Hohensee v. Divine Miracles, Inc. et al

Filing 56

ORDER AND REASONS - IT IS ORDERED that the 55 Joint Motion to Approve Settlement be and hereby is GRANTED and that the Parties' settlement agreement is APPROVED. Signed by Judge Susie Morgan. (bwn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
LYDIA HOHENSEE,
Plaintiff

CIVIL ACTION

VERSUS

NO. 18-1287

DIVINE MIRACLES, INC., ET AL.,
Defendants

SECTION: “E”(2)

ORDER AND REASONS
Before the Court is the Parties’ Joint Motion to Approve Settlement.1 For the
reasons that follow, the motion is GRANTED.
BACKGROUND
Plaintiff Lydia Hohensee filed this collective action, individually and on behalf of
others similarly situated, on February 8, 2018.2 Plaintiff alleges Defendants Divine
Miracles, Inc. and Donyette Williams violated the Fair Labor Standards Act (“FLSA”)3 by
failing to pay her and other employees one and one half times their hourly rate for the hours
they work in excess of forty hours per week, failing to compensate her and other employees
for all hours worked, and failing to comply with the record-keeping provisions of the FLSA.4
On July 26, 2018, Plaintiff moved for conditional certification as a collective action
and notice to potential class members.5 The putative class was defined as “all individuals
who: (1) Worked for Divine Miracles, Inc. at any time during the past three years; and (2)
Worded as a home health care worker (“direct support worker”) on behalf of Divine

R. Doc. 55.
R. Doc. 1.
3 29 U.S.C. § 201 et seq.
4 R. Doc. 1.
5 R. Doc. 45.
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Miracles, Inc. and were paid straight time for all hours worked.”6 Defendants opposed.7
Conditional certification as a collective action has not been granted.
On October 31, 2018, the parties jointly filed the instant motion to approve the
proposed settlement agreement between Plaintiff and Defendants.8
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)].”9 This is true whether or not the
action has been certified as a collective action.10 “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.”11 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.12 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.13

Id. at 1.
R. Doc. 47.
8 R. Doc. 55.
9 Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 717 (E.D. La. 2008).
10 Id. at 719 (“[A] court must approve any settlement of claims brought under § 216(b) even if there is only
one plaintiff.”) (citing Walker v. Home at Last of Brevard, Inc., 2007 WL 2698535 (M.D.Fla. 9/12/07);
Russell v. Circle L Roofing, Inc., 2007 WL 1549307 (M.D.Fla. 5/28/07); Stalnaker v. Novar Corp., 293
F.Supp.2d 1260 (M.D.Ala.2003)).
11 Id.
12 See id.
13 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.

The Settlement is 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,”14 as “[w]ithout
a bona fide dispute, no settlement could be fair and reasonable.”15 This is particularly
true in an “FLSA [action because its provisions] are mandatory, and not subject to
negotiation and bargaining between employers and employees.”16
The Court finds a bona fide dispute exists between Plaintiff and Defendants with
regard to whether Defendants violated the FLSA. Plaintiff and Defendants dispute whether
Plaintiff was properly paid regular and overtime compensation and whether Defendants
maintained accurate records.17 The Court finds this sufficient to conclude that, in this case,
there was “aggressive prosecution and strenuous defense” to prove a bona fide dispute.18
II.

The Settlement is 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.19 Courts, however, “adopt or vary these factors in their
application in light of the special role of the Court in settlement of FLSA claims.”20 There
are six factors: (1) the existence of fraud or collusion behind the settlement; (2) the
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.
16 Allen, 2016 WL 614687, at *1.
17 R. Doc. 1 at 3–5, ¶¶ 7–16; R. Doc. 43 at 7–8, ¶¶ 7–16.
18 See Atkins v. Worley Catastrophe Response, LLC, No. 12-2401, 2014 WL 1456382, at *2 (E.D. La. Apr.
14, 2014).
19 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)).
20 Collins, 568 F. Supp. 2d at 722.
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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.21
A. 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,”22 and, absent evidence to the
contrary, there is a presumption that no fraud or collusion occurred between counsel.23 In
light of these presumptions, however, “it is clear that the court should not give rubberstamp approval.”24 The Court has found no indication of fraud or collusion. The parties
have engaged in discovery, motions practice, and negotiations to resolve this matter. This
factor indicates the settlement is fair and reasonable.
B. The complexity, expense, and likely duration of the litigation
The instant case has been pending for more than seven months. The Court has
scheduled a five-day bench trial for the case, to begin on August 5, 2019.25 If a collective action
were certified, there would be numerous issues of fact that would contribute to the
complexity, expense, and duration of the litigation. The Court finds that the unresolved issues
and the complexity of the litigation indicate the settlement is fair and reasonable.
C. The stage of the proceedings and the amount of discovery completed
A court will consider how much formal discovery has been completed for two

Id. (citing Camp v. Progressive Corp., No. 01-2680, 2004 WL 2149079 (E.D. La. Sept. 23, 2004)).
Domingue, 2010 WL 1688793, at *1 (internal quotations omitted).
23 Akins, 2014 WL 1456382, at *2.
24 Id. (quoting 4 NEWBERG ON CLASS ACTIONS §11.41 (4th ed.)).
25 R. Doc. 46 at 12.
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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.”26 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.27
In this case, the Parties have engaged in discovery relating to the motion to
conditionally certify the class.28 Because there is only one named Plaintiff, the parties have
had a sufficient opportunity to engage in discovery and reach a good understanding of the
strengths and weaknesses of their respective cases. The Court finds the Parties have
litigated the 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.
D. The probability of Plaintiffs’ success on the merits
Because the instant litigation is in its early stages, and Plaintiff’s motion for
conditional class certification is pending, it is uncertain whether Plaintiffs would be
successful. The Parties have taken into account the uncertain outcome and the risk of
continued litigation, as well as the difficulties and delays inherent in such litigation and the
likelihood of protracted appellate review. The Court finds that, given the unresolved

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)).
28 R. Doc. 45.
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disputes between the parties and the stage at which this litigation remains, it is unclear
whether and to what extent Plaintiffs would be meritorious. This factor indicates the
settlement is fair and reasonable.
E. The range of possible recovery
The settlement amount for Plaintiff is $10,500.29 The parties do not indicate how
this figure was calculated, but it is not a nominal amount. The Court cannot ascertain
whether the agreed-upon amount is within a range of possible recovery for the Plaintiffs.
There is no evidence indicating the amount would not be within a range of possible
recovery. As a result, this factor does not weigh for or against a finding that the settlement
is fair and reasonable.
F. The opinions of class counsel, class representatives, and absent class members
There are three parties in the case. No class has been certified. As a result, there
are no “absent class members.” The Parties jointly seek judicial approval of a settlement
agreement that addresses a bona fide dispute and was negotiated in good faith. The Court
finds the final factor indicates the settlement is fair and reasonable.
CONCLUSION
For the foregoing reasons, IT IS ORDERED that the Joint Motion to Approve
Settlement be and hereby is GRANTED and that the Parties’ settlement agreement is
APPROVED.30
New Orleans, Louisiana, this 14th day of November, 2018.
________________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
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R. Doc. 55-1 at 2, ¶ 4.1.
R. Doc. 131.

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