Bryant et al v. United Furniture Industries, Inc. et al

Filing 234

MEMORANDUM OPINION re 233 Order on Motion for Settlement, Order on Motion for Attorney Fees. Signed by District Judge Sharion Aycock on 2/16/2017. (adm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
RACHEL BROWN HEFFERNAN BRYANT, et al.
V.

PLAINTIFFS
CIVIL ACTION NO. 1:13CV246-SA-DAS

UNITED FURNITURE INDUSTRIES, INC.,

DEFENDANT

MEMORANDUM OPINION
In this action, former and current employees of United Furniture Industries, Inc. (“UFI”)
collectively pursued claims against UFI for violations of the minimum wage and overtime
provisions of the Fair Labor Standards Act (“FLSA”). Pending before the Court is the Parties
Joint Motion for Settlement Approval of FLSA claims [229], Plaintiff’s Motion for Attorney’s
Fees and Costs [230], and Defendant’s Motion for Joinder for Attorney’s Fees and Costs [232].
Factual and Procedural Background
In late 2013, factory workers at UFI plants sought recovery for unpaid minimum wage
and overtime compensation, as well as certification as a collective action under Section 216(b) of
FLSA. Approximately 1,320 individuals filed consents to opt-in to this action. Plaintiffs’ claims
were subsequently limited to workers in Defendant’s Mississippi factory locations. After
dismissal of claims of workers barred by the statute of limitations and those who did not
otherwise fit within the class definition, 553 Opt-in Plaintiffs remained.
Both parties served and responded to extensive discovery, including the disclosure of
thousands of pages of documents, including pay and time records, and responses to over a
hundred total interrogatories. The parties ultimately came to a settlement agreement on August 5,
2016. Thereafter, Plaintiffs motioned to Certify the Class, and Defendant joined. The Court
granted the motion, ordering that the final Class be defined as follows:

All persons employed by the defendant from January 1, 2010 until
December 30, 2013 as employees paid on a production basis as furniture
manufacturers in the operation of the defendant’s furniture manufacturing
plants in the State of Mississippi who worked off the clock and were not
paid for overtime wages under the FLSA, and whose claims are not time
barred, with the exception of those persons who previously “opted in” to
the lawsuit Carothers v. United Furniture Ind., Inc., No. 1:13-cv-00203DAS and reached a settlement of their claims in its course.
The Terms of the Settlement
As set out in greater detail within the Settlement Agreement, a settlement fund of
$400,000.00 will pay claims of the class, litigation, settlement costs and attorney’s fees. Rachel
Brown Heffernan Bryant and Kenny Bryant thoroughly assisted Class Counsel and staff
throughout the suit and settlement conferences, serving as liaisons with the group. Therefore, as
class representatives, they will receive $10,000.00 in the form of a Class Representative
Incentive Award. The remainder of the named plaintiff class representatives, Anthony Brown,
David L. Franks, Allie Everett, and Eric Thomas will each receive a $1,000.00 award as named
plaintiffs.1
Members of the Settlement Class will receive $79,334.57 on an equal pro-rata basis as
income for unpaid overtime benefits. The Settlement Class will also receive $79,334.57 in the
form of liquidated damages. Checks issued to a Settlement Class member that remain uncashed
for more than 90 days shall become null and void. Finally, Class Counsel, W. Howard Gunn will
receive $160,000 in the form of attorney’s fees and $57,330.86 for expenses.
Settlement Approval
The FLSA provides that a suit may be instituted by “one or more employees for and on
behalf of himself or themselves and other employees similarly situated” to recover unpaid

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The named Plaintiff Cleveland Woodrow Oliver, Jr. is not designated as a class representative as he failed to
maintain communication with class counsel, or provide assistance during the course of the litigation, and now
cannot be located.

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minimum wages, overtime compensation, and liquidated damages from employers who violate
the statute’s provisions. 29 U.S.C. § 216(b). This type of collective action follows an “opt-in”
procedure in which “[n]o 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.”2 Id.
In the absence of supervision by the Department of Labor or scrutiny from a court, a
settlement of an FLSA claim is generally prohibited. Bodle v. TXL Mortg. Corp., 788 F. 3d 159,
164 (5th Cir. 2015). In order to approve a settlement proposed by an employer and employees of
a suit brought under the FLSA and enter a stipulated judgment, a court must determine that the
settlement is a “fair and reasonable resolution of a bona fide dispute over FLSA provisions.”
Lynn’s Food Stores, Inc. v. U.S. By & Through U.S. Dep’t of Labor, Employment Standards
Admin., Wage & Hour Div., 679 F.2d 1350, 1352 (11th Cir. 1982); Camp v. Progressive Corp.,
2004 WL 2149079 (E.D. La. Sept. 23, 2004).
Bona Fide Dispute
In essence, the Court must ensure that the parties are not, via settlement of the plaintiffs’
claims, negotiating around the clear FLSA requirements of compensation for all hours worked,
minimum wages, maximum hours, and overtime. 29 U.S.C. §§ 206, 207; see also Lynn’s Food
Stores, Inc., 679 F.2d at 1352 (FLSA provisions are mandatory; the “provisions are not subject to
negotiation or bargaining between employer and employee”). If no question exists that the
plaintiffs are entitled under the statute to the compensation they seek (and therefore to liquidated
damages, as well), then any settlement of such claims would allow the employer to negotiate
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Section 216(b) actions differ from Federal Rule of Civil Procedure Rule 23 class actions in that members of the
class are permitted to “opt-in” rather than “opt-out” of the class. See Mooney v. Aramco Servs. Co., 54 F.3d 1207,
1212 (5th Cir.1995). Rule 23 and § 216(b) class actions are “mutually exclusive and irreconcilable,” and those who
choose not to opt-in to a class action under § 216(b) are not bound by, and may not benefit from, the judgment.
LaChapelle v. Owens–Illinois, Inc., 513 F.2d 286, 288–89 (5th Cir.1975) (per curiam).

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around the statute’s mandatory requirements. Without a bona fide dispute, no settlement could be
fair and reasonable. “Thus some doubt must exist that the plaintiffs would succeed on the merits
through litigation of their claims.” Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 721
(E.D. La. 2008).
In the case at bar, after the deadline passed for eligible conditional class members to opt
in to the action, the parties underwent investigation and discovery. Testimony was elicited from
employees or former employees of United Furniture wherein they described being required to
work off the clock. However, the testimony regarding frequency and duration, or how often and
to what extent employees were required to work of the clock was not uniform. Furthermore,
discovery showed that the overtime work was limited only to employees that were paid based on
an hourly wage—not production. The production workers were paid based on rates of
production, meaning that the alleged requirement of working off the clock did not impact the
production employees’ regular wage rate, but only impacted potential overtime wages of hourly
employees.
United Furniture denied Plaintiffs’ claims, and management testified in depositions that
such practices did not occur. Further, wage records of the named Plaintiffs and opt in Plaintiffs
showed regular payments of overtime benefits to the Plaintiffs. Therefore, while the claims
asserted in the complaint were supported by the testimony of named and opt in Plaintiffs, their
claims were disputed by both past and present management and non-management employees of
United Furniture who had no direct financial stake in the outcome of this action, as well as
business record evidence.
The Court agrees that this settlement reflects a reasonable resolution of a bona fide
dispute between the parties. Jarrard v. Southeastern Shipbuilding Corp., 163 F.2d 960, 961 (5th

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Cir. 1947). Considering the extent of litigation and discovery in this matter thus far, some doubt
still exists as to whether Plaintiffs would succeed on the merits of their claim. Therefore, it
cannot be said that the parties are merely negotiating around the clear FLSA requirements of
compensation for all hours worked, minimum wages, maximum hours, and overtime.
Fair and Reasonable Resolution
After a district court is satisfied that a bona fide dispute exists, it must then determine
whether the settlement is fair and reasonable. In Hoffmann–La Roche, Inc., v. Sperling, 493 U.S.
165, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989), the Supreme Court held that § 216(b) “must grant
the [district] court the requisite procedural authority to manage the process of joining multiple
parties in a manner that is orderly, sensible, and not otherwise contrary to the statutory
commands of the Federal Rules of Civil Procedure.” Id. at 170, 110 S. Ct. 482.
Although Rule 23 does not control FLSA collective actions, many courts have adopted
many of Rule 23’s procedures in such actions by analogy, in an exercise of their discretion to
manage the litigation of collective actions under § 216(b). See, e.g., Collins, 568 F. Supp. 2d at
719; Brask v. Heartland Automotive Services, Inc., 2006 U.S. Dist. LEXIS 62313, 2006 WL
2524212, *2 (D. Minn. Aug. 15, 2006); Hitchcock v. Orange County, Fla., 2006 U.S. Dist.
LEXIS 89504, 2006 WL 3614925, *5 (M.D. Fla. Dec. 11, 2006). Under Rule 23, a court should
consider the following six factors to determine whether a settlement is “fair, adequate and
reasonable: (1) the existence of fraud or collusion behind the settlement; (2) the complexity,
expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of
discovery completed; (4) the probability of plaintiffs’ success on the merits; (5) the range of
possible recovery; and (6) the opinions of class counsel, class representatives and absent class
members.” Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983).

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The Court finds no evidence of any fraud or collusion. Furthermore, the parties engaged
in arm’s length and good faith settlement negotiations, including a day-long mediation.
Therefore, there is no evidence of the first factor, fraud or collusion.
Turning to the next three factors, in the more than three years since the Complaint was
filed, the parties have engaged in extensive discovery, held numerous depositions, and
propounded thousands of pages of documents, including pay and time records. The parties
responded to over one hundred interrogatories. The parties fully understood the strengths and
weaknesses of their respective positions and earnestly worked to achieve a fair and reasonable
resolution of the conflict. This suit has already cost the parties three years of diligent effort, as
well as over $50,000 in expenses. Without grant of settlement, this suit will most certainly result
in a substantial and lengthy trial, wherein Named Plaintiffs would represent 553 other class
members. The costs of such trial may detract so from the expected award as to make it less
favorable to all involved parties than settlement, for the probability of Plaintiffs’ success on the
merits is difficult to gage, considering the evidence which contradicts their allegations. At this
point in the proceedings, the Court finds that the complexity, expense and likely continuing
duration of this matter weighs heavily in favor of settlement. The next factors also weigh in favor
of settlement, for the stage of proceedings is quite progressed, and the probability of Plaintiffs’
success is difficult to ascertain.
Regarding the next two factors, range of possible recovery and opinions of class counsel,
the Court also finds settlement to be fair and reasonable. The settlement amount is properly
reflective of the amount Plaintiffs stood to gain, offset by the further significant delay that would
result from extensive and expensive litigation. Furthermore, it is possible that Plaintiffs would
recover nothing. As to the opinions of class counsel, the parties joined in requesting approval of

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the settlement, which was arrived at after extensive negotiation by class counsel. The counselors
worked in good faith to secure settlement, taking into account the risks and uncertainty involved
in litigation of their claims.
The consideration of the “opinions of absent class members” is one that perhaps reflects
the starkest difference between class actions under Rule 23 and collective actions pursuant to §
216(b): the requirement that class members affirmatively give their consent to join in the latter.
All the present Plaintiffs to this collective action have agreed to join in this lawsuit, and be
represented by the named Plaintiffs’ counsel. All participating Plaintiffs have expressed an
opinion regarding the settlement, to a degree that satisfies the Court, by virtue of remaining in
the lawsuit. Because no real “absent” class members exist whose rights will be determined in this
settlement that have not consented to participate, the Court need not consider such interests as it
would in a settlement of a class action under Rule 23.
Reasonable Attorney’s Fees
Pursuant to 29 U.S.C. § 216(b), Plaintiffs are entitled to an award of reasonable
attorney’s fees and costs. The Defendants have agreed upon the amount Plaintiffs are seeking in
the fees and do not object to the Plaintiff’s motion. However, as part of its fairness
determination, the Court must also determine that the proposed attorney’s fees are reasonable.
Strong v. BellSouth Telecomms., Inc., 137 F.3d 844, 849-50 (5th Cir. 1998).
In the Plaintiffs’ Motion for Attorney’s Fees, Attorney Howard Gunn has requested the
Court use the “common fund” method, cross checked with factors from Johnson v. Ga. Hwy.
Express, Inc., 488 F.2d 714 (5th Cir. 1974). The factors are: (1) the time and labor required for
the litigation; (2) the novelty and difficulty of the questions presented; (3) the skill required to
perform the legal services properly; (4) the preclusion of other employment by the attorney due

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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
result obtained; (9) the experience, reputation and ability of the 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. Id. at 717–19.
Noting that many courts in this Circuit use this method when calculating attorneys’ fees
in common fund class action cases, Counselor Gunn requests that this Court award to him 40%
of the common fund. See Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632, 643 (5th
Cir. 2012); see also Bethea v. Sprint Commc’ns Co., 2013 WL 228094, *3 (S.D. Miss. Jan. 18,
2013) (“adopt[ing] the percentage-of-the-fund approach” to calculate attorneys’ fees in a
common fund class action case). This court has substantial discretion in determining the
appropriate fee percentage. However, awards commonly fall between a lower end of 20% and an
upper end of 50%. In re Catfish Antitrust Litig., 939 F. Supp. 493, 503 (N.D. Miss. 1996). In the
case at bar, the Johnson factors weigh heavily in Class Counsel’s favor, and the Court agrees that
he is entitled to the 40% requested.
The Johnson Factors
The Fifth Circuit has explained that of the Johnson factors, the court should “give special
heed to the time and labor involved, the customary fee, the amount involved and the result
obtained, and the experience reputation and ability of counsel.” Migis v. Pearle Vision, Inc., 135
F.3d 1041, 1047 (5th Cir. 1998) (citing Von Clark v. Butler, 916 F.2d 255, 258 (5th Cir. 1990)).
Prosecuting and settling these claims demanded considerable time, skill and labor. Over
one thousand individuals have filed consents to opt into this action. In addition to the massive
amount of discovery that Class Counsel reviewed, he also served notice upon the class and

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maintained the administration of Plaintiff consents and opt-ins. Class Counsel overcame
oppositions to Motions to Certify Class, as well as Motions for the Application of Res Judicata
and Partial Summary Judgment. Ultimately, Class Counsel reached a favorable settlement
agreement with Defendants, after spending more than 2951 hours on this case. It is apparent that
Class Counsel’s ability to seek other work was limited by the massive amount of work involved
in this case. Nevertheless, Counsel confronted these issues without any assurances as to how the
court would rule, accepting the case and the substantial risks that accompanied it. Adequate
compensation is necessary to insure that counsel of this caliber is available to undertake these
kinds of cases in the future. Therefore, Johnson factors (1), (2), (3), (8), (9) and (10) weigh in
Class Counsel’s favor. Johnson, 488 F.2d at 717-18.
As to the customary fee and whether the fee is fixed or contingent, Class Counsel
prosecuted the action entirely on a contingent fee basis. In undertaking to prosecute this complex
class action on that basis, Class Counsel assumed a significant risk of nonpayment or
underpayment. In recognizing the contingent risk of nonpayment in class action cases, courts
have found that counsel ought to be compensated for risk of loss or nonpayment assumed by
carrying through with the case. See King v. United SA Federal Credit Union, 744 F. Supp. 2d
607, 618 (W.D. Tex. 2010) (finding the fact that class counsel undertook the case on a
contingency fee basis relevant to the Johnson analysis). Class Counsel’s has a 40% contingency
agreement with Plaintiffs in the case at bar. Therefore, Plaintiffs, who have been working with
Class Counsel for numerous years on this matter were on notice of the amount. The Court is
satisfied that Johnson factors (6), (7) and (11) weigh in Class Counsel’s favor. Johnson, 488 F.2d
at 718.

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Public policy concerns such as ensuring the continued availability of experienced and
capable counsel to represent classes of injured plaintiffs holding small individual claims—
support the requested fee. It was uncontroverted that the time spent on the action was time that
could not be spent on other matters, and thus this factor (4) supports the requested fee, as well.
Id.
Furthermore, when cross-checked with the lodestar method, the attorney’s fees are
reasonable. “A cross-check is performed by dividing the proposed fee award by the lodestar
calculation, resulting in the lodestar multiplier.” In re Enron Corp. Sec., Derivative & ERISA
Litig., 586 F. Supp. 2d 732, 752 (S.D. Tex. 2008) (citing In re AT & T Corp., 455 F.3d 160, 164
(3d Cir. 2006)). The purpose of a lodestar cross-check of the results of a percentage fee award is
to avoid windfall fees, i.e., to “ensure that the percentage approach does not lead to a fee that
represents an extraordinary lodestar multiple.” In re Cendant Corp. Sec. Litig., 264 F.3d 201,
285 (3d Cir. 2001); In re Cendant Corp. Sec. Litig., 404 F.3d 173, 188 (3d Cir. 2005).
Class Counsel reports that he spent 2951 hours on this case, and that his standard hourly
rate is $300.00.3 Multiplying the hours expended by counsel and staff by the attorney’s hourly
rate results in total fees of $8,853,000.00. Dividing the proposed attorney fee award of
$160,000.00 by the lodestar of $8,853,000.00 yields a multiplier of about 0.02. The Court finds
this to be a reasonable calculation of fees because it cross-checks appropriately with acceptable
lodestar multipliers. See In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig.,
851 F. Supp. 2d 1040, 1088 n. 52 (S.D. Tex. 2012) (“In our informal review of opinions
evaluating a lodestar cross-check, the multipliers ranged from about 1.0 to over 5.0, with a
substantial number of multipliers in the 3.0 to 4.0 range”).

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The Court finds this a reasonable hourly rate. See Worrell v. Houston CanA Acad., 287 F. App’x. 320, 327 (5th
Cir. 2008) (affirming hourly rate of $500.00 for senior partner).

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Finally, the Court finds Class Counsel’s request for $57,330.86 in costs to be reasonable.
It is uncontroverted that Class Counsel spent this amount to cover the costs related to travel,
expert witnesses, investigation, discovery, service of process, and other administrative needs.
Conclusion
The parties Joint Motion for Settlement Approval and General Release is hereby
GRANTED. Furthermore, The Plaintiffs’ Motion for Attorney’s Fees and Costs, which has been
joined by the Defendant, is also GRANTED. The trial of this matter is CANCELLED and this
case is CLOSED.
IT IS SO ORDERED this 16th day of February, 2017.
/s/ Sharion Aycock
UNITED STATES DISTRICT JUDGE

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