Medrano v. Flowers Food, Inc. et al

Filing 216

MEMORANDUM OPINION AND ORDER by District Judge Judith C. Herrera granting 215 Joint Motion for Approval of Proposed Collective Action Settlement. (baw)

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 1 of 6

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
MARTIN F. CORONADO, JR., on his own behalf and
on behalf of all others similarly situated,
Plaintiff,
vs.

Civ. No. 16-350 JCH/KK

FLOWERS FOODS, INC., and
FLOWERS BAKING CO. OF
EL PASO, LLC,
Defendants.

MEMORANDUM OPINION AND ORDER
This case is before the Court on the Joint Motion for Approval of Proposed Collective
Action Settlement [Doc. 215], in which the parties ask the Court to approve the settlement of
Plaintiffs’ Fair Labor Standards Act (“FLSA”) claims against Defendants Flowers Foods, Inc. and
Flowers Baking Co. of El Paso, LLC (“Flowers”). After reviewing the motion, the affidavits, and
the settlement agreement, and after considering the law and the facts, the Court concludes that the
motion should be granted and the settlement agreement should be approved.
LEGAL STANDARD
In a lawsuit by employees against their employer to recover back wages under the FLSA,
the parties must present any proposed settlement to the district court for review and a determination
of whether the settlement agreement is fair and reasonable. See Lynn’s Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 (11th Cir. 1982). Requiring court approval of FLSA settlements
effectuates the purpose of the statute, which is to “protect certain groups of the population from

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 2 of 6

substandard wages and excessive hours... due to the unequal bargaining power as between
employer and employee.” Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945).
However, the requirement of court approval of FLSA settlements has recently been called
into question by some courts, including the District of New Mexico. See, e.g., Riley v. D. Loves
Rests., LLC, No. 20-1085 WJ/KK, 2021 WL 1310973, at *1-4 (D.N.M. Apr. 8, 2021) (concluding
that court need not approve private settlement of bona fide dispute regarding FLSA liability);
Lawson v. Procare CRS, Inc., No. 19-00248-TCK-JFJ, 2019 WL 112781, at *2-3 (N.D. Okla. Jan.
4, 2019) (same); Fails v. Pathway Leasing LLC, No. 18-00308-CMA-MJW, 2018 WL 6046428,
at *2-4 (D. Colo. Nov. 19, 2018) (same). While this issue has not been settled by the Tenth Circuit,
“there does not appear to be disagreement at this time over whether FLSA settlements may be
approved by the Court.” Slaughter v. Sykes Enters., Inc., No. 17-02038-KLM, 2019 WL 529512,
at *6 (D. Colo. Feb. 11, 2019) (citing Thompson v. Qwest Corp., No. 17-1745-WJM-KMT, 2018
WL 2183988, at *2 (D. Colo. May 11, 2018)). The parties here request court approval and neither
suggests that it is not required. Accordingly, the Court applies the standard used by district courts
in the Tenth Circuit to scrutinize FLSA settlements.
In order to approve a settlement under the FLSA, “the district court must find that (1) the
litigation involves a bona fide dispute, (2) the proposed settlement is fair and equitable to all parties
concerned, and (3) the proposed settlement contains an award of reasonable attorney fees.” See,
e.g., Mpia v. Healthmate Int’l, LLC, No. 19-CV-02276-JAR, 2021 WL 2805374 at *1 n.4 (D. Kan.
Jul. 6, 2021) (unpublished) (citing Geist v. Handke, No. 2:17-CV-02317-HLT, 2018 WL 6204592
(D. Kan. Nov. 28, 2018) (unpublished) and Lynn’s Food Stores, 679 F.2d at 1354)). Each of these
requirements is satisfied here.

2 

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 3 of 6

DISCUSSION
I.

Bona Fide Dispute
Parties requesting approval of an FLSA settlement must provide the Court with sufficient

information to determine whether a bona fide dispute exists. Dees v. Hydradry, Inc., 706 F.Supp.2d
1227, 1234 (M.D. Fla. 2010). In their extensive briefing on both the Defendants’ motion for
summary judgment and their motion for decertification, the parties have presented to this Court:
(1) a detailed description of the nature of the dispute; (2) a detailed description of Flowers’ business
and the type of work performed by the plaintiffs; (3) Flowers’ reasons for disputing the plaintiffs’
right to overtime; (4) the plaintiffs’ justification for the disputed wages; and (5) Flowers’ reasons
for disputing the plaintiffs’ right to additional compensation. The parties likewise disagree about
the merits of plaintiffs’ claims and the validity of Flowers’ defenses. Plaintiffs acknowledge that
resolution of these issues would therefore require significant litigation, with the possibility of
limited to no recovery on either side.
The Court finds that a bona fide dispute exists.
II.

Fair and Reasonable
To be fair and reasonable, an FLSA settlement must provide adequate compensation to the

employees and must not frustrate the FLSA policy rationales. Baker v. Vail Resorts Mgmt. Co.,
Case No. 13-CV-01649-PAB-CBS, 2014 WL 700096, at *2 (D. Colo. Feb. 24, 2014). When
determining whether a settlement is fair and reasonable, courts weigh a number of 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 have represented the plaintiffs; (5)
the probability of plaintiffs’ success on the merits and (6) the amount of the settlement in relation
3 

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 4 of 6

to the potential recovery. Hargrove v. Ryla Teleservices, Inc., Case No. 2:11CV344, 2013 WL
1897027, at *2 (E.D. Va. Apr. 12, 2013) (citation omitted). There is a strong presumption in favor
of finding a settlement fair. Id.
The parties in this case have engaged in extensive discovery and motion practice, enabling
them to fully explore the merits of their respective positions. The parties also have representation
from experienced counsel, and this Court attributes significant weight to their professional
judgment that this agreement represents a fair and reasonable settlement of this dispute. Further,
the Court finds that this settlement is a product of extensive arms-length negotiations that took
place over the course of months, including a settlement conference with a United States Magistrate
Judge and the exchange of multiple offers and counteroffers. The settlement also delivers fair value
to plaintiffs, who will receive compensation for overtime without the risk, expense, and heartache
that comes with protracted litigation and trial, the outcome of which is uncertain. The settlement
specifically obligates Flowers to pay a gross amount of $137,500, of which $21,000 ($3,500
apiece) will be paid to those six plaintiffs currently working as distributors for Flowers Foods in
exchange for their agreement to enter into a mutual arbitration agreement with Flowers that
contains a class and collective action waiver applicable to any future disputes between them. Under
that agreement, Flowers will pay all fees and costs associated with arbitration, and ample discovery
will be permitted. After deductions are made for attorney fees and costs, another $81,000 will be
divided equally among the nine plaintiffs for recovery under the FLSA. The parties represent that
they believe the settlement amount to be fair and reasonable.
Accordingly, the Court finds that the Settlement is fair and reasonable.

4 

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 5 of 6

III.

Attorney’s Fees
The FLSA entitles a prevailing plaintiff to recover “a reasonable attorney’s fee ... and costs

of the action.” 29 U.S.C. § 216(b); see, e.g., Gray v. Phillips Petrol. Co., 971 F.2d 591, 593 (10th
Cir. 1992). Though the fee is mandatory, the Court has discretion to determine the amount and
reasonableness of the fee. Wright v. U–Let–Us Skycap Serv., Inc., 648 F. Supp. 1216, 1218 (D.
Colo. 1986). In common fund cases, it is standard to use a percentage method when calculating
attorneys’ fees. See Gottlieb v. Barry, 43 F.3d 474, 482-83 (10th Cir. 1994), abrogated on other
grounds by Devlin v. Scardelletti, 536 U.S. 1 (2002); Barr v. Qwest Communications Co., LLC,
Case No. 01-cv-00748-WYD-KLM, 2013 WL 141565, *3-4 (D. Colo. Jan. 11, 2013). Regardless
of the method used to calculate fees, the fees awarded must be reasonable. Gottlieb, 43 F.3d at 482
(citing Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 853 (10th Cir. 1993)
(implying a preference for the percentage of the fund method)).
Here, the plaintiffs’ counsel will be paid $35,500 for fees, costs, and expenses, which is
about 25.8% of the total settlement amount. This is significantly below the traditional 33%
awarded to plaintiffs’ counsel in contingency fee cases. Furthermore, that amount—$35,500—is
a significant reduction from the amount of fees attributable to plaintiffs’ counsel using the lodestar
method, which is a little over $46,000. Based on the affidavits of Jenny Kaufman and Philip Davis
[Docs. 215-2], the Court finds both the hourly rates of the plaintiffs’ counsel, along with the hours
spent on this complex and protracted litigation, to be reasonable. Therefore, the awarded fee of
$35,500 is a reduction in favor of the plaintiffs, and the Court finds it to be both fair and reasonable.

5 

Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 6 of 6

IT IS THEREFORE ORDERED that the Joint Motion for Approval of Proposed
Collective Action Settlement [Doc. 215]is GRANTED, and the Settlement Agreement is hereby
APPROVED.

_______________________________________
SENIOR UNITED STATES DISTRICT JUDGE

6