McGee v. Family Dollar Stores of Florida, Inc.

Filing 74

ORDER denying without prejudice 73 Joint Motion to Approve FLSA Settlement and for Dismissal with Prejudice. Signed by Judge Robin L. Rosenberg on 2/19/2016. (dzs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 2:14-cv-14370-ROSENBERG/LYNCH
DERRIS MCGEE,
Plaintiff,
v.
FAMILY DOLLAR STORES OF FLORIDA, INC.,
Defendant.
____________________________________________/
ORDER DENYING SETTLEMENT APPROVAL WITHOUT PREJUDICE
THIS CAUSE is before the Court upon the parties’ Joint Motion to Approve FLSA
Settlement and for Dismissal with Prejudice [DE 73], which asks the Court to approve the parties’
settlement agreement pursuant to Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.
1982). The Court has carefully reviewed the joint motion, as well as the settlement agreement
attached thereto, and is otherwise fully advised in the premises. For the reasons set forth below, the
parties’ request for settlement approval is DENIED without prejudice.
I.

PROCEDURAL HISTORY

In August 2014, Plaintiff filed a complaint in the Florida Circuit Court for the 19th Judicial
Circuit in and for St. Lucie County, Florida, seeking unpaid minimum and unpaid overtime wages.
See DE 1-1. Defendant removed the action to this Court in September 2014. See DE 1. Defendant
answered the complaint on October 7, 2014. See DE 4. Plaintiff filed a statement of claim on
November 21, 2014, see DE 15, and Defendant filed a response thereto on December 8, 2014, see DE
21. The case proceeded through discovery, which was set to end on July 31, 2015. See DE 19.
On June 30, 2015, at the request of the parties, the Court stayed the proceedings for ninety
days to allow the parties to participate in an omnibus mediation encompassing multiple plaintiffs’
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claims against Defendant. See DE 32-33. After the parties informed the Court that the mediation had
not resulted in a settlement of Plaintiff’s claims, on October 8, 2015, the Court re-opened the case
and set trial for March 2016. See DE 36-37. The case again proceeded through discovery. Plaintiff
filed multiple motions to compel. See DE 44-54. The parties filed cross-motions for summary
judgment, see DE 56 and 60, and multiple motions in limine. See DE 55, 57, 59. Plaintiff also moved
to amend his complaint to clarify an allegation regarding the accuracy of Defendant’s time records
and dropping his minimum wage claim. See DE 41. This motion was referred to Magistrate Judge
Lynch, who recommended that the Court grant it. See DE 69, 70.
Before the Court issued an order either adopting or declining to adopt that recommendation,
on January 19, 2016, the parties informed the Court that they had reached a settlement. See DE 71.
On February 5, 2016, they filed the present motion for settlement approval. See DE 73. The parties’
proposed settlement agreement provides that Defendant will pay Plaintiff $14,000 allocated as
follows: $3,000 to Plaintiff for unpaid wages; $3,000 to Plaintiff for liquidated damages; and $8,000
to Plaintiff’s counsel for attorneys’ fees, costs, and disbursements. See DE 73-1 at 1. The parties’
joint motion explains that, of the $8,000 allocated to fees and costs, $3,699.53 of that amount is
recoverable costs. See DE 73 at 2 ¶ 5.
II.

LEGAL STANDARD

Because FLSA rights cannot be abridged by contract or otherwise waived, claims arising
under the FLSA may be settled only with the approval of the Court or the Secretary of Labor. See
Lynn’s Food, 679 F.2d at 1352-53. In a suit brought by employees under the FLSA, the Court must
determine whether a settlement proposed by the employer and employees “is a fair and reasonable
resolution.” Id. at 1354. In doing so, the Court considers such factors as “(1) existence of fraud; (2)
complexity of the case; (3) the point of the proceedings when the settlement occurs; (4) the
probability of success on the merits; (5) the range of possible recovery; and (6) counsel’s opinion.”
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McHone v. Donald P. Hoekstra Plumbing, Inc., No. 10-60322-CIV, 2010 WL 4625999, at *1 (S.D.
Fla. Nov. 4, 2010) (citing Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1241 (M.D. Fla. 2010)); see
also Leverso v. SouthTrust Bank of Ala., Nat’l Ass’n., 18 F.3d 1527, 1530 n.6 (11th Cir. 1994).
Finally, the “FLSA 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 v. Miller, 307 F. App’x 349, 351
(11th Cir. 2009).
III.

ANALYSIS

On the present record, the Court cannot find that the parties’ settlement agreement is fair and
reasonable. The Court questions the amount of Plaintiff’s counsel’s fees and costs. It is unclear
whether the amount of fees and costs was calculated as a percentage of the total settlement amount,
or as the product of counsel’s hourly rate and time spent working on this case. If it was the latter, the
Court notes that Plaintiff’s counsel has submitted no affidavit or other evidence supporting the
reasonableness of the amount of fees and costs. See Comstock v. Fla. Metal Recycling, LLC, No. 0881190-CIV, 2009 WL 1586604, at *2 (S.D. Fla. June 5, 2009) (“In assessing the reasonableness of
attorney's fees to be awarded following an FLSA settlement, courts use the lodestar method. . . .
Thus, the plaintiff's attorney must provide the court with documentation showing the number of hours
expended, as well as support for the claimed hourly rate.”). Although the Court recognizes that this
case involved significant motion practice, as described supra, without further information the Court
cannot determine whether the fees requested are reasonable compensation.
The Court will allow the parties to file a renewed motion for settlement approval. In addition
to explaining how Plaintiff’s attorney’s fees and costs were calculated and demonstrating why that
amount is reasonable, any renewed motion should do the following:
a. State whether the settlement agreement would result in a complete recovery of all wages
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that Plaintiff claimed to be owed.
b. Explain, with specificity, the nature of the parties’ bona fide dispute and why the
settlement agreement represents a fair and reasonable resolution of that dispute, in light of
the six factors outlined above.
Failure to comply with these requirements may result in denial of the motion for settlement approval.
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.

The parties’ Joint Motion to Approve FLSA Settlement and for Dismissal with
Prejudice [DE 73] is DENIED without prejudice.

2.

On or before Friday, February 26, 2016, the parties may file a renewed request for
settlement approval. Failure to timely file a renewed joint motion and proposed
settlement may result in the entry of a final order of dismissal without prejudice
without further notice.

DONE AND ORDERED in Chambers, Fort Pierce, Florida, this 19th day of February, 2016.

Copies furnished to:
Counsel of Record

ROBIN L. ROSENBERG
UNITED STATES DISTRICT JUDGE

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