statute authorizes “the award of fees to ensure compensation for counsel undertaking socially beneficial litigation.” Slip op. at 6-7. The award of approximately $1 million in fees was reasonable where the injunctive relief provided in the settlement likely exceeded a value of $4 million. Slip op. at 7-8.

With regard to the settlement as a whole, the district court did not err in considering the difficulty of certifying the class, the defendant's poor financial health, the experience of class counsel, and the fact that only two settlement class members opted out of the settlement. Slip op. at 8-10.

The district court did not abuse its discretion in approving the settlement term that objectors be available for depositions. Slip op. at 14-15.

Finally, the district court did not abuse its discretion when it approved the settlement agreement consistent with the notice requirements contained within the Class Action Fairness Act (“CAFA”). 28 U.S.C. § 1715(b) and (d). Slip op. at 15.

The opinion is available here.