Barnhill et al v. Fred Stark Estate Stark Ritaex et al
AMENDED MEMORANDUM DECISION AND ORDER dated 9/24/15 in favor of plaintiff in the amount of $60,000.00. ( Ordered by Judge Brian M. Cogan on 9/24/2015 ) (Guzzi, Roseann)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------WILLIE BARNHILL, MOHAMMED
HOSSAIN and NURUL ALAM,
- against FRED STARK ESTATE and RITA STARK,
DECISION AND ORDER
15 Civ. 3360 (BMC)
COGAN, District Judge.
In Cheeks v. Freeport Pancake House, Inc., ___ F.3d ___, No. 14 Civ. 299, 2015 WL
4664283 (2d Cir. Aug. 7, 2015), the Second Circuit expressly abrogated my decision in Picerni
v. Bilingual Seit & Preschool Inc., 925 F.Supp.2d 368 (E.D.N.Y. 2013). Picerni had held that in
an action under the Fair Labor Standards Act (“FLSA”), court approval is not required for the
parties to stipulate to a dismissal of their action under Federal Rule of Civil Procedure
41(a)(1)(A)(ii). The Second Circuit disagreed in Cheeks, holding that notwithstanding the
absence of any express reservation in the FLSA, the FLSA is an “applicable federal statute,” as
that phrase appears in Rule 41, that limits the parties’ right to stipulate to the dismissal of their
The instant case raises a related question. Plaintiffs have filed a “Notice of Acceptance”
of a Rule 68 Offer of Judgment. The Notice recites that defendants shall
pay to Plaintiffs the sum of sixty thousand dollars ($60,000.00), representing full
payment for all the Plaintiff’s claims, including but not limited to their claims for
lost income, unpaid wages, liquidated damages, penalties, and interest, and
inclusive of all reasonable costs and fees (such as attorneys’ fees) incurred up to
the date of this offer of judgment. The Plaintiffs may divide this sum as they see
fit. If they cannot agree, the sum is to be divided equally among the Plaintiffs.
In the ordinary course, the Clerk of Court would simply enter judgment based on this
submission. The defendant then either pays the judgment, or if it does not, then, like any
judgment, the plaintiff has to enforce it under Federal Rule of Civil Procedure 69. The question
in this case is thus whether the FLSA, as interpreted by Cheeks, requires court approval before
the Clerk may enter the judgment upon the offer. I conclude that Cheeks should be confined to
the Rule 41 context, and does not reach an Offer of Judgment under Rule 68.
First, it is important to note that Picerni arose in a somewhat different context than
Cheeks. Like the instant case, the parties in Picerni had not attempted to proceed under Federal
Rule of Civil Procedure 41. The plaintiff had filed a Notice of Acceptance of a Rule 68 Offer. I
concluded that because the parties would have had the right to voluntarily dismiss their action
under Rule 41, it followed that they had the right to resolve their action by a Rule 68 judgment.
Although Cheeks disagreed with my conclusion as to Rule 41, it did not involve or even
mention Rule 68. Instead, in Cheeks, the parties had filed a joint stipulation and order of
dismissal under Rule 41. The district court declined to accept it without holding a fairness
hearing, and the Court of Appeals affirmed that decision. It therefore had no occasion to
consider whether proceeding under Rule 68 requires a different result than proceeding under
I think that it does. Unlike Rule 41, which defers to “any applicable federal statute,”
Rule 68 has no such limitation. It is available in any action. In that way, it is narrower than Rule
41, because while the latter, subject to its stated qualifications, permits dismissal for any or no
reason – for example, a change of heart by the plaintiff, or a settlement – Rule 68, by its terms,
requires entry of judgment. Indeed, Rule 68 provides when an offer of judgment is accepted, the
Clerk “must then enter judgment.” (Emphasis added.) Unlike Rule 41, as construed in Cheeks,
Rule 68 has no “hook,” no limiter, that restricts its use and that would permit excluding the
FLSA from its reach. To hold that Rule 68 is not available in FLSA cases without court
approval would be to rewrite it.
I recognize that the Court in Cheeks premised its decision not only on the qualifying
language in Rule 41, but also on its characterization of the FLSA as a “uniquely protective
statute” based on “unique policy considerations.” Cheeks, 2015 WL 4664283, at *6-7.
However, I do not think that language can be taken too far. As the Court noted, the statute was
enacted to protect against “the evil of overwork” without statutorily required compensation. Id.
at *6 (quoting, Chao v. Gotham Registry, Inc., 514 F.3d 280, 285 (2d Cir. 2008)). But surely,
that evil is no greater than a case where a police officer gratuitously beats a suspect (42 U.S.C. §
1983), or a debt collector threatens children that their father will be imprisoned if he does not pay
his bill (Fair Debt Collection Practices Act), or a consumer’s credit is ruined because of a falsely
reported debt (Fair Credit Reporting Act), or an employee is forced to submit to unwanted sexual
advances or face termination (Title VII). These, and many others, are federal cases for a reason.
They are all important, and the statutes and constitutional provisions under which they arise all
protect unique interests based on unique policy considerations. For the courts to begin ranking
the wrongs addressed by Congress where Congress has not would be to assume a legislative role.
In relying on the “unique policy considerations” underlying the FLSA, the Cheeks Court
offered several cases of gross abuse of the statute in settlement agreements that rightfully were
rejected by the courts, like secret settlements meant to shield the result from other employees,
Lopez v. Nights of Cabiria, LLC, No. 14 Civ. 1274, 2015 WL 1455689 (S.D.N.Y. Mar. 30,
2015), unreasonable allocation of recoveries as attorneys’ fees at the expense of the plaintiff, id.,
or restrictions on the ability of the plaintiff’s attorney to represent other employees, Guareno v.
Vincent Perito, Inc., No. 14 Civ. 1635, 2014 WL 4953746, at *2 (S.D.N.Y. Sept. 26, 2014). Of
course, with 8,126 FLSA cases filed in 2014,1 it is precarious to rely on anecdotal instances.
This is especially so since it is not possible to perform a cost/benefit analysis to determine
whether apprehending what may be relatively few outlier unfair settlements warrants fairness
hearings in each of the 8,126 cases.
Nor can we operate on a presumption that the plaintiff’s bar in FLSA cases is out to
enrich itself through unreasonable fees at the expense of their clients, although, as the Nights of
Cabiria case shows, there is no doubt that it happens. But as I noted in Picerni, it also no doubt
happens in cases brought under each of the other, non-FLSA consumer and citizen protection
statutes referenced above. The fact is that most of the litigation to protect the vulnerable under
remedial legislation is attorney-driven as a result of fee-shifting provisions, but it does not follow
that there is a pervasive problem of attorneys favoring themselves at their clients’ expense that is
peculiar to the FLSA and that requires the courts to police every Rule 68 offer in FLSA cases for
Finally, I note that to the extent the Court in Cheeks was concerned about secret
settlements and the curtailment of co-employees’ information, Rule 68 judgments address that
Administrative Office of the United States Courts, Statistical Tables for the Federal Judiciary (October 9th, 2014),
covering the most recent reporting period 4/1/13 through 3/31/14.
In addition, I do not know how many FLSA cases are resolved in the state courts, where they may be brought
pursuant to the concurrent jurisdiction provisions of the statute, and will remain unless the defendant removes the
case. See Breuer v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691, 123 S. Ct. 1882 (2003). Unlike Cheeks, the New
York State courts, for example, do not read Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895 (1945)
and D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 66 S.Ct. 925, 90 L.Ed. 1114 (1946), as requiring a fairness hearing
prior to dismissing a case, but rather use the procedure of post-settlement review if the settlement is challenged, the
method identified in Picerni. See e.g. Weiss v. Testrite Instrument Co., Inc., 272 A.D. 696, 74 N.Y.S.2d 673 (1st
concern, and thus they are further distinguishable from a Rule 41 stipulated dismissal.2 The
filing of a Rule 68 judgment is just as publicly available as a filed settlement agreement, so to the
extent co-employees review judicial dockets (or more likely, prospective attorneys do), the
information that a plaintiff has recovered a wage settlement will be known.3
Accordingly, the Clerk is directed to enter judgment in favor of plaintiffs in the amount
Digitally signed by Brian M. Cogan
Dated: Brooklyn, New York
September 24, 2015
In addition, once again, under other statutes protecting important rights, like, for example, the Fair Debt Collection
Practices Act, nothing prevents an attorney, under Rule 41, from settling secretly, including an attorney
representation restriction, on behalf of a client that received the same illegal dunning letter as hundreds of other
similarly situated debtors.
I recognize that nothing in Rule 68 prevents the parties from having a side agreement containing terms that might
be unpalatable in a fairness hearing. For that matter, even in the context of a fairness hearing, there is no way to
ensure that the parties will not conspire to withhold disclosure of a side agreement from the court. But either of
those scenarios brings us back full circle to Picerni, which holds that such side agreements, including releases, are
not enforceable unless the court in which enforcement is sought finds that the settlement terms were fair and
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