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Schiefer v. Bain Capital, LP

Superior Court of Massachusetts, Suffolk, Business Litigation Session

October 1, 2018

Ashley SCHIEFER et al., on Behalf of Themselves and All Others Similarly Situated[1]
v.
BAIN CAPITAL, LP fka Bain Capital, LLC

          File Date: October 3, 2018

          AMENDED MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS’ APPLICATION FOR ATTORNEYS FEES AND CLASS REPRESENTATIVE INCENTIVE PAYMENTS[2]

          Janet L. Sanders, Superior Court Justice

          This action was brought on behalf of executive assistants and "floater executive assistants" employed by the defendant Bain Capital, LP (Bain). It alleges a failure to pay overtime wages and asserts both statutory and common-law claims. The parties were before this Court on September 18, 2018 seeking final approval of a class settlement. A component of that settlement includes a request for approximately $1.167 million in attorneys fees, which is one-third of the total settlement. Plaintiffs also ask that I award each of the two class representatives $100, 000. These amounts would come out of a common settlement fund of $3.5 million, reducing the recovery to class members (not including the named plaintiffs) to approximately $2.133 million. The defendant does not oppose the request-and no class member has lodged any objection to the proposed settlement, including the attorneys fee and incentive payment components. However, because approval of those amounts would substantially reduce class members’ recovery, it becomes even more important that this Court fulfill its obligation to make an independent determination as to the reasonableness of these requests. This Memorandum sets forth the reasons why this Court concludes that the incentive payments should be awarded in the amount requested but that the award of attorneys fees be reduced.

         1. The settlement reached was a good one for the plaintiffs: based on the most optimistic assessment of damages, each class member was not paid for 2.2 hours of overtime a week which roughly corresponds to the overall settlement amount of $3.5 million. Even if the Court were to approve the attorneys fees requested, the amount of the settlement that would be paid out to plaintiffs will compensate each class member for 1.5 hours a week that he or she has worked for Bain since November 25, 2009-an average overall recovery of $16, 000 for each participating class member. The settlement has other benefits. First, it covers an eight-year period, even though class members working in the earlier years faced more of a risk that their common-law-based claims would not be successful. Second, as part of the settlement, Bain has agreed to certain changes in its policies which will make it easier for its executive assistants to collect overtime in the future. Third, unlike other common fund cases where any amount of the fund not claimed by class members reverts to the defendant, the entire fund here will be distributed to class members.

         2. This Court has already determined that plaintiff’s counsel’s hourly rate of $450 is reasonable and has approved an earlier fee request that was made in connection with offers of judgment that were tendered to and ultimately accepted by plaintiffs Ashley Schiefer and Colleen McPherson. See Memorandum and Order dated October 24, 2017. In approving the full amount requested in that earlier decision, the Court noted that plaintiff’s counsel had done "a commendable job" on the case, where Bain proved to be a tough adversary. Those observations remain true with respect to the current fee application.

          3. In support of their request for attorneys fees calculated as one-third of the total recovery, plaintiff’s counsel has cited a number of cases in which federal courts have approved fee awards based on a percentage of the total settlement. See In re Thirteen Appeals Arising out of San Juan DuPont Plaza Hotel Fire Litigation, 56 F.3d 295 (1st Cir. 1995) (noting that "percentage of fund" or the "POF method" is "the "prevailing praxis" in determining attorneys fees in common fund cases, particularly since that approach eliminates the need for detailed judicial review of time records). Still, the standard that applies in state court cases remains the lodestar approach, which requires multiplying the total number of hours reasonably spent preparing and litigating a case by the fair market rate for those services. Fontaine v. Ebtec Corp., 415 Mass. 309, 324 (1993). Here, plaintiff’s counsel has submitted records documenting fees which (using the hourly rate of $450) total $765, 000.

         4. Counsel asks that I apply a lodestar multiplier to reflect the benefits conferred on the plaintiffs, the performance of counsel, and the risk that they were willing to assume in undertaking this case on a contingent basis. Multipliers between 1.5 and 2.0 are not uncommon in cases like this one. This Court agrees that a multiplier is warranted, and applying a multiplier of 1.6 to that total of $765, 000 for a total amount of attorneys fees of $1.224 million.

         5. This Court already awarded to class counsel $272, 073.76 in attorneys fees in connection with two former plaintiffs’ acceptance of individual offers of judgment. Taking that earlier fee award into account, this Court concludes that the total amount of additional fees which class counsel is entitled to receive is $951, 014.89.

         6. As to the incentive payments to class representatives, the amount requested is unusually high-and in this Court’s view, unprecedented in amount. Plaintiffs argue that this higher amount is warranted, however, not just because these two individuals put time and effort into the case (responding to discovery requests and subjecting themselves to deposition) but as young professionals, they have put at risk their professional reputations, since future employers will likely learn about this lawsuit and the role they played in it. Perhaps most significant, they turned down offers of judgment for approximately the same amount. In rejecting those offers, they faced the risk not only that they would not recover anything but also that they could be forced to pay Bain its attorneys fees if they recovered less than the offer.

         This Court is persuaded by these arguments, particularly with respect to the risk that the individual plaintiffs took in rejecting offers of judgment. It has become increasingly common for employer defendants to try to buy off class representatives in wage cases and thus prevent the case from proceeding as a class action. The use of incentive payments as part of class settlements is one way to minimize the sacrifice that class representatives necessarily make if they resist those efforts. An award of $100, 000 to each named plaintiff roughly approximates the amount that each of the settling plaintiffs received in connection with the offers of judgment. Thus, although the amount is high, it is justified by the unusual circumstances of this case.

         Accordingly, attorneys fees are awarded in the amount of $951, 014.89. Each plaintiff shall be paid $100, 000 each. Other costs ($8, 001 in litigation costs and $25, 000 in claims administration costs) are awarded in the amount requested. As a result of the reduction in attorneys fees, the total amount to be distributed to participating class members is $2, 315, 984.11.

         SO ORDERED.

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