Pucciarelli v. Lakeview Cars Inc. et al

Filing 19

MEMORANDUM AND ORDER: The joint motion to approve the parties' settlement (Doc. No. 18 ) is granted. The Clerk of Court is directed to close this case. Ordered by Judge Roslynn R. Mauskopf on 6/23/2017. (Taronji, Robert)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

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JAMES PUCCIARELLI; and SALVATORE
ISOLDA, individually and on behalf of all others
similarly situated,

MEMORANDUM AND ORDER
16-CV-4751 (RRM) (RER)

Plaintiffs,
- against LAKEVIEW CARS, INC. d/b/a CLOVE LAKE
CARS; AFRIM T AHIROVIC; and GONI
T AHIROVIC, jointly and severally,
Defendants.

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ROSL YNN R. MAUSKOPF, United States D istrict Judge.

INTRODUCTION
On August 24, 20 16, plaintiff James Pucciarelli commenced this action pursuant to the
Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 201 et seq., and the New York Labor Law
(the "NYLL") alleging, inter alia, that defendants failed to pay an estimated $150,000 in
overtime wages . (Comp!. (Doc. No. 1).) On October 3, 20 16, Salvatore Isolda filed a "Consent
to Become Party Plaintiff' letter. (Consent Letter (Doc. No. 11). On November 9, 2016, the
parties appeared before Magistrate Judge Ramon E. Reyes, who referred the case for mediation.
(See 11 /09/20 16 M inute Entry). Following mediation, the parties indicated that they settled this
action. (See 1105120 17 Report) The pa11i es now ask that the Court approve their proposed
settlement agreement (the "Agreement" (Doc. No. 18-1 )) as "a reasonable compromise of
disputed issues [rather] than a mere waiver of statutory rights brought about by an employer's
ovetTeaching." Lev. SITA Info. Networking Computing, USA, Inc. , No. 07-CV-86 (JS), 2008
WL 724155 , at * 1 (E.D.N.Y. Mar. 13, 2008) (internal quotation marks om itted); see also Cheeks

v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 20 15) ("Stipulated dismissals
settling FLSA claims with prejudice require the approval of the district court . . .. ").
Under the FLSA, parties cannot settle claims without the approval of a district court or
the Department of Labor. Cheeks, 796 F.3 d at 206. The parties must satisfy the Court that their
agreement is "fair and reasonable." Flores v. Food Express Rego Park, Inc., No. 15-CV-1410
(KAM) (SMG), 201 6 WL 386042, at * l (E. D.N.Y. Feb. 1, 20 16). Here, the parties have
demonstrated that the Agreement "reflects a reasonable compromise over contested issues" and
is fair and reasonable in all respects. Johnson v. Brennan, 10-CV-4712 (CM) 201 1 U.S. D ist.
LEXIS 105775 at *36 (S.D.N.Y. Sept. 16, 20 11 ).

DISCUSSION
I.

Settlement Amount

The parties represent in the Agreement that Pucciarell i and Isolda are receiving full
compensation for the wages and liquidated damages to w hich they are entitled, and in a timel ier
mann er than in the event of a trial. (Joint Mot. to Approve FLSA Settlement (Doc. No. 18) at 4.)
Accordingly, the Court finds the total award to Pucciare lli and Isolda to be fai r and reasonable.
II.

Attorney's Fees

Courts calculate reasonable attorney's fees either by determining the so-called "lodestar"
amount or by awarding a percentage of the settlement. See McDaniel v. Cnty. ofSchenectady,
595 F.3d 4 11 , 41 7 (2d C ir. 20 10). The lodestar figure is the product of the attorney's reasonable
hourly rate and the number of hours reasonably expended in the litigation. See Millea v. Metro-

N. R. Co., 658 F.3d 154, 166 (2d Cir. 201 1). "Once that initial computation has been made, the
district court may, in its discretion, increase the lodestar by applying a multipl ier based on other
less objective factors, such as the risk of the liti gation and the performance of the attorneys."

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Goldberger v. Integrated Res., Inc. , 209 F.3d 43 , 4 7 (2d Cir.2000) (internal quotation marks and
citation omitted). Under the percentage method, counsel is awarded a reasonable percentage of
the total funds recovered in the action. McDaniel, 595 F.3d at 417. In accordance with common
practice, the Court emp loys the lodestar method as a "crosscheck" on the percentage method. Id.
at 50.
Both Pucciarelli and Isolda agreed to pay one-third of all funds recovered in the lawsuit
to Pelton Graham LLC. (Joint Mot. to Approve FLSA Settlement at 4.) Here, the Agreement
calls for fees in the amount of one-third of the settlement. (Agreement at 3.) "Courts in this
Circuit have often approved requests for attorneys ' fees amounting to 33.3% of a settlement
fund." See Karie v. Major Automotive Companies, Inc., 09 CV 5708 (CLP), 20 16 WL 1745037
at *8 (E.D.N.Y. April 27, 2016) (citing cases). Therefore, based on the percentage method, the
attorney's fees specified in the Agreement are reasonable.
The lodestar method confirms that conclusion. "Recent decisions in the Eastern D istrict
of New York have determined that reasonable hourly rates in FLSA cases are approximately
$300-$450 for partners, $200-$325 for senior associates, $100- $200 for junior associates, and
$60- 80 for legal support staff." Romero v. Westbwy Jeep Chrysler Dodge, Inc., No. 15-CV4145 (ADS) (S IL), 2016 WL 1369389, at *2 (E.D.N.Y. Apr. 6, 2016). In this case, plaintiffs'
counsel bill ed for 67.57 hours of work at various hourly rates for a total lodestar of $21 ,623.22.

(See Affidavit in Support of Settlement (Doc. No. 18-2) at Ex. A.) Thus, plaintiffs' counsel
billed at an average rate of approximately $320 per hour.
When app lying the lodestar method, courts generally "apply a multipli er to take into
account the contingent nature of the fee, the risks of non-payment, the qual ity ofrepresentation,
and the results achieved." In re Platinum & Palladium Commodities Litig., No. 1O-CV-36 17

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(CCH), 2015 WL 4560206, at *3 (S.D.N.Y. July 7, 2015). A multiplier is also appropriate
where, as here, the "fee award will not only compensate them for time and effort already
expended, but for time that they wi ll be required to spend administering the settlement going
forward." Willix v. Healthfirst, Inc., No. 07-CV- 1143 (ENV) (RER) 201 1 U.S. Dist. LEXIS
2 11 02 at *7 (E.D.N.Y. Feb. 18, 20 11 ). Courts have routinely found that doubling the lodestar
yields a reasonable fee in the context of FLSA settlements. See e.g. Hall v. Prosource Techs.,

LLC,

o. 14-cv-2502 (SIL) 2016 U.S. Dist. LEXIS 53791 at *53-55 (E.D.N.Y. Apr. 11, 20 16)

("This award represents a 2.08 multiplier of the modified lodestar, w hich is reasonable in light of
the Goldberger factors, and is in line with other cases in the Second Circuit.); Gattinella v.

Michael Kors (USA), Inc. , No. 14-CV-573 1 (WHP), 201 6 U .S. Dist. LEX IS 204 19 at *2
(S. D.N.Y. Feb. 9, 2016) (applying 1.94 lodestar multiplier); Fujiwara v. Sushi Yasuda Ltd., 58 F.
Supp. 3d 424 (S.D .N.Y. Nov. 12, 20 14) (holding that "a mu ltiplier near 2 should, in most cases,
be sufficient compensation for the risk associated with contingent fees in FLSA cases," and
applying mu ltiplier of 2.28 to the modified lodestar). Here, the Agreement calls fo r attorney's
fees that amount to a 1.3 1 multiplier of the loadstar - well below the multipliers found
reasonable in the Second Circuit. Accordingly, both the lodestar method and the percentage
method confirm that the billing rate in this case is reasonable.
The number of hours billed is reasonabl e, as well. Courts in this district have found fau lt
with bi lling practices due to, inter alia, vague time entries, time billed for unnecessary or
redundant tasks, block-billing (i.e. , grouping multiple tasks into a single time entry), and overbilling for travel time. See, e.g., Marshall v. Deutsche Post DHL, No. 13-CV- 147 1 (RJD)(JO),
20 15 WL 556054 1, at * 11 (E.D.N.Y. Sept. 2 1, 2015) (reducing attorney's fees where counse l
submitted vague time entries and "the time entries submitted for the two most senior partners ...

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ind icate[d] that they spent the majority of their time reviewing the work of other attorneys and
conferring with each other," findin g that "[t]his top heavy approach could have been reduced or
avoided"); Sheet Metal Workers ' Nat. Pension Fund v. Coverex COip. Risk Sols., No. 09-CV012 1 (SJF) (ARL), 20 15 WL 3444896, at *12 (E.D.N.Y. May 28, 20 15) ("[B]lock-bi lling makes
it difficult if not imposs ible for a court to determine the reasonableness of the time spent on each
of the individual services or tasks provided."); Flores, 20 16 WL 386042, at *3 (reducing
attorney's fees where counsel " billed a not-insubstantial amount of travel time"). In this case,
counsel submitted time entries explai ni ng in sufficient detail the work that was done, billed only
fo r time spent on criti cal tasks such as client communication and drafting the complaint, did not
engage in block-billing fo r many hours of wo rk at a time, and did not bill for any travel time
whatsoever. (See Affi davit in Support of Settlement at Ex. A.) As a result, the Court finds that
the amount of time billed is reasonable. Because the amount of time billed and the hourly rate
are reasonable, the attorney 's fees specified in the Agreement are reasonable.
III.

Release

The proposed settlement sets forth a release of claims by plaintiffs. (Agreement at 3-4.)
Courts have rejected such unilateral general releases where the agreement "would 'waive
practicall y any possible claim against the defendants, including unknown claims and claims that
have no relati onship whatsoever to wage-and-hour issues . .. ."'Cheeks, 796 F.3 d at 206
(quoting Lopez v. Nights ofCabiria, LLC, 96 F. Supp. 3d 170, 18 1 (S.D.N.Y.20 15)); see also
Panganiban v. Medex Diagnostic & Treatment Ctr., LLC, No. 15-CV-2588 (AMD) (LB), 2016

WL 927 183, at *3 (E.D.N.Y. Mar. 7, 20 16) ("[I] n the context of a typical FLSA case, an
emp loyee who executes a broad release effecti vely gambles, exchangi ng unknown rights for a
few hundred or a few thousand dollars to which he is otherwise unconditionally entitled.")

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(internal quotation marks and alteration omitted). In other words, " an employer is not entitled to
use an FLSA claim ... to leverage a rel ease from liability unconnected to the FLSA." Camacho

v. ESS-A-Bagel, Inc., No. 14-CV-2592 (LAK), 2014 WL 6985633 at *4 (S.D.N.Y. Dec. 11,
2014).
However, FLSA settlement releases " may include claims not presented and even those
which could not have been presented, but only when the released conduct ari ses out of the
identical factual predicate as the settled conduct." Nights ofCabiria, LLC, 96 F. Supp. 3d at 181
(internal quotation marks omitted). In other words, "a release is val id only insofar as it precludes
future claims that arise from the same facts at issue in the class action (its goal being to prevent
the parties fro m litigating the same issues again under a different legal theory)." Souza v. 65 St.

Marks Bistro, 2015 U.S. Dist. LEXIS 151144at * 18 (S .D.N.Y. Nov. 6, 2015).
Here, the proposed release provides for:
[F]ull accord and satisfaction of, any and all past and present matters, claims,
demands, causes of action, and appeals of any kind, whether at common law,
pursuant to statute, ordinance or regulation, and whether arising under federal, state,
local or other applicable law, that are based upon federal, state or local laws
governing minimum wage, overtime pay, wage payments, spread-of-hours
payments, failure to pay for all homs worked, fai lure to provide wage statements
and/or wage notices fa ilure to keep appropriate timekeeping and payroll records, or
otherwise arise out of or relate to the facts, acts, transactions, occurrence, events or
omissions al leged in the Lawsui t or which could have been alleged in the Action.
Thus, while broad, the terms of the release are not "unconnected to the FLSA." Camacho, No.
I 4-CV-2592 (LAK), 20 14 WL 6985633 at *4. Rather "the released conduct arises out of the
identical factual predicate as the settled conduct," Nights of Cabiria, LLC, 96 F. Supp. 3d at 181,
and it relates specifically to wage and hour issues without encompassing, for example,
prospective discrimination claims. See Cheeks, 796 F.3d at 206; cf Batres v. Valente

Landscaping Inc., No . 14-CV-1434 (SIL), 2016 WL 499 1595, at *3 (E.D.N.Y. Sept. 19, 2016)
(declining to approve a settlement agreement that would release "claims arising under theories of
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liability not alleged in the instant action"); Francis v. Bowe1y Residents ' Comm., Inc., No. 15CY-7102 (RLE), 20 16 WL 4120500, at* I (S. D.N.Y. July 14, 2016) (holding that a release
provision was overly broad where it required that the plaintiffs release claims " wholly unrelated
to FLSA actions, including claims that arise under the Americans with D isabili ties Act, contract
c laims, and tort claims"). Accordingly, the Agreement's proposed release is fair and reasonab le.
IV.

Confidentiality

The Agreement contains a confidentiality provision which states:
Plaintiffs agree that they will treat the existence and terms of this Agreement as
confidential, and will not actively publish information about the existence or terms
of thi s Agreement on socia l media, including, but not limi ted to Facebook. Nothing
herein shall be construed to prevent P laintiffs from discussing the existence or
terms of this Agreement with: (i) Plaintiffs' respective spouses, who shall be
instructed that the existence and terms of this Agreement are confidential; (ii)
P laintiffs' counsel and/o r tax advisor, as necessary to seek profess ional services
and/or advice; or (iii) any persons as required by compulsory legal process.
Notwithstanding the above, the Parti es acknowledge that, to the extent required to
achi eve dismissal of the Lawsu it, the Parties may disclose the existence and terms
of the Agreement to the Comt , and via public fi ling on the Court's ECF system, as
may be required by the Court to termi nate the lawsuit.
(Agreement at 5.) Highly restrictive confidentiality provisions are in tension with the remedial
purpose of the FLSA. See Cheeks, 796 F.3d at 206. However, the FLSA imposes no per se bar
o n confidentiality provisions in settlement. Rather, the fairness of restrictions on the parties'
ability to disclose details of a settlement depends on the particular circumstances of any given
case. See Lola v. Skadden, Arps, No. 13-CY-5008 (RJS), 2016 U.S. Dist. LEXIS 12871 at *6
(S.D.N.Y. February 3, 20 16) The Court finds that the confidentiality provision does not run
afou l of the FLSA's remedial purposes. As the parties assert, the confidentiality provision is not
highly restrictive because it pertains only to the Agreement, and the parties may disclose the
existence and terms of the Agreement to their spouses, legal or financia l advisers, and "via
public fi ling on the Court's ECF system." (Agreement at 5.)
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CONCLUSION
For the foregoing reasons, the joint motion to approve the parties ' settlement (Doc. No.
18) is granted. The Clerk of Court is directed to close this case.

SO ORDERED.

s/Roslynn R. Mauskopf
ROSLYNN R. MAUSKOPF
United States District Judge
Dated: Brooklyn, New York
~ 23 ,2017

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