Lackey et al v. SDT Waste and Debris Services, L.L.C. et al
Filing
302
ORDER AND REASONS granting 301 Joint MOTION for Settlement Approval. The settlement agreement is ACCEPTED, and the case is DISMISSED WITH PREJUDICE. Signed by Judge Jane Triche Milazzo.(ecm) Modified document type on 9/26/2014 (ecm).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TANYA LACKEY
CIVIL ACTION
VERSUS
NO. 11-1087
SDT WASTE AND DEBRIS
SERVICES, LLC ET AL.
SECTION "H"(4)
ORDER AND REASONS
Before the Court is a Joint Motion for Settlement Approval (R. Doc. 301).
Accordingly, the Motion is GRANTED, the settlement is ACCEPTED, and the
case is DISMISSED WITH PREJUDICE.
BACKGROUND
In this case, 200 opt-in plaintiffs brought suit under the Fair Labor
Standards Act (FLSA) against their former or current employer SDT Waste &
Debris Services, its owner Sidney D. Torres IV, its Vice President Jason
McDaniel, and its operations manager Henry Gonlag (collectively, "Defendants").
1
Plaintiffs allege that while Defendants deducted 30 minutes per day from
Plaintiffs' paid time for a lunch break, they were not permitted to stop working
to eat. Plaintiffs allege that this practice resulted in work for which they were
not paid and that this work was in excess of forty hours per week. Accordingly,
Plaintiffs brought this collective action for unpaid overtime. The settlement
agreement at issue is the culmination of more than three years of litigation.
Because this case arises under the FLSA, this Court must approve of the
fairness of the settlement.1 For the following reasons, the settlement is accepted.
LAW AND ANALYSIS
"When employees bring a private action for back wages under the FLSA,
and present to the district court a proposed settlement, the district court may
enter a stipulated judgment after scrutinizing the settlement for fairness."2 To
pass muster, a settlement agreement must be both (1) the product of a bona fide
dispute and (2) fair and reasonable.3 This Court will analyze the fairness of the
settlement agreement at issue accordingly.
A. Bona Fide Dispute
In determining whether a bona fide dispute exists, the court must look for
a genuine dispute as to the defendants liability under the FLSA. "This is
because the provisions of the FLSA are mandatory, and not subject to
1
Lynn's Food Stores, Inc. v. U.S. By & Through U.S. Dep't of Labor, Employment
Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1353 (11th Cir. 1982).
2
Id.
3
Id.; Domingue v. Sun Elec. & Instrumentation, Inc., CIV.A. 09-682, 2010 WL 1688793,
at *1 (E.D. La. Apr. 26, 2010).
2
negotiation and bargaining between employers and employees."4 The court
should ensure that the settlement does not allow the employer to negotiate
around the FLSA's mandatory requirements.5 "[S]ome doubt must exist that the
plaintiffs would succeed on the merits through litigation of their claims."6
Under the FLSA, an employee must be paid time and one-half for any time
worked in excess of forty hours per week.7 Plaintiffs argue that they are owed
overtime because they worked through their lunch breaks but were not paid for
that work because a daily 30-minute meal break was subtracted from their pay.
Resolution of this matter hinges on the factual dispute of whether the
Plaintiff–employees were permitted to take lunch breaks.
On Motion for
Summary Judgment, the Plaintiffs presented affidavits that clearly showed that
the employees were denied their meal breaks;8 in response, Defendants
marshaled compelling evidence to the contrary, including declarations in which
employees admitted that they took meal breaks.9 In light of this genuine issue
of material fact, summary judgment was denied.10 Because Plaintiffs have
evidence of an explicit violation of the FLSA and Defendant's have a clear
defense to these allegations, the Court finds that a genuine dispute exists
4
Domingue, 2010 WL 1688793, at *1 (quoting Collins v. Sanderson Farms, Inc., 568
F. Supp. 2d 714, 718 (E.D. La. 2008) (internal quotations and alterations omitted)).
5
Collins, 568 F. Supp. 2d at 719.
6
Id. at 719–20.
7
29 U.S.C. § 207(2)(C) (West 2014).
8
R. Doc. 235.
9
R. Doc. 237.
10
R. Doc. 271.
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between the parties as to whether or not the Defendants violated the FLSA.
This is a bona fide dispute such that the settlement agreement at issue is not an
effort by the Defendants to skirt the mandatory requirements of the FLSA.
B. Fair and Reasonable
Although there are marked differences between a collective action under
the FLSA and a Rule 23 class action,11 courts have found that the factors used
in determining the fairness of a settlement under Rule 23 should be applied by
analogy in considering the fairness of a settlement of a FLSA collective action.12
In considering these factors below, this Court finds that the settlement
agreement at issue is fair and reasonable.
1. The existence of fraud or collusion behind the settlement
In the absence of evidence to the contrary, the court may presume that no
fraud or collusion occurred between counsel.13 There is no evidence of such here.
This settlement was reached after three settlement conferences in front of a
magistrate judge, as well as a 12-hour mediation with an expert in FLSA claims.
As such, it is clear that this settlement was reached through legitimate armslength negotiation.14
11
See Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 916–19 (5th Cir. 2008).
12
E.g., Collins, 568 F. Supp. 2d at 721; Liger v. New Orleans Hornets NBA Ltd. P'ship,
CIV.A. 05-1969, 2009 WL 2856246, at *2 (E.D. La. Aug. 28, 2009); Altier v. Worley Catastrophe
Response, LLC, CIV.A. 11-241, 2012 WL 161824, at *13–14 (E.D. La. Jan. 18, 2012).
13
Collins, 568 F. Supp. 2d at 725 (citing Camp v. Progressive Corp., CIV.A. 01-2680,
2004 WL 2149079, at *7 (E.D. La. Sept. 23, 2004)).
14
See Altier, 2012 WL 161824, at *15 ("The court may presume that a proposed
settlement is fair and reasonable when it is the result of arm's-length negotiations.").
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2. The complexity, expense and likely duration of the litigation
This case, which has been pending since May of 2011, is complex such that
it involves 200 plaintiffs and was set for an 8-day jury trial.15
3. The stage of the proceedings and the amount of discovery completed
When the parties settled, this case was only a few weeks from trial.
Extensive discovery had been undertaken and completed, and all 200 plaintiffs
had responded to written discovery requests. In addition, counsel had taken
about 20 depositions. In preparation for trial, each party had submitted at least
ten witnesses that it planned to call to testify.
4. The probability of Plaintiffs' success on the merits
Plaintiffs' counsel believed that the case had a high likelihood to succeed;
however, Defendants raised significant defenses. The parties reached this
settlement because both realized the inherent risks in jury verdicts and the
appellate process.16
5. The range of possible recovery
At a fairness hearing, counsel for both parties stipulated to the range of
possible recovery. The amount agreed to in the settlement is squarely within the
range of possible recovery and represents a genuine compromise of the dispute.
6. The opinions of class counsel, class representatives, and absent class
members
Counsel for both Plaintiffs and Defendants have, after extensive
negotiation, approved of this agreement and recommended it to their clients. At
15
R. Doc. 287.
16
See Collins, 568 F. Supp. 2d at 726.
5
the fairness hearing, both stated that they think the settlement is fair and
reasonable. "The Court is entitled to rely on the judgment of experienced
counsel in its evaluation of the merits of a class action settlement."17
Unlike in a traditional class action, all class members have affirmatively
joined into this litigation and are represented by Plaintiffs' counsel. Accordingly,
there are no absent class members whose rights will be determined by this
settlement and thus their interests need not be considered.
In consideration of these factors, it is clear to this Court that the
settlement agreement reached between the parties in this case is a fair and
reasonable resolution to a bona fide dispute.
C. Attorneys' Fees
The FLSA provides that a court “shall, in addition to any judgment
awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid
by the defendant, and costs of the action.”18
The Court, however, must
determine that the proposed attorneys' fees are reasonable.19
In their
agreement, Defendants have agreed to bear Plaintiffs' attorneys' fees, which will
be divided between the two law firms that worked as Plaintiffs' counsel on the
case.
The Fifth Circuit employs the lodestar method to determine the
reasonableness of attorneys' fees in FLSA collective actions.20 The lodestar
17
Id. at 727.
18
29 U.S.C. § 216(b) (West 2014).
19
Collins, 568 F. Supp. 2d at 728.
20
Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999).
6
method requires the court to multiply the number of hours reasonably expended
in the case by an appropriate hourly rate in the community.21 An hourly rate is
considered prima facie reasonable when an attorney has provided his hourly rate
to compute the lodestar method, it is within the range of prevailing market
rates, and is not contested.22 As such, this Court has multiplied the more than
1,500 hours worked by Plaintiffs' counsel on this case by the hourly rates
provided by Plaintiffs' counsel. The amount produced by this calculation far
exceeds the amount that counsel will receive under the settlement. In addition,
the amount agreed to in the settlement is in accord with the 40% contingency fee
agreement that was signed by all Plaintiffs. While 40% is a higher contingency
than most courts have allowed,23 this Court finds that it is reasonable in light of
the lodestar calculation and foregoing discussion of the complexity, longevity,
and extensive discovery that took place in this case.
CONCLUSION
For the foregoing reasons, the Motion is GRANTED, the settlement
agreement is ACCEPTED, and the case is DISMISSED WITH PREJUDICE.
New Orleans, Louisiana, this 26th day of September, 2014.
___________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
21
Id.
22
Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 328 (5th Cir. 1995).
23
See Altier, 2012 WL 161824, at *12–25.
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