Wagner v. Plexos Group, LLC

Filing 79

ORDER denying 75 Motion for Reconsideration of 66 Order on Motion for Settlement filed by James Patrick Wagner. Signed by Chief Judge Shelly D. Dick on 11/17/2022. (SWE)

Case 3:19-cv-00822-SDD-EWD

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JAMES PATRICK WAGNER, Individually
and for Others Similarly Situated
CIVIL ACTION
VERSUS
19-822-SDD-EWD
PLEXOS GROUP, LLC
ORDER
Before the Court is the Motion for Reconsideration1 filed by Plaintiff James Patrick
Wagner and the opt-in Plaintiffs (collectively “Plaintiffs”), seeking reconsideration of this
Court’s August 12, 2022, Order2 denying Plaintiffs’ Motion for Settlement Approval.3 The
Motion is unopposed by Defendant Plexos Group, LLC (“Plexos”). For the following
reasons, the Motion is denied.
The Parties sought court approval of a settlement agreement (“the Agreement”)
reached in this FLSA case. Regarding attorney compensation, the Agreement provided
that “Class Counsel shall receive attorneys’ fees in an amount of $146,000.00, which is
approximately 40 percent of the Gross Settlement Amount.”4 The Court denied approval,
finding that the award of attorney’s fees was unreasonable. Plaintiffs moved for
reconsideration, arguing that judicial approval of FLSA settlements under 29 U.S.C. does
not extend to review of settled attorney fees.
The Court stayed proceedings, pending the Fifth Circuit’s ruling on a case with
similar issues.5 However, the Fifth Circuit decided the case on other grounds and did not

1

R. Doc. 75.
R. Doc. 66.
3
R. Doc. 60.
4
R. Doc. 59, p. 4.
5
See Valdez v. Superior Energy Servs., Inc., No. 20-40182, 2022 WL 1184371 (5th Cir. Apr. 21, 2022).
2

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address whether the FLSA allows a court on its own motion to address separately settled
attorney’s fees.6 The Court lifted the stay on July 12, 2022. Through the instant Motion,
Plaintiffs again urge the Court to reconsider its previous decision and approve the
Agreement and settled attorney’s fees.
“District courts have considerable discretion in deciding whether to reconsider an
interlocutory order.”7 However, “this broad discretion must be exercised sparingly in order
to forestall the perpetual reexamination of orders and the resulting burdens and delays.”8
“There are three major grounds justifying reconsideration: (1) an intervening change in
controlling law; (2) the availability of new evidence; and (3) the need to correct clear error
or prevent manifest injustice.”9
Plaintiffs argue that reconsideration is appropriate to prevent manifest injustice
because, absent an approved settlement, Plexos has communicated its intent to move to
decertify the collective.10 Plaintiffs contend that “[i]f the court does not reconsider its
Order, Plaintiffs will likely incur substantial expense defending against a motion for
decertification and potentially a motion for summary judgment.”11
At no point, however, has Plexos indicated that it is unwilling to accept a modified
settlement agreement with the Court’s proposed reduction in attorney’s fees. In fact,
Plexos has expressly stated that it “remains interested and committed to resolving this
dispute in good faith, and will settle on the terms Judge Dick set forth in her August 12,

6

Id. (affirming denial of attorney’s fees because “[e]ven if the district court erroneously concluded that it
needed to approve the settlement in all respects before dismissing the case, that error would not give
[appellant’s] attorney license to ignore the order”).
7
Wagster v. Gautreaux, 2014 WL 46638, at *2 (M.D. La. Jan. 6, 2014).
8
Id.
9
Id.
10
See R. Doc. 78-1.
11
R. Doc. 74, p. 4.

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2021 order.”12 By all accounts, whether this case moves forward depends solely on the
fee award. The proposed Settlement Agreement specifies a gross settlement amount of
$365,000.00.13 The Court will approve a Settlement in the gross amount of $365,000.00
agreed upon by the parties. To be clear, the Court’s reduction of the amount of attorney’s
fees is not intended to and should not be understood by the parties as a reduction in the
gross settlement amount. In short, the reduction in the fee award inures to the benefit of
the Plaintiffs, not the Defendant.
Plaintiffs also point to intervening law, arguing that, since the Court’s August 2021
Ruling, “several courts have noted that review of an FLSA settlement does not extend to
the issue of attorney’s fees when the parties have separately resolved that issue and
none of the parties have requested review.”14 However, this new legal authority is thin at
best. First, Plaintiffs use an “e.g.” signal and cite only a single case, Wagaman v. E-Z
Stop Food Marts, Inc., in the Eastern District of Tennessee.15 Second, Wagaman is
inapposite to the facts of this case. There, the court questioned whether the FLSA
requires courts to independently review the settled amount of attorney's fees when the
parties “negotiated fees separately from Plaintiff's damages claims, and the amount for
attorney's fees did not affect the amount to be paid to Plaintiff.”16 Contrary to Plaintiffs’
argument, Wagaman suggests that judicial scrutiny would apply to contingency fees that
affect an FLSA plaintiff’s overall award, which is the case here.
Plaintiffs also cite Barbee v. Big River Steel, an Eighth Circuit case from before the

12

R. Doc. 78-1, p. 3.
R. Doc. 59
14
R. Doc. 75, p. 4.
15
Wagaman v. E-Z Stop Food Marts, Inc.
16
Id. (internal quotation marks omitted) (emphasis added).
13

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August 2021 Ruling, for the proposition that “authority for judicial approval of FLSA
settlements . . . does not extend to review of settled attorney fees[.]”17 However, like
Wagaman, Barbee suggests a more nuanced approach:
This reading of the statute is consistent with the rationale of the circuits that
require approval for all FLSA settlements because such approval serves the
‘FLSA's underlying purpose’ of protecting workers’ rights.” When the parties
negotiate the reasonable fee amount separately and without regard to the
plaintiff's FLSA claim, the amount the employer pays to the employees’
counsel has no bearing on whether the employer has adequately paid its
employees in a settlement.18
Again, this reasoning undercuts the notion that continency fees in FLSA cases are
immune from judicial scrutiny. By taking a piece of the pie, a contingency fee directly
affects the employee’s recovery and thus “whether the employer has adequately paid its
employees.”19 An unreasonably large contingency fee could detrimentally impact the
“FLSA’s underlying purpose” of protecting workers rights.20
In any case, even if Barbee does shield contingency fees in FLSA cases from
judicial review, the Court declines to follow it. As Plaintiffs acknowledge, the FLSA’s
minimum-wage, maximum-hour, and overtime guarantees “cannot be modified through
contract.”21 Judicial oversight is appropriate to ensure that a settlement agreement is “a
reasonable compromise of disputed issues [rather] than a mere waiver of statutory rights
brought about by an employer’s overreaching.”22 This protection would be meaningless if
Plaintiffs could simply bargain away FLSA guarantees to their own attorneys in the

17

927 F.3d 1024, 1027 (8th Cir. 2019).
Id. (citations omitted).
19
See id.
20
See id.
21
Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 69 (2013).
22
Lynn's Food Stores, Inc. v. U.S. By & Through U.S. Dep't of Lab., Emp. Standards Admin., Wage &
Hour Div., 679 F.2d 1350, 1354 (11th Cir. 1982).
18

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absence of judicial guardrails. Even attorneys with the best intentions will find that they
possess vastly more bargaining power than FLSA plaintiffs who are desperate to recover
a fraction of the minimum wages they are owed. Contingency fees directly impact the
Plaintiff’s recovery and thus fall within the scope of review required by the FSLA. No Court
within the Fifth Circuit has held otherwise, and for the reasons discussed herein, this
Court will not be the first to do so.
IT IS HEREBY ORDERED that Plaintiffs’ Motion for Reconsideration23 is DENIED.
Signed in Baton Rouge, Louisiana the 17th day of November, 2022.

S

CHIEF JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

23

R. Doc. 75.

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