Comeens et al v. HM Operating Incorporated et al
MEMORANDUM OPINION and ORDER granting 120 the joint motion for approval of settlement agreement; the settlement is approved and the parties are authorized to implement its terms; the Court shall retain jurisdiction with respect to all matters arising from or related to the implementation of this Order for two years from the date of this order. Signed by Magistrate Judge John H England, III on 8/18/2016. (KAM, )
2016 Aug-18 PM 02:28
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
CHRIS COMEENS, et al.,
HM OPERATING, INC., et al.,
Case Number: 6:14-cv-00521-JHE
MEMORANDUM OPINION AND ORDER1
On May 20, 2016, Plaintiffs, on behalf of themselves and the preliminarily approved
settlement class, together with Defendants Chikol, LLC; Linsalata Capital Partners Fund IV,
L.P.; and Linsalata Capital Partners Fund IV N-Q, L.P. (together, “the Linsalata Funds”),2 filed a
joint motion for an order (1) preliminarily approving their settlement agreement, (2) approving
the form and manner of notice to the proposed settlement class, (3) scheduling a final fairness
hearing, and (4) finally approving settlement.
On June 13, 2016, the Court
preliminarily approved the settlement class; appointed Plaintiffs and their counsel as class
representatives and class counsel, respectively; approved the class notice and notice procedure;
and set a fairness hearing for August 12, 2016. (Doc. 127). After notice was sent and responses
received, class counsel filed a supplemental affidavit in support of the joint motion. (Doc. 128).
In accordance with the provisions of 28 U.S.C. § 636(c) and Federal Rule of Civil
Procedure 73, the parties have voluntarily consented to have a United States Magistrate Judge
conduct any and all proceedings, including trial and the entry of final judgment. (Doc. 126).
The Linsalata defendants were identified by their trade name in the Second Amended
Complaint as “Linsalata Capital Partners.” (See doc. 14). By joint motion, (doc. 25), the parties
named above were substituted on August 6, 2014. (Doc. 27). HM Operating Inc. (a/k/a Harden
Manufacturing Corporation) was originally also a defendant in the Second Amended Complaint,
(doc. 14), but Plaintiffs voluntarily dismissed it without prejudice on June 9, 2016. (Doc. 125).
It is, however, included among the parties who entered into the settlement agreement.
(Doc. 120-1 at 1).
Upon consideration of the motion, the supplemental affidavit, and the discussions at the fairness
hearing, the joint motion for approval of the settlement agreement, (doc. 120), is GRANTED.
On March 24, 2014, Plaintiffs brought this suit against Defendants under the Worker’s
Adjustment and Retraining Notification Act (“WARN Act”), alleging Defendants were “a single
employer” for purposes of the act and had violated its provisions when they closed down
dismissed Defendant HM Operating, Inc.’s bedroom furniture plant in Haleyville, Alabama,
without giving the statutorily required sixty-day notice to the workers. (Docs. 1 & 14). On
August 5, 2014, the Linsalata Funds moved to dismiss the complaint against them for lack of
Plaintiffs opposed the motion and sought jurisdictional
discovery, (doc. 32), which was granted, (doc. 45). Two weeks later, the Funds moved to certify
questions to the Alabama Supreme Court, (doc. 46), which the undersigned granted,
(docs. 58 & 59), but the state court declined to answer, (doc. 62). After a series of discovery
disputes were litigated, jurisdictional discovery was completed, and the parties’ supplements to
their briefs on the jurisdictional issues and regarding Plaintiffs’ alternative request for transfer
came under submission on December 7, 2015. (Docs. 102, 103, 107, 108, & 109). On March
16, 2016, the parties moved to stay the case for sixty days while they attempted mediation,
(doc. 113), and the parties filed the joint motion for approval of their mediated settlement on
May 20, 2016, (doc. 120).
On June 13, 2016, the Court preliminarily certified the settlement class, for settlement
purposes only, and approved a notice that was sent to all members of the class advising them of
their ability to opt out of the settlement and of their right to appear in person or by counsel at the
The class, as defined by the settlement agreement and
preliminarily approved in that order, is as follows:
[A]ll employees of HM Operating, Inc. (“MH”) who do not opt out and who were
terminated without cause on or after March 12, 2014, as part of, or as the
foreseeable result of, the plant closing at the facility located at 7155 State
Highway 13, Haleyville, Alabama 35565, which occurred on or about March 12,
(Id. at 2-3). After the passing of the response deadline, four members had opted out and no
objections had been filed.3 (Doc. 128 at 3). On August 12, 2016, the parties’ attorneys appeared
at the fairness hearing and supplemented the filed documents on the record. No class members
appeared individually, in person or by counsel, at the hearing to object to approval of the
The remaining considerations for this Court are to approve final certification of the
settlement class and the reasonableness of the settlement agreement and of its agreed-upon award
of fees and costs to class counsel.
A. Final Approval of the Class
Rule 23 of the Federal Rules of Civil Procedure governs class actions and, for purposes
of class certification, requires that all of the requirements of section (a) be met along with at least
one of the conditions set forth in section (b). FED. R. CIV. P. 23(a), (b). The requirements of
section (a) are that
(1) the class is so numerous that joinder of all members is impracticable
(2) there are questions of law or fact common to the class [“commonality”];
(3) the claims or defenses of the representative parties are typical of the claims or
defenses of the class [“typicality”]; and
The names of the four potential class members who opted out are: Cynthia Vogele;
Irene Alvarado; Fermin Martinez and James Kauffman. (Doc. 128 at 3 n.3).
(4) the representative parties will fairly and adequately protect the interests of the
FED. R. CIV. P. 23(a). Because the parties contend this case meets the conditions of subsection
(b)(3), the relevant requirement from that subsection is that “ the questions of law or fact
common to the class members predominate over any questions affecting only individual
members, and that  a class action is superior to other available methods for fairly and
efficiently adjudicating the controversy.” FED. R. CIV. P. 23(b)(3).
1. Rule 23(a) Requirements
When determining whether the joinder of all members is “impracticable,” “generally less
than twenty-one is inadequate, more than forty adequate, with numbers between varying
according to other factors.” Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir.
1986) (quoting 3B Moore’s Federal Practice ¶ 23.05 at n.7 (1978)). The 269 class members
here certainly meet the standard. See Cox, 784 F.2d at 1557 (finding the trial court abused its
discretion in decertifying the class for lack of numerosity after reversing the trial judge’s ruling
that had reduced the class size from 240 to 47).
The commonality requirement requires only that there be questions of law or fact
common to the class, not to be confused with the higher “predominance” requirement of
Rule 23(b)(3). See Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 (11th Cir. 2009). Here,
there are many common questions of law and fact because the majority of the disputed issues
involve Defendants and their actions, e.g., (1) whether there was a “plant closing” as defined by
the WARN Act, (2) whether Defendants constitute a “single employer,” (3) whether Defendants’
“unforeseeable business circumstances” defense applies, and (4) whether Defendants acted in
good faith. These issues are common to the entire class. Similarly, because this action’s only
claim is the WARN Act claim that is common to all of the plaintiffs, class members and
representatives alike, “the claims or defenses of the representative parties are typical of the
claims or defenses of the class.”
Lastly, “a party’s claim to representative status is defeated only if the conflict between
the representative and the class is a fundamental one, going to the specific issues in controversy.”
Carriuolo v. Gen. Motors Co., 823 F.3d 977, 989 (11th Cir. 2016). As there do not appear to be
any substantial individual issues (for the class representatives or otherwise), there do not appear
to be any fundamental conflicts between the class representatives and the rest of the class. The
representatives have hired competent counsel, who have been appointed class counsel in many
previous WARN Act actions, (doc. 120-2 at 8-9), and have zealously prosecuted this case to
2. Rule 23(b)(3) Requirements
This subsection requires the court to find (1) the common questions “predominate” over
questions affecting individual members and (2) a class action is superior to other methods for
handling the matter “fairly and efficiently.” Rule 23(b)(3). “Common issues can predominate
only if they have a direct impact on every class member’s effort to establish liability that is more
substantial than the impact of individualized issues in resolving the claim or claims of each class
member.” Carriuolo, 823 F.3d at 985 (internal quotation marks omitted). Among the matters
pertinent to superiority are the following:
(A) the class members’ interests in individually controlling the prosecution or
defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already
begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in
the particular forum; and
(D) the likely difficulties in managing a class action.
Id. at 989 (quoting FED. R. CIV. P. 23(b)(3)).
Because the questions of law and fact at issue in this case are primarily about Defendants
and their actions, they are all the same for the entire class, and there do not appear to be any
substantial individual issues for any of the settlement class members. Further, the damages for
sixty days’ back pay would likely be insufficient for most individual plaintiffs to bring suit on
their own; no other litigation is in progress by the class members; consolidation will avoid the
potential for a multiplicity of suits in multiple courts; and management is not difficult because
the class is well-defined and has already been identified.
As a result, common questions
predominate and class-wide adjudication conserves judicial resources and advances judicial
Because all of the requirements of subsection (a) and at least one of the alternative
requirements of subsection (b) have been met, the Court confirms its prior preliminary approval
of the Settlement Class.
B. Final Settlement Approval
The court reviews a class settlement to ensure it is “fair, reasonable, and adequate.”
FED. R. CIV. P. 23(e)(2). There is a strong presumption in favor of class action settlements,
Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977) (“Particularly in class action suits, there is
an overriding public interest in favor of settlement.”),4 and the Eleventh Circuit has instructed
district courts to consider the following factors:
(1) the likelihood of success at trial; (2) the range of possible recovery; (3) the
range of possible recovery at which a settlement is fair, adequate, and reasonable;
(4) the anticipated complexity, expense, and duration of litigation; (5) the
opposition to the settlement; and (6) the stage of proceedings at which the
settlement was achieved.
The decisions of the United States Court of Appeals for the Fifth Circuit, as that court
existed on September 30, 1981, handed down prior to the close of business that day, are binding
precedent in the Eleventh Circuit. Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th
Faught v. Am. Home Shield Corp., 668 F.3d 1233, 1240 (11th Cir. 2011). The absence of
collusion is also imperative, and, in the absence of fraud or collusion, the judgment of
experienced counsel is not only relevant but is extremely persuasive. See Cotton, 559 F.2d at
There does not appear to have been any collusion here. Both sides are represented by
counsel, who have zealously prosecuted and defended the case, and the settlement was ultimately
reached through arms’ length negotiation with a mediator, (doc. 120-2 at 4). Further, the
expected complexity, expense, and duration of this litigation weigh very strongly in favor of
settlement: the case has already been going on for two-and-a-half years, in which the parties
have been litigating the Court’s personal jurisdiction over the Linsalata Funds, a dispute that is
ongoing and could potentially be appealed before moving on to the merits of the case. In
addition, because the Funds are the only non-defunct party, Plaintiffs would have to prove
“single employer” status on top of the WARN Act violation to have an opportunity to collect any
recovery. (Doc. 128 at 13). As a result, there is a strong likelihood Plaintiffs could receive
nothing from continued, protracted, expensive litigation, even if successful against the other
defendants. The settlement, before deductions, is roughly 28% of the maximum theoretical
damages of the proposed class, (doc. 120 at 17), but the high risks and expense associated with
continued litigation place this within the realm of a reasonable settlement.
potential class members opted out, no one opposed the settlement.
Considering the expected duration and expense of continued litigation, the Court finds
that, under the circumstances, the settlement is reasonable. All settlement class members who
did not exercise the right to opt out of the settlement class are bound by this Order and the terms
of the settlement agreement.
C. Approval of Class Counsel’s Fees
In class action settlements, in which the agreement creates a common fund from which to
pay claims, the courts review the reasonableness of class counsel’s fees using the “percentage
method.” See Camden I Condominium Association v. Dunkle, 946 F.2d 768, 774 (11th Cir.
1991); Noell v. Suncruz Casinos, No. 808-CV-683-T-30TBM, 2009 WL 541329, at *1 (M.D.
Fla. Mar. 4, 2009).
In Dunkle, the Eleventh Circuit noted courts have generally approved counsel fees of
20% to 30% but that higher than 50% was known to occur. 946 F.2d at 774-75. It also noted
many courts view 25% as a benchmark to be adjusted on individual circumstances, using the
twelve Johnson factors.5 Id. at 775. Subsequent courts have considered this process implicitly
approved in this circuit. See Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1185, 1203
(S.D. Fla. 2006) (using 25% as a floor for a fee award); Carnegie v. Mut. Sav. Life Ins. Co., No.
CV-99S3292NE, 2004 WL 3715446, at *36-37 (N.D. Ala. Nov. 23, 2004) (finding counsel’s
request was “almost precisely the median, 25% benchmark identified and implicitly approved by
the Eleventh Circuit”). Since Dunkle, analyses of common-fund cases have shown the average
fee courts have approved to be around one-third of the recovery. See Wolff v. Cash 4 Titles, No.
03-22778-CIV, 2012 WL 5290155, at *5 (S.D. Fla. Sept. 26, 2012).
The twelve factors are (1) the time and labor required; (2) the novelty and difficulty of
the questions involved; (3) the skill requisite to perform the legal service properly; (4) the
preclusion of other employment by the attorney due to acceptance of the case; (5) the customary
fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the
circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation,
and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and the length of
the professional relationship with the client; and (12) awards in similar cases. Dunkle, 946 F.2d
at 772 n.3 (citing Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)).
Plaintiffs’ counsel here seeks one-third of the class recovery, plus costs6, as their
attorney’s fee and costs. After having the opportunity to review the agreement, including the
agreed-upon fee for class counsel, none of the class members remaining in the settlement
objected. Taking 25% as the baseline, Plaintiffs’ counsel is reasonable to ask for 33⅓ percent,
considering class counsel’s experience, (doc. 128 at 5-9), and the complexity and novelty of
WARN Act cases, combined with the additional complexity and duration of the jurisdictional
issues particular to this case. Although it is early in the case procedurally, the parties have
already done considerable briefing and discovery on the jurisdictional issue over a two-and-ahalf year span, and, if the case had gone forward, there was a substantial risk of losing the case
against the only party not now defunct. Accordingly, the Court finds the fees are reasonable
under the circumstances.
Accordingly, it is ORDERED the joint motion, (doc. 120), is GRANTED, and the
settlement agreement, attached to the joint motion, (doc. 120-1), is APPROVED as fair and
The parties are authorized to implement its terms.
This Court shall retain
jurisdiction with respect to all matters arising from or related to the implementation of this Order
for two years from the date of this order.
DONE this 18th day of August 2016.
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE
Currently, costs are under $20,000. (Doc. 128 at 10). Plaintiffs’ counsel expects the
final amount to stay under the $25,000 estimate used for purposes of settlement. (Id.).
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