Daoust v. Maru Restaurant, LLC et al

Filing 35

FINAL ORDER AND JUDGMENT Granting Final Approval of the Class Action Settlement Agreement. Signed by District Judge Terrence G. Berg. (AChu)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KELSEY DAOUST, on behalf of herself
and those similarly-situated,
Case No. 17-cv-13879
Plaintiff,
v.

Hon. Terence Berg

MARU RESTAURANT, LLC, MARU
DETROIT, LLC, MARU EAST LANSING,
LLC, MARU GRAND RAPIDS, LLC, MARU
KALAMAZOO, LLC, MARU MIDLAND, LLC
and MARU HOSPITALITY, LLC, Domestic
Limited Liability Companies, and
ROBERT SONG, Individually,
Defendants.
________________________________________________________/
FINAL ORDER AND JUDGMENT GRANTING
FINAL APPROVAL OF THE CLASS ACTION
SETTLEMENT AGREEMENT
Based upon the facts presented to the Court during the June 19, 2019 Final
Approval and Fairness Hearing, the Court’s review of the Plaintiff’s Memorandum
of Law is Support of the Motion for Preliminary Approval, the Declaration of
Andrew R. Frisch (“Frisch Declaration”), and all other papers submitted in
connection with Plaintiff’s Motion for Preliminary Approval, the Court grants final
approval of the settlement memorialized in the Settlement Agreement and Release
(“Settlement Agreement”) between Plaintiff, KELSEY DAOUST, and Defendants

29692234.2
31494690.2

MARU RESTAURANT, LLC, MARU DETROIT, LLC, MARU EAST
LANSING, LLC, MARU GRAND RAPIDS, LLC, MARU MIDLAND, LLC,
MARU HOSPITALITY, LLC, and ROBERT SONG (“Defendants”) (collectively
“the Parties”), and “so orders” all of its terms except as set forth herein.
Background
This lawsuit is a hybrid class and collective action asserting wage and hour
claims under the Fair Labor Standards Act (“FLSA”) and Michigan’s Workforce
Opportunity Wage Act (“WOWA”), M.C.L. § 408.411, et seq.

It concerns

Defendants’ use of a tip pool and, later, a service charge. Plaintiff contends the tip
pool and service charge were unlawful and should result in Defendants being
unable to take a tip credit (i.e., paying the lower tipped minimum wage and taking
a credit for tips received to make up for the difference with the regular minimum
wage). Defendants denied Plaintiff’s allegations.
The Parties have agreed to a $1,450,000 settlement covering 359 class
members. The settlement was reached during arms-length negotiations between the
Parties, which were conducted by experienced counsel following extensive
investigation, and on the basis of mutual recognition of the strengths and
weaknesses of each other's positions. The settlement was achieved during
mediation with the assistance of the Honorable Steven Rhodes (Retired Chief
Judge, U.S. Bankruptcy Court for the Eastern District of Michigan).

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After

subtracting for fees, administrative costs and the like, the average payment per
class member is approximately $2,585.
Certification of the Settlement Class
1.

The Court finds that all requirements of Rule 23(a) and (b)(3) of the

Federal Rules of Civil Procedure are satisfied for settlement purposes.
2.

The Court finally certifies the following class under Fed.R.Civ.P.

23(e), for settlement purposes only (“Settlement Class”):
All tipped server employees who worked for any of the Defendants
from November 30, 2014 through June 3, 2018, with the exception of
six (6) servers who did not receive the class notice after a remailing
and who therefore are excluded from the class definition.
Approval of the Settlement Agreement
3.

The Court hereby grants the Motion for Final Approval and approves

the settlement on behalf of the class as set forth in the settlement Agreement and
this Order under Federal Rule of Civil Procedure 23(e).
4.

Under Rule 23(e), a class settlement must be “fair, reasonable, and

adequate” under a seven-factor standard. UAW v. General Motors Corp., 497 F.3d
615, 626 (citing Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th
Cir.1992); Williams v. Vukovich, 720 F.2d 909, 922-23 (6th Cir.1983)).
The Seven Factor Standard is Satisfied
5.

The Sixth Circuit uses the following seven factors to evaluate class

action settlements: (1) the risk of fraud or collusion; (2) the complexity, expense
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and likely duration of the litigation; (3) the amount of discovery engaged in by the
parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel
and class representatives; (6) the reaction of absent class members; and (7) the
public interest. UAW v. General Motors Corp., 497 F.3d 615, 626 (6th Cir. 2007)
(citing Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th Cir.1992);
Williams v. Vukovich, 720 F.2d 909, 922-23 (6th Cir.1983).
6.

These factors were thoroughly reviewed with Class Counsel during

the June 19, 2019 Fairness Hearing. The Court finds that all of the factors set forth
in UAW, 497 F.3d at 615, which provides the analytical framework for evaluating
the fairness of a class action settlement, weigh in favor of final approval.
7.

With respect to the first factor concerning the risk of fraud or

collusion, the Parties were represented by experienced counsel. The Parties'
counsel have extensive experience litigating wage and hour class and collective
action lawsuits, including tip pool and unpaid overtime claims and other claims for
unpaid hours worked. Further, the Settlement Agreement was achieved only after
arms-length and good faith negotiations between the Parties. The settlement was
reached after Class Counsel had conducted a thorough investigation of the facts
and engaged in significant discovery, and after extensive negotiations. To help
resolve the case, the parties enlisted the services of a retired Federal Judge, Judge
Steven Rhodes, in facilitating the Parties’ mediation, thereby reinforcing that the

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Settlement Agreement is non-collusive. See In re Delphi Corp. Sec., Derivative &
"ERISA" Litig., 248 F.R.D. 483, 498 (E.D. Mich. 2008). As such, there is no
indication of fraud or collusion.
8.

With respect to the second factor, the policy favoring the settlement of

class actions and other complex cases applies with particular force here.
Employment cases in general, and wage-and-hour cases in particular, are
expensive and time-consuming. Moreover, the Parties continue to disagree over the
merits of Plaintiff's claims. If forced to litigate this case further, the Parties would
certainly engage in complex, costly and protracted wrangling. The Settlement, on
the other hand, provides substantial relief to Representative Plaintiff and the Class
Members promptly and efficiently, and amplifies the benefits of that relief through
the economies of class resolution. Therefore, the second UAW factor weighs in
favor of final approval.
9.

With respect to the third factor, the Parties engaged in substantial

investigation prior to negotiating the Settlement Agreement. Relevant information
was

exchanged,

Plaintiff's

Counsel

obtained

investigation

notes

from

Representative Plaintiff and other employees who are members of the proposed
settlement class, obtained declarations from the class members, and spoke with a
Defendants’ former manager. Plaintiff’s counsel thoroughly examined the records
provided by Defendants’ counsel, and the legal issues in the case were thoroughly

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researched by counsel for the Parties. Thus, all of aspects of the dispute are wellunderstood by both sides, and the parties have completed enough discovery to
recommend settlement.
10.

With respect to the fourth factor, the risk of establishing liability and

damages further weighs in favor of final approval. "Litigation inherently involves
risks." In re Painewebber Ltd. P'ships Litig., 171 F.R.D. 104, 126 (S.D.N.Y. 1997).
One purpose of a settlement is to avoid the uncertainty of a trial on the merits. In
re Ira Haupt & Co., 304 F. Supp. 917, 934 (S.D.N.Y. 1969). Here, the factintensive nature of Plaintiffs' claims and Defendant's affirmative defenses present
risk. The settlement eliminates this uncertainty.
11.

With respect to the fifth factor, class counsel and the class

representative approve the settlement. The Parties' counsel are experienced in
wage-and-hour class actions, have acted in good faith, and have represented their
clients' best interests in reaching the Settlement Agreement. As discussed during
the Fairness hearing, both Plaintiffs' and Defendants' counsel believe that the
settlement is fair and reasonable, which weighs in favor of approving the
settlement. See Worthington v. CDW Corp., 2006 U.S. Dist. LEXIS 32100 at *13
(S.D. Ohio May 22, 2006). Courts are particularly likely to defer to the judgment
of experienced trial counsel where, as here, significant discovery has been
completed. Williams v. Vukovich, 720 F.2d 909, 922–23 (6th Cir.1983)

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12.

With respect to the sixth factor, the class' reaction to the settlement

has been positive.

No class member objected, and only one class member

excluded herself from the settlement. "The fact that the vast majority of class
members neither objected nor opted out is a strong indication" of fairness. Wright
v. Stern, 553 F. Supp. 2d 337, 344-45 (S.D.N.Y. 2008); Willix v. Healthfirst, Inc.,
No. 07 Civ. 1143, 2011 WL 754862, at *4 (E.D.N.Y. Feb. 18, 2011).
13.

With respect to the seventh factor, public interest favors settlement.

The Sixth Circuit has recognized that “the law generally favors and encourages the
settlement of class actions.” Franks v. Kroger Co., 649 F.2d 1216, 1224 (6th Cir.
1981); Int’l Union, United Auto., Aerospace, and Agr. Implement Workers of Am.
v. General Motors Corp., 497 F. 3d 615, 632 (6th Cir. 2007) (“we must consider—
the federal policy favoring settlement of class actions.”); Vassalle v. Midland
Funding LLC, 2014 WL 5162380, at *6 (N.D. Ohio Oct. 14, 2014), aff'd sub nom.
Pelzer v. Vassalle, 655 F. App'x 352 (6th Cir. 2016) (“It is axiomatic that the
settlement of class-action litigation is favored.”); Griffin v. Flagstar Bancorp, Inc.,
2013 WL 6511860, at *2 (E.D. Mich. Dec. 12, 2013) (“The Sixth Circuit and
courts in this district have recognized that the law favors the settlement of class
action lawsuits.”) Therefore, when considering the below factors, the courts apply
a “strong presumption” in favor of finding a settlement to be fair.

In re

Telectronics Pacing Sys., Inc., 137 F. Supp. 2d 985, 1008 (S.D. Ohio 2001)

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(“Being a preferred means of dispute resolution, there is a strong presumption by
courts in favor of settlement.”); see also Bautista v. Twin Lakes Farms, Inc., 2007
WL 329162, at *5 (W.D. Mich. Jan. 31, 2007); Robinson v. Ford Motor Co., 2005
WL 5253339, at *4 (S.D. Ohio June 15, 2005).
The Settlement Agreement Is Updated to Reflect the Increased Settlement
Administrator Costs
14.

The Parties have recalculated certain figures stated in the Settlement

Agreement as a result of increased costs from the settlement administrator, which
were $33,625 versus the $16,500 estimated in the Settlement Agreement.
Accordingly, it is understood that the amount available for distribution to the class,
as specified in Section 7.1 of the Settlement Agreement, is $928,041.69 instead of
$945,166.67. The installment payment chart referenced in Section 8.2 of the
Settlement Agreement is updated as follows:
Installment
Payment

Paid to Class
Counsel

Amount Remaining for
Participating Class Members

1 ($290,000)

$96,666.66

$154,708.34

2 ($145,000)

$48,333.33

$96,666.67

3 ($145,000)

$48,333.33

$96,666.67

4 ($145,000)

$48,333.33

$96,666.67

5 ($145,000)

$48,333.33

$96,666.67

6 ($145,000)

$48,333.33

$96,666.67

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Installment
Payment

Paid to Class
Counsel

Amount Remaining for
Participating Class Members

7 ($145,000)

$48,333.33

$96,666.67

8 ($145,000)

$48,333.33

$96,666.67

9 ($145,000)

$48,333.36

$96,666.66

Approval of FLSA Settlement
15.

The Court hereby approves the FLSA settlement.

16.

The standard for approval of an FLSA settlement is lower than for a

Rule 23 settlement because an FLSA settlement does not implicate the same due
process concerns as does a Rule 23 settlement. Torres v. Gristede's Operating
Corp., No. 04-CV 3316 PAC, 2010 WL 5507892 at*6 (S.D.N.Y. Dec. 21, 2010),
aff'd, 519 F. App'x 1 (2d Cir. 2013).
17.

Courts approve FLSA settlements when they are reached as a result of

contested litigation to resolve bona fide disputes. Clark v. Ecolab Inc., No.
04CIV.4488PAC, 2010 WL 1948198 at *7 (S.D.N.Y. May 11, 2010). "Typically,
courts regard the adversarial nature of a litigated FLSA case to be an adequate
indicator of the fairness of the settlement." Torres, 2010 WL 5507892, at *6
(internal quotation marks omitted). If the proposed settlement reflects a reasonable
compromise over contested issues, the settlement should be approved. Clark, 20 I0
WL 1948198, at *7.

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18.

The Court finds that the FLSA settlement was the result of contested

litigation and arm's-length negotiation.
Dissemination of Notice
19.

Pursuant to the Preliminary Approval Order, the Notice was sent by

first-class mail to each identified class member at his or her last known address
(with re-mailing of returned Notices). The Court finds that the Notice fairly and
adequately advised Class Members of the terms of the settlement, as well as the
right of Class Members to exclude themselves from the class, and to object to the
settlement, and to appear at the fairness hearing conducted on June 19, 2019. See
D.E. 33-3. Class Members were provided the best notice practicable under the
circumstances. The Court further finds that the Notice and distribution of such
Notice comported with all constitutional requirements, including those of due
process.
Award of Fee and Costs to Class Counsel and Award of Service Awards to
Class Representative
20.

On April 13, 2018, the Court appointed Morgan & Morgan, P.A. as

Class Counsel because they met all of the requirements of Federal Rule of Civil
Procedure 23(g). See D.E. 20.
21.

Class Counsel did substantial work identifying, investigating,

prosecuting, and settling Plaintiff's and the Class Members' claims.

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22.

Class Counsel have substantial experience prosecuting and settling

employment class actions, including wage and hour class actions, and are wellversed in wage and hour law and in class action law. ECF No. 33-4; see also
Pierre-Val v. Buccaneers Ltd. P’Ship, 2015 WL 3776918, at *4 (M.D. Fla. June
17, 2015) (appointing Frisch and Morgan & Morgan as class counsel in Florida
minimum wage class action); Seghroughni v. Advantus Restaurant, Inc., 2015 WL
390329, at *2 (M.D. Fla. Jan. 28, 2015) (same); Deleon v. Wells Fargo, N.A., 1:12cv 04494-RLE, D.E. 39 (S.D.N.Y. Jan. 12, 2015) (appointing Frisch and M&M as
class counsel in NYLL class action); Reyes v. AT&T Mobility Services, LLC, 1:10cv-20837-MGC, D.E. 191 (S.D. Fla. Dec. 20, 2012) (appointing Frisch as class
counsel); Toure v. Amerigroup Corp., 2012 WL 3240461, at *5 (E.D.N.Y. August
6, 2012) (“Class Counsel have substantial experience prosecuting and settling
employment class actions, including wage and hour class actions, and are well
versed in wage and hour law and in class action law.”); Aponte v. Comprehensive
Health Management, Inc., 2011 WL 2207586, at *12 (S.D.N.Y. June 2, 2011)
(finding that Frisch and Morgan & Morgan “are qualified, experienced, and
capable of acting as lead counsel” in wage and hour class actions).
23.

The work that Class Counsel has performed in litigating and settling

this case demonstrates their commitment to the Class and to representing the
Class's interests. Class Counsel has committed substantial resources to prosecuting

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this case.
24.

The Court hereby grants Plaintiffs' Motion for Attorneys' Fees and

awards Class Counsel $483,333.33 in attorneys' fees and costs, or one-third of the
fund (including any interest in the fund).
25.

The Court finds that the amount of fees requested is fair and

reasonable using the "percentage-of-recovery" method, which is consistent with the
"trend in this Circuit." See Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d
513, 516 (6th Cir. 1993) (“The percentage of the fund method has a number of
advantages: it is easy to calculate; it establishes reasonable expectations on the part
of plaintiffs’ attorneys as to their expected recovery; and it encourages early
settlement, which avoids protracted litigation.”); See also In re Skelaxin
(Metaxalone) Antitrust Litig., 2014 WL 2946459, at *1 (E.D. Tenn. June 30, 2014)
(“The Court finds that the requested counsel fee of one third is fair and reasonable
and fully justified. The Court finds it is within the range of fees ordinarily
awarded.”); Dillworth v. Case Farms Processing, Inc., 2010 WL 776933, at *8
(N.D. Ohio Mar. 8, 2010) (“The amount of the contingency, one-third of the total
award, is also reasonable and has been approved in similar FLSA collective
actions”) (collecting cases).
26.

In wage and hour class action lawsuits, public policy favors a

common fund attorneys' fee award. See Frank v. Eastman Kodak Co., 228 F.R.D.

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174, 189 (W.D.N.Y. 2005). Where relatively small claims can only be prosecuted
through aggregate litigation, "private attorneys general" play an important role.
Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 338-39 (1980). Attorneys who
fill the private attorney general role must be adequately compensated for their
efforts. If not, wage and hour abuses would go without remedy because attorneys
would be unwilling to take on the risk. See Goldberger v. Integrated Res. Inc., 209
F.3d 43, 51 (2d Cir. 2000) (commending the general "sentiment in favor of
providing lawyers with sufficient incentive to bring common fund cases that serve
the public interest"). Adequate compensation for attorneys who protect wage and
hour rights furthers the remedial purposes of the FLSA and Michigan’s WOWA.
27.

Class Counsel's request for one-third of the fund to cover their fees

and costs is reasonable and consistent within the norms of class litigation in this
circuit.
28.

Class Counsel risked time and effort and advanced costs and

expenses, with no ultimate guarantee of compensation.
29.

All of the factors in Goldberger v. Integrated Res. Inc., 209 F.3d 43,

50 (2d Cir. 2000), weigh in favor of a fee award of one-third of the fund.
30.

The fact that Class Counsel's fee award will not only compensate

them for time and effort already expended, but for time that they will be required
to spend administering the settlement going forward also supports their fee request.

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Clark, 2010 WL 1948198, at *9.
31.

The awarded attorneys’ fees and reimbursed costs shall be paid from

the settlement fund.
32.

The Court finds the service award of $5,000.00 to named-Plaintiff,

Kelsey Daoust, to be reasonable as well. This amount shall be paid from the
settlement fund.
33.

Such service awards are common in class action cases and are

important to compensate plaintiffs for the time and effort expended in assisting the
prosecution of the litigation, the risks incurred by becoming and continuing as a
litigant, and any other burdens sustained by plaintiffs. See Sewell v. Bovis Lend
Lease, Inc., No. 09 CIV. 6548 RLE, 2012 WL 1320124 at * 14 - 15 (S.D.N.Y. Apr.
16, 2012); Reyes v. Altamarea Grp., LLC, No. 10-CV-6451 RLE, 2011 WL
4599822 at *9 (S.D.N.Y. Aug. 16, 2011); Willix, 2011 WL 754862, at *7.
34.

Here, the service award recognizes the risks that the named-Plaintiff

faced by participating in a lawsuit against her former employer and the efforts she
made on behalf of the class, including producing documents, continuously
speaking with Class Counsel, and actively participating in the mediation. See
Parker v. Jekyll & Hyde Entm 't Holdings, L.L.C., No. 08 Civ. 7670, 2010 WL
532960, at *l (S.D.N.Y. Feb. 9, 2010).

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Retention of Jurisdiction to Enforce
35.

The Court retains jurisdiction over this action for the purpose of

enforcing the Settlement Agreement and overseeing the distribution of settlement
funds. The parties shall abide by all terms of the Settlement Agreement, which are
incorporated herein, and this Order.
It is so ORDERED.
/s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Dated: July 3, 2019

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