in the united states district court for the southern ... · jill filippone, and heather bradshaw,...

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

KRISTINA KUCKER, SONNY URBINE, HILLARY ANDERSON, MAGDA ALEXANDRA SERENO, AMY DOIDGE, JILL FILIPPONE, and HEATHER BRADSHAW, on behalf of themselves and all others similarly situated,

Plaintiffs,

v. PETCO ANIMAL SUPPLIES STORES, INC.,

Defendant.

Case No. 14 Civ. 9983 (DCF)

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ UNOPPOSED MOTION FOR APPROVAL OF SETTLEMENT, SERVICE AWARDS,

AND ATTORNEYS’ FEES AND COSTS

Case 1:14-cv-09983-DCF Document 149 Filed 03/01/17 of 33

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TABLE OF CONTENTS

INTRODUCTION .......................................................................................................................... 1

FACTUAL AND PROCEDURAL BACKGROUND.................................................................... 2

I. Overview of Investigation, Litigation, and Settlement Negotiations ................................. 2

SUMMARY OF THE SETTLEMENT TERMS ............................................................................ 4

I. The Settlement Fund ........................................................................................................... 4

II. Settlement Awards .............................................................................................................. 4

III. Claim Procedure .................................................................................................................. 5

IV. Release ................................................................................................................................ 6

V. Service Awards ................................................................................................................... 6

VI. Settlement Claims Administration ...................................................................................... 7

VII. Attorneys’ Fees and Litigation Costs .................................................................................. 7

ARGUMENT .................................................................................................................................. 8

I. The Settlement Is Fair and Reasonable and Should Be Approved ..................................... 8

II. The Notice of Settlement Adequately Informs Named Plaintiffs and Opt-In Plaintiffs of the Terms of the Settlement .......................................................................................... 10

III. The Service Awards to Plaintiffs Should Be Approved as Fair and Reasonable ............. 10

IV. Plaintiffs’ Requested Attorneys’ Fees and Costs are Reasonable and Should Be Approved ......................................................................................................... 13

A. The Percentage Method Is the Preferred Method for Awarding Attorneys’ Fees in Common Fund Cases in the Second Circuit ..................................................... 13

B. The Goldberger Factors Support an Award of One Third of the Settlement Amount ................................................................................................................. 16

1. Plaintiffs’ Counsel’s Time and Labor ....................................................... 18

2. Magnitude and Complexity of the Litigation ........................................... 18

3. Risk of Litigation ...................................................................................... 18

4. Quality of Representation ......................................................................... 19


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5. Fee in Relation to the Settlement .............................................................. 21

6. Public Policy Considerations .................................................................... 22

C. The Lodestar Cross Check Further Supports an Award to Plaintiffs’ Counsel of One Third of the Settlement Amount.................................................................... 23

1. Plaintiffs’ Counsel’s Lodestar Is a Reasonable Percentage of the Requested Fee and Within the Reasonable Range Routinely Approved by Courts ................................................................................................... 24

2. The Time That Plaintiffs’ Counsel Spent on the Litigation Is Well Documented and Justified. ........................................................................ 24

3. Plaintiffs’ Counsel’s Rates Are Reasonable, Market Rates. ..................... 24

D. Plaintiffs’ Counsel Are Entitled to Reimbursement of Reasonable Expenses under the Settlement Agreement ........................................................................... 25

CONCLUSION ............................................................................................................................. 25


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TABLE OF AUTHORITIES

Cases Page(s)

A.H. Phillips, Inc. v. Walling, 324 U.S. 490 (1945) .................................................................................................................22

Amador v. Morgan Stanley & Co, LLC, S.D.N.Y. Case 11 Civ 4326 .....................................................................................................20

Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182 (2d Cir. 2008) ...............................................................14

Asare v. Change Grp. N.Y., Inc., No. 12 Civ. 3371, 2013 WL 6144764 (S.D.N.Y. Nov. 18, 2013) ...........................................15

Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728 (1981) .................................................................................................................18

Beckman v. KeyBank, N.A., 293 F.R.D. 467 (S.D.N.Y. 2013) ..................................................................................... passim

Behzadi v. Int’l Creative Mgmt. Partners, LLC, No. 14 Civ. 4382, 2015 WL 4210906 (S.D.N.Y. July 9, 2015) ..........................................7, 16

Campos v. Goode, No. 10 Civ. 0224, 2011 WL 9530385 (S.D.N.Y. Mar. 4, 2011) ...............................................8

Ceka v. PBM/CMSI Inc., No. 12 Civ. 1711, 2014 WL 6812127 (S.D.N.Y. Dec. 2, 2014) ..............................................16

Chavarria v. N.Y. Airport Serv., LLC, 875 F. Supp. 2d 164 (E.D.N.Y. 2012) .....................................................................................14

City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) ....................................................................................................18

Clark v. Ecolab Inc., Nos. 07 Civ. 8623, 04 Civ. 4488, 06 Civ. 5672, 2010 WL 194898 (S.D.N.Y. May 11, 2010) .........................................................................................................18

In re Colgate-Palmolive Co. ERISA Litig., 36 F. Supp. 3d 344 (S.D.N.Y. 2014) ......................................................................13, 16, 20, 22

Deposit Guar. Nat’l Bank, Miss. v. Roper, 445 U.S. 326 (1980) .................................................................................................................22

Diaz v. E. Locating Serv. Inc., No. 10 Civ. 4082, 2010 WL 5507912 (S.D.N.Y. Nov. 29, 2010) ...........................................25


v

Frank v. Eastman Kodak Co., 228 F.R.D. 174 (W.D.N.Y. 2005) ..........................................................................11, 18, 20, 23

Fujiwara v. Sushi Yasuda Ltd., 58 F. Supp. 3d 424 (S.D.N.Y. 2014) ..................................................................................15, 16

Gaspar v. Pers. Touch Moving, Inc., No. 13 Civ. 8187, 2015 WL 7871036 (S.D.N.Y. Dec. 3, 2015) ..............................................15

In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004) .............................................................................................23

Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000)...........................................................................................16, 18, 23

Guan Ming Lin v. Benihana Nat’L Corp., 755 F. Supp. 2d 504 (S.D.N.Y. 2010) ........................................................................................9

Hall v. ProSource Techs., LLC, No. 14 Civ. 2502, 2016 WL 1555128 (E.D.N.Y. Apr. 11, 2016) ......................................11, 12

Hernandez v. Immortal Rise, Inc., 306 F.R.D. 91 (E.D.N.Y. 2015) ...............................................................................................13

Hernandez v. Merrill Lynch & Co., Inc., No. 11 Civ. 8472, 2013 WL 1209563 (S.D.N.Y. March 21, 2013) .........................................21

Hicks v. Morgan Stanley, No. 01 Civ. 10071, 2005 WL 2757792 (S.D.N.Y. Oct. 24, 2005) ..........................................23

In re Indep. Energy Holdings PLC Sec. Litig., 302 F. Supp. 2d 180 (S.D.N.Y. 2003) ......................................................................................25

In re Ira Haupt & Co., 304 F. Supp. 917 (S.D.N.Y. 1969).............................................................................................9

Khait v. Whirlpool Corp., No. 06 Civ. 6381, 2010 WL 2025106 (E.D.N.Y. Jan. 20, 2010).............................................21

Kochilas v. Nat’l Merch. Servs., Inc., No. 14 Civ. 311, 2015 WL 5821631 (E.D.N.Y. Oct. 2, 2015) ................................................13

Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350 (11th Cir. 1982) .................................................................................................8

McDaniel v. Cty. of Schenectady, 595 F.3d 411 (2d Cir. 2010).....................................................................................................13


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Melito, et al. v. American Eagle Outfitters, Inc., et al., No. 14 Civ. 2440, 2017 WL 366247 (S.D.N.Y. Jan. 24, 2017) ...............................................20

In re Michael Milken & Assocs. Sec. Litig., 150 F.R.D. 57 (S.D.N.Y. 1993) ...............................................................................................10

Mills v. Capital One, N.A., No. 14 Civ. 1937, 2015 WL 5730008 (S.D.N.Y. Sept. 30, 2015) ...........................................12

In re Milos Litig., No. 08 Civ. 6666, 2010 WL 199688 (S.D.N.Y. Jan. 11, 2010) ...............................................10

Monzon v. 103W77 Partners, LLC, No. 13 Civ. 5951, 2015 WL 993038 (S.D.N.Y. Mar. 5, 2015) ...............................................16

In re PaineWebber Ltd. P’ships Litig., 171 F.R.D. 104 (S.D.N.Y.) ........................................................................................................9

Perez v. Allstate Ins. Co., No. 11 Civ. 1812, 2014 WL 4635745 (E.D.N.Y. Sept. 16, 2014) ...........................................20

In re Polaroid ERISA Litig., No. 03 Civ. 8335, 2007 WL 2116398 (S.D.N.Y. July 19, 2007) ............................................15

In re Ramp Corp. Sec. Litig., No. 05 Civ. 6521, 2008 WL 58938 (S.D.N.Y. Jan. 3, 2008) ...................................................15

Raniere v. Citigroup Inc., 310 F.R.D. 211 (S.D.N.Y. 2015) .......................................................................................13,15

Sand v. Greenberg, No. 08 Civ. 7840, 2010 WL 69359 (S.D.N.Y. Jan. 7, 2010) .............................................22, 23

Savoie v. Merchs. Bank, 166 F.3d 456 (2d Cir. 1999).....................................................................................................15

Sewell v. Bovis Lend Lease, Inc., No. 09 Civ. 6548, 2012 WL 1320124 (S.D.N.Y. Apr. 16, 2012) ..........................12, 13, 14, 23

Steiner v. Am. Broad. Co., 248 F. App’x 780 (9th Cir. 2007) ............................................................................................24

Strougo ex rel. The Brazilian Equity Fund, Inc. v. Bassini, 258 F. Supp. 2d 254 (S.D.N.Y. 2003) ......................................................................................14

Sukhnandan v. Royal Health Care of Long Island LLC, No. 12 Civ. 4216, 2014 WL 3778173 (S.D.N.Y. July 31, 2014) ......................................13, 22


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In re Sumitomo Copper Litig., 74 F. Supp. 2d 393 (S.D.N.Y. 1999) ..................................................................................14, 22

Taft v. Ackermans, No. 02 Civ. 7951, 2007 WL 414493 (S.D.N.Y. Jan. 31, 2007) ...............................................19

Tiro v. Public House Investments, LLC, Nos. 11 Civ. 7679, 11 Civ. 8249, 2013 WL 4830949 (S.D.N.Y. Sept. 10, 2013) ........................................................................................................12

Torres v. Gristede’s Operating Corp., 519 F. App’x. 1 (2d Cir. 2013) ................................................................................................24

Velez v. Majik Cleaning Serv., Inc., No. 03 Civ. 8698, 2007 WL 7232783 (S.D.N.Y. June 25, 2007) ............................9, 12, 14, 15

Viafara v. MCIZ Corp., No. 12 Civ. 7452, 2014 WL 1777438 (S.D.N.Y. May 1, 2014) ..............................................11

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)...........................................................................................13, 14, 15

Westerfield v. Washington Mut. Bank, No. 06 Civ. 2817, 2009 WL 5841129 (E.D.N.Y. Oct. 8, 2009) ..............................................21

Yu G. Ke.v. Saigon Grill, Inc., 595 F. Supp. 2d 240 (S.D.N.Y. 2008) .....................................................................................10

In re Zyprexa Prods. Liab. Litig., 594 F.3d 113 (2d Cir. 2010).....................................................................................................14

Statutes

29 U.S.C. § 216(b) ...........................................................................................................................3


INTRODUCTION

Subject to Court Approval, Named Plaintiffs Kristina Kucker, Sonny Urbine, Magda

Alexandra Sereno, Amy Doidge, Jill Filippone, and Heather Bradshaw (the “Named Plaintiffs”),

the Opt-in Plaintiffs (together with Named Plaintiffs, “Plaintiffs” or “Collective Members”) and

Defendant Petco Animal Supplies Stores, Inc. (“Petco” or “Defendant”) have settled this wage

and hour action for $845,000.00. The settlement satisfies all criteria for approval of a Fair Labor

Standards Act (“FLSA”) settlement because it resolves a bona fide dispute, was reached after

contested litigation, and was the result of arm’s-length settlement negotiations conducted by

counsel well-versed in wage and hour law.

Plaintiffs respectfully request that the Court issue an order: (1) approving the

$845,000.00 settlement set forth in the Settlement Agreement and Release (“Settlement

Agreement”);1 (2) approving the proposed Court Ordered Notice of Settlement (“Settlement

Notice”) (attached as Exhibit B to the Settlement Agreement) and directing its distribution; (3)

approving service awards of $4,000 each to Named Plaintiffs Kristina Kucker and Magda

Alexandra Sereno and $2,000 each to Named Plaintiffs Amy Doidge, Sonny Urbine, Jill

Filippone, and Heather Bradshaw; (4) approving Plaintiffs’ request for one-third of the

settlement for attorneys’ fees plus additional reimbursement of costs and expenses; (5) approving

the Settlement Claims Administrator’s fees and costs; (6) incorporating the terms of the

Settlement Agreement; and (7) retaining jurisdiction to enforce the Settlement.2

1 The Settlement Agreement is attached as Exhibit A to the Declaration of Molly A. Brooks in Support of Plaintiffs’ Unopposed Motion for Approval of Settlement and Attorneys’ Fees and Costs (“Brooks Decl.”). Unless otherwise indicated, all exhibits are attached to the Brooks Declaration and all capitalized terms have the definitions set forth in the Settlement Agreement. 2 A Proposed Order is attached as Exhibit B to the Brooks Decl.


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FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs and Opt-in Plaintiffs (collectively, “Plaintiffs” or “Collective Members”) are

Pet Stylists and Grooming Assistants who worked for Petco between December 2008 and March

1, 2017 and who opted in to the lawsuit. Plaintiffs alleged that Petco violated the FLSA because

it improperly failed to reimburse Plaintiffs and other similarly situated employees for the cost of

purchasing and maintaining tools and equipment necessary to perform their duties, causing their

wages to fall below the applicable minimum wage during pay periods in which they purchased or

maintained tools. ECF No. 10 (“FAC”) ¶ 3. Defendant denies that it committed any wrongdoing

or violated any federal, state, or local laws pertaining to the payment of wages or hours worked,

and vigorously disputed the claims asserted in this litigation.

I. Overview of Investigation, Litigation, and Settlement Negotiations.

Before initiating this suit, Plaintiffs’ Counsel conducted a thorough investigation into the

merits of potential claims and defenses. Brooks Decl. ¶ 13. They focused their investigation and

legal research on the merits of Plaintiffs’ claims, the damages to which they were entitled, and

the propriety of collective action certification. Id. ¶ 14. Plaintiffs’ Counsel obtained and

reviewed documents from Plaintiffs; including job descriptions, pay records, corporate

documents, and receipts for the purchase and maintenance of grooming equipment. Id. ¶ 15.

They also conducted in-depth interviews and reviewed documents of other Pet Stylists and

Grooming Assistants employed by Defendant throughout the country. Id. ¶ 16.

On December 18, 2014, Plaintiffs Kristina Kucker, Hillary Anderson, Magda Alexandra

Sereno, Amy Doidge, and Jill Filippone filed a class and collective action lawsuit alleging that

Petco violated the FLSA and New York, California, New Jersey, and Connecticut state wage and


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hour laws. ECF No. 1 (Compl.).3 On February 17, 2015, Plaintiffs amended their Complaint to

add two additional Named Plaintiffs, Sonny Urbine and Heather Bradshaw, and to add wage and

hour claims under the Kansas Wage Payment Act, K.S.A. § 44-313. ECF No. 10.

The parties engaged in significant discovery, including depositions. In advance of

Plaintiffs’ motion for conditional certification pursuant to 29 U.S.C. § 216(b), the parties served

and responded to interrogatories and document requests, and produced documents and class data.

Brooks Decl. ¶ 19. Petco deposed Named Plaintiff Kristina Kucker on August 3, 2015 and

Named Plaintiff Magda Sereno on August 20, 2015, and noticed depositions for Plaintiffs Amy

Doidge, Sonny Urbine, Jill Filipone, and Heather Bradshaw. Id. ¶ 20. Plaintiffs deposed Petco’s

Grooming Operations and Training Manager, Wendy Weinand, on October 15, 2015. Id. ¶ 21.

The Court conditionally certified the FLSA collective pursuant to 29 U.S.C. § 216(b) on

January 19, 2016. ECF No. 56. The Parties agreed to mediate the dispute shortly after the Court

conditionally certified the collective. Brooks Decl. ¶ 23. In advance of the mediation, Plaintiffs

interviewed approximately 65 former and current Pet Stylists and Grooming Assistants to gather

information regarding Plaintiffs’ claims. Plaintiffs also obtained 18 declarations from Pet

Stylists and Grooming Assistants and their supervisors, which supported Plaintiffs’ claims

against Petco. Id. ¶ 24.

On March 3, 2016, the Parties attended a full-day mediation with Ruth Raisfeld, an

experienced and well-regarded collective action law mediator. Id. ¶ 25. Although the parties

failed to reach an agreement on the material terms of a settlement, they continued to negotiate

throughout the spring of 2016. Id. ¶ 26.

3 Hillary Anderson was a class member of the settlement in Matthews v. Petco Supplies Stores, Inc., Case No. BC539637 (Sup. Ct. L.A. Cnty Cal. Sept. 4, 2015), which settled nearly identical claims as those brought in this case. Because Ms. Anderson participated in the Matthews settlement, she files a notice of withdrawal contemporaneously with this motion.


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Plaintiffs sent notice to the FLSA collective on April 25, 2016. Brooks Decl. ¶ 27.

Approximately 2,060 members of the FLSA collective opted in to the lawsuit. Id. ¶ 28. After

the close of the opt-in notice period, the Parties stipulated to a revised discovery schedule, which

the Court entered on August 31, 2016. ECF No. 133. The Parties exchanged limited discovery

and continued to engage in settlement negotiations throughout the fall of 2016. Brooks Decl. ¶

30.

On or about December 2, 2016, the Parties reached an agreement on principle as to the

monetary settlement of Plaintiffs’ FLSA claims. Id. ¶ 31. The Parties moved to stay all

deadlines on December 8, 2016, which the Court granted on December 12, 2016. ECF Nos. 134

& 135. Throughout the next two months, the parties worked to finalize the terms of the

settlement, which was memorialized in the final Settlement Agreement executed by the parties

on or about March 1, 2017. Brooks Decl. ¶ 33.

SUMMARY OF THE SETTLEMENT TERMS

I. The Settlement Fund

The Settlement Agreement establishes a Gross Settlement Fund of $845,000.00 (the

“GSF”). Ex. A (Settlement Agreement) § 4.1(A). The GSF covers any and all amounts to be

paid to Collective Members, Plaintiffs’ attorneys’ fees and costs approved by the Court, any

Court-approved service awards, fees and costs associated with investing and liquidating the

Qualified Settlement Fund, and the Settlement Claims Administrator’s fees and costs. Id.

II. Settlement Awards

Plaintiffs will be paid out of the Net Settlement Fund. Each Collective Member who

worked as a Pet Stylist will receive a flat payment of approximately $271.59, pre-taxes. Ex. A

(Settlement Agreement) § 4.4(C). Each Collective Member who worked as a Grooming


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Assistant will receive a flat payment of approximately $127.81, pre-taxes.

III. Claim Procedure

The Settlement Administrator will mail notice of the settlement and a settlement check

(the “Notice and Settlement Check Packet”) to each Collective Member within 31 days after the

Approval Order (assuming no appeal). Ex. A (Settlement Agreement) § 3.5(A). The proposed

Settlement Notice will inform Collective Members of the terms of the settlement, their individual

settlement allocations, and the scope of the release. See id. at Ex. B (Settlement Notice). The

Settlement Claims Administrator will take all reasonable steps to obtain the correct address of

Collective Members for whom a Settlement Notice is returned undeliverable and shall make all

reasonable attempts to ensure that the Settlement Notice and Settlement Check are successfully

delivered. Ex. A (Settlement Agreement) ¶ 3.5(B). The Settlement Claims Administrator shall

perform a skip trace using Social Security numbers, among other information, to ascertain the

correct mailing information and affect a second mailing in the event that a Notice and Settlement

Check Packet is returned as undeliverable. Id.

Collective Members will have one-hundred and eighty (180) days to negotiate their

Settlement Checks (the “Settlement Check Cashing Period”). Id. § 3.5(C). If a Named Plaintiff

or Collective Member has not negotiated his or her check within thirty (30) days prior to the last

day by which the Named Plaintiff or Collective Member must cash the Settlement Check (the

Bar Date), the Settlement Administrator will send that Named Plaintiff or Collective Member a

reminder postcard by mail and an email (where available) reminding them of the expiration of

the Settlement Check Cashing Period. Id. § 3.5(E).

The Parties shall meet and confer in good faith to resolve any disputes over a late

endorsement and deposit of a Settlement Check. Id. § 3.5(D). The Settlement Agreement


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presumes that the endorsement and deposit or cashing of a Collective Member’s Settlement

Check is timely, so long as the Settlement Check is cashed within ten (10) days of the Bar Date

and there is a reasonable, good faith explanation to support the otherwise untimely action. Id.

IV. Release

In exchange for their award, all Collective Members who timely cash their Settlement

Checks will fully release Petco of any and all claims brought or which could have been brought

in the Complaint, or that the Collective Members knew or should have known of at the time of

the deposit or cashing of their Settlement Checks, relating to allegations that Petco’s failure to

pay the Collective Members for the purchase and maintenance of grooming equipment resulted

in Petco failing to pay the applicable minimum wage and overtime pay to the Collective

Members. Ex. A (Settlement Agreement) § 5.1.

In addition to the release that applies to all Collective Members who timely cash their

Settlement Checks, Plaintiffs receiving Service Awards (“Service Award Recipients”), release

Petco of and from any actions in law or equity, which they may have against Petco as of the date

of execution of this Agreement. Id. § 5.2.

A Collective Member who does not timely cash their Settlement Check will not release

any claims.

V. Service Awards

Under the Settlement Agreement, subject to Court approval, Plaintiffs hereby apply to the

Court to receive a Service Award of Four Thousand Dollars and Zero Cents ($4,000) each for

Named Plaintiffs Kristina Kucker and Magda Alexandra Sereno, who were both deposed; and

apply for a Service Award of Two Thousand Dollars and Zero Cents ($2,000) each for Named

Plaintiffs Amy Doidge, Sonny Urbine, Jill Filippone, and Heather Bradshaw. Ex. A (Settlement


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Agreement) § 4.3(A). These Service Awards recognize the services that Named Plaintiffs

Kristina Kucker, Magda Alexandra Sereno, Amy Doidge, Sonny Urbine, Jill Filippone, and

Heather Bradshaw rendered to the Collective in obtaining the benefits of the settlement as well

as the risks they took in doing so. Brooks Decl. ¶ 54. The Service Award Recipients assisted

Plaintiffs’ Counsel in the investigation of Collective Members’ claims, responded to discovery,

produced documents, helped prepare for the mediation, and provided assistance that helped

Plaintiffs’ Counsel achieve this settlement for the benefit of the Collective Members. Id. ¶ 55.

The Parties have agreed that in consideration for the receipt of the Service Awards, the Service

Award Recipients will agree to be bound by the general release in Section 5.2 of the Settlement

Agreement. Ex. A (Settlement Agreement) §§ 4.3(C) & 5.2.

VI. Settlement Claims Administration

The parties have retained Rust Consulting, Inc. (“Rust”), an experienced wage and hour

claims administrator, to serve as the Settlement Claims Administrator. Ex. A (Settlement

Agreement) § 2.19. Courts have routinely approved Rust as a settlement administrator in class

actions. See, e.g., Behzadi v. Int’l Creative Mgmt. Partners, LLC, No. 14 Civ. 4382, 2015 WL

4210906, at *3 (S.D.N.Y. July 9, 2015) (approving Rust as claims administrator).

The Settlement Claims Administrator’s fees, which shall not exceed $19,000, will be paid from

the Gross Settlement Fund. Id. § 2.12. These fees and costs will cover preparing the notice,

cutting checks and mailing them, establishing a Qualified Settlement Fund, and preparing tax

returns for the Qualified Settlement Fund. Brooks Decl. ¶ 60.

VII. Attorneys’ Fees and Litigation Costs

Under the Settlement Agreement, Plaintiffs’ Counsel will receive $281,667 (one-third of

the $845,000.00 settlement amount) as attorneys’ fees, plus reimbursement of $78,979.97 in


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reasonable out-of-pocket costs and expenses. Ex. A (Settlement Agreement) § 4.2(A); Brooks

Decl. ¶ 61 &; Exs. C (O&G Time Records), D (O&G Costs Summary), E (O&G Fee Summary);

Declaration of Gregg I. Shavitz (“Shavitz Decl.”) ¶¶ 13-14; Declaration of Brian S. Schaffer

(“Schaffer Decl.”) ¶ 14.

ARGUMENT

I. The Settlement Is Fair and Reasonable and Should Be Approved.

Courts approve FLSA settlements when they are reached as a result of contested

litigation to resolve bona fide disputes. See Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350,

1353 n.8 (11th Cir. 1982). Courts regard the adversarial nature of a litigated FLSA case to be an

adequate indicator of the fairness of the settlement. See Beckman v. KeyBank, N.A., 293 F.R.D.

467, 476 (S.D.N.Y. 2013). When a proposed FLSA settlement reflects a reasonable compromise

over contested issues, the court should approve the settlement. Id.

This FLSA settlement meets the standard for approval. The settlement was reached

through vigorous arm’s-length negotiations facilitated by an experienced mediator, substantial

discovery, and more than two years of contested litigation. Brooks Decl. ¶ 34; see, e.g., Campos

v. Goode, No. 10 Civ. 0224, 2011 WL 9530385, at *6 (S.D.N.Y. Mar. 4, 2011) (FLSA settlement

approved after “the parties engaged in mediation with an experienced mediator in an effort to

reach a resolution”).

The settlement of $845,000.00 represents a significant percentage of the recovery that

Collective Members would have achieved had they prevailed on all of their claims and survived an

appeal, and a substantial portion of what Defendant would be required to pay if faced with a

judgment. Plaintiffs’ Counsel estimates that the gross settlement amount represents

approximately 60% of Plaintiffs’ equipment-related expenses. Brooks Aff. ¶ 41. Each


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Collective Member who worked as a Pet Stylist will receive a net amount of approximately

$271.59, pre-tax, and each Collective Member who worked as a Grooming Assistant will receive

a net amount of approximately $127.81, pre-tax.

This Settlement is reasonable in light of the considerable risk that Plaintiffs face.

“Litigation inherently involves risks.” In re PaineWebber Ltd. P’ships Litig., 171 F.R.D. 104,

126 (S.D.N.Y.), aff’d sub nom. In re PaineWebber Inc. Ltd. P’ships Litig., 117 F.3d 721 (2d Cir.

1997). Indeed, “[i]f settlement has any purpose at all, it is to avoid a trial on the merits because

of the uncertainty of the outcome.” In re Ira Haupt & Co., 304 F. Supp. 917, 934 (S.D.N.Y.

1969); see also Velez v. Majik Cleaning Serv., Inc., No. 03 Civ. 8698, 2007 WL 7232783, at *6

(S.D.N.Y. June 25, 2007).

Although Plaintiffs believe their case is strong, it is subject to considerable risk. The

facts of this case created significant risks that Plaintiffs would not succeed in maintaining a

collective through trial. Petco would likely argue that it did not require Pet Stylists and

Grooming Assistants to purchase their own equipment because Petco supplied sufficient

grooming equipment to its salons, or that there were sufficient differences between individual

stores that Plaintiffs could not litigate this case as a collective action. Although Plaintiffs

disagree, other defendants have prevailed on such arguments in similar cases. See, e.g., Guan

Ming Lin v. Benihana Nat’L Corp., 755 F. Supp. 2d 504, 513 (S.D.N.Y. 2010) (denying

conditional certification due to inconsistencies among collective members’ expenses purchasing

tools of the trade).

The allocation of the settlement is also reasonable. It reflects the proportion of

damages owed to each Collective Member based on their status as either a Pet Stylist or

Grooming Assistant during the relevant period. Ex. A (Settlement Agreement) §4.1(A). This


10

allocation is reasonable because Pet Stylists’ equipment was more expensive than Grooming

Assistants’ equipment. Brooks Decl. ¶ 40. Paying Collective Members a flat fee based on their

equipment purchase and maintenance expenses is consistent with this Court’s precedent. See,

e.g., Yu G. Ke.v. Saigon Grill, Inc., 595 F. Supp. 2d 240, 258, 267-282 (S.D.N.Y. 2008).

(ordering defendants compensate plaintiffs for amount of equipment purchases and repairs).

II. The Notice of Settlement Adequately Informs Named Plaintiffs and Opt-In Plaintiffs of the Terms of the Settlement. The Court should approve the proposed Settlement Notice. See Ex. A (Settlement

Agreement) at Ex. B (Court Authorized Notice). The proposed Settlement Notice sufficiently

informs Collective Members of the terms of the settlement, the allocation formula, the scope of

the release, and the request for attorneys’ fees and costs. Although Collective Members have

already opted in to the lawsuit, the court-authorized Settlement Notice is necessary to inform

Collective Members of the terms of the settlement and the scope of the release, such that they

can make an informed decision about whether to release their rights by cashing the Settlement

Check. See, e.g., In re Milos Litig., No. 08 Civ. 6666, 2010 WL 199688, at *1 (S.D.N.Y. Jan.

11, 2010) (notice should “provide[] accurate and timely notice concerning the pendency of the

collective action, so that [an individual receiving the notice] can make an informed decision

about whether to participate.”) (internal quotation marks omitted); In re Michael Milken &

Assocs. Sec. Litig., 150 F.R.D. 57, 60 (S.D.N.Y. 1993) (notice “need only describe the terms of

the settlement generally”).

III. The Service Awards to Plaintiffs Should Be Approved as Fair and Reasonable.

In addition to their pro rata shares of the Net Settlement Fund, Plaintiffs request a Service

Award of Four Thousand Dollars and Zero Cents ($4,000) each for Named Plaintiffs Kristina

Kucker and Magda Alexandra Sereno; and for a Service Award of Two Thousand Dollars and


11

Zero Cents ($2,000) each for Named Plaintiffs Amy Doidge, Sonny Urbine, Jill Filippone, and

Heather Bradshaw. Ex. A (Settlement Agreement) § 4.3(A). These Service Awards will

compensate Plaintiffs Kucker, Sereno, Doidge, Urbine, Filippone, and Bradshaw for their

participation and assistance in the prosecution of this lawsuit, and are standard in FLSA

collective action settlements.

Service awards in collective actions are designed to reward lead plaintiffs for the time,

effort, and inconvenience of consulting with counsel over the time a case was active. See Viafara

v. MCIZ Corp., No. 12 Civ. 7452, 2014 WL 1777438, at *16 (S.D.N.Y. May 1, 2014) (“Service

awards are common in class action cases and serve to compensate plaintiffs for the time and

effort expended in assisting the prosecution of the litigation, the risks incurred by becoming and

continuing as a litigant, and any other burdens sustained by the plaintiffs”); Hall v. ProSource

Techs., LLC, No. 14 Civ. 2502, 2016 WL 1555128, at *9 (E.D.N.Y. Apr. 11, 2016) (“Courts

regularly grant requests for service awards in class actions to compensate plaintiffs for the time

and effort expended in assisting the prosecution of the litigation, the risks incurred by becoming

and continuing as a litigant, and any other burdens sustained by the plaintiffs.”) (internal

quotation marks omitted); Frank v. Eastman Kodak Co., 228 F.R.D. 174, 187 (W.D.N.Y. 2005)

(recognizing the important role that plaintiffs play as the “primary source of information concerning

the claim[,]” including by responding to counsel’s questions and reviewing documents).

Here, the Service Award Recipients’ actions exemplify the very reasons courts award

service payments. The Service Award Recipients assisted Plaintiffs’ Counsel in the development

and prosecution of the claims by providing detailed factual information and documents. Brooks

Decl. ¶ 55. Throughout the investigation and settlement negotiations, they regularly made


12

themselves available to communicate with Plaintiffs’ Counsel, participated in discovery,

submitted declarations, and Plaintiffs Kucker and Sereno sat for depositions. Id.

In addition, service awards acknowledge that lead plaintiffs play a crucial role in bringing

justice to those who would otherwise be hidden from judicial scrutiny, and that in doing so, lead

plaintiffs assume the “risk of adverse actions by the employer or co-workers.” Velez, 2007 WL

7232783, at *7. Particularly in the employment context, where workers are often black listed if

they are considered “trouble makers,” lead plaintiffs are vulnerable to retaliation. See, e.g., Tiro

v. Public House Investments, LLC, Nos. 11 Civ. 7679, 11 Civ. 8249, 2013 WL 4830949, at *11

(S.D.N.Y. Sept. 10, 2013) (service awards are especially appropriate in employment litigation

because “the plaintiff is often a former or current employee of the defendant, and thus he has, for

the benefit of the class as a whole, undertaken the risks of adverse actions by the employer or co-

workers.”) (alteration omitted); Sewell v. Bovis Lend Lease, Inc., No. 09 Civ. 6548, 2012 WL

1320124, at *14 (S.D.N.Y. Apr. 16, 2012) (recognizing that plaintiffs in wage and hour case

“fac[e] potential risks of being blacklisted as ‘problem’ employees”) (citation omitted). Given

the insular nature of the pet grooming industry, the Service Award Recipients took a chance that

they would be “black listed” in the industry for the sake of the collective. Brooks Decl. ¶ 56.

The $4,000 and $2,000 service awards requested are well within the range awarded by

courts in similar matters, and should be approved as part of the settlement. See, e.g., Mills v.

Capital One, N.A., No. 14 Civ. 1937, 2015 WL 5730008, at *18 (S.D.N.Y. Sept. 30, 2015)

(approving service awards of $6,000 and $3,000 to named plaintiffs and opt-ins); Hall, 2016 WL

1555128, at *17 (granting service awards of $3,500 to each of twelve named plaintiffs); Beckman,

293 F.R.D. at 483 (service awards of $7,500 and $5,000).


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IV. Plaintiffs’ Requested Attorneys’ Fees and Costs are Reasonable and Should Be Approved.

Plaintiffs’ request for one-third of the Gross Fund for their attorneys’ fees plus

reimbursement of their reasonable out-of-pocket costs is reasonable. See Ex. A (Settlement

Agreement) § 4.2.

A. The Percentage Method Is the Preferred Method for Awarding Attorneys’ Fees in Common Fund Cases in the Second Circuit.

In wage-and-hour lawsuits, public policy favors a common fund attorneys’ fee award.

See Hernandez v. Immortal Rise, Inc., 306 F.R.D. 91, 102 (E.D.N.Y. 2015) (“Public policy

favors a common fund attorneys’ fee method in wage and hour class action litigation”); Raniere

v. Citigroup, 310 F.R.D. 211, 220 (S.D.N.Y. 2015) (“Courts in the Second Circuit tend to grant

class counsel a percentage of any settlement, rather than utilize the ‘lodestar method’ . . .

because the percentage method aligns the interests of the class and its counsel and provides a

powerful incentive for the efficient prosecution and early resolution of litigation”); see also

Kochilas v. Nat’l Merch. Servs., Inc., No. 14 Civ. 311, 2015 WL 5821631, at *8 (E.D.N.Y. Oct.

2, 2015) (“In wage and hour class action lawsuits, public policy favors a common fund

attorneys’ fee award”).

There are two ways to compensate attorneys for successful prosecution of statutory

claims: the lodestar method and the percentage of the fund method. See McDaniel v. Cty. of

Schenectady, 595 F.3d 411, 417 (2d Cir. 2010). The trend in this Circuit is to use the

percentage-of-the-fund method in common fund cases like this one. See, e.g., id.; Wal-Mart

Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121 (2d Cir. 2005); Hernandez, 306 F.R.D. at 102;

Raniere, 310 F.R.D. at 220; Sukhnandan v. Royal Health Care of Long Island LLC, No. 12 Civ.

4216, 2014 WL 3778173, at *9 (S.D.N.Y. July 31, 2014); Sewell, 2012 WL 1320124, at *10; see


14

also In re Colgate-Palmolive Co. ERISA Litig., 36 F. Supp. 3d 344, 348 (S.D.N.Y. 2014)

(“Under the percentage method, the fee is a reasonable percentage of the total value of the

settlement fund created for the class.”). Recovery of fees based on the percentage-of-the-fund

method “permits litigants or lawyers who recover a common fund for the benefit of persons other

than themselves to obtain reasonable attorney’s fees out of the fund, thus spreading the cost of

the litigation to its beneficiaries.” In re Zyprexa Prods. Liab. Litig., 594 F.3d 113, 128 (2d Cir.

2010).

There are several reasons that the Court should choose the percentage method. First, the

percentage method “directly aligns the interests of the class and its counsel [because it] provides

a powerful incentive” to attorneys to resolve the case efficiently and to create the largest

common fund out of which payments can be made. Wal-Mart Stores, 396 F.3d at 121; see also

Sewell, 2012 WL 1320124, at *10; Velez, 2007 WL 7232783, at *7.

Second, the percentage method is also aligned with market practices because it “mimics

the compensation system actually used by individual clients to compensate their attorneys.” In

re Sumitomo Copper Litig., 74 F. Supp. 2d 393, 397 (S.D.N.Y. 1999); see also Chavarria v. N.Y.

Airport Serv., LLC, 875 F. Supp. 2d 164, 177 (E.D.N.Y. 2012) (“[T]he percentage method is

intended to mirror the private marketplace where contingent fee attorneys typically negotiate

percentage fee arrangements with their clients.”); Strougo ex rel. The Brazilian Equity Fund, Inc.

v. Bassini, 258 F. Supp. 2d 254, 262 (S.D.N.Y. 2003) (same).

This rationale is consistent with the Second Circuit’s decision in Arbor Hill Concerned

Citizens Neighborhood Ass’n v. Cty. of Albany & Albany Cnty. Bd. of Elections, where the Court

held that a “presumptively reasonable fee” takes into account what a “reasonable, paying client”

would pay. 522 F.3d 182, 191 (2d Cir. 2008). While Arbor Hill is not controlling because it


15

does not address a common fund fee petition, it supports use of the percentage of the fund

method. See Beckman, 293 F.R.D. at 477 (Arbor Hill supports award of one-third of fund).

Third, the percentage of the fund method promotes earlier resolution and removes the

incentive for plaintiffs’ lawyers to engage in wasteful litigation in order to increase their billable

hours. It “provides a powerful incentive for the efficient prosecution and early resolution of

litigation.” Wal-Mart Stores, 396 F.3d at 121 (internal quotation marks omitted); In re Ramp

Corp. Sec. Litig., No. 05 Civ. 6521, 2008 WL 58938, at *2 n.2 (S.D.N.Y. Jan. 3, 2008); In re

Polaroid ERISA Litig., No. 03 Civ. 8335, 2007 WL 2116398, at *2 (S.D.N.Y. July 19, 2007)

(same); Velez, 2007 WL 7232783, at *7 (same). As the Second Circuit has explicitly noted,

using the percentage of the fund method will discourage other plaintiffs’ lawyers from running

up their billable hours in order to achieve a higher fee. See Savoie v. Merchs. Bank, 166 F.3d

456, 460-61 (2d Cir. 1999) (“It has been noted that once the fee is set as a percentage of the fund,

the plaintiffs’ lawyers have no incentive to run up the number of billable hours for which they

would be compensated under the lodestar method.”).

Fourth, “the percentage method preserves judicial resources because it relieves the court

of the cumbersome, enervating, and often surrealistic process of evaluating fee petitions.” Asare

v. Change Grp. N.Y., Inc., No. 12 Civ. 3371, 2013 WL 6144764, at *17 (S.D.N.Y. Nov. 18,

2013) (quoting Savoie, 166 F.3d at 461 n.4) (internal quotation marks omitted).4 As the Second

4 Fujiwara v. Sushi Yasuda Ltd., 58 F. Supp. 3d 424, 436-39 (S.D.N.Y. 2014) is distinguishable because here Plaintiffs’ lodestar of $757,440.50, far exceeds the $281,666.67 sought under the percentage-of-the-fund method. In Fujiwara, Plaintiffs sought $800,000 in fees, a 3.8 multiplier of their estimated $210,805 lodestar. Id. at 437. Moreover, while the court in Fujiwara, expressed concern about the percentage of the fund method, courts in this circuit have nevertheless continued to use the percentage-of-the-fund method in wage and hour cases and award plaintiffs’ counsel approximately one-third of the settlement funds. See, e.g., Gaspar v. Pers. Touch Moving, Inc., No. 13 Civ. 8187, 2015 WL 7871036, at *2 (S.D.N.Y. Dec. 3, 2015) (Nathan, J.) (approving attorney’s fees of just under one-third of recovery); Raniere, 310


16

Circuit has explained, the “primary source of dissatisfaction [with the lodestar method] was that

it resurrected the ghost of Ebenezer Scrooge, compelling district courts to engage in a gimlet-

eyed review of line-item fee audits.” Goldberger v. Integrated Res., Inc., 209 F.3d 43, 48-49 (2d

Cir. 2000).

B. The Goldberger Factors Support an Award of One Third of the Settlement Amount.

Reasonableness is the touchstone for determining attorneys’ fees. In Goldberger v.

Integrated Res., Inc., the Second Circuit articulated six factors for courts to consider in

determining the reasonableness of fee applications:

(1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of litigation; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations.

209 F.3d 43, 50 (2d Cir. 2000) (internal quotation marks omitted); see also In re Colgate-

Palmolive Co. ERISA Litig., 36 F. Supp. 3d at 347. All of the Goldberger factors weigh in favor

of granting approval of Plaintiffs’ Counsel’s fee application.

F.R.D. at 220 (approving attorneys’ fees of $1,550,000, one-third of settlement) (Sweet, J.); Puglisi v. TD Bank, N.A., No. 13 Civ. 637, 2015 WL 4608655, at *1 (E.D.N.Y. July 30, 2015) (approving attorneys’ fees award of one-third of settlement fund in nationwide misclassification case) (Brown, M.J.); Behzadi v. Int’l Creative Mgmt. Partners, LLC, No. 14 Civ. 4382, 2015 WL 4210906, at *2-3 (S.D.N.Y. July 9, 2015) (approving attorneys’ fees award of one-third of fund in case brought on behalf of unpaid interns) (Schofield, J.); Monzon v. 103W77 Partners, LLC, No. 13 Civ. 5951, 2015 WL 993038, at *2 (S.D.N.Y. Mar. 5, 2015) (awarding attorneys’ fees of one-third of the settlement fund in wage and hour settlement) (Torres, J.); Ceka v. PBM/CMSI Inc., No. 12 Civ. 1711, 2014 WL 6812127, at *1 (S.D.N.Y. Dec. 2, 2014) (awarding attorneys one-third of settlement fund in wage and hour class action alleging off-the-clock claims) (Batts, J.). To the extent that the court in Fujiwara paints all wage and hour cases with the same brush, see 58 F. Supp. 3d at 432 (“[w]age and hour cases are not unduly complex”), Plaintiffs respectfully disagree with the reasoning in Fujiwara. Some wage and hour matters are much more complicated and risky than others.


17

1. Plaintiffs’ Counsel’s Time and Labor.

Achieving the $845,000.00 settlement required significant effort by Plaintiffs’ Counsel.

This Settlement is the result of more than two years of contested litigation. Brooks Decl. ¶ 62.

Here, Plaintiffs’ counsel performed an extensive investigation prior to filing suit and in

preparation for mediation. Id. ¶¶ 13, 24. This litigation involved serving and responding to

document requests and interrogatories, producing Named Plaintiffs’ documents, reviewing

Defendant’s document production, taking and defending depositions, preparing for mediation,

briefing conditional certification, and administering notice to the Collective. Id. ¶ 64. As part

of discovery, Plaintiffs Kucker and Sereno sat for depositions, and Plaintiffs took the deposition

of Defendant’s fact witness, Wendy Weinand. Id. ¶ 65. Plaintiffs also reviewed the

approximately 3,100 documents provided by Petco, and repeatedly met and conferred with

Petco’s counsel to resolve deficiencies in Petco’s production. Id. ¶ 66.

The substantial recovery for the workers in the case is the direct result of Plaintiffs’

Counsel’s time and labor. In performing these and other tasks, Plaintiffs’ Counsel have

expended approximately 2,015.35 hours of attorney, paralegal, and staff member time—an

aggregate lodestar of $757,550.50 through February 28, 2017. Brooks Decl. ¶ 69 & Ex. D

(O&G Fee Summary); Shavitz Decl. ¶ 14; Schaffer Decl. ¶ 14.5 Plaintiffs request for one-third

of the Fund ($281,666.67) as attorneys’ fees, plus costs of $78,979.97, is well below their

lodestar—underscoring the significant time and effort expended by Counsel to obtain this

substantial recovery for Plaintiffs.

5 These hours were compiled from contemporaneous time records maintained by each attorney, paralegal, and support staff member participating in the case. Brooks Decl. ¶ 69; Shavitz Decl. ¶ 14; Schaffer Decl. ¶ 12. Plaintiffs’ Counsel used a small team of attorneys at any one time in order to minimize duplication of efforts and maximize billing judgment and made every effort to have the work performed by the attorney or paralegal with the lowest hourly rate who was able to effectively perform it. Brooks Decl. ¶ 69.


18

2. Magnitude and Complexity of the Litigation.

The size and difficulty of the issues in a case are significant factors to be considered in

making a fee award. See Goldberger, 209 F.3d at 50. Wage and hour cases “typically involve

complex mixed questions of fact and law . . . These statutory questions must be resolved in light

of volumes of legislative history and over four decades of legal interpretation and administrative

rulings.” Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 743 (1981). Since the

Supreme Court’s pronouncement in Barrentine, over thirty additional years of legal

interpretation and administrative rulings have been issued.

These difficult legal and factual questions support approval of Plaintiffs’ Counsel’s

attorneys’ fee request. See Beckman, 293 F.R.D. at 477-79 (size and difficulty of case, including

mixed questions of fact and law, supported attorneys’ fee award of one third of the fund); Frank,

228 F.R.D. at 189 (mixed questions of fact and law supported court’s award of attorneys’ fees

representing approximately 40% of the common fund); see also Clark v. Ecolab Inc., Nos. 07

Civ. 8623, 04 Civ. 4488, 06 Civ. 5672, 2010 WL 1948198, at *4-8 (S.D.N.Y. May 11, 2010)

(approving settlement and award of attorneys’ fees representing one third of the fund in wage

and hour action involving multiple job titles).

3. Risk of Litigation.

The risk of litigation also is an important factor in determining a fee award. Uncertainty

that an ultimate recovery will be obtained is highly relevant in determining the reasonableness of

an award. See City of Detroit v. Grinnell Corp., 495 F.2d 448, 471 (2d Cir. 1974), abrogated on

other grounds by Goldberger, 209 F.3d 43. “[D]espite the most vigorous and competent of

efforts, success is never guaranteed.” Id.

The substantial risk at the outset of the litigation that Plaintiffs’ Counsel would recover


19

no compensation after years of litigation supports Plaintiffs’ Counsel’s fee request.

“Contingency risk is the principal, though not exclusive, factor courts should consider in their

determination of attorneys’ fees.” Beckman, 293 F.R.D. at 479 (quoting In re Dreyfus

Aggressive Growth Mut. Fund Litig., No. 98 Civ. 4318, 2001 WL 709262, at *6 (S.D.N.Y. June

22, 2001)) (internal quotation marks omitted).

Here, Plaintiffs’ Counsel undertook to prosecute this action without any assurance of

payment for their services, litigating the case on a wholly contingent basis and in the face of

significant risk. Brooks Decl. ¶ 67. Now, after over two years of litigation, Plaintiffs’ Counsel

are set to recover substantially less than their lodestar—illustrating the real risks that workers’

rights attorneys take on each time they bring a contingency case. Moreover, should Plaintiffs’

Counsel have continued to litigate the case, they would have faced real continued risks—as

discussed above.

Plaintiffs’ Counsel take on difficult cases like this one because they believe that they are

important Id. ¶ 68. Plaintiffs’ Counsel continue to do so despite, unfortunately, having suffered

several major (and very expensive) losses in wage and hour cases over the years. Id.

4. Quality of Representation.

“To determine the quality of the representation, courts review, among other things, the

recovery obtained and the backgrounds of the lawyers involved in the lawsuit.” Taft v.

Ackermans, No. 02 Civ. 7951, 2007 WL 414493, at *10 (S.D.N.Y. Jan. 31, 2007) (internal

quotation marks omitted).

Here, the recovery obtained for the Collective is fair and appropriate. Defendant agreed

to pay a total of $845,000.00, amounting to a gross recovery of $473.81 for each Pet Stylist

Collective Member and $222.97 for each Grooming Assistant Collective Member. Brooks Decl.


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¶ 37. As discussed, the settlement represents a favorable recovery, particularly in light of the

risks of litigation. As a direct result of Counsel’s efforts, the GSF covers approximately 60% of

Plaintiffs’ potential recovery of equipment purchase and maintenance costs. Id. ¶ 41.

Plaintiffs’ Counsel have significant experience prosecuting wage and hour litigations.

Brooks Decl. ¶ 12 (listing cases); Shavitz Decl. ¶ 6 (same); Schaffer Decl. ¶ 4 (same). Many

courts have recognized Outten and Golden’s experience. See, e.g., Hr’g Tr. 12, July 30, 2015,

Puglisi v. TD Bank, No. 13 Civ. 637 (E.D.N.Y.) (“Puglisi Tr.”) (commenting that lawyering by

the plaintiffs’ counsel—including O&G and SLG—was “excellent” and noting “the high level of

service that was provided to the class”); Perez v. Allstate Ins. Co., No. 11 Civ. 1812, 2014 WL

4635745, at *25 (E.D.N.Y. Sept. 16, 2014); see also Brooks Decl. ¶ 12 (collecting cases).

Likewise, Shavitz Law Group and Fitapelli & Shaffer, LLP have acted as lead counsel or co-

counsel on many of wage and hour actions, including Puglisi v. TD Bank N.A., E.D.N.Y. Case 13

Civ 6037 (2014-2015); Amador v. Morgan Stanley & Co, LLC, S.D.N.Y. Case 11 Civ 4326;

Crosby, et al., v. Lasership, Inc., et al., No. 15 Civ. 8694 (GWG), ECF No. 164 (S.D.N.Y. Jan.

26, 2017); Melito, et al. v. American Eagle Outfitters, Inc., et al., No. 14 Civ. 2440 (VEC), 2017

WL 366247 (S.D.N.Y. Jan. 24, 2017).

Plaintiffs’ Counsel’s skill and experience litigating wage and hour cases are directly

responsible for the settlement, and weigh in favor of granting the requested fees. See In re

Colgate-Palmolive Co. ERISA Litig., 36 F. Supp. 3d at 352 (finding relevant that “Class Counsel

in this case belong to what they credibly maintain is a small and select group of experienced

class counsel who have litigated numerous ERISA pension benefit class actions”); Frank, 228

F.R.D. at 189 (citing class counsel’s experience as one factor supporting an attorneys’ fee award

of approximately 40% of the fund).


21

5. Fee in Relation to the Settlement.

Here, Plaintiffs’ Counsel are seeking approximately $475,773.83 less than their lodestar.

Brooks Decl. ¶ 63. Although not a dispositive factor,6 the fact that Plaintiffs Counsel’s request

fees are less than their lodestar shows in this particular case that the fee they request is

reasonable for purposes of this factor.

Plaintiffs’ Counsel’s request for one third of the fund plus costs is reasonable, and

supported by the case law. Generally, “the percentage used in calculating any given fee award

must follow a sliding-scale and must bear an inverse relationship to the amount of the

settlement.” Beckman, 293 F.R.D. at 481 (quoting In re Indep. Energy Holdings PLC Sec. Litig.,

No. 00 Civ. 6689, 2003 WL 22244676, at *6 (S.D.N.Y. Sept. 29, 2003)) (internal quotation

marks and modifications omitted). Where the size of the fund is relatively small, courts typically

find that requests for a greater percentage of the fund are reasonable. Here, the size of this

settlement weighs in favor of granting the requested fee award of one-third of the common fund.

Courts routinely grant requests for approximately one-third of the fund in cases with settlement

funds substantially larger than this one. See, e.g., Puglisi v. TD Bank, N.A., No. 13 Civ. 637,

2015 WL 4608655, at *1 (E.D.N.Y. July 30, 2015) (awarding attorneys’ fees of one-third of the

fund in $9.9 million settlement of wage-and-hour misclassification class and collective action);

Hernandez v. Merrill Lynch & Co., Inc., No. 11 Civ. 8472, 2013 WL 1209563, at *1, *8-10

(S.D.N.Y. March 21, 2013) (awarding 33% of a $7 million settlement in a FLSA and NYLL

misclassification case); Khait v. Whirlpool Corp., No. 06 Civ. 6381, 2010 WL 2025106, at *1,

*8-9 (E.D.N.Y. Jan. 20, 2010) (awarding class counsel 33% of $9.25 million settlement fund in

FLSA and multi-state wage and hour case); Westerfield v. Washington Mut. Bank, No. 06 Civ.

6 Courts in this District routinely award one-third of the fund to attorneys even when their lodestar is substantially less than what they are seeking in fees, see infra Argument § IV.


22

2817, 2009 WL 5841129, at *1-2 (E.D.N.Y. Oct. 8, 2009) (awarding class counsel 30% of $38

million settlement in FLSA and multi-state wage and hour case).

6. Public Policy Considerations.

Public policy considerations weigh in favor of granting Plaintiffs’ Counsel’s requested

fees. In rendering awards of attorneys’ fees, “the Second Circuit and courts in this district also

have taken into account the social and economic value of class actions, and the need to

encourage experienced and able counsel to undertake such litigation.” In re Sumitomo Copper

Litig., 74 F. Supp. 2d at 399. “Counsel’s fees should reflect the important public policy goal of

providing lawyers with sufficient incentive to bring common fund cases that serve the public

interest. While court awarded fees must be reasonable, setting fees too low or randomly will

create poor incentives to bringing large class action cases.” In re Colgate-Palmolive Co. ERISA

Litig., 36 F. Supp. 3d at 352 (internal quotation marks and citations omitted).

The FLSA is a remedial statute designed to protect the wages of workers. See A.H.

Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945) (recognizing FLSA’s objective of ensuring

that every employee receives “a fair day’s pay for a fair day’s work”) (internal quotation marks

omitted). Adequate compensation for attorneys who protect those rights by taking on such

litigation furthers the remedial purpose of those statutes. Otherwise, wage and hour abuses

would go unpunished because attorneys would be unwilling to take on the risk. See Sukhnandan,

2014 WL 3778173 at *9; see also Sand v. Greenberg, No. 08 Civ. 7840, 2010 WL 69359, at *3

(S.D.N.Y. Jan. 7, 2010) (“But for the separate provision of legal fees, many violations of the Fair

Labor Standards Act would continue unabated and uncorrected.”).

Courts have recognized that fee awards in cases like this serve the dual purposes of

encouraging “private attorney[s] general” to seek redress for violations and discouraging future


23

misconduct of a similar nature. See Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 338-39,

354(1980); Beckman, 293 F.R.D. at 477. An award of attorneys’ fees helps to ensure that

“plaintiffs’ claims [will] . . . be heard.” Frank, 228 F.R.D. at 189. Fee awards in wage and hour

cases “encourage members of the bar to provide legal services to those whose wage claims might

otherwise be too small to justify the retention of able, legal counsel.” Sand, 2010 WL 69359, at

*3. “Where relatively small claims can only be prosecuted through aggregate litigation, and the

law relies on prosecution by private attorneys general, attorneys who fill . . . [that] role must be

adequately compensated for their efforts.” Beckman, 293 F.R.D. at 477 (internal quotation

marks omitted). If courts denied sufficient attorneys’ fees “no attorneys . . . would likely be

willing to take on . . . small-scale class actions[.]” Frank, 228 F.R.D. at 189.

C. The Lodestar Cross Check Further Supports an Award to Plaintiffs’ Counsel of One Third of the Settlement Amount.

Following Goldberger, the trend in the Second Circuit has been to apply the percentage

method and loosely use the lodestar method as a “baseline” or as a “cross check[.]” Goldberger,

209 F.3d at 50. The Second Circuit “encourage[s] the practice of requiring documentation of

hours as a ‘cross check’ on the reasonableness of the requested percentage.” Id.; see also Sewell,

2012 WL 1320124, at *13 (endorsing the Goldberger “cross-check”). As part of the cross check,

the lodestar is determined by multiplying the hours reasonably expended on the case by a

reasonable hourly rate. Hicks v. Morgan Stanley, No. 01 Civ. 10071, 2005 WL 2757792, at *8

(S.D.N.Y. Oct. 24, 2005). In calculating the lodestar for cross-check purposes, “the hours

documented by counsel need not be exhaustively scrutinized by the district court.” Goldberger,

209 F.3d at 50 (citation omitted). Rather, “the reasonableness of the claimed lodestar can be

tested by the court’s familiarity with the case[.]” Id.; see also In re Global Crossing Sec. &


24

ERISA Litig., 225 F.R.D. 436, 468 (S.D.N.Y. 2004) (using an “implied lodestar” for the lodestar

cross check).

1. Plaintiffs’ Counsel’s Lodestar Is a Reasonable Percentage of the Requested Fee and Within the Reasonable Range Routinely Approved by Courts.

Here, Plaintiffs’ Counsel’s request for one third of the Fund is approximately 37% of

their “lodestar.” Brooks Decl. ¶ 61. In contrast to what Plaintiffs’ Counsel seek for fees, Courts

regularly approve fees that are higher than their lodestar. Beckman, 293 F.R.D. at 481-82

(approving fee of 6.3 times lodestar); see also Steiner v. Am. Broad. Co., 248 F. App’x 780, 783

(9th Cir. 2007) (multiplier of 6.85 “falls well within the range of multipliers that courts have

allowed”).

2. The Time That Plaintiffs’ Counsel Spent on the Litigation Is Well Documented and Justified.

Plaintiffs’ Counsel’s requested fee award is also warranted because Plaintiffs’ Counsel

has documented its time and used billing judgment. Here, Plaintiffs’ Counsel minimized

duplication of efforts, maximized billing judgment, and made every effort to have work

performed by the attorney or paralegal with the lowest hourly rate who was able to effectively

perform it. See Brooks Decl. ¶ 69. The time Plaintiffs’ Counsel spent on the litigation is further

justified in light of the substantial motion practice and discovery. See Torres v. Gristede’s

Operating Corp., 519 F. App’x. 1, 4-6 (2d Cir. 2013) (upholding attorneys’ fee award as

reasonable in light of defendant’s “vigorous” litigation tactics).

3. Plaintiffs’ Counsel’s Rates Are Reasonable, Market Rates.

O&G has individual clients who pay the same hourly rates as those used in the

calculation of Plaintiffs’ Counsel’s lodestar. Brooks Decl. ¶7. The rates O&G used for its

lodestar calculation are the same rates that other comparable O&G attorneys, typically of the


25

same graduation year, routinely charge to paying clients in employment matters. See Brooks

Decl. ¶ 71; see also Shavitz Decl. ¶ 15 (explaining that hourly rates have been accepted and

approved); Schaffer Decl. ¶ 13 (same).

D. Plaintiffs’ Counsel Are Entitled to Reimbursement of Reasonable Expenses under the Settlement Agreement.

Plaintiffs’ Counsel request reimbursement of $78,979.97 for out-of-pocket expenses to be

paid from the GSF. Brooks Decl. ¶ 61. “Attorneys may be compensated for reasonable out-of-

pocket expenses incurred and customarily charged to their clients, as long as they were incidental

and necessary to the representation of those clients.” In re Indep. Energy Holdings PLC Sec.

Litig., 302 F. Supp. 2d 180, 183 n.3 (S.D.N.Y. 2003) (internal quotation marks and citation

omitted); see also Diaz v. E. Locating Serv. Inc., No. 10 Civ. 4082, 2010 WL 5507912, at *8

(S.D.N.Y. Nov. 29, 2010) (“Courts typically allow counsel to recover their reasonable out-of-

pocket expenses.”). Here, Plaintiffs’ Counsel’s actual expenses were incidental and necessary to

the representation of Plaintiffs. Brooks Decl. ¶ 74. These expenses include court fees, postage

fees, transportation, travel expenses, working meals, photocopies, electronic research, court

reporters and Plaintiffs’ share of the mediator’s fees. Id.; Ex. C (O&G Costs Summary); Shavitz

Decl. ¶ 13.

CONCLUSION

For the reasons set forth above, Plaintiffs respectfully request that the Court issue an

order: (1) approving the $845,000.00 settlement set forth in the Settlement Agreement and

Release; (2) approving the proposed Court Ordered Notice of Settlement and directing its

distribution; (3) approving service awards of $4,000 to each Named Plaintiffs Kristina Kucker

and Magda Alexandra Sereno and $2,000 to each Named Plaintiffs Amy Doidge, Sonny Urbine,

Jill Filippone, and Heather Bradshaw; (4) approving Plaintiffs’ request for one-third of the


26

settlement for attorneys’ fees plus reimbursement of costs and expenses; (5) approving the

Settlement Claims Administrator’s fees and costs; (6) incorporating the terms of the Settlement

Agreement; and (7) retaining jurisdiction to enforce the Settlement.

Dated: New York, New York March 1, 2017 Respectfully submitted,

/s/ Molly A. Brooks

OUTTEN & GOLDEN LLP Justin M. Swartz

Molly A. Brooks Sally J. Abrahamson 685 Third Ave, 25th Floor New York, New York 10017 Telephone: (212) 245-1000 SHAVITZ LAW GROUP, P.A. Gregg I. Shavitz, admitted pro hac vice Susan H. Stern, admitted pro hac vice Alan Quiles, admitted pro hac vice 1515 S. Federal Hwy, Suite 404 Boca Raton, FL 33432 Telephone: (561) 447-8888 FITAPELLI & SCHAFFER, LLP Brian S. Schaffer Arsenio Rodriguez 28 Liberty Street New York, NY 10005 Telephone: (212) 300-0375 Attorneys for Plaintiffs


in the united states district court for the southern ... · jill filippone, and heather bradshaw,...

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