Holick et al v. Cellular Sales of New York, LLC et al
Filing
527
ORDER GRANTING PLAINTIFFS' MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT re 513 MOTION Approval of Settlement Agreement. The Court approves the terms and conditions of the Settlement Agreement. The parties shall proceed with the administrat ion of the settlement in accordance with the terms of the Settlement Agreement. The case is dismissed on the merits and with prejudice. The Court approves and incorporates herein by reference the releases and waivers set forth in the Settlement Agree ment. Without affecting the finality of this Final Order, the Court will retain jurisdiction over the case following the entry of the dismissal with prejudice of this action to enforce the Settlement Agreement until 30 days after the end of the time for class members to cash their settlement check has expired, as defined in the Settlement Agreement. The parties shall abide by all terms of the Settlement Agreement and this Order. IT IS SO ORDERED. Signed by Magistrate Judge Daniel J. Stewart on 10/5/2022. (egr, ) Modified on 10/6/2022 to reflect that copy served via CM/ECF rather than regular mail. (egr, ).
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
JAN P. HOLICK, JR., et al.,
Plaintiffs,
1:12-CV-584
(DJS)
v.
CELLULAR SALES OF NEW YORK, LLC, and
CELLULAR SALES OF KNOXVILLE, INC.,
Defendants.
APPEARANCES:
OF COUNSEL:
GLEASON, DUNN,
WALSH, & O’SHEA
Attorneys for Plaintiffs
40 Beaver Street
Albany, New York 12207
RONALD G. DUNN, ESQ.
CHRISTOPHER M. SILVA, ESQ.
CHAMBERLAIN HRDLICKA
Attorneys for Defendants
1200 Smith Street, Suite 1400
Houston, Texas 77002
CHARLES L. CARBO, III, ESQ.
JULIE R. OFFERMAN, ESQ.
HINMAN STRAUB
Attorneys for Defendants
121 State Street
Albany, New York 12207
DAVID T. LUNTZ, ESQ.
DANIEL J. STEWART
United States Magistrate Judge
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ORDER GRANTING PLAINTIFFS’ MOTION FOR
FINAL APPROVAL OF CLASS SETTLEMENT
Presently pending is Plaintiffs’ Motion for Final Approval of the Settlement
Agreement in this action. Dkt. No. 513. Defendants do not oppose the Motion. For the
reasons set forth below, the Court grants the Plaintiffs’ Motion.
I. BACKGROUND AND PROCEDURAL HISTORY
This action was commenced alleging statutory and common law claims against
Defendants regarding the alleged failure to provide proper compensation to Plaintiffs.
The statutory claims are brought pursuant to the federal Fair Labor Standards Act
(“FLSA”) and New York Labor Law. This action has an extensive and complicated
procedural history, familiarity with which is assumed.
Plaintiffs Jan Holick, Steven Moffitt, Justin Moffitt, Gurwinder Singh, Jason
Mack, William Burrell, and Timothy Pratt filed a collective and class action complaint
against Cellular Sales of New York (“CSNY”) and Cellular Sales of Knoxville, Inc.
(“CSK”) (collectively, “Cellular Sales”), asserting claims for alleged violations of FLSA
and NYLL minimum wage and overtime requirements.
In February of 2014, the Court so ordered the parties’ stipulation for conditional
certification of a collective action. See Holick et al. v. Cellular Sales of New York, LLC
et al., No. 1:13-CV-738, Dkt. No. 83. In October of 2015, the Court approved the parties’
stipulation to expand the collective, and forty-seven opt-in plaintiffs joined in the action.
No. 1:12-CV-584, Dkt. Nos. 95 & 377-2. In October of 2018, Plaintiffs moved for class
certification pursuant to Rule 23 of the Federal Rules of Civil Procedure and Defendants
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moved to decertify the Court’s conditional certification of the collective action. Dkt. Nos.
345 & 377. In April of 2019, the District Court denied Plaintiffs’ motion for class
certification and granted Defendants’ motion for decertification, finding Plaintiffs failed
to demonstrate that the issue of whether the putative class members were independent
contractors or employees was not capable of resolution through class-wide proof. See
Holick v. Cellular Sales of New York, LLC, 2019 WL 1877176 (N.D.N.Y. Apr. 26, 2019).
The District Court thus dismissed the claims of the Opt-In Plaintiffs and ordered the
action to proceed on behalf of the current Plaintiffs.
The parties then consented to the undersigned for purposes of trial. Dkt. No. 436.
After trial, the Court found that the remaining Plaintiffs (“Named Plaintiffs”) were
employees of Defendants. Dkt. No. 483. Based upon a stipulation of the parties, the Court
determined the amount of compensatory damages to which each Plaintiff would be
entitled. Id. As the prevailing party, Plaintiffs were also entitled to an award of reasonable
attorney’s fees pursuant to both the FLSA and NYLL. N.Y. Lab. Law §§ 198 & 663(1);
29 U.S.C. § 216(b). On March 15, 2021, this Court awarded fees and costs to Plaintiffs’
counsel in the amount of $576,870.30 and $14,227.63, respectively. Dkt. No. 506.
On June 26, 2020, Plaintiffs filed a Notice of Appeal from the Court’s denial of
class certification, decertification of the FLSA collective, and dismissal of the Plaintiffs’
NYLL claims for untimely commission payments. Dkt. Nos. 485 & 513-1 at p. 5. On
July 10, 2020, Defendants filed a notice of cross-appeal and conditionally cross-appealed
the denial of Cellular Sales’ Motion to Dismiss Plaintiffs’ claims for alleged untimely
commission payments. Dkt. Nos. 488 & 513-1 at p. 5. Finally, on April 14, 2021,
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Defendants filed a Notice of Appeal contesting the District Court’s March 15, 2021,
Memorandum-Decision and Order regarding attorneys’ fees. Dkt. No. 507.
With the assistance of the Second Circuit mediation program, counsel were able
to negotiate an agreement to resolve and settle the matters encompassed in the original
appeal and cross-appeal. Dkt. No. 513-1 at p. 6. Pursuant to the agreed-to settlement, the
parties would stipulate to certification of a collective action consisting of the Named
Plaintiffs and Opt-In Plaintiffs pursuant to 29 U.S.C. § 216(b), for the purposes of
settlement only. Dkt. No. 513-1 at p. 7. That settlement agreement provided for
contribution and settlement of the alleged damages for all Named Plaintiffs as well as the
Opt-in Plaintiffs, a reasonable recovery for Plaintiffs’ and Opt-In Plaintiffs’ claims for
unpaid minimum wage and overtime. and a reasonable compromise for recovery for the
claims currently under appeal. Id. at p. 7.
Pursuant to Federal Rule of Civil Procedure 62.1, this Court issued an indicative
ruling that it would likely approve the proposed settlement were the Second Circuit to
remand the matter despite the pendency of an appeal. Holick v. Cellular Sales of New
York, LLC, 2022 WL 1525460, at *1-2 (N.D.N.Y. Apr. 20, 2022). Following a motion in
the Second Circuit, the matter was remanded to this Court for consideration of the pending
Motion. Dkt. No. 518. Defendants’ fee award appeal was thereafter resolved by the
Second Circuit in a separate decision, which affirmed this Court’s holding. Dkt. No. 526.
On July 15, 2022, the Court preliminarily approved the parties’ proposed
settlement and authorized the issuance of a notice of settlement of the collective action.
Dkt. No. 519. The Court set the matter down for a fairness hearing on September 12,
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2022, at the James T. Foley Courthouse in Albany New York. Id. The named and opt-in
Plaintiffs were afforded 30 days to submit any objection to the proposed settlement. Id.
Prior to the scheduled hearing, Plaintiffs’ counsel filed affidavits of mailing and
certificates of service on the affected parties. Dkt. Nos. 520, 521, 522, 523, & 525. The
fairness hearing was held, as scheduled, on September 12, 2022, at which time the Court
heard from counsel regarding the terms of the settlement agreement, as well as the
substantive fairness of the settlement to the parties, and specifically discussed with
counsel the factors relevant to settlement approval. At the time of the hearing, no
individual spoke out against the proposed final settlement, nor has the Court or counsel
received any written objections to the settlement.
II. THE PROPOSED SETTLEMENT
The proposed settlement in this case involves a total payment by Defendants of
$89,710.61. See Dkt. No. 513-3 at p. 2. It provides that the named Plaintiffs shall receive
payment in the amount of the Judgment awarded following trial, plus an additional
$2,000. Under the settlement each of the 41 Opt-In Plaintiffs will receive a payment of
$1,575.35. 1
III. FINAL APPROVAL OF THE FLSA SETTLEMENT
Having considered the Motion for Final Approval, the supporting declarations, the
arguments presented at the fairness hearing, and the complete record in this matter, and
The settlement does not provide any amount for attorneys’ fees, as that issue that was resolved by a recent decision
of the Second Circuit Court of Appeals. Holick v. Cellular Sales of New York, LLC, ___ F.4th ___, 2022 WL 4088001
(2d Cir. Sept. 7, 2022). No additional fees or costs are sought by any side in connection with this settlement
agreement. See Dkt. No. 513-2.
1
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for good cause shown, the Court grants final approval of the settlement memorialized in
the Settlement Agreement. See Dkt. No. 513-2.
Regarding procedural fairness, it is clear from the history of the case that the
parties reached this settlement only after engaging in thorough investigation and
discovery, as well as a bench trial, which allowed each side to assess the potential risks
of continued litigation, and after robust settlement discussions, including several
discussions via telephone, email and in-person. The settlement was reached as a result of
arm’s length negotiations between experienced, capable counsel after the meaningful
exchange of information and discovery, and with the critical assistance of the Second
Circuit mediator.
Courts in the Second Circuit generally consider the nine factors set forth in City of
Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974) to assess the substantive
fairness of a FLSA settlement. See Emeterio v. A&P Rest. Corp., 2022 WL 274007, at
*8 (S.D.N.Y. Jan. 26, 2022).
This is because “the standard for approval of an FLSA
settlement is lower than for a Rule 23 settlement,” and so satisfaction of the Grinnell
factor analysis will, necessarily, satisfy the standards for approval of the FLSA settlement.
Massiah v. MetroPlus Health Plan, Inc., 2012 WL 5874655, at *5 (E.D.N.Y. Nov. 20,
2012). The Grinnell factors are:
(1) the complexity, expense, and likely duration of the litigation; (2) the
reaction of the class to the settlement; (3) the stage of the proceedings and
the amount of discovery completed; (4) the risks of establishing liability;
(5) the risks of establishing damages; (6) the risks of maintaining the class
action through the trial; (7) the ability of the defendant to withstand a
greater judgment; (8) the range of reasonableness of the settlement fund in
light of the best possible recovery; [and] (9) the range of reasonableness of
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the settlement fund to a possible recovery in light of all the attendant risks
of litigation.
City of Detroit v. Grinnell Corp., 495 F.2d at 463 (internal citations omitted). In this case,
most of the Grinnell factors weigh in favor of granting final approval of the Settlement
Agreement.
While a bench trial has already occurred in this case, a successful appeal could
necessitate a second class action trial which would be complex, expensive, and long.
Accordingly, the first factor weighs in favor of approval.
Next, the response of the Plaintiffs and opt-in Plaintiffs to the settlement has been
positive. There have been no objections to the settlement that have been registered at this
time. “The fact that the vast majority of class members neither objected nor opted out is
a strong indication” of fairness. Wright v. Stern, 553 F. Supp. 2d 337, 344-45 (S.D.N.Y.
2008) (approving settlement where 13 out of 3,500 class members objected and 3 opted
out); see also Willix v. Healthfirst Inc., 2011 WL 754862, at *4-5 (E.D.N.Y. Feb. 18,
2011) (approving settlement where 7 of 2,025 class member submitted timely objections
and 2 requested exclusion). Thus, this factor weighs strongly in favor of approval.
The third factor delves into whether, considering the status of the case, counsel has
“an adequate appreciation of the merits of the case.” In re Warfarin Sodium Antitrust
Litig., 391 F.3d 516, 537 (3d Cir. 2004). Based upon the Court’s observations and its
understanding of the litigation activities in this matter, the Court would be hard-pressed
to find counsel who are more competent or who have a better appreciation of the merits
of the claims and defenses in this case.
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Next, as the Court has already held a bench trial on this case, the risk of
establishing liability and damage may not be a significant hurdle. Nevertheless, litigation
always involves inherent risks, and the settlement proposed here will alleviate any
uncertainty and provide final closure in this long-running battle.
Defendants’ ability to pay is not a substantial factor in the decision.
Finally, the dispute in this case primarily involved the classification of workers,
and the actual damage calculation for the named Plaintiffs was known and stipulated to
at trial. This proposed settlement agreement goes further and provides additional
compensation for individuals (the Opt-In Plaintiffs) who had been left out of the previous
trial. The Court’s analysis of the eighth and ninth factors, therefore, weighs in favor of
final approval of the settlement.
IV. DISSEMINATION OF NOTICE
Pursuant to the Preliminary Approval Order, notice was sent by first-class mail to
each identified Plaintiff or Opt-In Plaintiff at his or her last known address. The Court
finds that the mailed notice fairly and adequately advised the named Plaintiffs and OptIn Plaintiffs of the terms of the settlement, as well as their right to object to the settlement,
and to appear at the fairness hearing conducted on September 12, 2022. The Court further
finds that the notice and distribution of it comported with all constitutional requirements,
including those mandated by due process.
V. CONCLUSION AND DISMISSAL
The Court, therefore, approves the terms and conditions of the Settlement
Agreement. The parties shall proceed with the administration of the settlement in
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accordance with the terms of the Settlement Agreement. The case is dismissed on the
merits and with prejudice. The Court approves and incorporates herein by reference the
releases and waivers set forth in the Settlement Agreement. Neither this Order, the
Settlement Agreement, nor any other documents or information relating to the settlement
of this action shall constitute, be construed to be, or be admissible in any proceeding as
evidence (a) that any group of similarly situated or other employees exists to maintain a
collective action under the FLSA, or a class action under Rule 23 of the Federal Rules of
Civil Procedure or comparable state law or rules, (b) that any party has prevailed in this
case, or (c) that the Defendants or others have engaged in any wrongdoing.
Without affecting the finality of this Final Order, the Court will retain jurisdiction
over the case following the entry of the dismissal with prejudice of this action to enforce
the Settlement Agreement until 30 days after the end of the time for class members to
cash their settlement check has expired, as defined in the Settlement Agreement. The
parties shall abide by all terms of the Settlement Agreement and this Order.
IT IS SO ORDERED.
Dated: October 5, 2022
Albany, New York
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