Dunagan v. ABBC, Inc.

Filing 28

ORDER granting 20 Motion to Approve Settlement Agreement; granting 21 Motion to Amend/Correct; granting 22 Motion to Approve Settlement Agreement; granting 27 Motion to Supplement as set out in order and dismissing this action with prejudice. Signed by Judge Kristi K. DuBose on 3/21/2012. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ROBERT L. DUNAGAN,
Plaintiff,
vs.
ABBC, INC., d/b/a/ PICK ‘N SAVE,
Defendant.

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CIVIL ACTION NO. 11-00280-KD-C

ORDER
This action is before the Court on the parties’ motion for approval of settlement (docs.
20-22), the parties’ joint submission of settlement agreement (doc. 24) and supplemental
submissions regarding attorney’s fees and costs (doc. 26, 27).1 Upon consideration and for the
reasons set forth herein, the parties’ motion for approval of settlement (docs. 20-22) is
GRANTED. Therefore, the settlement is APPROVED as a fair and reasonable resolution of a
bona fide dispute over Fair Labor Standards Act provisions, plaintiff Robert L. Dunagan is due
to be paid the sum of $8,325.17 as back wages and $8,325.16 as liquidated damages for a total
sum of $16,650.34, and his counsel are due to be paid the sum of $11,707.50 as a reasonable
attorney’s fee plus court costs of $350.00.
Accordingly, this action is hereby dismissed with prejudice. Further, the Court does not
retain jurisdiction to enforce the settlement agreement. Final judgment as required by Lynn=s
Food Stores, Inc. v. United States of America, 679 F. 2d. 1350 (11th Cir. 1982), shall be entered
by separate document.
I. Background
Plaintiff Robert L. Dunagan, Jr. brought this action against defendant ABBC, Inc., doing
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Dunagan’s motion to supplement (doc. 27) is GRANTED.

business as Pick ‘N Save Market. Dunagan alleges that he was employed with Pick N’ Save from
2003 until December 31, 2010 as a produce helper with no supervisory responsibilities. He
alleges that he was paid a set salary of $425.15 which was composed of 40 hours per week at
$8.95 per hour and 5 hours of overtime per week at $13.43 per hour. Dunagan alleges that he
actually worked between 56 and 57 hours per week and seeks to recover unpaid overtime
compensation. (Doc. 1)
Defendant Pick N’ Save answered and admitted that Dunagan worked during the time
frame alleged, had no supervisory responsibilities, and was paid $8.95 per hour and overtime at
the rate of $13.43, but denied the allegation as to hours worked or that Dunagan was paid a set
salary. Defendant answered seriatim other allegations denying some and admitting others and
set forth its affirmative defenses. (Doc. 14).
The parties negotiated, reached a settlement, moved for approval of the settlement, and
filed a joint submission of settlement agreement. (Docs. 20-22, 24). In the submission, the
parties explain that they have no written settlement agreement but reached an agreement which
was a compromise by both parties. Dunagan sought 955 hours of unpaid overtime at $13.43 per
hour, or $12,825.65. The terms of the FLSA provide for liquidated damages in an amount equal
to the back wages. Thus, adding $12,825.65 yields $25,651.30. Dunagan’s claim was
compromised to $8,325.17 as back wages and $8,325.16 as liquidated damages for a total of
$16,650.34. The parties report that this amount compensates Dunagan for “essentially 633 hours
of unpaid overtime”.2
In order to assess the reasonableness of the attorney’s fee requested, $11,333.00, the

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Since the parties refer to compensation for “essentially” 633 hours, the award appears
based on some formula other than multiplying the hourly rate by the number of unpaid hours.
By this Court’s calculation, 633 hours at $13.43 yields $8,501.19. Adding an equal amount of
liquidated damages, $8,501.19, yields $17,002.38. If the parties’ computation is simply a math
error, then the Court hopes that the parties will “do the math” again.

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Court required supplemental documentation.(Docs. 26-27).3 In the supplemental documentation,
counsel Henry Brewster documents an attorney’s fee of $8,670.00 which is based upon an hourly
rate of $300.00 for 28.9 hours. Counsel Philip Perkins documents an attorney’s fee of $3,037.50
which is based upon an hourly rate of $250.00 for 12.15 hours. Counsel states that their
combined fees of $11,707.50 exceed the $11,333.33 sought in the motion for approval of
settlement. Counsel Brewster supplements his information with a copy of his recent attorney’s
fee award based upon an hourly rate of $300.00. Evans v. Wieser Security, No. 09-cv-0445-C
(S.D. Ala. March 15, 2012) (Doc. 157). Dunagan also seeks court costs of $350.00.
II. Settlements of private actions under the FLSA
In Lynn=s Food Stores, Inc. v. United States of America, 679 F. 2d. 1350 (11th Cir. 1982),
the Eleventh Circuit recognized two methods for settlement of claims brought pursuant to the
FLSA: supervision by the Secretary of Labor or by court approval in a private action where
plaintiff is represented by counsel. The circuit court stated that the FLSA “contemplates that ‘the
wronged employee should receive his full wages plus the penalty without incurring any expense
for legal fees or costs.’ ” Id. at 351 (citation omitted). Therefore, in any case where a plaintiff
agrees to accept less than his full FLSA wages and liquidated damages, he has compromised his
claim.
Thus, when the plaintiff settles the claim and agrees to less than the full wages plus the
penalty, the plaintiff has compromised as contemplated by Lynn’s Foods, and may do so only
with Court approval of the settlement agreement. The rationale is that
[s]ettlements may be permissible in the context of a suit brought by employees
under the FLSA for back wages because initiation of the action by the employees
provides some assurance of an adversarial context. The employees are likely to be
represented by an attorney who can protect their rights under the statute. Thus,
when the parties submit a settlement to the court for approval, the settlement is
more likely to reflect a reasonable compromise of disputed issues than a mere
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Plaintiff’s motion to supplement the attorney fee affidavit is GRANTED. (Doc. 27).

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waiver of statutory rights brought about by an employer's overreaching. If a
settlement in an employee FLSA suit does reflect a reasonable compromise over
issues, such as FLSA coverage or computation of back wages, that are actually in
dispute; we allow the district court to approve the settlement in order to promote
the policy of encouraging settlement of litigation.
Lynn=s, 679 F.2d at 1354. The circuit court concluded that
[o]ther than a section 216(c) payment supervised by the Department of Labor,
there is only one context in which compromises of FLSA back wage or liquidated
damage claims may be allowed: a stipulated judgment entered by a court which
has determined that a settlement proposed by an employer and employees, in a
suit brought by the employees under the FLSA, is a fair and reasonable resolution
of a bona fide dispute over FLSA provisions.
Lynn=s, 679 F.2d at 1355.
Therefore, before entry of a stipulated judgment, the Court must determine whether there
is a “bona fide dispute over FLSA provisions”, and then determine whether the settlement
agreement proposed is a fair and reasonable resolution of that dispute.
III. Bona fide dispute over FLSA provisions
Section 216(b) provides that “ . . . [a]ny employer who violates the provisions of section
206 or section 207 of this title shall be liable to the employee or employees affected in the
amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may
be, and in an additional equal amount as liquidated damages. . . . ” 29 U.S.C. § 216(b). Section
207 is captioned “Maximum Hours” and paragraph (a)(1) states as follows:
Except as otherwise provided in this section, no employer shall employ any of his
employees who in any workweek is engaged in commerce or in the production of
goods for commerce, or is employed in an enterprise engaged in commerce or in
the production of goods for commerce, for a workweek longer than forty hours
unless such employee receives compensation for his employment in excess of the
hours above specified at a rate not less than one and one-half times the regular
rate at which he is employed.
29 U.S.C. § 207(a)(1).
Upon review of the complaint and answer (docs. 1, 14), the Court finds that there is a
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“bona fide dispute” as to whether the FLSA applies or Dunagan’s employment is exempt,
whether there has been a violation of § 207(a)(1) for overtime pay and the number of overtime
hours, as well as whether Dunagan’s claims are barred by the applicable statute of limitation in
the FLSA or other affirmative defenses. See Lynn's Food Stores, 679 F.2d at 1353.
IV. Fair and reasonable resolution
In Silva v. Miller, 307 Fed. Appx. 349 (11th Cir. 2009), the circuit court explained that
the FLSA imposes a heightened duty on the Court to “scrutinize for fairness” a settlement
agreement in a private claim brought pursuant to the Act.

The Court may approve a

compromise of an FLSA claim where there are “problems” which warrant a reasonable
compromise. Moreno v. Regions Bank, 729 F. Supp. 2d 1346 (M.D. Fla. 2010) (“Problems, for
example, in proving hours-worked or “non-exempt” status-or the presence of some other lawful
defense to payment (if any)-may warrant a reasonable compromise, if the court approves.”);
Meek v. Wachovia Corporation, 2007 WL 2728404, 2 (M.D. Fla. Sept. 17, 2007) (AThe
settlement to Plaintiff is a reflection of the difficulties of proof Plaintiff faced, should he proceed
to trial, and makes allowances for the inherent difficulties and costs of a trial.@).
The parties report that both sides compromised “[i]n light of uncertain results, the
dispute over legal exemptions, and the normal vagaries of any litigated suit” and “reached an
arms-length bargained settlement.” (Doc. 22, p. 2). The Court observes that in the face of this
uncertainty, Dunagan compromised the total unpaid hours claimed but did not waive or
compromise his right to liquidated damages or attorney fees and court costs. Therefore, the
Court approves Dunagan’s compromise of his FLSA claim as a fair and reasonable resolution of
his FLSA dispute and Dunagan is due to be paid $8,325.17 as back wages and $8,325.16 as
liquidated damages for a total of $16,650.34.
V. Attorney fees
The FLSA requires that in any action to enforce §207 of the Act, the Court “shall, in
addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee
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to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). The FLSA also
“requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel
is compensated adequately and that no conflict of interest taints the amount the wronged
employee recovers under a settlement agreement.” Silva, 307 F. App'x. at 351. In order to
determine the reasonableness of the attorney’s fees requested, the Court employs the lodestar
analysis: the number of hours reasonably expended multiplied by a reasonable hourly rate.
In the supplemental information regarding attorney’s fees (doc. 26-1), counsel apply the
guidelines from Johnson v Georgia Highway Express, 488 F. 2d 711 (5th Cir. 1974) and begin
with an analysis of their proposed reasonable hourly rates: $300.00 for Brewster and $250.00 for
Perkins and apply the twelve factors from Johnson. The Court has reviewed the supplemental
information including the time sheets showing the hours expended and the work performed by
the attorneys. The Court finds that the hours documented were reasonably expended on the
litigation; particularly the hours documented for the initial interview with Dunagan, negotiating
the settlement, and updating Dunagan as to the status of his litigation.
As to the hourly rate requested, the Court finds that the rate of $300.00 is a reasonable
hourly rate for Brewster who is a skilled and knowledgeable attorney who has practiced law
since 1981, routinely practiced in the federal courts since 1987, and thus with greater than
twenty-five years experience in the fields of employment law, civil rights and constitutional law.
The Court finds that the rate of $250.00 is a reasonable hourly rate for Perkins who is an attorney
practicing in the general practice of civil and criminal law with approximately nineteen years of
experience.4 The Court finds that these hourly rates are in line with the prevailing hourly rates
for attorneys of comparable knowledge, skill, and years of experience practicing in the Southern

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The Court notes that it is not familiar with Perkins or his reputation in the legal
community. While having appeared before other judges in the Southern District, this is the
second action in which Perkins has appeared in this Court.

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District of Alabama.5 See Norman v. Housing Authority of City of Montgomery, 836 F.2d 1292,
1303 (11th Cir. 1988) (citations omitted) (“The court, either trial or appellate, is itself an expert
on the question and may consider its own knowledge and experience concerning reasonable and
proper fees and may form an independent judgment either with or without the aid of witnesses as
to value.”). Multiplying the reasonable hourly rates by the number of hours expended yields the
lodestar of $8,670.00 ($300.00 x 28.9 hours = $8,670.00) for Brewster and $$3,037.50 ($250.00
x 12.15 hours = $3,037.50) for Perkins, for a total of $11,707.50.
Generally, in this circuit, “there is a strong presumption that the lodestar is the reasonable
sum the attorneys deserve.” Longcrier v. HL-A Co., Inc., 2009 WL 1118906, 1 (S.D. Ala., Apr.
27, 2009) quoting Bivins v. Wrap It Up, Inc., 548 F.3d 1348, 1350 (11th Cir. 2008). Therefore,
the Court finds that the lodestar of $11,707.50 is a reasonable attorney’s fee. The Court further
finds that the reasonableness of this fee is supported by the attorney’s fee negotiated by the
parties in their arms-length settlement negotiation: $11,333.33. The lodestar is only slightly
more. Therefore, no adjustments to the lodestar are necessary and the Court awards a reasonable
attorney’s fee in the amount of $11,707.50 and court costs of $350.00 in favor of Dunagan.
DONE and ORDERED this 21st day of March, 2012.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

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As to an award of $300 as a reasonable hourly rate for Brewster, the Court is persuaded
by the recent decision in Evans v. Wieser Security, No. 09-cv-0445-C (S.D. Ala. March 15,
2012) (Doc. 157).

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