Atkins v. Sunbelt Rentals, Inc.

Filing 48

MEMORANDUM OPINION, ORDER granting 47 Joint MOTION for Settlement filed by Greg Atkins. Signed by Judge Paul W. Grimm on 6/29/2016. (kw2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division

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GREG ATKINS,

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Plaintiff,

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v.

Civil Case No.: PWG-14-1717

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SUNBELT RENTALS, INC.,

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Defendant.

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MEMORANDUM OPINION & ORDER
Plaintiff Greg Atkins filed this action against his former employer, Sunbelt Rentals Inc.
("Sunbelt") on May 29, 2014, alleging that Sunbelt failed to pay him overtime compensation in
violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.c.

SS

201-219, and the Maryland

Wage and Hour Law ("MWHL"), Md. Code Ann., Lab. & Empl.

SS

3-401 to 3-430. ECF No. 1.

On August 18, 2014, Atkins filed an Amended Complaint that added a claim that, in failing to
pay him overtime

compensation,

Sunbelt also violated

Maryland's

Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl.

SS

Wage Payment

and

3-501 to 3-509. ECF No. 16.

On the eve of trial, after almost two years of pretrial proceedings, the parties jointly moved on
May 11, 2016 for court approval of the settlement agreement they have executed. Jt. Mot., ECF
No. 47. I find the net amount Atkins is to receive to be fair and reasonable in light of the facts of
this case. Additionally, I approve the attorneys' fee award under a lodestar calculation.
I.

BACKGROUND
The parties agreed to the following facts:

On March 18, 2002, Plaintiff began employment with Sunbelt rentals as a
Field Foreman ... at a pay of $22.50 per hour. Plaintiff resigned from
employment on May 2, 2002 for personal reasons. Sunbelt rehired Plaintiff as a
Field Foreman ... at a pay rate of $20.00 per hour on May 16,2002. Throughout
the course of Plaintiff's employment, Plaintiff worked as a field foreman ....
On May 30, 2002, Sunbelt transferred Plaintiff from an hourly to a
salaried employee, effective June 6, 200[2]. From June 6, 2002 through August
11, 2013, Defendant paid Plaintiff a salary [which did not include overtime] for
all hours worked. Effective August 12,2013, Defendant changed Plaintiff from a
salaried employee to an hourly employee and reclassified Plaintiff as a nonexempt employee. After being reclassified as a non-exempt hourly employee in
August of2013, Plaintiff's job duties and work performed did not change.
Stmt. of Undisputed Facts 'il'il7-10,14-16, ECF No. 26-1.
Plaintiff estimated that he worked, on average, 13.75 hours per week of
overtime during the relevant period. Plaintiff calculated that he was owed
$22,525.42 in unpaid overtime during the three-year statutory period. Plaintiff
also claimed that his statute of limitations should be tolled from August 2013. In
the event that his statute of limitations was tolled, his unpaid overtime would be
$30,593.39. Plaintiff also asked that his damages be doubled and trebled.
Sunbelt alleged that it properly classified Plaintiff as an Exempt
Administrative or Executive Employee, and he was therefore not entitled to
overtime. Sunbelt disputed the number of overtime hours that Plaintiff claimed
and asserted that no tolling was proper.
Jt. Mot. & Mem. 2-3.
The Settlement Agreement provides that it "is in full and final accord, satisfaction, and
final compromise and settlement of Plaintiff's claims against the Released Parties for unpaid
regular wages, unpaid overtime wages, liquidated damages, treble damages, interest, court costs,
and all other monetary and equitable relief, including attorneys' fees." Settlement Agr. 'il3, ECF
NO.4 7-1. It also states that Plaintiff agrees not to sue Sunbelt "with respect to any and all claims
... of any kind whatsoever, ... for, upon or by reason of any allegation of unpaid wages or other
violation of the FLSA, MWHL, MWPCL, or comparable state law, arising out of Plaintiff's
employment with Defendant, pursuant to the FLSA, MWHL, MWPCL, or comparable state
law." Id. 'il5.

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The Settlement Agreement does not contain a provision governing whether Atkins is the
prevailing party for purposes of attorneys' fees or costs under 29 U.S.C.

9 216(b),

but it does

include a sum for attorneys' fees. ld. ~ 2. The $125,400 settlement includes (l) $30,000 to
Atkins "as back wages with appropriate deductions and withholdings," and (2) $95,400 to Zip in,
Amster & Greenberg LLC for attorneys' fees and costs.

ld. ~ 2. The attorneys' fees "were

contingent on the successful outcome of the case." Jt. Mot. & Mem. 9.
II.

DISCUSSION
a. FLSA Settlement Generally
Congress enacted the FLSA to protect workers from the poor wages and long hours that

can result from significant inequalities in bargaining power between employers and employees.
To that end, the statute's provisions are mandatory and generally are not subject to bargaining,
waiver, or modification by contract or settlement.
697, 706 (1945).

Court-approved

See Brooklyn Sav. Bank v. 0 'Neil, 324 U.S.

settlement is an exception to that rule, "provided that the

settlement reflects a 'reasonable compromise of disputed issues' rather than 'a mere waiver of
statutory rights brought about by an employer's

overreaching.'''

Saman v. LBDP, Inc., No.

DKC-12-1083, 2013 WL 2949047, at *2 (D. Md. June 13,2013) (quoting Lynn's Food Stores,
Inc. v. United States, 679 F.2d 1350, 1354 (lith Cir. 1982)).
Although the Fourth Circuit has not addressed the factors to be considered in approving
FLSA settlements, "district courts in this circuit typically employ the considerations set forth by
the Eleventh Circuit in Lynn's Food Stores." ld. at *3 (citing Hoffman v. First Student, Inc., No.
WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md. Mar. 23, 2010); Lopez v. NT!, LLC, 748 F.
Supp. 2d 471,478 (D. Md. 2010)). The settlement must "reflect a fair and reasonable resolution
of a bona fide dispute over FLSA provisions," which includes findings with regard to (l)
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whether there are FLSA issues actually in dispute, (2) the fairness and reasonableness of the
settlement in light of the relevant factors from Rule 23, and (3) the reasonableness

of the

attorneys' fees, if included in the agreement. Id. (citing Lynn's Food Stores, 679 F.2d at 1355;
Lomascolo v. Parsons BrinckerhojJ, Inc., No. 08-1310, 2009 WL 3094955, at *10 (E.D. Va.
Sept. 28,2009);

Lane v. Ko-Me, LLC, No. DKC-I0-2261,

2011 WL 3880427, at *2-3 (D. Md.

Aug. 31, 2011)). These factors are most likely to be satisfied where there is an "assurance of an
adversarial context" and the employee is "represented by an attorney who can protect [his] rights
under the statute." Lynn's Food Stores, 679 F.2d at 1354.
b. Bona Fide Dispute
In deciding whether a bona fide dispute exists as to a defendant's

liability under the

FLSA, courts examine the pleadings in the case, along with the representations and recitals in the
proposed settlement agreement.

See Lomascolo, 2009 WL 3094955, at * 16-17.

The Joint

Motion and Memorandum, as well as the previous filings, including summary judgment briefing
and pretrial memoranda,

make clear that several issues are in bona fide dispute.

Most

importantly, the parties disagree about the nature of the work Atkins performed (which impacts
his entitlement to overtime wages), the number of hours he worked, whether Sunbelt acted
willfully (which affects the length of the statute of limitations), and whether a bona fide dispute
existed about Atkins's entitlement to overtime wages (which affects the availability of treble
damages).
c. Fairness & Reasonableness
In finding this settlement fair and reasonable, I should evaluate several factors, including:.
"(1) the extent of discovery that has taken place; (2) the stage of the proceedings,
including the complexity, expense and likely duration of the litigation; (3) the
absence of fraud or collusion in the settlement; (4) the experience of counsel who
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have represented the plaintiffl]; (5) the opinions of [] counsel ... ; and (6) the
probability of plaintiff[' s] success on the merits and the amount of the settlement
in relation to the potential recovery."
Saman, 2013 WL 2949047, at *3 (quoting Lomascolo, 2009 WL 3094955, at *10).
First, the parties completed discovery, which included five depositions and significant
written discovery. Jt. Mot. & Mem. 3. Second, the parties reached their Settlement Agreement on
the eve of trial, after almost two years of pretrial proceedings, having briefed multiple issues on
summary judgment and prepared bench memoranda for trial. ld. at 3-4; see ECF Nos. 26, 26-3,
27, 28, 31, 36, 40, 41. With regard to the third factor, the parties state:
there was no fraud or collusion related to the" Settlement Agreement. Prior to
accepting the settlement agreement, Defendant and Plaintiff-with
the advice of
their respective counsel-considered
the potential value of Plaintiff's claims,
considered the strength/weaknesses of Defendant's defenses, and both parties
independently concluded that settlement is/was in their best interests and a fair
and reasonable resolution of Plaintiff's claims. Defendant further support this
result because it eliminates the uncertainties and risks of further litigation.
Jt. Mot. & Mem. 4. I accept these repre-sentations. Additionally, the parties have established
Atkins's counsel's experience with FLSA cases. See id.
As for the fifth factor, it is not relevant in this individual action, as it pertains to class or
collective actions. See Lomascolo, 2009 WL 3094955, at *I O. With regard to the sixth factor,
the total proposed settlement, exclusive of attorneys'

fees, would compensate

Atkins for

"roughly 130% of [his] claim for back wages for the three-year statutory period or roughly 100%
of [his] claim for back wages in the event that the matter was tolled." Jt. Mot. & Mem. 4-5. This
amount takes "into account the risks attendant with litigation," which includes the possibility that
Atkins be found to have been an exempt employee, not entitled to overtime, "as well as the
possibility that, even if liability were found, Plaintiff may not be entitled to [treble] damages" or
damages for the longer period of time Plaintiff seeks to recover back pay. See Berrios v. Green
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Wireless, LLC, No. GJH-14-3655, 2016 WL 1562902, at *3 (D. Md. Apr. 18,2016).
the parties view this amount as "a reasonable compromise."

Moreover,

Jt. Mot. & Mem. 4.

General releases can render settlement agreements unreasonable.

See, e.g., Moreno v.

Regions Bank, 729 F. Supp. 2d 1346, 1352 (M.D. Fla. 2010) (concluding that "a pervasive
release in an FLSA settlement confers an uncompensated, unevaluated, and unfair benefit on the
employer" that "fails judicial scrutiny"); McKeen-Chaplin

v. Franklin Am. Mortg. Co., No. 10-

5243, 2012 WL 6629608, at *3 (N.D. Cal. Dec. 19,2012).

But here, the Settlement Agreement

contains a specific release covering only Atkins's claims for unpaid wages or other FLSA,
MWHL, or MWPCL violations.
compromise

See Settlement Agr. ~ 5. The narrow release supports the

amount that Atkins is to receive, and I am not required

to evaluate the

reasonableness of the settlement as to the non- FLSA claim. See Saman, 2013 WL 2949047, at
*5 (citing Robertson v. Ther-Rx Corp., No. 09-1010-MHT, 2011 WL 1810193, at *2 (M.D. Ala.
May 12, 2011); Bright v. Mental Health Res. Ctr., Inc., No. 09-1010, 2012 WL 868804, at *2
(M.D. Fla. Mar. 14, 2012)).

The compromise avoids the possibility that Atkins could lose

entirely.
The proposed settlement does not provide for an entry of judgment, and some courts
view settlements without such a stipulated judgment as per se unreasonable.

See Duprey v.

Scotts Co. LLC, 30 F. Supp. 2d 404, (D. Md. 2014) (citing, inter alia, Lynn's Food Stores, 679
F.2d at 1353; Dionne v. Floormasters Enters., Inc., 667 F.3d f199, 1205 (11th Cir. 2012)).
However, in the absence of clear binding authority to the contrary, a plaintiff "is permitted to
agree that-in

light of the bona fide disputes as to liability and the costs and risks of proceeding

on the merits-accepting

a lesser amount than he ultimately could receive at trial is reasonable."

ld. Atkins's settlement, like that in Duprey, "is better viewed as a stipulation to an amount that
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fairly compensates [Plaintiff] for the release, given the specific risks of the case at bar, rather
than an impermissible waiver under Brooklyn Savings [v. O'Neil, 324 U.S. 697 (1945)]."

Id.

The amount provided in consideration for Atkins's narrow release is fair and reasonable.
d. Attorneys' Fees
The Settlement Agreement's
reasonableness.

provisions regarding attorneys' fees must be assessed for

Saman, 2013 WL 2949047, at *6. Atkins's attorneys' fees "were contingent on

successful outcome of the case," but they were not set as a percentage of his recovery. Jt. Mot.
& Mem. 9. The Settlement Agreement proposes the Defendant pay Atkins a sum of $125,400
($95,400 for attorneys' fees and $30,000 in damages). Id. at 2. Although the attorneys' fees are
more than three times the damages, attorneys'
damages" in FLSA cases.

fees awards may "substantially

exceed []

See Almendarez v. 1. T.T. Enters. Corp., No. JKS-06-68, 2010 WL

3385362, at *3 (D. Md. Aug. 25, 2010) (concluding that $84,058 attorneys' fee award was
reasonable, even though jury verdict in favor of three of eight plaintiffs awarded plaintiffs only
$3,200, $1,200, and $2,200 each); e.g., Butler v. Directsat USA, LLC, No. DKC-I0-2747,

2016

WL 1077158, at *7 (D. Md. Mar. 18,2016) (approving attorneys' fees award of $258,390.67 in
FLSA collective action where plaintiffs had received between $54.36 and $4,197.78, for a total
of approximately $36,000) ; see also Reyes v. Clime, No. PWG-14-1908, 2015 WL 3644639, at
*4 (D. Md. June 8, 2015) (finding "relatively modest fee of $15,516 [to be] reasonable" where
one plaintiff received $5,500 and other plaintiff received $2,500, even though "the fee sought
[was] nearly double the total recovery realized by Plaintiffs," give that "this is likely to occur in
FLSA actions, where vulnerable plaintiffs may be vindicating important rights that entitle them
to relatively modest compensation").
Fourth Circuit has ...

Indeed, "[t]he FLSA is a civil rights statute," and "[t]he

recognized that '[a]wards
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of attorney's

fees substantially

exceeding

damages are not unusual in civil rights litigation.'" Nelson v. A & H motors, Inc., No. JKS-122288, 2013 WL 388991, at *2 & n.3 (D. Md. Jan. 30, 2013) (quoting Thorn v. Jefferson-Pilot
Life Ins. Co., 445 F.3d 311, 328 n.20 (4th Cir. 2006); noting award of $349,244 in attorneys' fees
in Title IX suit where court awarded only nominal damages, and $13 ,317 attorneys' fees award
in Fair Housing Act case where court awarded only $1,000 in compensatory damages).

"In calculating an award of attorney's

fees, the Court must determine the lodestar

amount, defined as a 'reasonable hourly rate multiplied by hours reasonably expended.'"

Lopez

v. XTEL Canst. Grp., LLC, 838 F. Supp. 2d 346, 348 (D. Md. 2012) (citing Grissom v. The Mills
Corp., 549 F.3d 313,320-21

(4th Cir. 2008); Plyler v. Evatt, 902 F.2d 273,277 (4th Cir. 1990)).

"[T]here is a 'strong presumption'

that the lodestar figure is reasonable, but that presumption

may be overcome in those rare circumstances in which the lodestar does not adequately take into
account a factor that may properly be considered in determining a reasonable fee." Perdue v.
Kenny A. ex reI. Winn, 559 U.S. 542, 554 (2010). In determining whether the lodestar results in a
reasonable fee, this Court evaluates "the twelve well-known factors articulated in Johnson v.
Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974) and adopted by the Fourth
Circuit in Barber v. Kimbrell's, Inc., 577 F.2d 216,226 (4th Cir. 1978)." Thompson v. HUD, No.
MJG-95-309, 2002 WL 31777631, at *6 (D. Md. Nov. 21, 2002) (footnotes omitted). Those
factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3)
the skill requisite to properly perform the legal service; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitations imposed by the
client or the circumstances; (8) the amount involved and the results obtained; (9)
the experience, reputation, and ability ofthe attorneys; (10) the "undesirability" of
the case; (11) the nature and length of the professional relationship with the client;
and (12) awards in similar cases.
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Id. at *6 n. 19 (citing Johnson, 488 F.2d at 717-19). However, the Supreme Court has noted that
the subjective Johnson factors provide very little guidance and, in any event, that '''the lodestar
figure includes most, if not all, of the relevant factors constituting a 'reasonable attorney's fee.'''
Perdue, 559 U.S. at 551,553

(quoting Pennsylvania v. Del. Valley Citizens' Council/or

Clean

Air, 478 U.S. 549, 566 (1986)).
An hourly rate is reasonable if it is "in line with those prevailing in the community for
similar services by lawyers of reasonably comparable skill, experience, and reputation."

Blum v.

Stenson, 465 U.S. 886, 890 n.11 (1984); see Thompson v. HUD, No. MJG-95-309, 2002 WL
31777631, at *6 n.18 (D. Md. Nov. 21,2002) (same). In Appendix B to its Local Rules (D. Md.
Jui. 2014, Dec. 2015 Supp.), available at https://www.mdd.uscourts.gov/publications/forms/
LocaIRules.pdf, this Court has established rates that are presumptively reasonable for lodestar
calculations.

See, e.g., Poole ex rei. Elliott v. Textron, Inc., 192 F.R.D. 494, 509 (D. Md. 2000).

The billing rates listed for Plaintiffs

three attorneys and the paralegal(s)

are within the

presumptively reasonable rates set forth in Appendix B of this Court's Local Rules. I find that
these rates are reasonable.
As for the hours expended, the Joint Motion and Memorandum

for Approval

of

Settlement Agreement submits detailed information listing the billable hours that Atkins's three
attorneys and paralegal(s) spent for each stage of the litigation. The attorneys worked a total of
299.2 hours on this case and the paralegal(s) worked 23.8 hours. Jt. Mot. & Mem. 6-7.

The

parties' comprehensive analysis of the Johnson factors, see id. at 5-12, supports a finding that
the number of hours expended were reasonable.

Moreover, while Atkins's attorneys also noted

costs incurred throughout the case including: $400 for filing fees; $3,292.08 deposition costs;
$221.38 for postage/other costs; and service fees of $152.50, such that fees and costs total
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$109,434.96, counsel seeks approval of attorneys' fees and costs in the reduced amount of
$95,400, which is less than 90% of the total amount incurred. Taking into account the period of
litigation of almost two years, which included discovery, motions practice, a pretrial conference
and pretrial memoranda, I find that $95,400 for fees and costs is reasonable. Accordingly, I will
approve the attorneys' fee award of $95,400.
III.

ORDER
Accordingly, it is this 29th day of June, 2016, hereby ORDERED that the Joint Motion to

Approve Settlement, ECF No. 47, IS GRANTED.

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lSI
Paul W. Grimm
United States District Judge
dh/lyb

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