Blume v. International Services, Inc., et al.

Filing 85

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the unopposed motion of the Plaintiff Class for approval of the settlement of this action and the release of the plaintiffs' claims under the Fair Labor Standards Act (Doc. 81) is sustained. The parties' Settlement Agreement and Release of Claims (Doc. 81-1) is hereby approved and incorporated by reference as part of this Memorandum and Order. IT IS FURTHER ORDERED that the parties execute the provisions of their Settlement Agreement and Release of Claims, including the funding of the escrow account, the distribution of proceeds therefrom, and the payment of the reasonable attorney's fees and expenses of class counsel as the parties have agreed. IT IS FURTHER ORDERED that this court retain both personal and subject matter jurisdiction over the enforcement of the parties' Settlement Agreement and Release of Claims (Doc. 81-1) and this Memorandum and Order. Nevertheless, the Clerk of Court shall administratively terminate this action. Signed by Magistrate Judge David D. Noce on 9/2/2014. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
CHARLES BLUME, individually and on
behalf of others similarly situated,
Plaintiffs,
v.
INTERNATIONAL SERVICES,
INC., et al.,
Defendants.

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No. 4:12 CV 165 DDN

MEMORANDUM AND ORDER APPROVING SETTLEMENT
This matter came before the court on August 29, 2014 for a hearing on plaintiff's
unopposed motion (Doc. 81) for approval of the settlement of this case and the approval of the
release of claims under the Fair Labor Standards Act (FLSA). The parties have consented to the
exercise of plenary authority by the undersigned United States Magistrate Judge under 28 U.S.C. §
636(c).
The court has considered the materials filed in support of the motion and the undisputed
factual information presented at the hearing, and from this record makes the following findings of
fact and conclusions of law:
FACTS
1.

This is a collective class action, brought under 29 U.S.C. § 216(b),1 in which

plaintiff Charles Blume represents a class of 166 current and former employees of International
Services, Inc. (ISI plaintiff class), all of whom have opted into the class. The plaintiff class
alleged that defendants violated the FLSA by failing to pay them overtime wages to which they
were entitled and failed to pay them for all the hours they actually worked.
2.

The issues presented in this action involved the classification of the subject

employees as not exempt or exempt from the relevant provisions of the FLSA; and the action
involved the method of calculation of the relevant hours and damages. These issues were
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Under 29 U.S.C. § 216(b), an action may be brought to recover unpaid and owing wages by a
group of employees who have given their consent to be a party to the action. Section 216(b) also
provides, "The court in such action 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."
29 U.S.C. § 216(b).

strongly contested by the parties. Previously, the defendants reviewed this issue with the United
States Department of Labor, which stated that defendants' position was incorrect; defendants
disputed this determination. The amount in controversy between the class and the defendants
substantially exceeded $1 Million.
3.

The parties negotiated in good faith during the progress of this action to achieve a

mediated, 2 reasonable proposed settlement agreement and release of claims. The determination
of the number of hours upon which the settlement was achieved involved a survey of employees
for information and consideration of whether they worked part-time or full-time. The settlement
also involved consideration of service awards to the lead class member, Charles Blume, and to two
other class members, who cooperated and actively participated in the litigation. The terms of the
settlement and the proposed distribution of funds are described in the exhibits attached to filed
Document 81. The court has carefully reviewed these documents and finds their provisions fair,
reasonable, and adequate to the class members. Further, the method of payment of the settlement
amounts and class counsel attorneys' fees over time is fair and reasonable, given the relevant
economic circumstances.
4.

The settlement agreement also provides for reasonable attorney's fees and expenses

for the ISI plaintiff class counsel, which are to be paid by the defendant employer. The ISI
plaintiff class has been fairly and competently represented by the Lear Werts LLP law firm during
the court proceedings and during the Alternative Dispute Resolution proceedings which led to the
settlement of the action. Class counsel have expended monies, described in the exhibits to the
settlement agreement, on behalf of the class. These expenditures and the amount of counsel hours
recorded are fair and reasonable and are properly reimbursable from the settlement proceeds. In
this common fund case the agreed upon percentage-of-recovery method is preferable to the usual
lodestar method for determining reasonable attorney's fees and expenses. West v. PSS World
Med., Inc., 2014 U.S. Dist. LEXIS 57150, at 3-4 (E.D. Mo. 2014). Class counsel have agreed to
receive a lesser percentage fee (33%) than they originally agreed to (35%). In originally agreeing
to a contingency fee, class counsel originally took the substantial risk that it would receive nothing
or substantially less at the conclusion of this action.

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The court appreciates the successful efforts of the mediator, John R. Phillips, Esq., in bringing the
parties to a settlement of this action. The record of the court establishes that the parties engaged
in substantial Alternative Dispute Resolution efforts and proceedings in good faith.
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5.

The parties have proposed a third-party administrator to notify the class members

of the settlement and to distribute the settlement funds from an escrow account established for this
purpose. This arrangement is acceptable and fair.
6.

Given the agreement of the parties that distribution of the settlement amounts will

occur over time, the parties have agreed that this federal district court would retain both personal
and subject matter jurisdiction over the enforcement of the parties' settlement agreement.

DISCUSSION
The court's duty in reviewing the agreement between the ISI plaintiff class and the
defendants is to determine whether the settlement of this collective class action (a) resulted from
contested litigation to resolve an actual controversy between the employees and the employer, and
(b) is fair, reasonable, and adequately protects the best interests of the ISI plaintiff class members
and the defendants. See Fry v. Accent Mktg. Servs., LLC, 2014 U.S. Dist. LEXIS 9464 (E.D. Mo.
2014) (Perry, C.J.) ("A district court may only approve a settlement agreement in a case brought
under § 216(b) after it determines that the litigation involves a bona fide dispute and that the
proposed settlement is fair and equitable to all parties."); Lynn's Food Stores, Inc. v. United States
by and through U.S. Dept. of Labor, 679 F.2d 1350, 1353 (11th Cir. 1982)("When employees
bring a private action for back wages under the FLSA, and present to the district court a proposed
settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for
fairness.").
The facts set forth above express the court's belief and conclusions that the litigation that
led to the settlement was an actual dispute that was strongly contested; the settlement is fair,
reasonable, and protects the best interests of the parties; and the amounts of the agreed upon
attorney's fees and expenses for the plaintiff class counsel are reasonable.
Therefore,
IT IS HEREBY ORDERED that the unopposed motion of the Plaintiff Class for approval
of the settlement of this action and the release of the plaintiffs' claims under the Fair Labor
Standards Act (Doc. 81) is sustained. The parties' Settlement Agreement and Release of Claims
(Doc. 81-1) is hereby approved and incorporated by reference as part of this Memorandum and
Order.
IT IS FURTHER ORDERED that the parties execute the provisions of their Settlement
Agreement and Release of Claims, including the funding of the escrow account, the distribution of
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proceeds therefrom, and the payment of the reasonable attorney's fees and expenses of class
counsel as the parties have agreed.
IT IS FURTHER ORDERED that this court retain both personal and subject matter
jurisdiction over the enforcement of the parties' Settlement Agreement and Release of Claims
(Doc. 81-1) and this Memorandum and Order.

Nevertheless, the Clerk of Court shall

administratively terminate this action.

UNITED STATES MAGISTRATE JUDGE

Signed on September 2, 2014.

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