In re Taco Bell Wage & Hour Actions
| Decision Date | 15 July 2016 |
| Docket Number | Case No. 1:07–cv–01314–SAB |
| Citation | 222 F.Supp.3d 813 |
| Court | U.S. District Court — Eastern District of California |
| Parties | IN RE TACO BELL WAGE AND HOUR ACTIONS |
Andrew Joseph Sokolowski, Glenn A. Danas, Jonathan Sing Lee, Raul Perez, Rebecca Maria Labat, Robert J. Drexler, Matthew Thomas Theriault, Jennifer Renee Bagosy, Capstone Law Group, Monica Balderrama, Initiative Legal Group APC, Los Angeles, CA, Stuart Rowe Chandler, Law Office of Stuart R. Chandler, Fresno, CA, for Plaintiff.
Morgan Patricia Forsey, Sheppard Mullin Richter and Hampton, San Francisco, CA, Tracey Adano Kennedy, Sheppard Mullin Richter & Hampton LLP, Los Angeles, CA, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR ATTORNEY FEES, LITIGATION EXPENSES, AND ENHANCEMENT AWARDS
Currently before the Court is Plaintiffs' motion for attorney fees. Oral argument on the motion was heard on June 15, 2016. Matthew Theriault, Monica Balderrama, Andrew Sokolowski, Stuart Chandler were present and Jerusalem Beligan appeared telephonically for the class and Tracey Kennedy, Nora Stiles, Morgan Forsey, and John Makarewich were present for Defendants Taco Bell Corp. and Taco Bell of America, Inc. Having considered the moving, opposition and reply papers, the declarations and exhibits attached thereto, arguments presented at the June 15, 2016 hearing, as well as the Court's file, the Court issues the following order.
A jury trial was held in this action beginning on February 22, 2016, on the claims of three classes which had been certified in this action: the Late Meal Period Class, the Underpaid Meal Period Class, and the Rest Period Class. The parties agreed to have the Court decide Plaintiffs' claims under California's Private Attorney General Act ("PAGA"). On March 9, 2016, the jury returned a verdict. At the conclusion of the presentation of evidence, Defendants moved for judgment as a matter of law pursuant to Rule 50(a) of the Federal Rules of Civil Procedure.
The jury found that the Late Meal Period Class had proved that Defendant had a standardized or uniform policy that did not provide meal periods that began before the end of the fifth hour an employee worked for the relevant time period. But the Class did not prove that during the relevant time period class members were non-exempt employees who worked for a corporate Taco Bell Corporate restaurant and worked shifts longer than six hours without being provided a meal period that began before the end of the fifth hour of work.
Similarly, the jury found that the Rest Period Class had proved that Defendant had a standardized or uniform company-wide policy that did not authorize and permit a second ten minute or a net twenty minute rest period when an employee worked more than six hours and less than seven hours. But the Class did not prove that that during the relevant time period class members were non-exempt employees who worked for a corporate Taco Bell Corporate restaurant and worked shifts longer than six hours but less than seven hours without being authorized and permitted to take a second ten minute or net twenty minute rest period.
The jury found that the Underpaid Meal Premium Class had proved that from September 7, 2003 through November 12, 2007, Defendant had a standardized or uniform company-wide policy that underpaid meal premiums for missed or short meal periods and that during this time period the class members were non-exempt employees who worked for a Taco Bell Corporate restaurant and missed or received short meal periods and were paid a meal premium payment of less than one full hour of compensation. The jury awarded damages in the amount of $495,913.66 to the Underpaid Meal Premium Class.
On May 9, 2016, Plaintiffs filed a motion for attorney fees, litigation expenses, and incentive awards. (ECF No. 751.) Plaintiffs filed a revised declaration in support of the motion for attorney fees on May 13, 2016. (ECF No. 754.) Defendants filed an opposition to the motion for attorney fees on June 1, 2016.1 (ECF No. 760.) On June 10, 2016, Plaintiffs filed a reply. (ECF No. 771.) On June 17, 2016, Plaintiffs filed a supplemental briefing on the authority to issue incentive awards. (ECF No. 775.) Defendants filed a supplemental response on June 21, 2016. (ECF No. 776.)
Under the "American Rule", each party to a lawsuit ordinarily bears its own attorney fees unless there is express statutory authorization to award attorney fees. Hensley v. Eckerhart , 461 U.S. 424, 429, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).
In a diversity action, the federal district court applies the substantive law of the forum state, which in this instance is California. Kabatoff v. Safeco Ins. Co. of Am. , 627 F.2d 207, 209 (9th Cir. 1980). In general, California law only allows a prevailing party to recover attorney's fees when a statute or an agreement of the parties provides for fee shifting. Kirby v. Immoos Fire Prot., Inc. , 53 Cal.4th 1244, 1248, 140 Cal.Rptr.3d 173, 274 P.3d 1160 (2012).
Pursuant to Labor Code Section 218.5, a party may recover reasonable attorney fees and costs where he prevails in "any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions." Cal. Lab. Code § 218.5(a). Section 1194 allows an employee to recover reasonable attorney fees and costs if he prevails in an action to recover the full amount of minimum wage or overtime compensation. Cal. Lab. Code § 1194(a). The California Supreme Court has held that a party who prevails on an action brought under Labor Code section 226.7 cannot recover attorney fees and costs under Labor Code Sections 218.5 or 1194. Kirby , 53 Cal.4th at 1248, 140 Cal.Rptr.3d 173, 274 P.3d 1160.
California has provided an exception to the American Rule in section 1021.5 of the California Code of Civil Procedure which allows a successful party in an action to recover attorney fees where the action has "has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." Graham v. DaimlerChrysler Corp. , 34 Cal.4th 553, 565, 21 Cal.Rptr.3d 331, 101 P.3d 140 (2004), as modified (Jan. 12, 2005) (quoting Cal. Code Civ. P. § 1021.5 ). The private attorney general doctrine rests on the recognition that lawsuits which are privately initiated are often essential to effectuate fundamental public policies which are embodied in constitutional or statutory provisions. Graham , 34 Cal.4th at 565, 21 Cal.Rptr.3d 331, 101 P.3d 140. The fundamental objective of the private attorney general doctrine is to encourage suits which enforce important public policies by providing attorney fees to successful litigants. Id.
Plaintiffs seek attorney fees pursuant to section 1021.5 arguing that this action enforced an important wage law governing meal breaks that benefited a large class of individuals. Plaintiffs contend that this action caused Taco Bell to remedy an unlawful policy of only paying employees one-half hour of premium pay for missed or short meal breaks. Defendants counter that Plaintiffs have not shown that this action resulted in the enforcement of an important right affecting the public interest. Furthermore, Defendants argue that Plaintiffs have not established that any significant benefit has been conferred on a large class of persons. Defendants also claim that Plaintiffs cannot prevail on a catalyst theory because they cannot establish that this lawsuit caused Taco Bell to provide the primary relief sought.2
In determining whether an award of attorney fees should be granted, "[t]he trial court in its discretion 'must realistically assess the litigation and determine, from a practical perspective, whether or not the action served to vindicate an important right so as to justify an attorney fee award' under section 1021.5." Graham , 34 Cal.4th at 566, 21 Cal.Rptr.3d 331, 101 P.3d 140 (quoting Woodland Hills Residents Assn., Inc. v. City Coun ci l ("Woodland Hills") , 23 Cal.3d 917, 938, 154 Cal.Rptr. 503, 593 P.2d 200 (1979) ). In this instance, the Court finds that Plaintiffs are entitled to recover fees for the Underpaid Meal Premium Class claim in this action. While Defendants argue that Plaintiffs' have not demonstrated that this lawsuit caused Taco Bell to provide the primary relief sought, within several months of this lawsuit being filed Taco Bell changed its autopay policy to pay employees one hour of premium pay for missed or short meal periods to comply with California law. The timing of the change in the amount of autopay, from one-half to one full hour of pay, is circumstantial evidence from which the Court finds that this lawsuit was the reason that Taco Bell changed its autopay policy.
Further, while Defendants argue that Plaintiffs did not prove that a large class of persons received a significant benefit from the policy change, during the four years prior to the policy change the jury found that there were 134,419 violations of state law. These violations would have continued had the policy not changed. So this lawsuit benefited not only the class members who will receive compensation by the jury's verdict here, but all those employees who received the statutory amount of autopay due to the policy change. The Court finds that this action conferred a significant benefit on a large class of persons.
At the June 15, 2016 hearing, Defendants argued that Plaintiffs are not entitled...
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...involved plaintiffs seeking incentive awards against the defendant in a case without a common fund. See In re Taco Bell Wage & Hour Actions , 222 F.Supp.3d 813, 848–49 (E.D. Cal. 2016). The reasoning of that case therefore does not apply here.Still, the Court finds the requested $50,000.00 ......
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