Roberts, et al. v. City of Chula Vista

Filing 43

ORDER re 39 Request for Approval of Settlement Agreement and Dismissal with Prejudice. The Court DEFERS ruling on the parties' request for approval of settlement and dismissal of the action with prejudice. The parties must submit the supplemental filings on or before 12/15/2017. Signed by Judge Michael M. Anello on 11/29/2017.(All non-registered users served via U.S. Mail Service)(acc)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9
10
11
12
13
14
15

SOUTHERN DISTRICT OF CALIFORNIA
DARRELL ROBERTS, et al,

Case No.: 16cv1955-MMA (DHB)
ORDER RE: REQUEST FOR
APPROVAL OF SETTLEMENT
AGREEMENT AND DISMISSAL
WITH PREJUDICE

Plaintiffs,

v.
CITY OF CHULA VISTA,

Defendant.

16
17

Plaintiffs Darrell Roberts, et al. (“Plaintiffs”) bring this action against Defendant

18

City of Chula Vista (“Defendant”) for violations of the Fair Labor Standards Act

19

(“FLSA”), 29 U.S.C. §§ 201-219. See Doc. No. 1 (hereinafter “Comp.”). On November

20

2, 2017, the parties filed a stipulation and request for approval of the parties’ settlement

21

agreement and dismissal of this action with prejudice. See Doc. No. 39. For the reasons

22

set forth below, the Court DEFERS ruling on the parties’ request.

23
24

BACKGROUND
Plaintiffs, who are or were employed by the City of Chula Vista as firefighters,

25

filed this action on August 2, 2016, alleging that Defendant failed to correctly pay

26

overtime compensation in violation of the FLSA. See Comp. ¶¶ 5-6. Plaintiffs seek

27

actual, consequential, liquidated and incidental damages, and any such other damages as

28

may be allowed. See Comp. Further, Plaintiffs seek attorney’s fees and costs. See id.
-1-

16cv1955-MMA (DHB)

1

On February 3, 2017, Defendant filed an answer to Plaintiffs’ Complaint, denying the

2

material allegations and asserting affirmative defenses. See Doc. No. 17.

3

In July 2017, the parties represented to the Court that they had reached a settlement

4

in principle. See Doc. No. 30 at 1. On November 2, 2017, the parties filed a stipulation

5

and request for dismissal of this action with prejudice. See Doc. No. 39. The parties

6

attached the settlement agreement to their stipulation and request for dismissal. See id.

7

The settlement agreement provides that Defendant will pay a total of

8

$1,039.616.81 to settle the claims of the one hundred and twenty-four plaintiffs. See

9

Doc. No. 39-1 at 3. Specifically, each plaintiff is entitled to receive a portion of damages

10

for scheduled and unscheduled overtime, totaling $538,890.79, and liquidated damages,

11

totaling $470,426.02. Id. Additionally, the law firm of Adams, Ferrone & Ferrone is to

12

receive $29,700.00 for attorneys’ fees and $600.00 for costs. Id. at 4.

13

The settlement agreement further provides that Plaintiffs agree to dismiss with

14

prejudice their claims against Defendant in this action, and to withdraw or dismiss any

15

other complaint, claim, grievance, or charge against Defendant alleging FLSA violations

16

that were asserted in this action. See id. Plaintiffs, however, “reserve the right to pursue

17

any FLSA . . . claims that they might have for events occurring after the effective date of

18

this Agreement.” Id. The release of claims is to become effective upon the Court’s

19

approval of the settlement agreement and dismissal of the action. See id. at 7.

20
21

LEGAL STANDARD
“The FLSA was enacted to protect covered workers from substandard wages and

22

oppressive working hours.” Selk v. Pioneers Mem’l Healthcare Dist., 159 F. Supp. 3d

23

1164, 1171 (S.D. Cal. 2016). Specifically, “[t]he FLSA establishes federal minimum-

24

wage, maximum-hour, and overtime guarantees that cannot be modified by contract.”

25

Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 69 (2013). “[C]laims for unpaid

26

wages under the FLSA may only be waived or otherwise settled if settlement is

27

supervised by the Secretary of Labor or approved by a district court.” Selk, 159 F. Supp.

28

3d at 1172; see also Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th
-2-

16cv1955-MMA (DHB)

1
2

Cir. 1982).
“The Ninth Circuit has not established criteria for district courts to consider in

3

determining whether a FLSA settlement should be approved.” Beidleman v. City of

4

Modesto, 2017 WL 5257087, at *1 (E.D. Cal. Oct. 26, 2017). However, district courts in

5

this circuit generally apply the standard adopted by the Eleventh Circuit in Lynne’s Food

6

Stores. Id.; see also Slezak v. City of Palo Alto, 2017 WL 2688224, at *1-2 (N.D. Cal.

7

June 22, 2017); Selk, 159 F. Supp. 3d at 1172; Ambrosino v. Home Depot U.S.A., Inc.,

8

2014 WL 1671489, at *1 (S.D. Cal. Apr. 28, 2014). Thus, in reviewing a FLSA

9

settlement, courts must determine whether the settlement represents a “fair and

10

reasonable resolution of a bona fide dispute.” Lynn’s Food Stores, 679 F.2d at 1355. “A

11

bona fide dispute exists when there are legitimate questions about ‘the existence and

12

extent of Defendant’s FLSA liability.’” Selk, 159 F. Supp. 3d at 1172 (citing Ambrosino,

13

2014 WL 1671489, at *1). A court will not approve a settlement of an action where there

14

is no question that the FLSA entitles the plaintiffs to the compensation they seek, because

15

it would shield employers from the full cost of complying with the statute. See id.

16

Once a court determines that a bona fide dispute exists, “it must then determine

17

whether the settlement is fair and reasonable.” Id. Courts should consider the following

18

factors in evaluating whether a settlement is fair and reasonable under the FLSA: (1) the

19

plaintiff’s range of possible recovery; (2) the stage of proceedings and the amount of

20

discovery completed; (3) the seriousness of the litigation risks faced by the parties; (4)

21

the scope of any release provision in the settlement agreement; (5) the experience and

22

views of counsel and the opinion of participating plaintiffs; and (6) the possibility of

23

fraud or collusion. Id. at 1173. A “district court must ultimately be satisfied that the

24

settlement’s overall effect is to vindicate, rather than frustrate, the purposes of the

25

FLSA.” Id. “If the settlement reflects a reasonable compromise over issues that are

26

actually in dispute, the Court may approve the settlement ‘in order to promote the policy

27

of encouraging settlement of litigation.’” Ambrosino, 2014 WL 1671489, at *1 (citing

28

Lynn’s Food Stores, 679 F.2d at 1354).
-3-

16cv1955-MMA (DHB)

1

DISCUSSION

2

Here, the parties have submitted a relatively short stipulation, a copy of the

3

settlement agreement, and a proposed order. See Doc. Nos. 39, 39-1. In the stipulation,

4

the parties summarily assert “the settlement amounts as calculated . . . are fair and

5

consistent and well within the range of the maximum results Plaintiffs could expect to

6

obtain at trial if they prevailed.” Doc. No. 39 at 4. Additionally, the parties contend “the

7

amount to be paid to Plaintiffs’ counsel accurately and fairly reflects the amount of

8

attorney’s fees and costs expended by Plaintiffs’ counsel in pursuing Plaintiffs’ claims to

9

date.” Id. The parties, however, fail to provide any factual representations or analysis as

10

to why this settlement is a fair and reasonable resolution of a bona fide dispute, or that the

11

amount to be paid to counsel is accurate in light of the time and money expended in this

12

case. As such, the Court is unable to apply the legal standard and six factors outlined

13

above to the facts of this case.

14

Accordingly, the parties are directed to supplement their stipulation for approval

15

and dismissal by way of declaration(s), briefing, or both, addressing the legal standard

16

and factors set forth above. Upon receipt of the filings, the Court will issue an order

17

addressing the proposed settlement and dismissal.

18

CONCLUSION

19

Based on the foregoing, the Court DEFERS ruling on the parties’ request for

20

approval of settlement and dismissal of the action with prejudice. The parties must

21

submit the supplemental filings on or before December 15, 2017.

22
23

IT IS SO ORDERED.

24
25
26
27
28

Dated: November 29, 2017
_____________________________
HON. MICHAEL M. ANELLO
United States District Judge

-4-

16cv1955-MMA (DHB)