Edelen v. American Residential Services, LLC et al
Filing
39
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 7/22/13. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
CHRISTOPHER EDELEN
:
v.
:
Civil Action No. DKC 11-2744
:
AMERICAN RESIDENTIAL SERVICES,
LLC., et al.
:
MEMORANDUM OPINION
Presently pending in this wage-and-hour law case is the
unopposed motion (ECF No. 34) filed by Plaintiff Christopher
Edelen seeking an order that:
(1) grants final approval of a
settlement agreement between Plaintiff and Defendants American
Residential
Services,
LLC
(d/b/a/
“ARS®/Rescue
Rooter®”)
and
American Residential Services Management Corporation (together,
“Defendants”); (2) grants final certification of the settlement
class
pursuant
to
Fed.R.Civ.P.
23;
(3)
grants
final
certification of this matter as a collective action pursuant to
29 U.S.C. § 216(b); (4) approves a payment of $32,000.00 to
class counsel for their attorneys’ fees and litigation expenses;
(5) approves an incentive payment of $1,000.00 to Mr. Edelen;
and (6) dismisses this action with prejudice, with the court to
retain jurisdiction over the interpretation, enforcement, and
implementation of the settlement agreement and the final order.
For the following reasons, the motion will be granted.
I.
Background
From approximately June 2010 until July 2011, Mr. Edelen
worked as an HVAC technician at a facility in Laurel, Maryland,
owned by Defendants.
collective
action
On September 23, 2011, Mr. Edelen filed a
complaint
against
Defendants,
alleging
two
violations of the Fair Labor Standards Act (“the FLSA”), 29
U.S.C. §§ 201 et seq.
(ECF No. 1).
First, Mr. Edelen alleged
that Defendants violated the FLSA in calculating his overtime
rate
of
pay
by
using
only
his
fixed
hourly
wage
of
$18.00
multiplied by 1.5, instead of combining his fixed hourly wage
with his non-hourly compensation (e.g., commissions and bonuses)
and
then
multiplying
that
total
by
1.5.
(Id.
¶¶ 18-20).
Second, Mr. Edelen alleged that Defendants failed to compensate
him properly for his work in connection with a referral program
with American Home Shield by paying him a flat, pre-determined
rate instead of paying him on a per-hour basis.
(Id. ¶¶ 21-25).
Mr. Edelen asserted these allegations on behalf of himself and a
putative
class
of
all
technicians
employed
anywhere in the nation since September 23, 2008.
27).
by
Defendants
(Id. ¶¶ 26-
On January 5, 2012, Defendants filed an answer that denied
the bulk of Mr. Edelen’s allegations and asserted a number of
affirmative defenses, including that any actions or omissions
giving rise to Mr. Edelen’s claims were undertaken in good faith
2
and with reasonable grounds for believing such conduct did not
violate the FLSA.
(ECF No. 15).
The parties agreed to engage in limited discovery prior to
Mr. Edelen moving for conditional certification of his proposed
collective class.
(See ECF No. 19).
In addition to exchanging
written discovery, Mr. Edelen deposed a corporate representative
of Defendants pursuant to Fed.R.Civ.P. 30(b)(6).
at
2).
After
conducting
this
discovery
(ECF No. 34-1,
and
engaging
in
preliminary settlement discussions, the parties stipulated to
the filing of an amended complaint by Mr. Edelen that asserts
only allegations relating to Defendants’ calculation of overtime
pay rates on behalf of only those HVAC technicians employed at
the Laurel facility since September 2008.
on
these
counts:
alleged
facts,
the
amended
(ECF No. 27).
complaint
Based
asserts
two
a collective action count under the FLSA and a class
action count under the Maryland Wage and Hour Law (“the MWHL”),
Md. Code. Ann., Lab. & Empl. §§ 3-401 et seq.
(Id. ¶¶ 23-43).
After Mr. Edelen filed the amended complaint, Defendants
filed an answer (ECF No. 28) and provided him with detailed
payroll data regarding the overtime wages paid to Mr. Edelen and
a sample of eleven other HVAC technicians employed at the Laurel
facility during the statute of limitations period (ECF No. 34-1,
at
3).
According
to
Mr.
Edelen,
a
review
of
this
data
demonstrated an average weekly underpayment of $8.54 for all
3
HVAC technicians in the sample, ranging from $0.42 per workweek
to $13.15 per workweek.
(Id.).
Following additional negotiations, the parties entered into
a formal settlement agreement (“the Settlement Agreement”).
The
Settlement Agreement contemplates certification of a settlement
class
consisting
of
59
individuals
who
worked
as
HVAC
technicians at Defendants’ Laurel facility during any workweek
between September 23, 2008 and October 5, 2011.
In
very
basic
terms,
the
Settlement
(ECF No. 29-1).
Agreement
requires
Defendants to pay a maximum of $68,055.75, divided as follows:
(1) $38,055.75,
less
applicable
payroll
taxes,
paid
to
class
members, representing $10.75 for every week worked during the
relevant timeframe, regardless of whether there was an actual
underpayment
in
that
week;
(2) subject
to
court
approval,
a
$1,000.00 incentive payment to Mr. Edelen in recognition of his
efforts
on
behalf
of
the
class;
and
(3) subject
to
court
approval, $32,000.00 to Mr. Edelen’s counsel for attorneys’ fees
and expenses.
(See id.).
The consideration offered in exchange reflects the hybrid
nature
of
Mr.
Edelen’s
amended
complaint
and
the
different
procedures governing Rule 23 class actions and FLSA collective
actions.
With
respect
to
the
MWHL
claims,
the
Settlement
Agreement provides that those class members who do not exclude
themselves in a specified timeframe agree to release all MWHL
4
claims arising out of Defendants’ alleged failure to calculate
their overtime rates of pay properly during the period from
September
respect
23,
to
2008,
the
FLSA
to
October
claims,
5,
2011.
those
(Id.
members
of
¶ 5).
the
With
proposed
collective class who sign or endorse their settlement checks
from Defendants will be deemed to have agreed to (1) joining the
FLSA
collective
action
and
(2)
releasing
their
FLSA
claims
(including any claims for liquidated damages) arising out of
Defendants’ purported failure to calculate their overtime rates
of pay properly during the period from September 23, 2008, to
October 5, 2011.
(Id.).
Class members do not agree to release
any other types of legal claims against Defendants, except that
Mr.
Edelen
individually
agrees
to
a
broad,
general
release.
(Id. ¶ 12).
On April 19, 2013, Mr. Edelen filed an unopposed motion
seeking preliminary approval of the Settlement Agreement.
No. 29).
(ECF
On May 23, 2013, the court issued an order (“the
Preliminary Approval Order”) granting Mr. Edelen’s motion and
preliminarily approving the Settlement Agreement (1) as fair,
reasonable,
and
adequate
within
the
meaning
of
Fed.R.Civ.P.
23(e) and (2) as representing a fair and reasonable compromise
of a bona fide FLSA dispute.
(ECF No. 32).
The Preliminary
Approval Order conditionally certified the following class both
as a class action pursuant to Fed.R.Civ.P. 23(a) & 23(b)(3)
5
(“the Rule 23 Settlement Class”) and as a collective action
pursuant
to
29
U.S.C.
§ 216(b)
(“the
Collective
Settlement
Class”):
Every individual employed by Defendants at
their company-owned service facility in
Laurel, Maryland as an HVAC Technician
during any workweek between September 23,
2008 and October 5, 2011.
The Preliminary Approval Order appointed Mr. Edelen as class
representative.
The Preliminary Approval Order also appointed
the law firms of Joseph, Greenwald & Laake, P.A., and Winebrake
& Santillo, LLC, as class counsel, and Heffler Claims Group as
claims administrator.
Finally, the Preliminary Approval Order
approved the notice forms provided by the parties; instructed
the parties to comply with the notice protocols set forth in the
Settlement Agreement; and set the final fairness hearing, which
was held on July 22, 2013, at 9:30 a.m.
II.
Analysis
After
Agreement
carefully
(ECF
No.
considering
the
29-1),
unopposed
the
terms
of
the
motion
Settlement
for
final
approval (ECF No. 34), the supplemental materials in support
thereof (ECF No. 36), and the statements of counsel for both
parties at the final fairness hearing held on July 22, 2013 (ECF
No.
38),
the
Collective
certification;
court
now
Settlement
whether
addresses
whether
Classes
should
the
Settlement
6
the
Rule
receive
Agreement
is
23
and
final
fair,
reasonable,
and
adequate;
whether
the
Settlement
Agreement
represents a fair compromise of a bona fide FLSA dispute; and
whether class counsel’s request for attorneys’ fees and costs,
as
well
as
granted.
A.
an
incentive
payment
for
Mr.
Edelen,
should
be
Each of these issues will be addressed, in turn.
Final Certification of the Settlement Class
Because the proposed Settlement Agreement seeks to resolve
a
so-called
hybrid
wage-and-hour
law
case
that
raises
both
collective action claims under the FLSA and class action claims
under the MWHL, two separate standards are implicated by Mr.
Edelen’s request for final class certification.
1.
Certification of the Collective Settlement Class
“Under
action
the
against
FLSA,
their
plaintiffs
employer
for
pursuant to 29 U.S.C. § 216(b).”
Inc.,
532
F.Supp.2d
762,
771
may
maintain
violations
a
collective
under
the
act
Quinteros v. Sparkle Cleaning,
(D.Md.
2008).
Section
216(b)
provides, in relevant part, as follows:
An action . . . may be maintained against
any employer . . . in any Federal or State
court of competent jurisdiction by any one
or more employees for and in behalf of
himself or themselves and other employees
similarly situated.
No employee shall be a
party plaintiff to any such action unless he
gives his consent in writing to become such
a party and such consent is filed in the
court in which such action is brought.
“This
provision
potential
establishes
plaintiffs
must
an
‘opt-in’
affirmatively
7
scheme,
notify
the
whereby
court
of
their intentions to be a party to the suit.”
Quinteros, 532
F.Supp.2d at 771 (quoting Camper v. Home Quality Mgmt., Inc.,
200 F.R.D. 516, 519 (D.Md. 2000)).
Deciding whether to certify a collective action pursuant to
the
FLSA
generally
requires
a
two-stage
process.
Westat, Inc., 756 F.Supp.2d 682, 686 (D.Md. 2010).
stage,
a
“threshold
determination”
must
be
Syrja
v.
In the first
made
regarding
“‘whether the plaintiffs have demonstrated that potential class
members are ‘similarly situated,’ such that court-facilitated
notice to the putative class members would be appropriate.’”
Id. (quoting Camper, 200 F.R.D. at 519).
Approval
Order
found
that
Mr.
Edelen
Here, the Preliminary
satisfied
the
modest
factual showing that is required with respect to the first stage
and
granted
conditional
Settlement Class.
certification
of
the
Collective
(ECF No. 32 ¶ 6).
In the second stage – which generally occurs following the
close
of
discovery
and
upon
a
defendant’s
motion
for
decertification – a “more stringent inquiry” is undertaken to
determine
whether
the
plaintiffs
are,
situated,” as required by § 216(b).
in
fact,
“similarly
Rawls v. Augustine Home
Health Care, Inc., 244 F.R.D. 298, 300 (D.Md. 2007).
Even when
parties agreed to settle an FLSA dispute on behalf of a class of
similarly situated employees, “‘some final class certification’”
determination
must
be
made
“‘before
8
approving
a
collective
action settlement.’”
Carter v. Anderson Merchs., LP, Nos. 08–
cv-00025, 09–cv-0216, 2010 WL 144067, at *3 (C.D.Cal. Jan. 7,
2010) (quoting Burton v. Utility Design, Inc., No. 07-cv-1045,
2008 WL 2856983, at *2 (M.D.Fla. July 22, 2008)).
factors
to
consider
in
deciding
whether
to
Relevant
grant
final
certification include “(1) the disparate factual and employment
settings of the individual plaintiffs; (2) the various defenses
available to [the] defendant which appear to be individual to
each plaintiff; and (3) fairness and procedural considerations.”
Rawls, 244 F.R.D. at 300 (internal quotation marks omitted).
Because
the
analysis
certification
23(a),”
analysis
these
passing.”
factors
“‘largely
overlap[s]
under
Federal
Rule
need
only
“address[ed]
be
of
with
Civil
class
Procedure
.
.
.
in
Bredbenner v. Liberty Travel, Inc., Nos. 09-cv-905,
09-cv-1248, 09-cv-4587, 2011 WL 1344745, at *17 (D.N.J. Apr. 8,
2011) (quoting Murillo v. Pac. Gas & Elec. Co., No. 08-cv-1984,
2010
WL
2889728,
at
*3
(E.D.Cal.
July
21,
2010)
(first
alteration in original)).
Here, the factual circumstances underlying the claims of
each
member
rather
than
of
the
Collective
disparate.
Each
Settlement
held
the
Class
same
are
similar
position
(HVAC
technician), at the same location (Defendants’ Laurel facility),
and allegedly received compensation in accordance with a common
method for calculating overtime rates of pay.
9
The class as a
whole is therefore “similarly situated” to Mr. Edelen.
Second,
Defendants have not offered any defenses that are individualized
in
nature.
(See
ECF
No.
34-1,
at
16-17).
In
any
event,
individualized defenses typically raise concerns because they
pose case management problems; such complications are largely
irrelevant
where
a
settlement purposes.
collective
class
is
being
certified
for
Cf. Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 620 (1997) (in the Rule 23 class action context, no
need to account for case management issues when deciding whether
to certify a class for settlement purposes).
Finally, with
respect to fairness, a settlement resolving the FLSA overtime
claims of all Laurel-based HVAC technicians is an efficient and
cost-effective means of resolving the common issue (i.e., the
legality of Defendants’ method for calculating overtime rates of
pay).
See Rawls, 344 F.R.D. at 298 (noting that collective
action treatment would serve as an efficient means of resolving
a facility-wide FLSA dispute and would further the purposes of
§ 216(b) by allowing the class members to pool their resources).
In sum, because Mr. Edelen is, in fact, similarly situated
to
the
members
of
the
Collective
Settlement
Class,
final
certification pursuant to § 216(b) is warranted.
2.
Rule 23 Class Certification
A class action will be certified only if it meets the four
prerequisites identified in Rule 23(a) and also fits within one
10
of the three subdivisions of Rule 23(b).
The United States
Supreme Court has held that district courts “must pay undiluted,
even heightened attention” to class certification requirements
in
the
settlement
(internal
context.
quotations
marked
Amchem
Prods.,
omitted);
see
521
also
U.S.
at
620
Grice
v.
PNC
Mortg. Corp. of Am., No. PJM-97-3084, 1998 WL 350581, at *2
(D.Md. May 21, 1998) (“Despite the parties’ agreement, class
certification must be carefully scrutinized.”).
a.
Rule 23(a) Prerequisites
Rule 23(a) provides as follows:
(a) Prerequisites. One or more members of a
class may sue or be sued as representative
parties on behalf of all members only if:
(1) the class is so numerous that joinder of
all members is impracticable; (2) there are
questions of law or fact common to the
class; (3) the claims or defenses of the
representative parties are typical of the
claims or defenses of the class; and (4) the
representative
parties
will
fairly
and
adequately protect the interests of the
class.
Based
on
a
review
of
the
parties’
submissions,
the
Rule
23
Settlement Class meets the numerosity, commonality, typicality,
and adequacy requirements.
Although
there
is
no
precise
threshold
for
determining
numerosity, see Gen. Tel. Co. v. E.E.O.C., 446 U.S. 318, 330
(1980),
the
individuals,
Rule
is
23
Settlement
larger
than
Class,
other
11
which
classes
consists
that
have
of
59
been
certified in the Fourth Circuit.
Med.
Corp.
(observing
Sec.
that
Litig.,
a
class
139
size
See, e.g., In re Kirschner
F.R.D.
of
25
74,
to
78
30
(D.Md.
members
presumption that the numerosity requirement is met).
numerosity
is
satisfied
where
joinder
of
members would prove to be “impracticable.”
all
1997)
raises
a
Moreover,
putative
class
Hewlett v. Premier
Salons Int’l, Inc., 185 F.R.D. 211, 215 (D.Md. 1997) (explaining
that practicability of joinder depends on a variety of factors,
including the geographic dispersion of putative class members
and
the
size
of
their
claims).
Given
the
relatively
small
dollar value of the class members’ individual claims here –
which range from a minimum of approximately $30.00 to a maximum
of approximately $2,100.00 (see ECF No. 34-1, at 3; ECF No. 291, at 16-17) – joinder seems unlikely here.
To establish commonality, the party seeking certification
must “demonstrate that the class members have suffered the same
injury” and that their claims “depend upon a common contention.”
Wal–Mart Stores, Inc. v. Dukes, ––– U.S. ––––, 131 S.Ct. 2541,
2551 (2011) (internal quotation marks omitted).
contention,
moreover,
must
be
of
such
a
nature
“That common
that
it
is
capable of classwide resolution — which means that determination
of its truth or falsity will resolve an issue that is central to
the validity of each one of the claims in one stroke.”
12
Id.
Here, all members of the Rule 23 Settlement Class worked as
HVAC technicians at a single facility in Laurel during a single
time period from September 23, 2008, until October 5, 2011.
(ECF No. 34-1, at 2-4).
According to class counsel’s review of
a sampling of payroll data from this time period, Defendants had
a common practice of calculating overtime pay rates for HVAC
technicians
that
(See id.).
Thus, a question of law that is common to the Rule
23
Settlement
excluded
Class
is
non-hourly
whether
forms
of
Defendants’
compensation.
method
for
calculating overtime pay between September 2008 and October 2011
violates the MWHL.
In other words, the success or failure of
the claims held by class members turns on the veracity of Mr.
Edelen’s contention that Defendants’ overtime calculation policy
at the Laurel facility during the relevant time period violates
the MWHL.
Because resolution of this common contention would
resolve “each one of the claims in one stroke,” Dukes, 131 S.Ct.
at 2551, the Rule 23 Settlement Class satisfies the commonality
prerequisite.
The
typicality
requirement
“goes
to
the
heart
representative part[y’s] ability to represent a class.”
v. Microsoft Corp., 436 F.3d 461, 466 (4th Cir. 2006).
of
a
Deiter
The
representative’s claim need not “be perfectly identical [to] or
perfectly aligned” with the claims of class members, so long as
any variation does not “strike[] at the heart of the respective
13
causes of actions.”
he
suffered
Id. at 467.
damages
when
Here, Mr. Edelen asserts that
Defendants
excluded
his
non-hourly
wages in calculating his rate of overtime pay, in violation of
the MWHL.
Mr. Edelen’s interest in prosecuting this claim would
also tend to advance the interests of the members of the Rule 23
Settlement Class, each of whom also allegedly suffered a loss in
wages as a result of the same method for calculating overtime
rates of pay.
Although Mr. Edelen may have worked more or less
overtime than other class members in a given week and therefore
might ultimately be entitled to greater or lesser damages, such
factual
differences
do
not
defeat
typicality
because
the
legality of the overtime calculation policy itself is at the
heart of Mr. Edelen’s MWHL claim.
Ultimately, “as goes the
claim
claims
of
[Mr.
Edelen],
Settlement Class.
Finally,
so
go
the
of”
the
Rule
23
Deiter, 436 F.3d at 466.
Rule
23(a)(4)
requires
“representative
parties
[who] will fairly and adequately protect the interests of the
class.”
Representation
is
adequate
if:
(1)
the
named
plaintiff’s interests are not opposed to those of other class
members,
and
(2)
the
plaintiff’s
experienced, and capable.
attorneys
Edelen
is
no
and
apparent
the
conflict
interests
qualified,
Mitchell–Tracey v. United Gen. Title
Ins. Co., 237 F.R.D. 551, 558 (D.Md. 2006).
there
are
of
between
the
14
Rule
Here, as discussed,
the
interests
23
Settlement
of
Mr.
Class.
Rather, Mr. Edelen shares an interest with class members in
establishing
the
illegality
of
calculating overtime rates of pay.
Defendants’
method
for
Moreover, as noted in the
Preliminary Approval Order (ECF No. 32 ¶ 5(d)), class counsel
are qualified, experienced, and competent, as evidenced by their
background
in
litigating
wage-and-hour
(see ECF Nos. 29-2 & 29-3).
class
action
lawsuits
Accordingly, the Rule 23 Settlement
Class satisfies each of the Rule 23(a) prerequisites.
b.
Rule 23(b) Requirements
The next step is to determine whether the requirements of
one of the three subdivisions of Rule 23(b) have been met.
Mr.
Edelen invokes Rule 23(b)(3), which permits a class action to be
maintained only if it can be concluded (1) that “questions of
law
or
fact
common
to
class
members
predominate
over
any
questions affecting only individual members,” and (2) “that a
class action is superior to other available methods for fairly
and efficiently adjudicating the controversy.”
The
predominance
inquiry
focuses
on
whether
liability
issues are subject to class-wide proof or require individualized
and
fact-intensive
determinations.
Cuthie
v.
Fleet
Reserve
Ass’n, 743 F.Supp.2d 486, 499 (D.Md. 2010).
Deciding whether
common
ones
questions
qualitative,
predominate
rather
than
over
individual
quantitative,
inquiry.
involves
Gunnells
Healthplan Servs., Inc., 348 F.3d 417, 429 (4th Cir. 2003).
15
a
v.
As set forth above, the claims of the Rule 23 Settlement
Class present the same legal question, i.e., whether Defendants’
alleged common method for calculating overtime rates of pay at
the
Laurel
facility
violated
the
MWHL.
Although
the
determination of damages for each class member would require a
certain degree of individualized inquiry given that the class
members
worked
relevant
for
timeframe
a
different
(ranging
from
number
3
of
weeks
weeks
to
during
weeks)
161
the
and
logged a different number of overtime hours in those weeks, such
computations do not require “separate mini-trials.”
185
F.R.D.
at
individualized
examining
220.
Instead,
damages
Defendants’
figures
the
are
standardized
records for the Laurel facility.
20).
the
record
easily
Hewlett,
indicates
ascertainable
timekeeping
and
that
by
payroll
(See, e.g., ECF No. 34-1, at
Moreover, the “qualitatively overarching issue by far” is
legality
of
Defendants’
alleged
common
method
for
calculating overtime rates of pay during the time period in
question, such that “the individual statutory damages issues are
insufficient to defeat class certification.”
Stillmock v. Weis
Markets, Inc., 385 F.App’x 267, 273 (4th Cir. 2010) (unpublished
table decision).
Thus, the Rule 23 Settlement Class satisfies
the predominance inquiry.
With respect to the superiority prong of Rule 23(b)(3),
four factors generally should be considered:
16
(i) the strength of the individual class
members’
interest
in
controlling
the
prosecution
and
defense
of
a
separate
action, (ii) the extent and nature of
existing litigation already begun by or
against
class
members,
(iii)
the
desirability
or
undesirability
of
concentrating the litigation in the single
forum selected by the class plaintiffs, and
(iv) the likely difficulties in managing the
class action.
Lloyd v. Gen. Motors Corp., 275 F.R.D. 224, 228 (D.Md. 2011).
Here,
each
certification.
of
these
factors
weighs
in
favor
of
final
First, as noted, the dollar values of the class
members’ claims are small as compared to the costs associated
with
pursuing
individual
lawsuits,
interest in class litigation.
giving
rise
to
a
strong
See, e.g., Jones v. Murphy, 256
F.R.D. 519, 524 (D.Md. 2009) (“Class treatment is appropriate in
situations, such as here, where the individual claims of many of
the putative class members are so small that it would not be
economically efficient for them to maintain individual suits.”).
Second,
no
against
Defendants
rates
Third,
at
class
the
member
has
regarding
separately
the
Laurel
facility.
concentrating
litigation
initiated
calculation
(See
of
the
ECF
of
No.
class
litigation
overtime
34-1,
at
members’
pay
21).
claims
here in the Southern Division of the District of Maryland is
desirable given its proximity to the Laurel facility at issue.
Finally, manageability concerns are irrelevant when a class is
17
being
certified
only
for
settlement
purposes.
See
Amchem
Prods., 521 U.S. at 593.
In sum, because the Rule 23 Settlement Class satisfies the
requirements
of
both
Rule
23(a)
and
23(b)(3),
final
certification will be granted.
B.
Final Approval of the Settlement Agreement
Having determined that final certification of both the Rule
23
Settlement
Class
and
the
Collective
Settlement
Class
is
warranted, the terms of the Settlement Agreement itself must be
addressed.
Here again, because of the hybrid nature of this
case, two standards are implicated by Mr. Edelen’s motion for
final approval.
1.
Fairness, Reasonableness, & Adequacy Under Rule 23
Pursuant to Rule 23(e), a settlement agreement that binds
members of a class action can only be approved upon a “finding
that it is fair, reasonable, and adequate.”
“The ‘fairness’
prong is concerned with the procedural propriety of the proposed
settlement agreement, while the ‘adequacy’ prong focuses on the
agreement’s substantive propriety.”
Derivative
Litig.,
Nos.
In re Am. Capital S’holder
11–2424-PJM,
11–2428-PJM/AW,
11–2459-
PJM, 11–2459-RWT, 2013 WL 3322294, at *2 (D.Md. June 28, 2013).
a.
Fairness
In evaluating the fairness of a proposed settlement, the
following
factors
must
be
considered:
18
(1)
the
presence
or
absence of collusion among the parties; (2) the posture of the
case
at
the
time
settlement
is
proposed;
(3)
the
extent
of
discovery that has been conducted; and (4) the circumstances
surrounding the negotiations and the experience of counsel.
In
re Mid-Atl. Toyota Antitrust Litig., 564 F.Supp. 1379, 1383-84
(D.Md. 1983).
the
danger
The fairness inquiry serves to protect against
that
counsel
might
“compromise[e]
a
suit
inadequate amount for the sake of insuring a fee.”
for
an
Id. at 1383
(internal quotation marks omitted).
Here, each of the fairness factors weighs in favor of final
approval.
The record indicates that the Settlement Agreement is
the product of good faith bargaining conducted at arm’s length.
In particular, Mr. Edelen represents that the parties exchanged
six different proposals over the course of three months before
reaching
a
tentative
agreement,
after
continued to negotiate additional terms.
which
the
parties
(ECF No. 34-1, at 8).
Moreover, nothing in the record hints of collusion.
With
reached
respect
the
to
the
Settlement
posture
Agreement
of
the
after
case,
engaging
the
in
parties
discovery
regarding the issue of conditional certification, which included
a
Rule
30(b)(6)
representative
and
deposition
the
records by Defendants.
production
of
of
Defendants’
payroll
and
corporate
timekeeping
Although the scope of this discovery was
somewhat limited and no dispositive motions were ever filed, it
19
appears that all parties had sufficient information about their
claims
and
defenses
at
the
possibility of settlement.
time
they
began
exploring
the
Finally, as has been noted, the
declarations and résumés submitted by class counsel establish
that they are qualified, experienced, and competent.
(See ECF
Nos. 29-2 & 29-3).
b.
Adequacy
The
adequacy
prong
requires
consideration
of:
(1)
the
relative strength of the plaintiff’s case on the merits and
probability for success at trial; (2) the anticipated duration
and expense of additional litigation; (3) the solvency of the
defendants
and
the
likelihood
of
recovery
on
a
litigated
judgment; and (4) the degree of opposition to the settlement.
In re Mid-Atl. Toyota, 564 F.Supp. at 1384.
The purpose of the
adequacy analysis is to “weigh the likelihood of the plaintiff’s
recovery
on
settlement.”
the
merits
against
the
amount
offered
in
Id. (internal quotation marks omitted).
Here, the adequacy factors, on balance, counsel in favor of
final approval of the Settlement Agreement.
The present record
– which consists primarily of the pleadings and the motions for
preliminary and final approval of the Settlement Agreement –
makes it difficult to ascertain the factual and legal merits of
Mr. Edelen’s contention that Defendants improperly excluded nonhourly
forms
of
compensation
when
20
calculating
class
members’
overtime rates of pay.
The authority cited by Mr. Edelen in his
amended complaint provides support for his position that, under
the FLSA, an employee’s regular rate of pay (which is multiplied
by 1.5 to determine the employee’s overtime rate of pay) must
include both hourly and non-hourly forms of compensation.
E.g.,
29 C.F.R. § 778.109 (for employees who are paid on a non-hourly
basis, the regular rate is determined by dividing the employees
“total remuneration for employment (except statutory exclusions)
in any workweek by the amount of hours actually worked”); see
also
29
U.S.C.
§ 207(e)
(an
employee’s
“regular
rate”
for
purposes of the FLSA includes “all remuneration” not otherwise
exempted);
Friolo
v.
Frankel,
373
Md.
501,
513
(2003)
(explaining that the MWHL is “the State parallel” to the FLSA).
In addition, class counsel represents that their analysis of a
sampling of 12 technicians’ payroll data during the relevant
timeframe demonstrated a pattern of excluding certain non-hourly
forms of compensation.
(ECF No. 34-1, at 3).
For their part,
Defendants disagree with Mr. Edelen’s positions regarding what
was and what should have been included in calculating his “total
remuneration” for purposes of regular and overtime pay.
(Id. at
15-16).
The existence of these disputed legal and factual issues
creates uncertainty and risk for all parties moving forward.
Additionally, even if Mr. Edelen’s legal position regarding the
21
proper
calculation
certain
members
method
of
the
proved
Rule
meritorious,
23
Settlement
he
admits
Class
that
would
be
entitled to very little in the way of damages – for some, as
little
as
$0.42
per
workweek.
Furthermore,
absent
final
approval of the Settlement Agreement, litigation of this dispute
could prove to be long and expensive.
In particular, the likely
next steps in this case – e.g., seeking class certification,
engaging in additional discovery, and filing dispositive motions
–
would
require
substantial
time
by
the
parties’
attorneys.
Although there is nothing to indicate that Defendants would be
unable to satisfy a judgment if one were ultimately entered, it
is not clear how long it might take to resolve this lawsuit.
On
balance, the risks, delays, and costs associated with further
litigation weigh in favor of granting final approval of the
Settlement Agreement.
Lastly,
Agreement.
the
terms
there
has
been
no
opposition
to
the
Settlement
Consistent with the Preliminary Approval Order and
of
the
Settlement
Agreement,
the
settlement
administrator mailed personalized notice forms to all 59 members
of the Rule 23 Settlement Class on June 7, 2013 – the best
notice practicable under the circumstances.
The notice form
informed each class member, in clear and concise language, of
the basis for this lawsuit; the definition of the Rule 23 and
Collective
Settlement
Classes;
22
the
procedure
for
and
consequences of opting in to the Settlement Agreement; the key
terms of the Settlement Agreement, including the member’s gross
recovery as an individual; the process for objecting to the
Settlement Agreement; and the date, time, and place of the final
fairness hearing.
Thus, the form and method of notice complied
with Fed.R.Civ.P. 23(c)(2) & 23(e).
The
postmark
deadline
for
requests was July 8, 2013.
filing
objections
or
opt-out
To date, no objections or opt-out
requests have been received by the court or by counsel, and no
one
appeared
objections.
at
the
final
fairness
hearing
to
lodge
any
The lack of objections provides further support for
final approval of the Settlement Agreement as fair, adequate,
and reasonable.
C.
Reasonable Settlement of Bona Fide Dispute
A district court can approve an FLSA settlement between an
employer
and
pursuant
to
agreement
an
employee
Section
represents
who
216(b)
a
has
only
brought
upon
“reasonable
a
a
private
finding
compromise
action
that
of
the
disputed
issues” rather than “a mere waiver of statutory rights brought
about by an employer’s overreaching.”
Lynn’s Food Stores, Inc.
v.
1354
United
Although
States,
the
679
Fourth
F.2d
Circuit
1350,
has
not
(11th
directly
Cir.
1982).
addressed
the
factors to be considered in deciding motions for approval of
such
settlements,
district
courts
23
in
this
circuit
typically
employ the considerations set forth by the Eleventh Circuit in
Lynn’s Food Stores.
See, e.g., Hoffman v. First Student, Inc.,
No. WDQ-06-1882, 2010 WL 1176641, at *2 (D.Md. Mar. 23, 2010);
Lopez
v.
NTI,
LLC,
748
F.Supp.2d
471,
478
(D.Md.
2010).
Pursuant to Lynn’s Food Stores, an FLSA settlement generally
should
be
approved
if
it
reflects
“a
fair
and
reasonable
resolution of a bona fide dispute over FLSA provisions.”
Lynn’s
Food, 679 F.2d at 1355.
Thus,
as
a
first
step,
the
bona
fides
of
the
parties’
dispute must be examined to determine if there are FLSA issues
that are “actually in dispute.”
Lane v. Ko-Me, LLC, No. DKC-10-
2261, 2011 WL 3880427, at *2 (D.Md. Aug. 31, 2011) (citing Dees
v. Hydradry, Inc., 706 F.Supp.2d 1227, 1241-42 (M.D.Fla. 2010)).
As a second step, the terms of the proposed settlement agreement
must be assessed for fairness and reasonableness.
Circuit,
the
same
“fairness
factors
generally
In the Fourth
considered
for
court approval of class action settlements under Federal Rule of
Civil Procedure 23” are used in this second step.
Lomascolo v.
Parsons Brinckerhoff, Inc., No. 08–cv–1310, 2009 WL 3094955, at
*10 (E.D.Va. Sept. 28, 2009).
Here, as evidenced by the pleadings, the motion for final
approval, and the terms of the Settlement Agreement itself, a
bona fide dispute exists as to Defendants’ liability under the
FLSA.
See id. at *16-17 (examining the complaint, answer, and
24
the parties’ recitals in the proposed settlement to conclude
that a bona fide dispute existed).
as
to
whether
Defendants
First, the parties disagree
properly
included
all
non-exempted
forms of remuneration in calculating overtimes rates of pay at
the
Laurel
facility.
Second,
even
to
the
extent
that
Mr.
Edelen’s legal position is credited, the parties disagree as to
the amount of unpaid wages that would be owed to members of the
Collective
Settlement
Class.
Mr.
Edelen
believes
that
the
damages suffered by most class members would be closer to the
figure of $13.15 per workweek (i.e., the high end of the range
of underpayment rates found in the 12-technician sample), while
Defendants contend that most class members’ damages would be
closer
to
$0.42
per
sample).
Third,
liquidated
damages.
would
have
argued
workweek
the
(i.e.,
parties
According
that
the
dispute
to
the
class
Defendants
lower
range
availability
counsel,
acted
of
Mr.
the
of
Edelen
“willfully”
in
improperly calculating the overtime rates of pay owed to class
members, warranting double damages as high as $26.30 per week
worked.
Defendants represent that they would have invoked a
good faith defense to liquidated damages by arguing that any
underpayments to class members were unintentional.
Relatedly,
the parties dispute whether the FLSA’s three-year limitations
period
–
which
applies
only
where
25
an
employer
demonstrates
indifference
towards
the
FLSA
requirements,
see
29
U.S.C.
§ 255(a) – would apply.
Given the disparity in the figures proposed by each side,
their apparent disagreements about the meaning of the phrase
“all
remuneration,”
and
the
uncertainty
regarding
liquidated
damages and the statute of limitations, the rate of underpayment
used
in
the
constitutes
claims.
Settlement
a
Agreement
reasonable
–
$8.54
compromise
of
per
week
class
worked
members’
–
FLSA
Additionally, as discussed, consideration of the Rule
23(e) factors establishes the fairness and reasonableness of the
Settlement
Agreement.
Accordingly,
the
Settlement
Agreement
will be approved as a fair and reasonable resolution of a bona
fide dispute.
D.
In
Attorneys’ Fees & Costs
approving
either
a
Rule
23
settlement
or
a
private
settlement of FLSA claims, the reasonableness of any award of
attorneys’ fees must be assessed.
See, e.g., Grice, 1998 WL
350581, at *6 (Rule 23 class action settlement settlement); KoMe,
LLC,
2011
settlement).
WL
3880427,
at
*2-3
(FLSA
collective
action
As noted, the Settlement Agreement provides that
Defendants will pay class counsel up to $32,000.00 in attorneys’
fees and litigation expenses, subject to court approval.
No.
29-1,
counsel
¶ 13).
request
In
an
the
award
motion
of
26
for
final
$1,199.20
approval,
for
(ECF
class
out-of-pocket
litigation expenses and $30,800.80 in attorneys’ fees.
(ECF No.
34-1, at 23-31).
In any action under the FLSA, “[t]he 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.”
attorneys’
fees
claims
mandatory.
is
and
29 U.S.C. § 216(b).
costs
to
“The
employees
amount
of
The payment of
who
prevail
on
the
attorney’s
FLSA
fees,
however, is within the sound discretion of the trial court.”
Burnley v. Short, 730 F.2d 136, 141 (4th Cir. 1984).
The MWHL
also allows for the recovery of attorneys’ fees and costs.
See
Md. Code Ann., Lab. & Empl. § 3-427 (“If a court determines that
an employee is entitled to recovery in an action under this
section, the court may allow against the employer reasonable
counsel
fees
(establishing
and
that
other
costs.”);
reasonable
accord
attorneys’
Fed.R.Civ.P.
fees
and
23(h)
nontaxable
costs that are authorized by law may be awarded in a certified
class action).
“The most useful starting point for determining the amount
of a reasonable fee is the number of hours reasonably expended
on
the
litigation
multiplied
by
a
reasonable
hourly
rate,”
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) — an approach
commonly known as the “lodestar” method, Grissom v. The Mills
27
Corp., 549 F.3d 313, 320 (4th Cir. 2008).1
In deciding what
constitutes a “reasonable” number of hours and a “reasonable”
rate, numerous factors may prove pertinent, including:
“(1) the time and labor expended; (2) the
novelty and difficulty of the questions
raised; (3) the skill required to properly
perform the legal services rendered; (4) the
attorney’s opportunity costs in pressing the
instant litigation; (5) the customary fee
for
like
work;
(6)
the
attorney’s
expectations
at
the
outset
of
the
litigation; (7) the time limitations imposed
by the client or circumstances; (8) the
amount
in
controversy
and
the
results
obtained; (9) the experience, reputation and
ability
of
the
attorney;
(10)
the
undesirability of the case within the legal
community in which the suit arose; (11) the
nature
and
length
of
the
professional
relationship between attorney and client;
and (12) attorneys’ fees awards in similar
cases.”
Robinson v. Equifax Info. Servs., 560 F.3d 235, 243–44 (4th Cir.
2009) (quoting Barber v. Kimbrell’s Inc., 577 F.2d 216, 226 n.28
(4th Cir. 1978)).2
“[T]he burden rests with the fee applicant to
1
Maryland courts also use the “lodestar” approach when
determining attorneys’ fees under fee-shifting statutes.
See,
e.g., Friolo, 373 Md. at 504-05.
2
The United States Supreme Court recently appeared to
question the approach adopted by the Fourth Circuit in
Kimbrell’s – originally set out in Johnson v. Georgia Highway
Express, Inc., 488 F.2d 714 (5th Cir. 1974) – describing it as an
“alternative” to the lodestar method and explaining that it
provides too little guidance for district courts and places too
great of an emphasis on subjective considerations.
See Perdue
v. Kenny A., 559 U.S. 542, 130 S.Ct. 1662, 1672 (2010) (“[T]he
lodestar method is readily administrable, and unlike the Johnson
28
establish the reasonableness of a requested rate.”
Id. (quoting
Plyler v. Evatt, 902 F.2d 273, 277–78 (4th Cir. 1990)).
“In
addition to the attorney’s own affidavits, the fee applicant
must produce satisfactory specific evidence of the prevailing
market rates in the relevant community for the type of work for
which he seeks an award,” including, for example, “affidavits of
other local lawyers who are familiar both with the skills of the
fee applicants and more generally with the type of work in the
relevant community.”
Id. at 244, 245 (internal quotation marks
omitted).
After arriving at the lodestar figure, the “‘fees for hours
spent
on
unsuccessful
should be subtracted.
claims
unrelated
to
successful
Grissom, 549 F.3d at 321 (quoting Johnson
v. City of Aiken, 278 F.3d 333, 337 (4th Cir. 2002)).
“[o]nce
the
court
ones’”
has
subtracted
the
fees
Lastly,
incurred
for
unsuccessful, unrelated claims, it then awards some percentage
approach, the lodestar calculation is objective, and thus cabins
the discretion of trial judges, permits meaningful judicial
review, and produces reasonably predictable results.” (internal
citations omitted)). Nonetheless, “the Johnson factors, as
opposed to the Johnson method, are still relevant in informing
the court’s determination of a reasonable fee and a reasonable
hourly rate”; “[Perdue] cautions against using a strict Johnson
approach as the primary basis for determining reasonable
attorneys’ fees, but nowhere calls into question the idea of
using relevant Johnson factors in helping to come to a
reasonable fee.” Spencer v. Cent. Servs., LLC, No. CCB-10-3469,
2012 WL 142978, at *5-6 (D.Md. Jan. 13, 2012) (internal
quotations marks and citations omitted).
29
of the remaining amount, depending on the degree of success
enjoyed by the plaintiff.”
Id. (internal quotation marks and
citation omitted).
In support of their request for attorneys’ fees in the
amount of $30,800.80, class counsel submit attorney declarations
from R. Andrew Santillo of Winebrake & Santillo, LLC (ECF No.
34-1, at 37-40) and Brian J. Markovitz of Joseph, Greenwald &
Laake, P.A. (id. at 48-51), both of whom attest to the number of
hours spent on this litigation by attorneys and non-attorneys in
their
respective
firms.
As
amended
by
class
counsel’s
supplemental brief in support of their fee request (ECF No. 36,
at 1-2),3 Mr. Santillo represents that his firm expended a total
of
101.8
hours
on
this
case,
including
83.0
hours
by
Mr.
Santillo, a junior partner with nearly 9 years of experience,
and 18.8 hours by Mark J. Gottesfeld, an associate with nearly 4
years of experience.
¶¶ 3-4).
74.1
hours
(ECF No. 34-1, at 38-39, Santillo Decl.
Mr. Markovitz, in turn, attests that his firm spent
on
this
litigation,
including
47.7
hours
by
Mr.
Markovitz, a partner with almost 13 years of experience, and
26.4 hours by a combination of three legal assistants and a
3
To “streamline” the lodestar analysis, class counsel are
no longer requesting compensation for the 1.9 hours of time
expended by Peter Winebrake, a senior partner at Winebrake &
Santillo, LLC, or for the 0.4 hours of time expended by Steven
Vinick, a partner at Joseph, Greenwald & Laake, P.A.
(ECF No.
36, at 1-2).
30
paralegal.
(ECF No. 34-1, at 49-50, Markovitz Decl. ¶¶ 3-4).
Class counsel substantiate these averments with detailed time
records for both firms, broken down by six-minute increments
according to specific tasks.
(ECF No. 34-1, at 41-47, 53-55).
With respect to hourly rates, class counsel propose using
the higher end of the ranges set forth in Appendix B to the
Local
Rules
–
in
other
words,
$300.00
per
hour
for
Mr.
Markovitz, $250.00 per hour for Mr. Santillo, $190.00 per hour
for Mr. Gottesfeld, and $115.00 per hour for all paralegals and
law
clerks.
Class
counsel
thus
contends
that
the
proper
lodestar figure is $41,668.00 – approximately $11,000.00 more
than what the Settlement Agreement contemplates and what class
counsel are actually requesting.
To
class
support
counsel
the
submit
reasonableness
a
second
of
their
attorney
proposed
declaration
rates,
from
Mr.
Markovitz, which focuses on his firm’s customary rates for work
of
this
nature.
(See
Markovitz Decl.).
Greenbelt-based
ECF
No.
36,
at
14-17,
Supplemental
Mr. Markovitz avers that he is a partner at a
litigation
firm
and
focuses
his
practice
on
employment law, having served as the primary attorney of record
in
“hundreds”
(Id. ¶ 4).
of
employment
cases,
including
FLSA
disputes.
Mr. Markovitz also states that, as of January 2012,
the rate he typically charges to paying clients is $350.00 per
hour
–
i.e.,
$50.00
more
than
31
the
rate
that
class
counsel
suggest using to calculate the lodestar figure.
(Id.
¶ 5).
With respect to the non-attorneys who worked on this case, Mr.
Markovitz represents that his law firm typically charges paying
clients between $115.00 and $130.00 per hour for these specific
paralegals and law clerks – i.e., equal to or slightly more than
the hourly rates proposed here.
As
further
support
for
(Id. ¶ 6).
using
the
higher
ends
of
the
Appendix B ranges, class counsel offer a declaration from Linda
Hitt Thatcher, a Greenbelt-based attorney, that was originally
submitted in December 2012 in connection with a contested fee
petition
in
the
lawsuit
captioned
Unlimited, Inc., No. RWT-11-887.
Decl.).
Grayson
was
another
Grayson
v.
Register
Tapes
(ECF No. 36, at 6-9, Thatcher
wage-and-hour
lawsuit
in
this
division in which Mr. Santillo and Mr. Markovitz served as class
counsel.
that,
For purposes of that lawsuit, Ms. Thatcher averred
based
on
her
own
experience
litigating
employment
disputes, the prevailing market rate in the Greenbelt, Maryland
legal community for someone of Mr. Markovitz’s experience level
is between $350.00 and $400.00 per hour, such that a rate in the
range of $300.00 to $350.00 per hour is “extremely reasonable.”
(Id. ¶ 5) (emphasis in original).
Ms. Thatcher likewise averred
that the prevailing market rates in Greenbelt for lawyers of Mr.
Santillo’s and Mr. Gottesfeld’s experience and skill levels are,
respectively, between $300.00 and $350.00 per hour and between
32
$175.00 and $225.00 per hour.
(Id. ¶¶ 6-7).
Thus, according to
Ms. Thatcher, it would have been “extremely reasonable” to use a
rate of $325.00 for Mr. Santillo and a rate of $190.00 for Mr.
Gottesfeld.
Titus
(Id.) (emphasis in original).
ultimately
adopted
Judge
In Grayson, Judge
Schulze’s
report
and
recommendation in which she concluded that the following rates
were reasonable:
per
hour
for
Gottesfeld.
Mr.
$300.00 per hour for Mr. Markovitz, $250.00
Santillo,
and
$175.00
per
hour
for
Mr.
See Grayson v. Register Tapes Unlimited, Inc., No.
RWT-11-887, 2013 WL 1953342, at *2 (D.Md. May 9, 2013), accepted
and adopted by Grayson v. Register Tapes Unlimited, Inc., No.
RWT-11-887, Order of July 15, 2013.4
Finally, class counsel contend that the use of the higher
end
of
the
Appendix
B
ranges
is
warranted
based
on
their
“significant experience litigating complex wage and hour class
and collective actions.”
(ECF No. 36, at 3).
According to Mr.
Santillo, his firm has successfully represented employees in 54
class or collective actions throughout the United States and is
actively litigating approximately 40 other collective or class
actions.
¶ 4).
(ECF No. 36, at 19-21, Supplemental Santillo Decl.
According
to
Mr.
Markovitz,
his
firm
is
currently
litigating “several dozen employment-related cases” in state and
4
Class counsel submit a copy of Judge Titus’s adoption and
approval order at pages 10-12 of ECF No. 36.
33
federal courts.
(ECF No. 36, at 14-17, Supplemental Markovitz
Decl. ¶ 4).
Based on the evidence submitted by class counsel and an
analysis
of
the
relevant
Kimbrell’s
factors,
the
proposed
lodestar figure of $41,668.00 appears reasonable, as it is based
on a reasonable number of total hours and reasonable hourly
rates
($300.00
for
Mr.
Markovitz,
$250.00
for
Mr.
Santillo,
$190.00 for Mr. Gottesfeld, and $115.00 for all paralegals and
law
clerks).
The
time
records
do
not
redundant, excessive, or unnecessary work.
reflect
any
overly
To the extent that
there was some duplication in efforts or time expended on tasks
not typically compensated,5 the deductions that might otherwise
be warranted would not exceed the $11,000.00 disparity between
the proposed lodestar figure and the actual amount of class
counsel’s fee request.
Additionally, class counsel’s proposed
lodestar figure is reasonable considering the complexity of the
case,
particularly
collective
action
the
intricacies
practice;
the
associated
knowledge,
with
labor,
class
and
and
time
required to initiate an FLSA case and to achieve a class-wide
5
For example, Appendix B to the Local Rules establishes a
general rule that only one lawyer for each party will be
compensated for certain types of tasks, including depositions,
hearings, and client conferences.
Here, class counsel seek
compensation for time expended by both Mr. Markovitz and Mr.
Santillo in connection with certain hearings and conferences in
which both attorneys participated.
(See ECF No. 34-1, at 3755).
34
settlement
agreement
of
this
nature;
the
inherent
risks
associated with undertaking cases on a contingency basis; the
evidence of prevailing market rates in Greenbelt, Maryland; and
the use of the same or similar hourly rates in other wage-andhour cases that have been litigated in this division.
The question remains whether a reduction is necessary based
on the scope of the Settlement Agreement as compared to the
claims asserted by Mr. Edelen in his original complaint.
As
discussed, Mr. Edelen originally asserted two types of wage-andhour violations – one relating to the calculation of overtime
rates of pay and one relating to improper compensation for “offthe-clock” work – but later narrowed the scope of his suit by
filing an amended complaint.
The Settlement Agreement resolves
only the FLSA and MWHL claims relating to Defendants’ methods
for calculating overtime rates of pay.
As Judge Blake recently observed, it is appropriate “to
subtract plaintiffs’ billable hours attributable to unsuccessful
claims
when
they
are
successful claims.’”
637,
642
(D.Md.
‘distinct
in
all
respects
from
[the]
Andrade v. Aerotek, Inc., 852 F.Supp.2d
2012)
(quoting
(emphasis added in Andrade)).
Hensley,
461
U.S.
at
440
In Andrade, Judge Blake explained
that the plaintiffs’ successful FLSA off-the-clock claims could
not be characterized as being distinct “in all respects” from
their unsuccessful FLSA misclassification claims.
35
Id.
Thus,
while
it
was
appropriate
to
subtract
those
hours
that
were
readily identifiable as being devoted solely to the unsuccessful
claims,
the
plaintiffs
compensation
for
were
hours
that
also
entitled
“benefitted
to
or
reasonable
addressed
claims” or “aid[ed] the litigation as a whole.”
both
Id. (internal
quotation marks and citations omitted).
Here,
class
counsel’s
time
records
do
not
include
any
entries that are readily identifiable as relating only to Mr.
Edelen’s unsuccessful off-the-clock claim.
that
class
addressed
counsel’s
both
work
claims
Rather, it appears
throughout
the
aided
litigation
and
the
case
benefitted
as
a
or
whole.
Accordingly, there is no basis for reducing the lodestar figure
of
$41,668.00
based
on
Mr.
beyond
the
Edelen’s
amount
lack
of
requested
success
on
(i.e.,
his
$30,800.80)
off-the-clock
claim.
Class counsel also seeks the following litigation costs:
(1) filing fees ($400.00); (2) online research & PACER fees
($92.72); (3) postage, express mail, and messenger fees ($9.78);
(4) deposition transcript fees ($381.50); and (5) printing and
photocopying
costs
($315.20).
(ECF
NO.
34-1,
at
39
&
50).
District courts have discretion to determine the costs that will
be taxed in FLSA cases.
Roy v. Cnty. of Lexington, S.C., 141
F.3d 533, 549 (4th Cir. 1998).
“those
reasonable
Costs that may be charged include
out-of-pocket
36
expenses
incurred
by
the
attorney which are normally charged to a fee-paying client, in
the course of providing legal services.”
F.2d 762, 771 (4th Cir. 1988).
Spell v. McDaniel, 852
Examples of costs that have been
charged include necessary travel, depositions and transcripts,
computer
research,
Almendarez
v.
postage,
J.T.T.
court
Enters.
costs,
Corp.,
No.
and
JKS
photocopying.
06–68,
2010
WL
3385362, at *7 (D.Md. Aug. 25, 2010) (citing Vaughns v. Bd. of
Educ. of Prince George’s Cnty., 598 F.Supp. 1262, 1289–90 (D.Md.
1984)).
Here, the expenses requested by class counsel appear to
be reasonable and typical.
Accordingly, Mr. Edelen’s request
for $30,800.80 in attorneys’ fees and $1,999.20 in expenses will
be approved.
E.
Incentive Award
As a last step in granting final approval of the Settlement
Agreement, the reasonableness of the $1,000.00 incentive payment
to Mr. Edelen must be assessed.
Incentive
awarded
in
actions.
FLSA
payments
both
FLSA
to
class
collective
representatives
actions
and
have
23
Rule
been
class
See, e.g., Hoffman, 2010 WL 1176641, at *3 (hybrid
collective
action
and
MWHL
class
action);
In
re
Tyson
Foods, Inc., No. RDB-08-1982, 2010 WL 1924012, at *4 (D.Md. May
11,
2010)
(Rule
23
class
action).
To
determine
whether
an
incentive payment is warranted, it is appropriate to consider
“the actions the plaintiff has taken to protect the interests of
37
the class, the degree to which the class has benefitted from
those actions, and the amount of time and effort the plaintiff
expended in pursuing the litigation.”
Hoffman, 2010 WL 1176641,
at *3 (internal quotation marks omitted);
Bottling
Grp.,
LLC,
No.
DKC
10–0218,
see also Leigh v.
2012
WL
460468,
at
*7
(D.Md. Feb. 10, 2012) (observing that, in the FLSA context,
incentive awards to named plaintiffs may be appropriate if “they
faced
substantial
risks
by
participating
in
the
lawsuit
and
incurred actual expenses during the litigation”).
Here, the Settlement Agreement contemplates an incentive
payment of $1,000.00 to Mr. Edelen, in addition to his receipt
of a settlement payment of $688.00.
A).
(ECF No. 29-1 ¶ 12 & Ex.
In the final approval motion, class counsel represent that
this award “is justified by the diligent efforts of” Mr. Edelen,
who
“independently
locate
legal
investigated
counsel,”
the
law,”
“participat[ed]
“made
in
“achieve[d] a recovery on behalf of others.”
31-32).
efforts
discovery,”
to
and
(ECF No. 34-1, at
At the final fairness hearing held on July 22, 2013 –
which Mr. Edelen attended in person – class counsel expounded
upon
the
lawsuit,
specifics
of
explaining
Mr.
that
Edelen’s
he
participation
sought
out
in
counsel
this
after
independently reviewing his paystubs and suspecting something
might
be
discovery
amiss.
by
Mr.
preparing
Edelen
for
also
a
38
made
possible
contributions
deposition
during
and
by
responding to written discovery requests.
counsel,
Mr.
Edelen
then
made
According to class
himself
available
during
settlement negotiations to discuss potential terms.
In light of Mr. Edelen’s role in initiating this lawsuit
and in helping to achieve a favorable resolution, the relatively
modest
incentive
payment
of
$1,000.00
is
reasonable.
Additionally, although there is no indication that Mr. Edelen
faces
any
specific
challenges
in
his
current
or
future
job
prospects as a result of his participation in this lawsuit,
there clearly is a risk that he could.
It is also significant
that
appears
the
$1,000.00
incentive
payment
to
have
been
negotiated for separately and does not decrease the recovery
available to other class members.
serves
as
additional
Finally, the incentive award
consideration
for
Mr.
general release of claims against Defendants.
¶ 12).
Edelen’s
broad,
(See ECF No. 29-1
Accordingly, the $1,000.00 incentive payment will be
approved as reasonable.
III. Conclusion
For the foregoing reasons, the unopposed motion for final
approval filed by Plaintiff Christopher Edelen will be granted.
A separate Order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
39
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