Pierce v. Big River Steel LLC
ORDER denying without prejudice 11 Joint motion. Joint status report on where the case is going from here due by 12/13/2017. Signed by Judge D. P. Marshall Jr. on 11/13/2017. (jak)
Case 3:17-cv-00063-DPM Document 19 Filed 11/13/17 Page 1 of 6
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
KIM PIERCE, on Behalf of All
Others Similarly Situated
BIG RIVER STEEL LLC
The parties want to settle their dispute about unpaid overtime.
That's a good thing, and it is thus with reluctance that the Court says
no. The terms proposed aren't fair or reasonable.
Pierce used to work at Big River's steel mill. She filed this case,
alleging that the mill had shorted her and other employees in paying
She proposed a collective action under the Fair Labor
Standards Act and a class action under the parallel Arkansas statute.
Pierce and her colleagues were paid production bonuses. Big River, she
alleged, hadn't included those bonuses in calculating the correct rate
for the overtime everyone routinely worked at the mill.
After getting the suit papers, Big River investigated. The mill
concluded that it had indeed made the mistake Pierce and her lawyers
asserted. Approximately three weeks after Pierce filed her case, Big
River made its employees whole. It paid Pierce and her co-workers the
difference between the amount of overtime each had been paid and the
Case 3:17-cv-00063-DPM Document 19 Filed 11/13/17 Page 2 of 6
amount each person was owed, plus a 100% match to cover liquidated
damages available under the wage statutes, and interest at 6%. Pierce
got $2,978.68. Big River paid more than $2 million to its workers. Those
workers did not sign any release; and the payments to them weren't
marked "settlement" or conditioned in any way. Pierce's case wasn't
The parties' lawyers then started talking settlement. The case was
about a month old. In due course, Big River answered, explaining its
mistake and its fix, and saying it stood ready to pay Pierce a reasonable
attorney's fee. The parties eventually made a deal. Their proposed
settlement is now before the Court and they seek approval. NQ 11;
Lynn's Food Stores, Inc. v. U.S. By & Through U.S. Department of Labor,
Employment Standards Administration, Wage & Hour Division, 679 F.2d
1350, 1354 (11th Cir. 1982). The parties have, helpfully, responded to
questions and provided documents. NQ 18. The Court has drawn freely
on those materials in stating the case.
Here's the proposed deal. Pierce agrees to dismiss this case with
prejudice, release a basket of other potential claims (reserving those
asserted in a pending EEOC charge), and not to seek or accept
employment with Big River in the future. There's no release of coworkers' claims. Big River agrees to provide a neutral reference. The
parties acknowledge the $2,978.68 already paid Pierce for unpaid
overtime, an equal amount of liquidated damages, and interest. The
Case 3:17-cv-00063-DPM Document 19 Filed 11/13/17 Page 3 of 6
parties propose that Big River pay Pierce $10,720 more "representing
an incentive award for settlement[.]" NQ 12 at 2. They also propose that
Big River pay Pierce's lawyers $62,000 in fees and expenses.
lawyers are out of pocket $487.49 for the filing fee, service, and copies.
"[T]he agreed amount of fees[,]" the parties say in their joint motion to
approve the settlement, "is based primarily on the results obtained for
Plaintiff and her co[-]workers, not the hours expended by counsel."
NQ 11 at 2. Rounding for simplicity, Pierce's lawyers worked fifty-one
hours, which generated (at healthy hourly rates ranging from $175 to
$290) an $11,500 bill.
Several circumstances favor approving the deal. It was negotiated
at arms-length between adversaries. Able counsel represent each side.
There's not even a hint that Pierce or her co-workers would be shortchanged. Pierce is made completely whole for the overtime violation.
As the indirect beneficiaries of Pierce's lawsuit, her co-workers got
made whole, too, and this involved big money.
Other circumstances, though, weigh against the deal, decisively
so, in this Court's view. First, no collective action or class has been
certified. An incentive award to Pierce and a non-lodestar attorney' s
fee reflect group-wide litigation that didn't really happen. None of the
procedural protections that attend group litigation, such as notice to
those affected and a chance to object, are present. This case stopped at
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Second, the proposed incentive award to Pierce is not fair. The
payment she got for overtime represents a 100% recovery of everything
she could have gained by winning the case. She did not earn a service
fee by giving a deposition, attending hearings, or being the public face
of workers in an extended dispute with their employer. Filing the case
pushed Big River into investigating the pay issue.
But the mill's
immediate fix shows that there was no push back, much less a real fight.
Pierce is merely one step away from all her co-workers on the overtime
point-she sued, and that step doesn't justify a $10,720 payment.
Perhaps more money for Pierce could be justified in terms of other
things she's giving up in the deal. The release of many other potential
claims and the no-reapplication terms come to mind. But these are not
the words or the structure of the parties' agreement, and in terms of the
overtime claims pleaded, this proposed award would be a windfall.
The Court has found no precedent that would support this payment.
And the parties have not cited one.
The proposed attorney's fee is unreasonable. To get the dispute
resolved and move on, it's understandable that Big River would not
quibble over hourly rates or the inefficiencies that come from having
many lawyers on a case. Four main lawyers, with assists from five
more, strikes the Court as too many hands. But, at the threshold this
looked like a big case; a full team was justified. The proposed fee,
though, doesn't simply cover the time billed. It doesn't go a bit farther,
Case 3:17-cv-00063-DPM Document 19 Filed 11/13/17 Page 5 of 6
seeking a multiplier of l, for example, to reflect the substantial collateral
benefits. Even that step would be novel under precedent, but it w ould
come much closer to being reasonable. Instead, the parties' proposal
seeks a multiplier of more than 5. In lodestar terms, the proposal seeks
an hourly rate of more than $1200. That's unreasonable. It is, as the
parties note, only approximately 3% of the total payout to all
employees. NQ 18 at 3. But this is not a common fund case. Compare
Keil v. Lopez, 862 F.3d 685 (8th Cir. 2017). Every precedent cited by the
parties, NQ 18 at 1-2, involved a collective action or class certified by the
Court with all the usual procedural steps and protections. E.g., Collins
v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 717 (E.D. La. 2008) . Those
cases provide no support here.
This suit alerted Big River to a
widespread overtime problem, which the company promptly fixed
before the case launched. Counsel deserves credit, and probably some
reasonable compensation for raising the storm flag, but approximately
$50,000 more than a generous hours-based fee is just too much.
Joint motion, NQ 11, denied without prejudice. Joint status report
on where the case is going from here due by 13 December 2017.
Case 3:17-cv-00063-DPM Document 19 Filed 11/13/17 Page 6 of 6
United States District Judge
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