Suazo Corea et al v. SLDB, LLC et al
Filing
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MEMORANDUM OPINION. Signed by Judge Paula Xinis on 10/3/2018. (heps, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CARLOS SUAZO COREA, et al.,
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Plaintiffs
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v.
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SLDB, LLC, et al.,
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Defendants
Civil Action No. 8:18-cv-01120-PX
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MEMORANDUM OPINION
Pending before the Court is Plaintiffs Carlos Suazo Corea, Saturnino Romero Boquin,
and Karen Reyes’ third motion to approve settlement with consent of Defendants SLDB, LLC,
Shen Lin, and David Beeker. ECF Nos. 23, 24. Plaintiffs filed this action alleging that
Defendants failed to pay overtime wages in violation of the Fair Labor Standards Act (“FLSA”),
29 U.S.C. § 201 et seq.; the Maryland Wage and Hour Law (“MWHL”), Md. Code, Lab. &
Empl. Article (“LE”) § 3-401 et seq.; and the Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code, LE § 3-501 et seq. ECF No. 1. For the reasons that follow, the Court
GRANTS the parties’ motion and approves the settlement.
I.
BACKGROUND
Plaintiffs worked as hourly employees in the kitchen of Defendants’ restaurant, Sarku
Japan. ECF No. 1 ¶¶ 1, 15. Plaintiffs allege that Defendants paid Plaintiffs one rate for all work,
including for overtime. Id. The complaint avers that Corea is owed approximately $15,000 in
overtime wages, Boquin is owed approximately $21,000 in overtime wages, and Reyes is owed
approximately $4,000 in overtime wages. Id. ¶¶ 34–36.
On September 27, 2018, the parties jointly moved for the Court to approve a third
settlement agreement. ECF No. 23. 1 After informal discovery, Plaintiffs learned that, under
their theory of the case, their unpaid overtime wages would be $7,112.35 for Corea, $17,758.29
for Boquin, and $2,115.55 for Reyes. Id. at 2. The settlement agreement provides Plaintiffs with
85% of their maximum potential recovery, in both overtime and liquidated damages, under the
FLSA. Id. The agreement also provides $9,700 in attorneys’ fees and costs. Id. The Plaintiffs’
explained how their attorneys spent their time on the case and their hourly billing rates. Id. at 6–
7. In the agreement, Defendants deny all liability to Plaintiffs. ECF No. 24 at 7. Finally, the
agreement releases all claims, by each party, related to Plaintiffs’ employment with Defendants.
Id. at 6–7.
II.
STANDARD OF REVIEW
Because Congress enacted the FLSA to shield workers from substandard wages and
working conditions arising from the unequal bargaining power between workers and employers,
the FLSA’s requirements generally cannot be modified, waived, or bargained away by contract
or settlement. See Brooklyn Saw Bank v. O’Neil, 324 U.S. 697, 706 (1945). However, Courtapproved settlement is an exception to this rule where “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 (11th Cir. 1982)); see also Acevedo v. Phoenix Pres. Grp., Inc., No. PJM 13-3726, 2015
WL 6004150, at *4 (D. Md. Oct. 8, 2015).
“In reviewing FLSA settlements for approval, ‘district courts in this circuit typically
employ the considerations set forth by the Eleventh Circuit in Lynn’s Food Stores.’” Hackett v.
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The first motion to approve a settlement agreement was denied without prejudice for insufficient information in
support. ECF No. 18. The second motion was orally withdrawn during a recorded conference call with the Court.
ECF No. 21.
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ADF Rest. Invs., 259 F. Supp. 3d 360, 365 (D. Md. 2016) (quoting Beam v. Dillon’s Bus Serv.,
Inc., No. DKC 14-3838, 2015 WL 4065036, at *3 (D. Md. July 1, 2015)). More particularly,
“[t]he settlement must reflect a ‘fair and reasonable resolution of a bona fide dispute over FLSA
provisions.” Hackett, 259 F. Supp. 3d at 365 (quoting Beam, 2015 WL 4065036, at *3)). The
court considers (1) whether FLSA issues are actually in dispute; (2) the fairness and
reasonableness of the settlement; and (3) the reasonableness of the attorneys’ fees, if included in
the agreement. Hackett, 259 F. Supp. 3d at 365. The Court addresses each factor in turn.
III.
ANALYSIS
A. Bona Fide Dispute
In determining whether a bona fide dispute over FLSA liability exists, the Court reviews
the pleadings, any subsequent court filings, and the parties’ recitals in the proposed settlement.
See Lomascolo v. Parsons Brinckerhoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL 3094955, at
*10 (E.D. Va. Sept. 28, 2009). Here, Defendants “expressly deny any wrongdoing or liability of
any kind.” ECF No. 24 at 7. Defendants maintain that no labor laws were violated and that,
even if there were violations, Defendants did not act willfully. ECF No. 23 at 3. Accordingly,
the threshold factor of bona fide dispute is met.
B. Fairness and Reasonableness of the Settlement
Courts evaluate the fairness and reasonableness of a settlement based on six factors:
(1) the extent of discovery undertaken; (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 plaintiff’s counsel; (5) the opinions of counsel; and (6) the
probability of the plaintiff’s success on the merits, and the amount of settlement contrasted with
the potential recovery. Hackett, 259 F. Supp. 3d at 365.
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The Court finds the agreement is fair and reasonable. The parties agree that discovery
was “extensive” and that Plaintiffs’ counsel had “all the useful information he could ever hope to
obtain.” ECF No. 23 at 3. The case is relatively “simple” and Plaintiffs’ counsel believes this
agreement is an “optimal resolution.” Id. at 4. Plaintiffs’ counsel has litigated over one hundred
wage and hour cases. Id. Although the agreement includes a general release of claims related to
Plaintiffs’ employment, Defendants have fairly compensated Plaintiffs for the release. See
Duprey v. Scotts Co., LLC, 30 F. Supp. 3d 404, 410 (2014). The recovery itself is fair and
reasonable because it provides Plaintiffs with nearly the maximum potential recovery under the
FLSA. Plaintiffs receive 85% of their alleged unpaid overtime, with an equal amount in
liquidated damages. Given the dispute over Defendants’ liability, this recovery is fair and
reasonable.
C. Reasonableness of Attorneys’ Fees
The FLSA provides that “in addition to any judgment awarded to the plaintiff or
plaintiffs,” the Court must “allow a reasonable attorney’s fee to be paid by the defendant, and
costs of the action.” 29 U.S.C. § 216(b). Courts in this district assess independently the
reasonableness of requested fees even where the parties agree to a fee and represent that the fee
was negotiated without regard to plaintiff’s settlement amount. Kianpour v. Rest. Zone Inc., No.
DKC 11-0802, 2011 WL 5375082, at *3 (D. Md. Nov. 4, 2011) (“It would make little sense to
require the amount of the fees to be reasonable where the plaintiffs prevail on the merits, but to
abandon that requirement altogether where the parties agree to settle the case.”); accord Grissom
v. The Mills Corp., 549 F.3d 313, 322–23 (4th Cir. 2008). The Court typically measures the
reasonableness of the attorneys’ fees by the lodestar method. Johnson v. Heartland Dental, LLC,
No. PJM 16-2154, 2017 WL 2266768, at *4 (D. Md. May 23, 2017). The Court considers the
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following factors:
(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 the attorney and client; and (12) the attorneys’ fees awards in
similar cases.
Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 n.28 (4th Cir. 1978).
The parties seek $9,100 in attorneys’ fees and $600 in filing and service costs. ECF
No. 23 at 6. Plaintiffs had two attorneys working on the case. Justin Zelikovitz, who has over
nine years of experience as an attorney, seeks compensation at $300 per hour. Id. at 5–6. Mr.
Zelikovitz spent 14.3 hours on the case: 5.8 hours on pleadings, 6.2 hours on settlement
negotiations, and 2.3 hours on case development, background investigation, and case
administration. Id. at 5. Jonathan Tucker, who has been a practicing attorney for over eight
years, also seeks compensation at $300 per hour. Id. at 5–6. He spent 15.7 hours on the case:
4.1 hours on pleadings and 11.6 hours on case development, background investigation, and case
administration. Id. at 5. Plaintiffs’ paralegals also spent 13.8 hours on case development,
background investigation, and case administration. Id. The paralegals seek compensation at
$100 per hour. Id. at 6.
Given that counsel represented three plaintiffs in this action, the Court finds that the
number of hours spent on case development, background investigation, and case administration
is reasonable. The Court also finds the time spent on pleadings and settlement negotiations is
reasonable, and the hourly rates are presumptively reasonable under our Local Rules, Appendix
B. Even though the requested attorneys’ fees eclipse the amount recovered by one plaintiff, the
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fees are nonetheless reasonable in recognition that “attorneys’ fees may substantially exceed
damages in FLSA cases.” Atkins v. Sunbelt Rentals, Inc., No. PWG 14-1717, 2016 WL
3647610, at *6 (D. Md. June 30, 2016). Accordingly, the Court approves the requested amounts
in attorneys’ fees and costs.
IV.
CONCLUSION
For the foregoing reasons, the Court grants the third consent motion to approve
settlement. A separate order will follow.
October 3, 2018________________
Date
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Paula Xinis
United States District Judge
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