Hodge v. Signia Marketing, LTD et al

Filing 71

ORDER re: 70 Motion Hearing, for final approval of a settlement, by Magistrate Judge Kathleen M. Tafoya on 11/30/2017. (jgonz, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Kathleen M. Tafoya
Civil Action No. 15–cv–02839–KMT
DESIRE HODGE, individually, and on behalf of all others similarly situated,
Plaintiff,
v.
SIGNIA MARKETING, LTD, and
JEFFREY FELL,
Defendants.

ORDER

This matter is before the court for final approval of a settlement following the fairness
hearing on November 27, 2017.
The Fair Labor Standards Act (“FLSA”) provides that an employee or multiple
employees may bring an action “[on] behalf of himself or themselves and other employees
similarly situated.” 29 U.S.C. § 216(b). The Second Amended Complaint [Doc. No. 26] was
filed on March 17, 2016. On June 13, 2016, this court conditionally certified the collective as,
“all former and current hourly workers of Defendants from December 31, 2012 to the present
who were paid at a straight time rate for overtime.” [Doc. No. 32.]
On October 24, 2017, this court granted the parties’ “Joint Motion for Preliminary
Approval of Settlement Agreement and Final Fairness Hearing” and the “Plaintiff’s Unopposed
Motion for Attorney’s Fees and Costs.” (“October 24 Order” [Doc. No. 68].) In the eighteenpage Order approving the settlement of the FLSA claims, the court made findings of fact and

conclusions of law regarding the existence of a bona fide dispute and a finding that the
settlement proposed is fair and reasonable and also found the attorney fees and costs to be
reasonable after analysis under the lodestar methodology. The court therefore adopts in full the
October 24 Order and reaffirms the findings and conclusions therein as part of this final approval
of settlement.
Before final approval of a settlement, the court must address the issue of final
certification of the class or collective. See Thiessen v. General Electric Capital Corp., 267 F.3d
1095,1102–03 (10th Cir. 2001). In particular the court must determine whether class members
are similarly situated. Brown v. Money Tree Mortgage, Inc., 222 F.R.D. 676, 679 (D. Kan.
2004). In deciding whether to grant final certification to a collective action, courts consider
several factors, including: (1) the disparate factual and employment settings of individual
plaintiffs; (2) various defenses available to defendant which appear to be individual to each
plaintiff; and (3) fairness and procedural considerations. See Thiessen, 267 F.3d at 1103; Gassel
v. Am. Pizza Partners, L.P., No. 14–CV–00291–PAB–NYW, 2015 WL 5244917, at *2 (D. Colo.
Sept. 8, 2015).
In her Amended Complaint (“Am. Compl.”), Plaintiff alleges that “Plaintiff and all other
similarly situated employees were forced by Defendants and regularly worked overtime without
proper pay.” [Doc. No. 26, ¶ 38.] Plaintiff states, “Throughout Plaintiff’s employment with
Defendants, Plaintiff was paid at straight time rate for overtime hours recorded during many
workweeks” (id., ¶ 42), and “[t]he other Supervisors and Customer Service Representatives were
paid in a similar manner” (id., ¶ 43). In her Declaration attached to the Reply Plaintiff states she
was “employed by Defendants as an hourly paid employee from approximately April 2014 to

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December 2014 and from July 2015 to December 2015.” [Doc. No. 30-2, ¶ 2.] Further, she
states, “[t]hrough my employment time period with the Defendants, I worked in three (3)
different positions – Customer Service Representative (“CSR”), Floor Lead and Floor
Supervisor.” [Id., ¶ 3.] Plaintiff states that she supervised up to 35 CSRs and 2 Floor leads
during her tenure of employment. [Id., ¶¶ 16–17.] Plaintiff states that regardless of which job
she was performing, “Defendants paid me at straight time rate for hours recorded over forty (40)
in a workweek, without a premium.” [Id., ¶ 20.] Further, Plaintiff alleges, “Defendants’ policy
and practice of straight time rate for overtime pay was applicable the other CSRs, Floor Leads
and Floor Supervisors” (id., ¶ 21) and that “[t]he payroll records will show on their face exactly
what I’m complaining about on behalf of myself and all the others who were shorted pay” (id., ¶
22). Plaintiff alleges that “[t]here are hundreds of hourly employees, such as CSRs, Floor Leads
and Floor Supervisors, who were/are subjected to Defendants’ wage policy and practice
described above.” [Id., ¶ 24.] In her Amended Complaint, the Plaintiff concludes that “[a]t all
relevant times, Plaintiff and all other similarly situated employees worked in the manner
described above and Defendants encouraged, instructed, and required them to work in such
manner.” [Am. Compl., ¶ 54.] Further, Plaintiff alleges that Defendants automatically deducted
lunch breaks from Supervisors’ pay even though they worked through many of those unpaid
lunch breaks and that Defendants failed to compensate Plaintiff and all other Supervisors wages
for working off the clock and overtime compensation at time and a half (1.5) their regular rate of
pay. [Id., ¶¶ 87–88.]
After full opportunity to examine the opt-in Plaintiffs, the Defendant has not filed a decertification motion and therefore has conceded that the Plaintiff opt-ins are similarly situated.

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Therefore, it is ordered that the collective described as “all former and current hourly workers of
Defendants from December 31, 2012 to the present who were paid at a straight time rate for
overtime” is certified.
The settlement of a class action may be approved where the court finds that the
settlement is fair, reasonable, and adequate. Rutter & Wilbanks Corp. v. Shell Oil, 314 F.3d
1180, 1186 (10th Cir. 2002). The court reviews a proposed class action settlement by
considering four factors: (1) whether the proposed settlement was fairly and honestly negotiated;
(2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation
in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of
future relief after protracted and expensive litigation; and (4) the judgment of the parties that the
settlement is fair and reasonable. Gottlieb v. Wiles, 11 F.3d 1004, 1014 (10th Cir. 1993)
abrogated on other grounds by Devlin v. Scardelletti, 536 U.S. 1, 6 (2002). Each of these factors
was thoroughly addressed by this court in the October 24 Order discussed supra.
Although § 216(b) may not require that a court hold a fairness hearing before approving a
collective action settlement, courts generally require, at minimum, that opt-in plaintiffs be given
notice of any settlement and an opportunity to object. Tommey v. Computer Sciences Corp.,
Case No. 11–cv–2214–EFM, 2015 WL 1623025 at *1(D. Kan. April 13, 2015); see also Goldsby
v. Renosol Seating, LLC, No. 2:08–0148–KD–N, 2013 WL 6535253, at *10 (S.D. Ala. Dec. 13,
2013)(“[T]he majority of the courts approve [an FLSA collective action] settlement only after
notice has been provided to the opt-in plaintiffs and a fairness hearing conducted, or at the least,
what is required is a statement to the Court that the opt-in plaintiffs have had notice of the
settlement and an opportunity to object.”); Gassel, 2015 WL 5244917, at *3.

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At the fairness hearing held November 27, 2017, both counsel represented that notice of
the settlement had been sent to 242 opt-in plaintiffs and the named plaintiff. In that group, 24
notices were returned undeliverable with no forwarding address. Counsel represented that they
were cooperatively working to ensure that concerted effort would be maintained to provide
notice to the 24 opt-ins whose notice was returned to the Defendants.
The parties represented that no objections were filed by any collective members either
with the court or with counsel for either side. See In re Dun & Bradstreet Credit Servs.
Customer Litig., 130 F.R.D. 366, 372 (S.D. Ohio 1990) (“No timely objection was raised by any
Class Member to the proposed settlement.) The court is allowed to, and therefore does, give the
lack of objections substantial weight in approving the proposed settlement. See Tuten v. United
Airlines, Inc., 41 F. Supp. 3d 1003, 1008 (D. Colo. 2014).
At the fairness hearing, both parties continued to represent that in their opinions the
Settlement is fair and reasonable and that no facts have come to light since the court preliminary
order which would change or influence the decision in a different direction. In light of the
extensive examination of the fairness and reasonableness of the settlement set forth in the court’s
October 24 Order, the court will not set forth the same findings again here.
The court finds that the value of the Settlement greatly outweighs the possibility of
recovery after protracted litigation. On this point, courts have held that the presumption in favor
of voluntary settlement agreements is especially strong in class actions and other complex cases
where substantial judicial resources can be conserved by avoiding formal litigation. The strong
judicial policy in favor of class action settlement contemplates a circumscribed role for the
district courts in settlement review and approval proceedings. This policy also ties into the

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strong policy favoring the finality of judgments and the termination of litigation. Settlement
agreements are to be encouraged because they promote the amicable resolution of disputes and
lighten the increasing load of litigation faced by the federal courts. In addition to the
conservation of judicial resources, the parties may also gain significantly from avoiding the costs
and risks of a lengthy and complex trial. Ehrheart v. Verizon Wireless, 609 F.3d 590, 594 (3d
Cir. 2010); Tuten, 41 F. Supp. 3d at 1007–08. Given this significant financial benefit to the
Class, the court has little difficulty concluding that the presumption in favor of voluntary
settlements has been satisfied here.
Based on these findings, and in accordance with the analysis set forth above, the court
ORDERS as follows:
1.

The collective described as “all former and current hourly workers of Defendants

from December 31, 2012 to the present who were paid at a straight time rate for overtime” is
certified;
2.

The Settlement as described more fully in the October 24 Order and in the “Joint

Motion for Preliminary Approval of Proposed Collective Settlement and Final Fairness Hearing
Settlement Agreement” [Doc. No. 66], including the “Settlement and Release Agreement” [Doc.
No. 66-2] is fully and finally APPROVED;
3.

The Court awards attorneys’ fees to the attorneys for the collective in the amount

of $100,000.00, paid by Defendants over a period of twenty months;
4.

The attorneys for the collective are awarded $25,000.00 as reimbursement for all

expenses incurred in prosecuting this action, including for any expenses yet to be incurred in
connection with safeguarding the administration of the collective;

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5.

Incentive awards of $2,000.00 to Desire Hodge and $500.00 each to Kathryn

Fresquez and Sean Vance are approved;
6.

Continuing jurisdiction is hereby retained over the parties and the collective

members for all matters relating to the terms of the Settlement Agreement, including the
administration, interpretation, effectuation or enforcement of the settlement embodied in the
Settlement Agreement and this Order and Final Judgment; and
7.

Under Rule 54(a) and (b) of the Federal Rules of Civil Procedure, this Order and

constitutes final adjudication on the merits. Accordingly, the Clerk of the Court is directed to
enter this Judgment forthwith.
Dated this 30th day of November, 2017.

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