Barbecho et al v. M.A. Angeliades, Inc. et al

Filing 137

OPINION AND ORDER: Accordingly, for all the foregoing reasons, I approve the settlements in this matter. In light of the settlements, the claims of all plaintiffs, other than Mario Astudillo, Augusto Venegas and Romulo Quizhpi, are dismissed with pr ejudice and without costs. With respect to Astudillo, Venegas and Quizhpi, within 30 days of the date of this Order, the parties are to submit a letter explaining why their claims should no longer remain open. (As further set forth in this Order.) E frain Fernandez, Fredy Gavilanes, Ortiz Julio, Wilson Ortiz, Manuel Pineda, Crecensiano V. Ruiz, Crecensiano V. Ruiz, Trinidad Ruiz, Juan Siavichay, Luis Tierra (on behalf of himself and others similarly situated), Miguel Yuquilima, Angel Zabala, Jose pineda, Jose Barbecho and Luis Barbecho (on behalf of himself and others similarly situated) terminated. (Signed by Magistrate Judge Henry B. Pitman on 4/12/2017) Copies Sent By Chambers (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------X
:
LUIS BARBECHO, on behalf of
himself and others
:
similarly situated, et al.,
:
Plaintiffs,
:
-against:
M.A. ANGELIADES, INC., et al.,
:
Defendants.
:
-----------------------------------X

11 Civ. 1717 (HBP)
OPINION
AND ORDER

PITMAN, United States Magistrate Judge:

This is a collective action brought under the Fair
Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201 et seq., and
the New York Labor Law (the "NYLL").

Plaintiffs have also

asserted a breach of contract claim.

The matter is currently

before me on the parties' application to approve the settlements
agreed to by eight of the more than 33 plaintiffs (Docket Item
("D.I.") 134).1

The parties have consented to my exercising

plenary jurisdiction pursuant to 28 U.S.C. § 636(c).
The action arises out of work performed by plaintiffs
in connection with contracts between defendants and various

1

By Orders dated April 1, 2016 and June 21, 2016, I approved
the settlements that had been reached with respect to 25 of the
plaintiffs.

public agencies, including the New York City Transit Authority
(the "NYCTA"), the New York City Housing Authority, the New York
City Department of Correction and the New York City School
Construction Authority.

Plaintiffs allege that they worked for

defendants as carpenters and laborers on these projects.

The

contracts required defendants to pay plaintiffs a prevailing wage
rate and required that plaintiffs be paid at least one and onehalf times their regular rate for work in excess of forty hours
per week and for weekend work.

Plaintiffs allege that they

worked Monday through Friday for forty hours and sometimes were
required to work an additional sixteen to twenty-four hours on
weekends.

Plaintiffs allege that they were paid less than their

regular hourly rate for the weekend work.
In 2009, several of the defendants were indicted for
falsifying business records and defrauding employees by underpaying them on four NYCTA projects.

Several of the defendants

pleaded guilty to some of the charges, and a restitution fund was
established to provide compensation to those workers who were
underpaid.

The restitution fund, however, was limited to the

projects that were the subject of the indictment.

Additionally,

in order to receive payment from the restitution fund, a worker
was required to release all claims against the defendants.

2

Accordingly, many of defendants' employees did not seek payment
from the fund.
Defendants concede that almost all plaintiffs are owed
some wages.
owed.

However, the parties vigorously dispute how much is

In support of their contention that plaintiffs' claims for

unpaid wages after 2008 are exaggerated, defendants note that
commencing in 2008, an independent monitor was installed to
oversee defendants' payroll practices and that in 2008 training
sessions for defendants' employees were conducted at which the
employees were advised of their rights under the FLSA and NYLL.
Defendants also note that the NYCTA conducted an audit to determine what wages were owed to employees who worked on NYCTA
projects, and that audit disclosed unpaid wages in amounts far
smaller than those claimed by plaintiffs.

As additional evidence

that plaintiffs' claims are exaggerated, defendants cite plaintiffs' interrogatory answers which defendants argue are inconsistent with plaintiffs' present claims.

Defendants also cite work-

site access records maintained in connection with several of the
projects at issue; for security reasons, sign-in/sign-out logs
were maintained at several of the work sites at issue.

Defen-

dants claim that these records demonstrate that some of the
plaintiffs could not have worked all the hours that they claim.

3

On November 10, 2015, the late Honorable Miriam Goldman
Cedarbaum, United States District Judge, granted in part and
denied in part defendants' motion for partial summary judgment.
Specifically, Judge Cedarbaum granted defendants' motion to
dismiss the NYLL claims but denied the motion to dismiss the
breach of contract claims.2

Almazo v. M.A. Angeliades, Inc., 11

Civ. 1717 (MGC), 2015 WL 6965116 (S.D.N.Y. Nov. 10, 2015)
(Cedarbaum, D.J.), reconsideration denied, 2016 WL 5719748
(S.D.N.Y. Sept. 29, 2016) (Pitman, M.J.).
Subsequent to Judge Cedarbaum's decision, I began
conducting day-long settlement conferences.

Conferences were

held on January 15, 22, March 29, and May 16, 2016.

The claims

of 21 plaintiffs were settled at the conferences held in January
and March.

After negotiations, four other plaintiffs agreed to

settle their claims either at or after the May 16 conference.
Finally, in August 2016 and November 2016, the following eight
plaintiffs agreed to settle their claims:
Plaintiff
Juan Siavichay

Amount Claimed

Settlement Amount

$86,242.00

$18,000.00

Luis Terra

$172,531.28

$25,000.00

Jose Barbecho

$168,391.86

$25,000.00

2

Defendants' motion did not seek dismissal of the FLSA
claims.
4

Luis Barbecho

$209,236.32

$50,000.00

Efrain Fernandez

$108,216.00

$25,000.00

Wilson Ortiz

$130,945.92

$45,000.00

Crecensiano Ruiz

$152,785.44

$75,000.00

Miguel Yuquilima3

$185,401.92

$45,000.00

The parties have also agreed that defendants will pay
an additional 1/3 of the total settlement amount of the August
2016 agreement and an additional 1/6 of the total settlement
amount of the November 2016 agreement as attorneys' fees and
costs.
I refused to approve earlier drafts of the settlement
agreements because they each had a general release that ran only
in favor of defendants (D.I. 133).

I ordered the parties either

to more narrowly define what was being released or to submit a
memorandum of law explaining why the proposed settlements should
have been approved in their present forms; the parties opted for
the former.

Under the revised settlement agreements, plaintiffs

are releasing their claims brought in this lawsuit, all claims
for unpaid overtime pursuant to the FLSA, all claims for retaliation pursuant to the FLSA and all correlative common law claims

3

Siavichay and Tierra settled their claims in August 2016,
and the other plaintiffs settled their claims by a separate
agreement in November 2016.
5

associated with nonpayment or underpayment of wages, including
any third-party beneficiary or breach of contract claims.
Counsel for both sides have requested that I approve
these settlements so that payments to the plaintiffs who have
settled can be made promptly.
Court approval of an FLSA settlement is appropriate "when [the settlement] [is] reached as a result of
contested litigation to resolve bona fide disputes."
Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376,
at *12 (S.D.N.Y. Sept. 16, 2011). "If the proposed
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." Id. (citing Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 n.8 (11th Cir. 1982)).
Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1
(S.D.N.Y. Apr. 4, 2013) (Baer, D.J.) (alterations in original).
"Generally, there is a strong presumption in favor of finding a
settlement fair, [because] the Court is generally not in as good
a position as the parties to determine the reasonableness of an
FLSA settlement."

Lliguichuzhca v. Cinema 60, LLC, 948 F. Supp.

2d 362, 365 (S.D.N.Y. 2013) (Gorenstein, M.J.) (internal quotation marks omitted).

"Typically, courts regard the adversarial

nature of a litigated FLSA case to be an adequate indicator of
Beckman v. KeyBank, N.A., 293

the fairness of the settlement."

F.R.D. 467, 476 (S.D.N.Y. 2013) (Ellis, M.J.), citing Lynn's Food
Stores, Inc. v. United States, supra, 679 F.2d at 1353-54.

The

presumption of fairness in this case is bolstered by the caliber
6

of the party's attorneys.

Based upon their performance at the

settlement conferences and in subsequent court conferences, it is
clear to me that all parties are represented by counsel who are
extremely knowledgeable regarding all issues in the case and who
are well suited to assess the risks of litigation and the benefits of the proposed settlements.
In Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332,
335 (S.D.N.Y. 2012), the Honorable Jesse M. Furman, United States
District Judge, identified five factors that are relevant to an
assessment of the fairness of an FLSA settlement:
In determining whether [a] proposed [FLSA] settlement is fair and reasonable, a court should consider
the totality of circumstances, including but not limited to the following factors: (1) the plaintiff's
range of possible recovery; (2) the extent to which the
settlement will enable the parties to avoid anticipated
burdens and expenses in establishing their respective
claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; and (5) the possibility of fraud or collusion.
(Internal quotation marks omitted).

The settlement here satis-

fies these criteria.
First, although the settlements represent less than
one-half of each plaintiff's total claimed damages, that fact
does not render them deficient.

Defendants' documentary evidence

7

concerning the hours worked by plaintiffs is persuasive, and it
is conceivable that plaintiffs could recover less at trial.
Second, the settlements will entirely avoid the burden,
expense and aggravation of litigation.
number of hours plaintiffs worked.

Defendants dispute the

Trial preparation would

potentially require additional discovery to explore this issue.
The settlement avoids the necessity of conducting this discovery.
Third, the settlement will enable plaintiffs to avoid
the risks of litigation.

The inconsistencies between the amounts

claimed by plaintiffs and their interrogatory answers and the
site access records constitute compelling evidence that plaintiffs' provable damages are not as great as they claim.

It is

uncertain whether, or how much, plaintiffs would recover at
trial.

See Bodon v. Domino's Pizza, LLC, No. 09-CV-2941 (SLT),

2015 WL 588656 at *6 (E.D.N.Y. Jan. 16, 2015) (Report & Recommendation) ("[T]he question [in assessing the fairness of a class
action settlement] is not whether the settlement represents the
highest recovery possible . . . but whether it represents a
reasonable one in light of the many uncertainties the class
faces . . . ." (ellipses in original; internal quotation marks
omitted)), adopted sub nom. by, Bodon v. Domino's Pizza, Inc.,
2015 WL 588680 (E.D.N.Y. Feb. 11, 2015); Massiah v. MetroPlus
Health Plan, Inc., No. 11-cv-05669 (BMC), 2012 WL 5874655 at *5
8

(E.D.N.Y. Nov. 20, 2012) ("[W]hen a settlement assures immediate
payment of substantial amounts to class members, even if it means
sacrificing speculative payment of a hypothetically larger amount
years down the road, settlement is reasonable . . . ." (internal
quotation marks omitted; assessing fairness of class action
settlement)).
Fourth, I am confident that the settlements are reasonable based on their being agreed to by plaintiffs' counsel.
Plaintiffs' counsel was exceptionally well prepared at all of the
settlement conferences conducted to date and was fully familiar
with the claims of each plaintiff and the pertinent legal and
factual issues.

Given the exceptional diligence and zeal with

which plaintiffs' counsel represented their clients, I am confident that the settlements are fair.
Fifth, there are no factors here that suggest the
existence of fraud or collusion.
The settlements also provide that plaintiffs' counsel
will receive an additional 1/3 of the total settlement amount of
the August 2016 agreement and an additional 1/6 of the total
settlement amount of the November 2016 agreement as attorneys'
fees and costs.

Contingency fees of one-third in FLSA cases are

routinely approved in this Circuit.

Santos v. EL Tepeyac Butcher

Shop Inc., 15 Civ. 814 (RA), 2015 WL 9077172 at *3 (S.D.N.Y. Dec.
9

15, 2015) (Abrams, D.J.) ("[C]ourts in this District have declined to award more than one third of the net settlement amount
as attorney's fees except in extraordinary circumstances."),
citing Zhang v. Lin Kumo Japanese Rest. Inc., 13 Civ. 6667 (PAE),
2015 WL 5122530 at *4 (S.D.N.Y. Aug. 31, 2015) (Engelmayer, D.J.)
and Thornhill v. CVS Pharm., Inc., 13 Civ. 507 (JMF), 2014 WL
1100135 at *3 (S.D.N.Y. Mar. 20, 2014) (Furman, D.J.); Rangel v.
639 Grand St. Meat & Produce Corp., No. 13 CV 3234 (LB), 2013 WL
5308277 at *1 (E.D.N.Y. Sept. 19, 2013) (approving attorneys'
fees of one-third of FLSA settlement amount, plus costs, pursuant
to plaintiff's retainer agreement, and noting that such a fee
arrangement "is routinely approved by courts in this Circuit");
Febus v. Guardian First Funding Grp., LLC, 870 F. Supp. 2d 337,
340 (S.D.N.Y. 2012) (Stein, D.J.) ("[A] fee that is one-third of
the fund is typical" in FLSA cases); accord Calle v. Elite
Specialty Coatings Plus, Inc., No. 13-CV-6126 (NGG)(VMS), 2014 WL
6621081 at *3 (E.D.N.Y. Nov. 21, 2014); Palacio v. E*TRADE Fin.
Corp., 10 Civ. 4030 (LAP)(DCF), 2012 WL 2384419 at *6-*7 (S.D.N.Y. June 22, 2012) (Freeman, M.J.).

Moreover, these amounts will

not be deducted from the settlement funds, but will instead be
paid in addition to the settlement funds, which bolsters their
reasonableness.

10

Accordingly, for all the foregoing reasons, I approve
the settlements in this matter.

In light of the settlements, the

claims of all plaintiffs, other than Mario Astudillo, Augusto
Venegas and Romulo Quizhpi, are dismissed with prejudice and
without costs.

With respect to Astudillo, Venegas and Quizhpi,

within 30 days of the date of this Order, the parties are to
submit a letter explaining why their claims should no longer
remain open.
Dated:

New York, New York
April 12, 2017
SO ORDERED

J~·~
HENRY PI~N

United States Magistrate Judge

Copies transmitted to:
All Counsel of Record

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