Owens et al v. GLH Capital Enterprise, Inc. et al
ORDER, GRANTING 60 Joint Motion to Approve Settlement and to Dismiss Action with Prejudice. This case is DISMISSED with prejudice. Judgment will be entered accordingly. Signed by Judge Nancy J. Rosenstengel on 3/9/2018. (bak)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
GLH CAPITAL ENTERPRISE, INC.,
M.L.K. ENTERPRISES, LLC, BACK
STREET ENTERTAINMENT, LTD., and )
CHARLES “JERRY” WESTLUND, JR.,
TABITHA OWENS and
CHAD WALTERS, on behalf of
themselves and all others similarly
Case No. 16-CV-1109-NJR-SCW
SETTLEMENT APPROVAL AND DISMISSAL ORDER
ROSENSTENGEL, District Judge:
Pending before the Court is the Parties’ Joint Motion for Order Approving
Settlement and Dismissing the Action with Prejudice (Doc. 60). The Court held a hearing
on the motion on March 8, 2018. For the reasons set forth below, the Court grants the
Plaintiffs Tabitha Owens and Chad Walters filed this lawsuit in their individual
capacities and on behalf of all others similarly situated, alleging that Defendants failed to
pay them overtime at a rate of one and one-half times the regular rate for hours worked
in excess of forty hours in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 207(a)(1) and the Illinois Minimum Wage Law (“IMWL”), 820 ILCS 105/3-4a. On July
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13, 2017, the Court conditionally certified the case as a collective action and authorized
notice to the proposed collective class (Doc. 41). Five current and former employees of
Defendants, in addition to the two named Plaintiffs, have filed consents to join this
lawsuit. On January 10, 2017, Defendant Westlund filed a motion to dismiss Plaintiffs’
claims (Doc. 29). Defendant Westlund also filed a counterclaim against Plaintiffs for
False Light and Defamation Per Se (Doc. 28). On January 31, 2017, Plaintiffs filed a
motion to dismiss Defendant Westlund’s counterclaim (Doc. 36).
On July 14, 2017, the Court denied Defendant Westlund’s motion to dismiss and
granted Plaintiffs’ motion to dismiss Defendant Westlund’s counterclaim (Doc. 43). The
case then moved into the collective notice period, discovery, and settlement
negotiations. Plaintiffs and Defendants have reached a settlement of the case and now
seek final settlement approval and dismissal of this case with prejudice (Doc. 60). Notice
of the settlement was sent out to the class members and they had until March 2, 2018 to
file any objections to the settlement. No objections have been filed.
A. Approval of Settlement Agreement
First, the Court finds that final certification of the class is appropriate. The class
members’ claims arise from similar factual and employment settings, Defendants
asserted numerous defenses applicable to all class members, and fairness and
procedural considerations support collective treatment. See Burkholder v. City of Fort
Wayne, 750 F. Supp. 2d 990, 993-994 (N.D. Ind. 2010) (the Court “must make some final
class certification before approving a collective action settlement”) (quoting Carter v.
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Anderson Merchandisers, LP, Nos. EDCV 08-0025-VAP (OPx), EDCV 09-216-VAP (OPx),
2010 WL 1946784, at *4 (C.D. Cal. May 11, 2010)).
The Court also finds that the settlement is fair, adequate, and reasonable.
Stipulated settlements in a FLSA case must be approved by the Court. Burkholder, 750 F.
Supp. 2d at 994. “To determine the fairness of a settlement under the FLSA, ‘the court
must consider whether the agreement reflects a reasonable compromise of disputed
issues rather than a mere waiver of statutory rights brought about by an employer’s
overreaching.’” Id. at 995 (quoting Tuan Le v. Sita Info. Networking Computing USA, Inc.,
No. 07-CV-86 (JS)(MLO), 2008 WL 724155, at *1 (E.D.N.Y. Mar. 13, 2008)). “The court
must review settlements because there is ‘a fear that employers would coerce employees
into settlement and waiver’ of their claims.” Id.
“Normally, a settlement is approved where it is the result of ‘contentious
arm’s-length negotiations, which were undertaken in good faith by counsel . . . and
serious questions of law and fact exist such that the value of an immediate recovery
outweighs the mere possibility of further relief after protracted and expensive
litigation.’” Id. (quoting Reyes v. Buddha-Bar NYC, No. 08 CV 2494 (DF), 2009 WL 5841177,
at *3 (S.D.N.Y. May 28, 2009)). “Furthermore, ‘courts may enter judgments on a basis that
does not require full payment of liquidated damages after scrutinizing the proposed
settlements for fairness.’” Id. (quoting Elliott v. Allstate Investigations, Inc., No. 07 CV 6078,
2008 WL 728648, at *1 (S.D.N.Y. Mar. 19, 2008)).
“When reviewing a FLSA class action settlement, a court normally considers the
following factors: (1) the complexity, expense, and likely duration of the litigation;
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(2) the reaction of the class to the settlement; (3) the stage of the proceeding and the
amount of discovery completed; (4) the risks of establishing liability; (5) the risks of
establishing damages; (6) the risks of maintaining the class action through the trial;
(7) the ability of the defendants to withstand a larger judgment; (8) the range of
reasonableness of the settlement fund in light of the best possible recovery; and (9) the
range of reasonableness of the settlement fund in light of all the risks of litigation.” Id.
(quoting Misiewicz v. D’Onofrio Gen. Contractors, No. 08 CV 4377, 2010 WL 2545439, at *3
(E.D.N.Y. May 17, 2010)).
The Court has considered and applied the factors set forth above and finds the
settlement to be fair, reasonable, and adequate when balanced against the probable
outcome of further litigation and the risks related to liability and damages.
Counsel represented that they participated in a settlement conference with
Magistrate Judge Williams, and it is clear that the Settlement was a result of contentious
arm’s-length negotiations conducted by experienced counsel for all parties. Prior to the
settlement, each side independently and thoroughly investigated the claims and
defenses at issue. This allowed each side intelligently, and in good faith, to weigh both
the risks and benefits of settlement as compared to continued litigation. The Court finds
that approving the settlement will save the parties from years of litigation and
tremendous uncertainty as to the ultimate outcome of the litigation. It should further be
noted that no objections were filed to the Settlement Agreement. The Court ultimately
finds that the settlement is fair, adequate, reasonable, and in the best interest of the
parties, and is therefore approved.
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B. Approval of Attorneys’ Fees and Costs
As part of the Settlement, Plaintiffs’ counsel seek the approval of $20,000.00 in
attorneys’ fees and costs. The attorneys representing Plaintiffs in this case are
experienced wage and hour litigators and have obtained a positive outcome on behalf of
the collective class. Plaintiffs’ former counsel Jesse Young 1 submitted a declaration
Doc. 60-3) indicating that Plaintiffs’ counsel actually incurred more than $64,000.00 in
fees and expenses in this case. Additionally, the Court asked attorney Charles Ash to
detail the number of hours worked and each attorney’s hourly rate at the Final Approval
Hearing. Counsel Jesse Young also indicated in the declaration that the requested fee
award is consistent with the prevailing market rate in wage and hour class and collective
actions in this District and others. The parties have agreed that the attorneys’ fees
represent fair and adequate compensation for the work performed.
Taking into account the stage of the litigation, which included discovery,
research, and negotiations, the Court considers the discounted amount of $20,000.00 in
Plaintiffs’ attorneys’ fees and costs to be reasonable. See Binissia v. ABM Industries, Inc.,
Case No. 13 cv 1230, 2017 WL 4180289, at *3 (N.D. Ill. Set. 21, 2017) (approving fee award
disproportionate to class’s recovery in FLSA collective action); see also De La Riva v.
Houlihan Smith & Co., Inc., No. 10 C 8206, 2013 WL 5348323 (N.D. Ill. Sept. 24, 2013) (in a
FLSA case in which the parties entered into, and the court approved, a consent decree,
plaintiffs’ counsel petitioned the court for attorneys’ fees and costs and the court
awarded a reduced hourly rate of $450 for the lead attorneys and a reduced hourly rate
Jesse Young voluntarily withdrew as counsel on February 7, 2018, because he left the firm of Sommers
Schwartz, P.C. Charles R. Ash, IV, from Sommers Schwartz, ,P.C. remains counsel of record for Plaintiffs,
however, and he attended the Final Approval Hearing on March 8, 2018 via telephone.
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of $300 for the junior attorney). The Court further finds it reasonable in light of the risk of
nonpayment that counsel faced, since they took the case on a contingent basis.
Accordingly, the Court approves the request for attorneys’ fees.
Accordingly, the Court GRANTS the parties’ Joint Motion to Approve Settlement
and to Dismiss Action with Prejudice (Doc. 60). This action is DISMISSED with
prejudice. Judgment will be entered accordingly.
IT IS SO ORDERED.
DATED: March 9, 2018
s/ Nancy J. Rosenstengel___________
NANCY J. ROSENSTENGEL
United States District Judge
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