Kervin et al v. Supreme Service & Specialty Company, Inc.

Filing 135

ORDER AND REASONS - IT IS ORDERED that the 134 motion to dismiss Plaintiff Jarae Parker without prejudice is GRANTED. Plaintiff Jarae Parkers claims are DISMISSED WITHOUT PREJUDICE. IT IS FURTHER ORDERED that the Joint 133 Motion to Approve Settlement is GRANTED and the parties settlement agreement is APPROVED. IT IS FURTHER ORDERED that this action is DISMISSED WITH PREJUDICE in accordance with the terms of the settlement agreement. Signed by Judge Susie Morgan.(bwn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BRANDON KERVIN, ET AL.,
Plaintiffs

CIVIL ACTION

VERSUS

NO. 15-1172

SUPREME SERVICE & SPECIALTY
COMPANY, INC.,
Defendant

SECTION: “E” (4)

ORDER AND REASONS
Before the Court is the parties’ Joint Motion to Approve Settlement. 1 For the
reasons below, the motion is GRANTED.
BACKGROUND
Plaintiff Brandon Kervin filed this collective action, individually and on behalf of
all others similarly situated, on February 27, 2015. Plaintiffs allege that Defendant
Supreme Service & Specialty Company, Inc. (“Defendant”) violated the Fair Labor
Standards Act of 1938 2 because Defendant failed to pay Plaintiffs overtime wages for all
hours worked in excess of 40 hours per week. 3
The Court approved the parties’ consent motion to certify the collective class on
August 25, 2015,4 and 169 individuals joined the lawsuit by the Court’s deadline. 5
Eighteen plaintiffs were later voluntarily dismissed by agreement. 6 Two individuals who
were inadvertently left off the notice list were allowed to participate in the case and
included in settlement negotiations. 7

R. Doc. 133.
29 U.S.C. § 201, et seq.
3 R. Doc. 1 ¶ 1.2.
4 R. Doc. 74.
5 See R. Doc. 133-1 at 1.
6 R. Docs. 105, 118, 119.
7 R. Doc. 130, 131.
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On June 6, 2016, the parties reached a settlement agreement in a settlement
conference before the magistrate judge. 8 The parties’ settlement resolves the claims of all
but one of the plaintiffs. 9 The parties agreed to voluntarily dismiss Plaintiff Jarae Parker’s
claims without prejudice and resolve his claims in another action pending in another
section of this Court. 10 On June 13, 2016, the parties jointly moved to approve the
proposed settlement agreement and dismiss this matter with prejudice. 11
STANDARD OF LAW
The Court “must approve any settlement reached by the parties which resolves the
claims in this action brought under [29 U.S.C. § 216(b)].”12 “In order to approve a
settlement proposed by an employer and employees of a suit brought under the FLSA and
enter a stipulated judgment, a court must determine that the settlement is a fair and
reasonable resolution of a bona fide dispute over FLSA provisions.” 13 The Court must
scrutinize the proposed settlement agreement to verify that parties are not circumventing
the “clear FLSA requirements” by entering into a settlement agreement. 14 When deciding
whether to approve a proposed settlement, the Court must assess whether the proposed
settlement is both (1) the product of a bona fide dispute over the FLSA’s provisions and
(2) fair and reasonable. 15

R. Doc. 133
See R. Doc. 133-1 at 4.
10 See Gomez, et al v. Supreme Service & Specialty Co., Inc., No. 2:15-cv-05264. Accordingly, the parties’
joint motion to dismiss Plaintiff Jarae Parker without prejudice is GRANTED. R. Doc. 134. The claims of
Plaintiff Jarae Parker are DISMISSED WITHOUT PREJUDICE.
11 R. Doc. 133.
12 Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 717 (E.D. La. 2008).
13 Id. at 719.
14 See id.
15 Domingue v. Sun Electric & Instrumentation, Inc., No. 09-682, 2010 WL 1688793, at *1 (E.D. La Apr.
26, 2010).
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ANALYSIS
I.

Is the Settlement the Product of a Bona Fide Dispute?
When deciding whether a bona fide dispute exists, the Court considers whether

there is a “genuine dispute as to the Defendant’s liability under the FLSA,” 16 as “[w]ithout
a bona fide dispute, no settlement could be fair and reasonable.” 17 This is particularly
true in an “FLSA [action because its provisions] are mandatory, and not subject to
negotiation and bargaining between employers and employees.” 18
The Court finds that a bona fide dispute exists between Plaintiffs and Defendant
with regard to whether Defendant violated the FLSA. The parties contested both the hours
worked and compensation due. Plaintiffs prosecuted the case through written discovery
and a corporate deposition of Supreme Service’s former chief operations officer. 19
Supreme Service, meanwhile, submitted its own written discovery to Plaintiffs, took four
depositions (and had about five more planned at the time of settlement), and reviewed
thousands of pages of records to support its affirmative defenses and its position
concerning potential damages. 20 Supreme Service also had filed a motion for summary
judgment. 21 Additionally, a five-day jury trial is set to begin September 19, 2016. 22 The
Court finds this sufficient to conclude that in this case there was “both aggressive
prosecution and strenuous defense” to prove a bona fide dispute. 23

Allen v. Entergy Operations, Inc., No. 11-1571, 2016 WL 614687, at *1 (E.D. La. Feb. 11, 2016).
Collins, 568 F. Supp. 2d at 719.
18 Allen, 2016 WL 614687, at *1.
19 R. Doc. 133 at 12.
20 R. Doc. 133 at 12-13.
21 R. Doc. 128.
22 R. Doc.
23 See Atkins v. Worley Catastrophe Response, LLC, No. 12-2401, 2014 WL 1456382, at *2 (E.D. La. Apr.
14, 2014).
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II.

Is the Settlement Fair and Reasonable?
In determining whether a negotiation is fair and reasonable under the FLSA, courts

are guided by Reed v. General Motors Corporation, in which the Fifth Circuit enumerated
factors to determine whether a settlement is fair in a class action under Rule 23 of the
Federal Rules of Civil Procedure. 24 Courts, however, “adopt or vary these factors in their
application in light of the special role of the Court in settlement of FLSA claims.” 25 There
are six factors: (1) the existence of fraud or collusion behind the settlement; (2) the
complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings
and the amount of discovery completed; (4) the probability of the plaintiffs’ success on
the merits; (5) the range of possible recovery; and (6) the opinions of class counsel, class
representatives, and absent class members. 26
A. Application of the Factors
1. The existence of fraud or collusion behind the settlement
With respect to the “fraud or collusion” factor, there are several presumptions that
guide a court’s determination of whether a settlement is fair and reasonable. “[T]here is a
strong presumption in favor of finding a settlement fair,” 27 and, absent evidence to the
contrary, there is a presumption that no fraud or collusion occurred between counsel. 28
In light of these presumptions, however, “it is clear that the court should not give rubberstamp approval.” 29 The Court has found no indication of fraud or collusion. The parties

Allen, 2016 WL 614687, at *2; Reed v. Gen. Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983). See also
Collins, 568 F. Supp. 2d at 722 (noting “Rule 23 does not control FLSA collective actions, [but] many courts
have adopted many of Rule 23’s procedures” given the court’s discretion under §216(b)).
25 Collins, 568 F. Supp. 2d at 722.
26 Id. (citing Camp v. Progressive Corp., No. 01-2680, 2004 WL 2149079 (E.D. La. Sept. 23, 2004)).
27 Domingue, 2010 WL 1688793, at *1 (internal quotations omitted).
28 Akins, 2014 WL 1456382, at *2.
29 Id. (quoting 4 NEWBERG ON CLASS ACTIONS §11.41 (4th ed.)).
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have engaged in discovery, motions practice, and negotiations to resolve this matter. This
factor indicates the settlement is fair and reasonable.
2. The complexity, expense, and likely duration of the litigation
The instant case has been pending more than a year and, while the discovery period
has almost concluded and a five-day jury trial is set to begin September 19, 2016, there
are still numerous unresolved issues, including number of hours worked and
compensation due. The Court finds that the unresolved issues and the complexity of the
litigation indicate the settlement is fair and reasonable.
3. The stage of the proceedings and the amount of discovery completed
A court will consider how much formal discovery has been completed for two
reasons: (1) “extensive discovery [by the parties indicates] a good understanding of the
strengths and weaknesses of their respective cases and hence that the settlement’s value
is based upon such adequate information,” and (2) “full discovery demonstrates that the
parties have litigated the case in an adversarial manner and . . . therefore . . . settlement
is not collusive but arms-length.” 30 The lack of much formal discovery is not necessarily
fatal, however, and a court may look to informal avenues of gathering information or may
approve a settlement with no formal discovery conducted. 31
In this case, the parties have engaged in both pre-certification discovery as well as
extensive “merits” discovery for the last eleven months. Supreme Service’s corporate
representative was deposed, and four plaintiffs were deposed. The parties have exchanged
thousands of pages of documents. The Court therefore finds the parties have litigated the

NEWBERG ON CLASS ACTIONS § 13:50 (5th ed.)
See id; In re Chicken Antitrust Litig. Am. Poultry, 669 F.2d 228, 241 (5th Cir. 1982) (explaining that
formal discovery is not “a necessary ticket to the bargaining table” where the parties and the court are
adequately informed to determine the fairness of the settlement) (citing In re Corrugated Container
Antitrust Litigation, 643 F.2d 195, 211 (5th Cir. 1981)).

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case in an adversarial manner and are sufficiently familiar with the facts of this case to
reach a fair settlement. This factor weighs in favor of finding the settlement fair and
reasonable.
4. The probability of the plaintiffs’ success on the merits
It is uncertain at this point whether Plaintiffs would be successful at trial.
Defendant provided a series of affirmative defenses, including the Motor Carrier Act
(“MCA”) exemption to the FLSA’s overtime pay requirements and prescription. 32
Defendant contended the claims of 28 Plaintiffs should be wholly barred and the claims
of 59 Plaintiffs should be partially barred because Plaintiffs lack evidence of the
“willfulness” required to apply the FLSA’s three-year statute of limitations. 33
Defendants asserted that the MCA exemption to FLSA’s overtime pay
requirements applies to 84 Plaintiffs who recorded driving across state lines vehicles in
excess of 10,000 pounds. 34 Plaintiffs contested the MCA exemption citing the “covered
employee” exception which allows employees whose work includes driving vehicles
weighing less than 10,000 pounds to be eligible for overtime. 35
The Court finds that given the numerous unresolved disputes between the parties
and the stage at which this litigation remains, it is unclear whether Plaintiffs would be
meritorious. This factor indicates the settlement is fair and reasonable.
5. The range of possible recovery
The settlement amounts for the majority of the putative class are based on a
negotiated number of overtime hours that the Plaintiffs allegedly worked but for which

See R. Doc. 21 at 9–11.
R. Doc. 133-1 at 2.
34 Id.
35 Id.
32
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they were not paid overtime. 36 Compromise amounts of overtime are provided for those
Plaintiffs whose claims may be completely barred. 37 The Court finds that all of the agreedupon amounts are within a range of possible recovery for the Plaintiffs, indicating the
settlement is fair and reasonable. 38
6. The opinions of class counsel, class representatives, and absent class members
The only parties to the settlement are the Plaintiffs and Defendant Supreme
Service Company, Inc. There are no “absent class members.” 39 All parties are represented
by counsel. 40 The parties jointly seek judicial approval of a settlement agreement that
addresses a bona fide dispute and was negotiated in good faith. The parties negotiated a
settlement agreement before the magistrate judge. The Court finds the final factor
indicates the settlement is fair and reasonable.
B. Conclusion
All six of the factors indicate the proposed settlement is fair and reasonable.
Accordingly, the Court finds the proposed settlement agreement is fair and reasonable.
CONCLUSION
For the foregoing reasons, the Court finds the settlement agreement is both
premised on a bona fide dispute and fair and reasonable.
Accordingly;

Id. at 3.
Id. at 4.
38 See Collins, 568 F.Supp. 2d at 726-27.
39 See LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 288 (5th Cir. 1975) (“Under [29 U.S.C. §
216(b)], . . . no person can become a party plaintiff and no person will be bound by or may benefit from
judgment unless he has affirmatively ‘opted into’ the class; that is, given his written, filed consent.”); Brown
v. United Furniture Industries, Inc., No. 13-246, 2015 WL 1457265, at *5 (N.D. Miss. Mar. 30, 2015) (“[I]n
an FLSA collective action, there are no absent class members; only those who have opted in are considered
parties to the suit and bound by the results of the action.”).
40 “‘The Court is entitled to rely on the judgment of experienced counsel in its evaluation of the merits of a
class action settlement.’” Lackey v. SDT Waste & Debris Servs., LLC, No. 11-1087, 2014 WL 4809535, at *2
(E.D. La. Sept. 26, 2014) (quoting Collins, 568 F. Supp. 2d at 727).
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IT IS ORDERED that the motion to dismiss Plaintiff Jarae Parker without
prejudice is GRANTED. 41 Plaintiff Jarae Parker’s claims are DISMISSED
WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that the Joint Motion to Approve Settlement is
GRANTED and the parties’ settlement agreement is APPROVED.
IT IS FURTHER ORDERED that this action is DISMISSED WITH
PREJUDICE in accordance with the terms of the settlement agreement.
New Orleans, Louisiana, this 17th day of June, 2016.
_________ ______________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

41

R. Doc. 134.

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