Lizondro-Garcia et al v. Kefi LLC et al
Filing
57
OPINION AND ORDER re: 54 MOTION for Settlement Preliminary Approval of Settlement, Conditional Certification of the Settlement Class, Appointment of Plaintiffs' Counsel as Class Counsel, and Approval of the Proposed Notice of Settlemen t, and Class Action Settlement Procedure filed by Jeraldo Gonzalez, Javier Toledo, Aleksander Velic, Kevin Anderson, Marco Torres, Moises Jimenez, Victorino Torres, Elena Pauta, Oscar Ramirez, Manuel Lizondro-Garcia, Efrain Duenas, Mar co Real, Dipika Pati, Jorge R Becerra, Jenna Lee Barron, Paulina Grzechnik, Jorge Garcia, Jose Cabrera, Luis Cruz, Carlos Ramirez, Ashley Bostick, Victor Galindo, Claudio Serrano, Victor Paguay, Pablo Martinez: Accordingly, for all the f oregoing reasons, plaintiffs' motion (Docket Item 54) is granted. It is hereby ORDERED that: 1. The proposed NYLL class is conditionally certified pursuant to Rule 23(a) and (b)(3). Manuel Lizondro-Garcia, Luis Cruz, Jorge Garcia, Jeraldo G onzalez, Aleksander Velic, Javier Toledo, Oscar Ramirez, Moises Jimenez and Marco Real are appointed class representatives and Joseph & Kirschenbaum LLP is appointed class counsel. 2. The Settlement Agreement is approved preliminarily. 3. The Propo sed Notice is approved subject to the above-referenced revisions. Members of the NYLL class will have 45 days after the date the revised notices are mailed to opt out of or object to the settlement. Individuals eligible to join the collective action will have 45 days after the date the revised notices are mailed to submit an opt-in form. 4. Within 7 days from the date of this Order, defendants shall provide the claims administrator with a list, in electronic form, of the names, last known addr esses, and telephone numbers of the FLSA collective and the NYLL class. 5. Within 14 days from the date of this Order, the claims administrator shall mail the revised Proposed Notice to the FLSA collective and the NYLL class using the information pro vided by defendants. 6. The Court shall hold a fairness hearing on September 12, 2014, at 2:00 p.m. at the United States District Court for the Southern District of New York, 500 Pearl Street, Courtroom 18A, New York, New York, 10007. 7. No later than August 29, 2014, counsel for plaintiffs shall move and file a memorandum of law in support of final approval of the Settlement Agreement, an award of attorney's fees and costs, and service payments to the plaintiffs. (Fairness Hearing se t for 9/12/2014 at 02:00 PM in Courtroom 18A, 500 Pearl Street, New York, NY 10007 before Magistrate Judge Henry B. Pitman.) (Motions due by 8/29/2014.) (Signed by Magistrate Judge Henry B. Pitman on 5/29/2014) Copies Transmitted By Chambers. (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------X
MANUEL LIZONDRO-GARCIA, LUIS CRUZ,
JORGE GARCIA, JERALDO GONZALEZ,
ALEKSANDER VELIC, JAVIER TOLEDO,
OSCAR RAMIREZ, MOISES JIMENEZ,
MARCO REAL, on behalf of
themselves and others similarly
situated,
Plaintiffs,
-against-
:
:
12 Civ. 1906 (HBP)
:
OPINION
AND ORDER
:
:
:
KEFI LLC, doing business as KEFI
RESTAURANT and KOSTANTINOS
DAMANIOS,
Defendants.
:
:
:
-----------------------------------X
PITMAN, United States Magistrate Judge:
I.
Introduction
Manuel Lizondro-Garcia, Luis Cruz, Jorge Garcia,
Jeraldo Gonzalez, Aleksander Velic, Javier Toledo, Oscar Ramirez,
Moises Jimenez and Marco Real ("plaintiffs"), on behalf of
themselves and other similarly situated, commenced this action
pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§
201 et seq. and the New York Labor Law ("NYLL") §§ 191 et seq. to
recover unpaid overtime and spread-of-hours compensation, reimbursement for improperly withheld tips and statutory damages.
On October 2, 2013, the parties informed the Court that
they had reached a tentative settlement of the FLSA collective
action and the NYLL class action, which they memorialized in the
Settlement Agreement & Release ("Settlement Agreement").
Plaintiffs now move for preliminary approval of the
settlement and other related relief.
Specifically, the seek an
Order (1) conditionally certifying a NYLL class pursuant to Rule
23(a) and (b)(3), (2) appointing Joseph & Kirschenbaum LLP as
class counsel, (3) preliminarily approving the Settlement Agreement (4) approving plaintiffs' proposed Notice of Class Action
Settlement (the "Proposed Notice") and (5) adopting the parties'
proposed schedule for final approval of the Settlement Agreement
(Notice of Motion, dated Nov. 5, 2013, (Docket Item 54)).
The
parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c) (Docket Item 51).
For the reasons set forth below, plaintiffs' motion is
granted.
II.
Facts
A.
Relevant Factual and
Procedural Background
Plaintiffs commenced this action on March 15, 2012.
Their complaint alleges that plaintiffs, and members of the FLSA
2
collective and putative NYLL class,1 are or were employed by
defendants as servers, bartenders, baristas, barbacks, bussers or
runners.
Plaintiffs allege that defendants failed to pay them
overtime for hours they worked in excess of 40 hours and spreadof-hours pay for days they worked in excess of 10 hours.
Plain-
tiffs also allege that defendants improperly forced plaintiffs to
share their tips with a "manager/party planner" (Declaration of
Josef Nussbaum, Esq., dated Nov. 5, 2013, (Docket Item 56)
("Nussbaum Decl.") at ¶ 6; Compl. ¶¶ 43-45).
In May 2012, the parties agreed to exchange only
limited discovery in order to facilitate the prompt settlement of
this matter.
Defendants produced tip sheets, payroll records and
clock-in reports for several of defendants' employees covering a
sixteen-week period (Nussbaum Decl. at ¶¶ 7-8).
After scrutiniz-
ing defendants' records, plaintiffs contend that they could
estimate the total damages owed to the FLSA collective and the
putative NYLL class (Nussbaum Decl. at ¶ 8).
1
The Complaint alleges that the FLSA collective includes
non-exempt employees who worked for defendants from March 15,
2009 to March 15, 2012 in "tipped position[s]" (Complaint, dated
Mar. 15, 2012, (Docket Item 1) ("Compl.") ¶ 22) and that the NYLL
class action includes non-exempt employees who worked for
defendants from December 1, 2008 to June 30, 2013 in tipped
positions (Compl. ¶ 25; Plaintiffs' Memorandum of Law in Support
of Preliminary Approval of Class Action Settlement, dated Nov. 5,
2013, (Docket Item 55) ("Pls.' Mem.") at 8).
3
On May 30, 2013, I conducted a settlement conference
that was attended by counsel and by the parties.
The parties
were unable to resolve the case at that time.
After further fact discovery, counsel for plaintiffs
lowered their estimate of plaintiffs' aggregate actual damages to
roughly $280,0002 (Nussbaum Decl. at ¶ 11).
Thereafter, the
parties agreed on the terms of a settlement, which were memorialized in the Settlement Agreement accompanying the present motion
(Nussbaum Decl. at ¶ 11 and Ex. 1 annexed thereto).
B.
The Settlement Agreement
The Settlement Agreement provides that defendants,
without conceding the validity of plaintiffs' claims and without
admitting liability, agree to create a common fund of $315,000 to
be paid in two equal installments of $157,500 (Ex. 1 to Nussbaum
Decl. at ¶¶ 1.28, 3.1(B)).
From the fund, the nine named plain-
tiffs will each receive $1,000 service awards, a claims administrator will receive an estimated $15,239.11 to set up and distribute monies from the fund and counsel for plaintiffs will
receive attorney's fees and costs, subject to the Court's ap-
2
Counsel for plaintiffs does not allocate the $280,000
between the FLSA and the NYLL.
4
proval, and not to exceed $105,000 (Ex. 1 to Nussbaum Decl. at ¶¶
1.27, 3.2-3.3).
The Settlement Agreement states that the remainder will
be divided up and awarded as follows:
25% to individuals who opt
in to the FLSA collective action and 75% to individuals who
remain in the NYLL class action (Nussbaum Decl. at ¶¶ 12-13).
Each member of the FLSA collective will be paid a percentage of
the 25%, calculated by dividing the number of hours he or she
worked for defendants during the relevant period by the total
number of hours that all members of the collective worked for
defendants (Ex. 1 to Nussbaum Decl. at ¶ 3.4(B)(4)).
Each member
of the putative NYLL class will be awarded a percentage of the
75% according to the same formula (Ex. 1 to Nussbaum Decl. at ¶
3.4(B)(3), (5)-(6)).
No class member will receive an award of
less than $100 (Ex. 1 to Nussbaum Decl. at ¶ 3.4(B)(2)).
Any
remaining monies will revert to defendants (Ex. 1 to Nussbaum
Decl. at ¶¶ 3.1(I), 3.4(B)(8)).
In return, each individual who
opts into the collective action and the class will release
defendants from all wage and hour claims brought or that could
have been brought in this action (Ex. 1 to Nussbaum Decl. at ¶
2.9(B)).
5
III.
Analysis
A.
Conditional Certification
of the NYLL Rule 23 Class
Plaintiffs first request that the Court conditionally
certify, for the purpose of settlement only, a class pursuant to
Rule 23(b)(3) consisting of all individuals who work or worked
for defendants as "[s]ervers, [b]artenders, [b]aristas,
[b]arbacks, . . . [b]ussers" and "runners . . . from December 1,
2008 to June 30, 2013" (Pls.' Mem. at 8; Ex. 1 to Nussbaum Decl.
at ¶ 1.6).
"Before certification is proper for any purpose -settlement, litigation, or otherwise -- a court must ensure that
the requirements of Rule 23(a) and (b) have been met."
Denney v.
Deutsche Bank AG, 443 F.3d 253, 270 (2d Cir. 2006); accord Cohen
v. J.P. Morgan Chase & Co., 262 F.R.D. 153, 157–58 (E.D.N.Y.
2009); Bourlas v. Davis Law Assocs., 237 F.R.D. 345, 349
(E.D.N.Y. 2006).
Class certification is appropriate under Rule 23(a) if
"(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common to
the class; (3) the claims . . . of the representative parties are
typical of the claims . . . of the class; and (4) the representa-
6
tive parties will fairly and adequately protect the interests of
the class."
Fed.R.Civ.P. 23(a).
If each of these four threshold requirements are met,
class certification is appropriate if the action also satisfies
one of the three alternative criteria set forth in Rule 23(b).
In this case, plaintiffs argue that class certification is proper
under Rule 23(b)(3), which provides that a class action may be
maintained where:
the questions of law or fact common to class members
predominate over any questions affecting only individual members, and [where] a class action is superior to
other available methods for fairly and efficiently
adjudicating the controversy.
The party seeking class certification bears the burden
of establishing each of these elements by a "preponderance of the
evidence."
Teamsters Local 445 Freight Div. Pension Fund v.
Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008); Amchem Prods.,
Inc. v. Windsor, 521 U.S. 591, 614 (1997); see Fedotov v. Peter
T. Roach & Assocs., P.C., 354 F. Supp. 2d 471, 478 (S.D.N.Y.
2005) (Haight, D.J.).
Although the Court of Appeals has "di-
rected district courts to apply Rule 23 according to a liberal
rather than a restrictive interpretation," In re NASDAQ Market–Makers Antitrust Litig., 169 F.R.D. 493, 504 (S.D.N.Y. 1996)
(Sweet, D.J.), citing Korn v. Franchard Corp., 456 F.2d 1206,
1208–09 (2d Cir. 1972), class certification should not be granted
7
unless, after a "'rigorous analysis,'" the court is satisfied
that Rule 23's requirements have been met.
Spagnola v. Chubb
Corp., 264 F.R.D. 76, 92 (S.D.N.Y. 2010), quoting In re Initial
Pub. Offering Secs. Litig., 471 F.3d 24, 33 (2d Cir. 2006).
Doubts concerning the propriety of class certification should be
resolved in favor of class certification.
See Levitt v. J.P.
Morgan Secs., Inc., 710 F.3d 454, 464 (2d Cir. 2013) (on appellate review, less deference is given to decisions denying class
certification than to decisions granting certification).
1.
Rule 23(a)'s Requirements
a.
Numerosity
Rule 23(a) requires that the members of the proposed
class be "so numerous that joinder of all members is impracticable."
Although precise calculation of the number of class
members is not required, "numerosity is generally presumed when
the prospective class consists of 40 members or more."
Alcantara
v. CNA Mgmt., Inc., 264 F.R.D. 61, 64 (S.D.N.Y. 2009) (Jones,
D.J.); Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483
(2d Cir. 1995).
Counsel for plaintiffs has already identified
240 members of the NYLL class (Nussbaum Decl. at ¶ 14).
the numerosity requirement is clearly met.
8
Thus,
b.
Commonality
Rule 23(a) also requires the existence of questions of
law or fact common to the class.
The Supreme Court has recently
emphasized that "[c]ommonality requires the plaintiff to demonstrate that the class members 'have suffered the same injury.'"
Wal-Mart Stores, Inc. v. Dukes, --- U.S. ---, ---, 131 S. Ct.
2541, 2551 (2011), quoting Gen. Tel. Co. v. Falcon, 457 U.S. 147,
157 (1982).
"Since '[a]ny competently crafted class complaint
literally raises common "questions,"'" the court must assess
whether the common questions are capable of "generat[ing] common
answers apt to drive the resolution of the litigation."
Wal-Mart
Stores, Inc. v. Dukes, supra, 131 S. Ct. at 2551, quoting Richard
A. Nagareda, Class Certification in the Age of Aggregate Proof,
84 N.Y.U. L. Rev. 97, 131–32 (2009).
"[P]laintiffs may meet the
commonality requirement where the individual circumstances of
class members differ, but 'their injuries derive from a unitary
course of conduct by a single system.'"
Fox v. Cheminova, Inc.,
213 F.R.D. 113, 126 (E.D.N.Y. 2003), quoting Marisol A. v.
Giuliani, 126 F.3d 372, 377 (2d Cir. 1997) (per curiam).
single common legal or factual question will suffice."
"Even a
Jackson
v. Bloomberg, L.P., --- F.R.D. ---, ---, 13 Civ. 2001 (JPO), 2014
WL 1088001 at *8 (S.D.N.Y. Mar. 19, 2014) (Oetken, D.J.), quoting
9
Freeland v. AT&T Corp., 238 F.R.D. 130, 140 (S.D.N.Y. 2006)
(Cote, D.J.).
Plaintiffs identify two questions common to the putative NYLL class:
(1) whether defendants failed to pay overtime
and (2) whether defendants retained tips from their service
employees (Pls.' Mem. at 9).
Because the claims of the named
plaintiffs and those of the putative NYLL class derive from the
same overtime and tipping and practices of defendants, each of
these questions will generate answers that will help resolve the
claims in the class action.
See, e.g., Shahriar v. Smith &
Wollensky Rest. Grp., Inc., 659 F.3d 234, 252 (2d Cir. 2011);
accord Schear v. Food Scope Am., Inc., 297 F.R.D. 114, 124
(S.D.N.Y. 2014) (Torres, D.J.); Espinoza v. 953 Assocs. LLC, 280
F.R.D. 113, 127 (S.D.N.Y. 2011) (Scheindlin, D.J.); Prasker v.
Asia Five Eight LLC, 08 Civ. 5811 (MGC), 2010 WL 476009 at *2
(S.D.N.Y. Jan. 6, 2010) (Cedarbaum, D.J.).
Accordingly, I
conclude that the commonality requirement is met.
c.
Typicality
Rule 23(a)'s third requirement, typicality, ensures
that "maintenance of a class action is economical and [that] the
named plaintiff's claim and the class claims are so interrelated
that the interests of the class members will be fairly and
10
adequately protected in their absence."
Marisol A. v. Giuliani,
supra, 126 F.3d at 376, quoting Gen. Tel. Co. v. Falcon, supra,
457 U.S. at 157 n.13.
The typicality requirement is satisfied
where "each class member's claim arises from the same course of
events and each class member makes similar legal arguments to
prove the defendant's liability."
In re Flag Telecom Holdings,
Ltd. Secs. Litig., 574 F.3d 29, 35 (2d Cir. 2009) (internal
quotation marks and citation omitted); Bolanos v. Norwegian
Cruise Lines Ltd., 212 F.R.D. 144, 155 (S.D.N.Y. 2002) (Berman,
D.J.) (adopting Report & Recommendation).
Plaintiffs satisfy the typicality requirement of Rule
23(a) because they were employed by defendants in the same
positions and subjected to the same overtime, spread-of-hours and
tipping practices as members of the proposed NYLL class.
Accord-
ingly, the typicality requirement is met here as well.
d.
Adequacy
Pursuant to Rule 23(a)'s final requirement, "the named
plaintiffs must 'possess the same interest[s] and suffer the same
injur[ies] as the class members.'"
In re Literary Works in Elec.
Databases Copyright Litig., 654 F.3d 242, 249 (2d Cir. 2011),
quoting Amchem Prods., Inc. v. Windsor, supra, 521 U.S. at 62526.
"Adequate representation is a twofold requirement:
11
class
counsel must be qualified and able to conduct the proposed
litigation, and the class representatives must not have interests
antagonistic to those of the other class members."
Fox v.
Cheminova, Inc., supra, 213 F.R.D. at 127, citing In re Drexel
Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir. 1992);
Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502
F.3d 91, 99 (2d Cir. 2007); Denney v. Deutsche Bank AG, supra,
443 F.3d at 268.
Plaintiffs also satisfy the adequacy requirement.
Counsel for plaintiffs has cited two relatively recent opinions
that acknowledge plaintiffs' counsel's record of competence and
experience in wage and hour class actions (Pls.' Mem. at 13,
citing, e.g., Sand v. Greenberg, 08 Civ. 7840 (PAC), 2011 WL
1338196 at *2 (S.D.N.Y. Mar. 22, 2011) (Crotty, D.J.), and Spicer
v. Pier Sixty LLC, 269 F.R.D. 321, 337-38 (S.D.N.Y. 2010) (Sand,
D.J.); see also Nussbaum Decl. at ¶ 19).
Moreover, at a settle-
ment conference that I conducted, plaintiffs' counsel demonstrated extensive knowledge of the law and was a vigorous advocate for its clients.
In light of their record in other cases
and their able representation at the settlement conference in
this case, I conclude that plaintiffs' counsel has and will
adequately represent the interests of the class.
12
In addition, counsel for plaintiffs represents that the
named plaintiffs have no conflicts with any of the class members
and have actively participated in discovery and settlement
negotiations (Nussbaum Decl. at ¶ 15).
Accordingly, I conclude that plaintiffs satisfy the
adequacy requirement of Rule 23(a)(4).
e.
The Implied Requirement
of Ascertainability
Ascertainability is not expressly required under the
terms of Rule 23, but is an implied element of class certification.
As explained by the late Honorable Harold Baer, United
States District Judge in Fears v. Wilhelmina Model Agency, Inc.,
02 Civ. 4911 (HB), 2003 WL 21659373 at *2 (S.D.N.Y. July 15,
2003):
"[W]hile Rule 23(a) does not expressly require that a
class be definite in order to be certified, a requirement that there be an identifiable [aggrieved] class
has been implied by the courts." In re Methyl Tertiary
Butyl Ether ("MTBE") Prods. Liability Litig., 209
F.R.D. 323, 336 (S.D.N.Y. 2002) (internal quotes and
citations omitted); Dunnigan v. Metropolitan Life Ins.
Co., 214 F.R.D. 125, 135 (S.D.N.Y. 2003). "An identifiable class exists if its members can be ascertained
by reference to objective criteria." MTBE Prods., 209
F.R.D. at 336. Membership should not be based on
subjective determinations, such as the subjective state
of mind of a prospective class member, but rather on
objective criteria that are administratively feasible
for the Court to rely on to determine whether a particular individual is a member of the class. Id. Fur13
ther, the Court "must be able to make this determination without having to answer numerous fact-intensive
inquiries." Id. at 336 n.20 (quoting Daniels v. City
of New York, 198 F.R.D. 409, 414 (S.D.N.Y. 2001).
See also Manual for Complex Litigation § 21.222 at 270 (4th ed.
2004) ("Although the identity of individual class members need
not be ascertained before class certification, the membership of
the class must be ascertainable.").
In this case, defendants'
payroll records will likely contain the names, titles, pay rates
and dates of employment of the NYLL class members.
Because
plaintiffs can easily identify the NYLL class by reviewing
defendants' payroll records, I conclude that the implied
ascertainability requirement of Rule 23 is met.
2.
Rule 23(b)(3)'s Requirements
As explained above, Rule 23(b)(3) requires that a
plaintiff seeking to represent a class establish "that the
questions of law or fact common to class members predominate over
any questions affecting only individual members, and that a class
action is superior to other available methods for fairly and
efficiently adjudicating the controversy."
23(b)(3).
14
Fed.R.Civ.P.
a.
Predominance
The Court of Appeals for the Second Circuit explained
the predominance requirement of Rule 23(b)(3) in Moore v.
PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir. 2002):
"The Rule 23(b)(3) predominance inquiry tests
whether proposed classes are sufficiently cohesive to
warrant adjudication by representation." Amchem
Prods., Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct.
2231, 138 L. Ed. 2d 689 (1997). It is a more demanding
criterion than the commonality inquiry under Rule
23(a). Id. at 623–24, 117 S. Ct. 2231. Class-wide
issues predominate if resolution of some of the legal
or factual questions that qualify each class member's
case as a genuine controversy can be achieved through
generalized proof, and if these particular issues are
more substantial than the issues subject only to individualized proof. [In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 136 (2d Cir. 2001)].
See also Myers v. Hertz Corp., 624 F.3d 537, 549 (2d Cir. 2010)
("Economies of time, effort, and expense in fully resolving each
plaintiff's claim will only be served, and the predominance
requirement satisfied, . . . if the plaintiffs can show that some
. . . questions can be answered with respect to the members of
the class as a whole through generalized proof and that those
common issues are more substantial than individual ones." (internal quotations marks, brackets and citations omitted)); Flores v.
Anjost Corp., 284 F.R.D. 112, 130 (S.D.N.Y. 2012) (McMahon,
D.J.).
15
Counsel for plaintiffs suggests that the predominance
requirement is satisfied because the class is unified by common
factual allegations:
(1) they were not paid at the overtime rate
when they worked more than 40 hours in a given workweek and (2)
they were required to share their tips with ineligible employees
(Pls.' Mem. at 11).
I agree.
The central issues in this litiga-
tion are whether defendants had policies that denied their
employees overtime, spread-of-hours pay and tips.
Because
defendants' practices applied to members of the putative NYLL
class uniformly, questions regarding the legality of those
policies "are about the most perfect questions for class treatment."
Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363,
373 (S.D.N.Y. 2007) (McMahon, D.J.); accord Shahriar v. Smith &
Wollensky Rest. Grp., Inc., supra, 659 F.3d at 253; Brown v.
Kelly, 609 F.3d 467, 484 (2d Cir. 2010) ("[W]here plaintiffs were
allegedly aggrieved by a single policy of the defendants, and
there is strong commonality of the violation and the harm, this
is precisely the type of situation for which the class action
device is suited." (internal quotation marks & citations omitted)); Whitehorn v. Wolfgang's Steakhouse, Inc., 275 F.R.D. 193,
200 (S.D.N.Y. 2011) (Sand, D.J.).
nance is met here.
16
Thus, I conclude that predomi-
b.
Superiority
Rule 23(b)(3) also requires plaintiffs to demonstrate
that class-wide adjudication is "superior to other available
methods for fairly and efficiently adjudicating the controversy."
In making this determination, the court must balance "the advantages of a class action against those of alternative available
methods of adjudication."
Anwar v. Fairfield Greenwich Ltd., 289
F.R.D. 105, 114 (S.D.N.Y. 2013) (Marrero, D.J.).
Rule 23(b)(3)
sets forth four non-exhaustive factors relevant to the superiority inquiry:
"the class members' interests in individually
controlling the prosecution . . . of separate actions;" "the
extent and nature of any litigation concerning the controversy
already begun by . . . class members;" "the desirability or
undesirability of concentrating the litigation of the claims in
the particular forum;" and "the likely difficulties in managing a
class action."
Fed.R.Civ.P. 23(b)(3).
The superiority requirement is also met here.
First,
litigation by way of a class action is more economically sensible
due to plaintiffs' limited financial resources and the relatively
modest size of any individual's recovery.
A class action is
likely the only vehicle by which all plaintiffs can, as a practical matter, adjudicate their state law claims.
17
Iglesias-Mendoza
v. La Belle Farm, Inc., supra, 239 F.R.D. at 374; McBean v. City
of New York, 228 F.R.D. 487, 503 (S.D.N.Y. 2005) (Lynch, D.J.).
Second, plaintiffs are unaware of any pending litigation by
individual class members concerning this controversy, and, third,
concentrating this litigation in the Southern District of New
York is appropriate because "the allegedly wrongful conduct
occurred within its jurisdiction" (Pls.' Mem. at 12).
Finally,
class adjudication as opposed to multiple individual actions will
conserve judicial resources.
Accordingly, for all the above reasons, I conditionally
certify pursuant to Rule 23(a) and (b)(3) a NYLL class consisting
of all individuals who work or worked for defendants as servers,
bartenders, baristas, barbacks, bussers and runners from December
1, 2008 to June 30, 2013.
B.
Appointment of Class Counsel
Rule 23(c)(1)(B) provides that "[a]n order that certifies a class action must . . . appoint class counsel under Rule
23(g)."
Counsel for the named plaintiffs request that I desig-
nate their firm, Joseph & Kirschenbaum LLP, as counsel for the
NYLL class.
Rule 23(g)(1)(A) sets forth four factors that must be
considered in appointing class counsel:
18
(i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel's
experience in handling class actions, other complex
litigation, and the types of claims asserted in the
action; (iii) counsel's knowledge of the applicable
law; and (iv) the resources counsel will commit to
representing the class.
A court may also consider "any other matter pertinent to counsel's ability to fairly and adequately represent the interests of
the class."
Fed.R.Civ.P. 23(g)(1)(B).
As discussed in Part III.A.d above, counsel for plaintiffs has experience litigating wage and hours cases and is
knowledgeable concerning the applicable law (Nussbaum Decl. at ¶¶
18-20).
Moreover, Joseph & Kirschenbaum LLP has represented the
named plaintiffs in this suit from its inception, and, therefore,
has expended substantial resources identifying and investigating
the potential claims in the action.
Finally, the prior work
Joseph & Kirschenbaum LLP has performed as lead or co-counsel in
litigating and settling other wage and hour actions, see, e.g.,
Sand v. Greenberg, supra, 2011 WL 1338196 at *2; Spicer v. Pier
Sixty LLC, supra, 269 F.R.D. at 337-38; Delaney v. Geisha NYC,
LLC, 261 F.R.D. 55 (S.D.N.Y. 2009) (Pauley, D.J.), demonstrates
the firm's commitment and financial ability to represent the NYLL
class.
Accordingly, Joseph & Kirschenbaum LLP is appointed as
counsel for the NYLL class.
19
C.
Preliminary Approval
of the Settlement Agreement
Plaintiffs next seek the preliminary of approval of the
Settlement Agreement, which would resolve the claims brought on
behalf of the FLSA collective and the NYLL class.
Pursuant to Fed.R.Civ.P. 23(e), the settlement of a
class action is not effective until judicially approved.
Al-
though there is a general policy favoring settlements, the court
may approve a class action settlement only if it is "fair,
adequate, and reasonable, and not a product of collusion."
A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000).
Joel
"A court
determines a settlement's fairness by looking at both the settlement's terms and the negotiating process leading to settlement."
Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d
Cir. 2005), citing D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d
Cir. 2001).
In assessing procedural fairness, there is a "presumption of fairness, reasonableness, and adequacy as to the settlement where 'a class settlement [is] reached in arm's-length
negotiations between experienced, capable counsel after meaningful discovery.'"
McReynolds v. Richards-Cantave, 588 F.3d 790,
803 (2d Cir. 2009), quoting Wal–Mart Stores, Inc. v. Visa U.S.A.,
Inc., supra, 396 F.3d at 116.
20
In assessing whether a settlement is substantively
fair, reasonable, and adequate, courts in this Circuit use the
nine-factor test set forth in City of Detroit v. Grinnell Corp.,
495 F.2d 448, 463 (2d Cir. 1974).
McReynolds v. Richards-
Cantave, supra, 588 F.3d at 804; accord Charron v. Wiener, 731
F.3d 241, 247 (2d Cir. 2013); Morris v. Affinity Health Plan,
Inc., 859 F. Supp. 2d 611, 619 (S.D.N.Y. 2012) (Carter, D.J.); In
re Giant Interactive Grp., Inc. Secs. Litig., 279 F.R.D. 151, 160
(S.D.N.Y. 2011) (Engelmayer, D.J.).
Those factors include:
(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 defendants to
withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best
possible recovery; (9) the range of reasonableness of
the settlement fund to a possible recovery in light of
all the attendant risks of litigation.
McReynolds v. Richards-Cantave, supra, 588 F.3d at 804.
Similarly, a settlement of an FLSA collective action is
not effective unless it is judicially approved.
Wolinksy v.
Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012)
(Furman, D.J.) ("[A]n employee may not waive or otherwise settle
an FLSA claim for unpaid wages for less than the full statutory
damages unless the settlement is supervised by the Secretary of
21
Labor or made pursuant to a judicially supervised stipulated
settlement."); Bouzzi v. F & J Pine Rest., LLC, 841 F. Supp. 2d
635, 639 (E.D.N.Y. 2012) ("The FLSA imposes strict limits on an
employee's ability to waive claims for fear that employers will
coerce employees into settlement and waiver." (internal quotation
marks & brackets omitted)); accord Beckman v. KeyBank, N.A., 293
F.R.D. 467, 476 (S.D.N.Y. 2013) (Ellis, M.J.); Chavarria v. N.Y.
Airport Serv., Inc., 875 F. Supp. 2d 164, 176 (E.D.N.Y. 2012);
Willix v. Healthfirst, Inc., No. 07 Civ. 1143 (ENV)(RER), 2011 WL
754862 at *5 (E.D.N.Y. Feb. 18, 2011).
However, settlement of a
collective action does not implicate the same Due Process concerns as the settlement of a class action because, under the
FLSA, "parties may elect to opt in but a failure to do so does
not prevent them from bringing their own suits at a later date."
Beckman v. KeyBank, N.A., supra, 293 F.R.D. at 476, quoting
McKenna v. Champion Intern. Corp., 747 F.2d 1211, 1213 (8th Cir.
1984).
Accordingly, an FLSA settlement is examined with less
scrutiny than a class action settlement; the court simply asks
whether the proposed settlement reflects a fair and reasonable
compromise of disputed issues that were reached as a result of
contested litigation.
Wolinksy v. Scholastic Inc., supra, 900 F.
Supp. 2d at 335.
22
Preliminary approval is the first step in the settlement of a class action3 whereby the court "must preliminarily
determine whether notice of the proposed settlement . . . should
be given to class members in such a manner as the court directs,
and an evidentiary hearing scheduled to determine the fairness
and adequacy of settlement."
Herbert B. Newberg & Alba Conte,
Newberg on Class Actions § 11.25 (4th ed. 2002) (internal quotation omitted); accord Chambery v. Tuxedo Junction Inc., No. 12cv-06539 (EAW), 2014 WL 1364933 at *2 (W.D.N.Y. Apr. 7, 2014);
Hernandez v. Merrill Lynch & Co., Inc., 11 Civ. 8472 (KBF)(DCF),
2012 WL 5862749 at *1-*2 (S.D.N.Y. Nov. 15, 2012) (Freeman,
M.J.); Davis v. J.P. Morgan Chase & Co., supra, 775 F. Supp. 2d
at 607.
Preliminary approval of a settlement agreement
requires only an "initial evaluation" of the fairness
of the proposed settlement on the basis of written
submissions and an informal presentation by the settling parties. Clark v. Ecolab, Inc., Nos. 07 Civ.
8623 (PAC) et al. [sic], 2009 WL 6615729, at *3
(S.D.N.Y. Nov. 27, 2009) (citing Herbert B. Newberg &
Alba Conte, Newberg on Class Actions ("Newberg") §
11.25 (4th ed. 2002)). Nevertheless, courts often
3
The principles concerning preliminary approval of class
action settlements appear to apply with equal force to
preliminary approval FLSA settlements. See, e.g., Davis v. J.P.
Morgan Chase & Co., 775 F. Supp. 2d 601, 607-08 (W.D.N.Y. 2011);
Johnson v. Brennan, 10 Civ. 4712 (CM), 2011 WL 1872405 at *1
(S.D.N.Y. May 17, 2011) (McMahon, D.J.); Clark v. Ecolab, Inc.,
07 Civ. 8623 (PAC), 04 Civ. 4488 (PAC), 06 Civ. 5672 (PAC), 2009
WL 6615729 at *3 (S.D.N.Y. Nov. 27, 2009) (Crotty, D.J.).
23
grant preliminary settlement approval without requiring
a hearing or a court appearance. See Hernandez v.
Merrill Lynch & Co., Inc., No. 11 Civ. 8472 (KBF)(DCF),
2012 WL 5862749, at *1 (S.D.N.Y. Nov. 15, 2012) (granting preliminary approval based on plaintiffs' memorandum of law, attorney declaration, and exhibits). To
grant preliminary approval, the court need only find
that there is "'probable cause' to submit the [settlement] to class members and hold a full-scale hearing as
to its fairness." In re Traffic Exec. Ass'n, 627 F.2d
631, 634 (2d Cir. 1980); see Newberg § 11.25 ("If the
preliminary evaluation of the proposed settlement does
not disclose grounds to doubt its fairness . . . and
appears to fall within the range of possible approval,"
the court should permit notice of the settlement to be
sent to class members); see also Girault v. Supersol
661 Amsterdam, LLC, No. 11 Civ. 6835 (PAE), 2012 WL
2458172, at *1 (S.D.N.Y. June 28, 2012) (granting
preliminary approval where the "proposed Settlement
Agreement [was] within the range of possible settlement
approval, such that notice to the Class [was] appropriate"); Danieli v. IBM, No. 08 Civ. 3688, 2009 WL
6583144, at *4–5 (S.D.N.Y. Nov. 16, 2009) (granting
preliminary approval where settlement "has no obvious
defects" and proposed allocation plan is "rationally
related to the relative strengths and weaknesses of the
respective claims asserted"). "If the proposed settlement appears to fall within the range of possible
approval, the court should order that the class members
receive notice of the settlement." Yuzary, 2013 WL
1832181, at *1 (internal quotation marks and citation
omitted).
Tiro v. Pub. House Invs., LLC, 11 Civ. 7679 (CM), 11 Civ. 8249
(CM), 2013 WL 2254551 at *1 (S.D.N.Y. May 22, 2013) (McMahon,
D.J.); see also Hernandez v. Merrill Lynch & Co., Inc., supra,
2012 WL 5862749 at *1-*2; Frank v. Eastman Kodak Co., 228 F.R.D.
174, 184 (W.D.N.Y. 2005).
24
Applying the foregoing principles, I conclude, based on
plaintiffs' memorandum of law, the declaration of Josef Nussbaum,
Esq. and the accompanying exhibits and the parties' informal
presentations at the May 30, 2013 settlement conference, that
there is probable cause to believe that the proposed Settlement
Agreement is fair, reasonable and adequate.
Plaintiffs' counsel represents that plaintiffs, the
FLSA opt-ins and the NYLL class are owed roughly $240,000 in
unpaid wages and misappropriated tips.
An award of $315,000
appears fair, reasonable and adequate because even after attorney's fees, service awards, and administrative costs, plaintiffs
would receive nearly all of their actual damages.
Additionally,
the award compensates plaintiffs almost immediately and removes
the uncertainty that litigation necessarily entails.
Defendants
presented several non-frivolous arguments at the settlement
conference that might have reduced plaintiffs' eventual damages
award or resulted in a verdict for defendants.
Finally, the
modest service awards to the named plaintiffs, administrative
costs and attorney's fees sought here are routinely approved in
district courts of this Circuit, see, e.g., Chavarria v. N.Y.
Airport Serv., LLC, supra, 875 F. Supp. 2d at 177-79; Morris v.
Health Affinity Plan, Inc., supra, 859 F. Supp. 2d at 624, and,
25
do not appear to have been the result of any collusion between
counsel.
Finally, the Settlement Agreement has all the earmarks
of an arms length transaction between opposing parties.
The
Settlement Agreement was reached by experienced counsel after an
investigation of the claims and defenses and contested negotiations.
At the settlement conference, counsel for both sides
demonstrated a mastery of the evidence and the legal principles
and zealously represented their clients.
In light of counsels'
experience and conduct in this action, I have no reason to doubt
that the terms of the Settlement Agreement are fair, reasonable,
and adequate.
Accordingly, plaintiffs' motion for preliminary approval of the Settlement Agreement is granted and notice to the
FLSA collective and the NYLL class is appropriate.
D.
Plaintiffs' Proposed Notice
Finally, plaintiffs seek approval of the Proposed
Notice accompanying their motion.
Counsel for plaintiffs states
that the designated claims administrator will mail the Proposed
Notice to the "FLSA Class Members"4 and the NYLL class at each
4
Plaintiffs have not requested "conditional certification"
(continued...)
26
individual's last known mailing address (Pls.' Mem. at 20).
Additionally, if notices are returned as undeliverable, the
claims administrator will use additional information provided by
defendants to locate the addressees of such notices and will mail
another copy to those individuals (Pls.' Mem. at 21).
"Where, as here, the parties seek simultaneously to
certify a settlement class and to settle a class action, the
elements of Rule 23(c) notice (for class certification) are
combined with the elements of Rule 23(e) notice (for settlement
or dismissal)."
In re Global Crossing Secs. & ERISA Litig., 225
F.R.D. 436, 448 (S.D.N.Y. 2004) (Lynch, D.J.); accord Shapiro v.
JP Morgan Chase & Co., 11 Civ. 8331 (CM)(MHD), 11 Civ. 7961 (CM),
2014 WL 1224666 at *17 (S.D.N.Y. Mar. 24, 2014) (McMahon, D.J.);
In re Citigroup Inc. Secs. Litig., 965 F. Supp. 2d 369, 380
4
(...continued)
of the collective action under Section 216(b) of the FLSA.
However, this step is not necessary. "Section 216(b) does not by
its terms require [certification], and nothing in the text of the
statute prevents plaintiffs from opting in to the action by
filing consents with the district court, even when the notice
described in Hoffmann–La Roche has not been sent, so long as such
plaintiffs are 'similarly situated' to the named individual
plaintiff who brought the action. Myers v. Hertz Corp., supra,
624 F.3d at 555 n.10 (internal citation omitted). So long as the
individuals who eventually opt in are "similarly situated" to the
named plaintiffs, plaintiffs' counsel is free to include
information regarding the FLSA collective action and opt-in
information in its Rule 23(c)(2)(B) notice to the NYLL class.
27
(S.D.N.Y. 2013) (Stein, D.J.); In re IMAX Secs. Litig., 283
F.R.D. 178, 185 (S.D.N.Y. 2012) (Buchwald, D.J.).
Pursuant to Rule 23(c)(2)(B), "the court must direct
[that] class members [be provided with] the best notice that is
practicable under the circumstances, including individual notice
to all members who can be identified through reasonable effort."
See also Fed.R.Civ.P. 23(e)(1) ("The court must direct notice in
a reasonable manner to all class members who would be bound by
the proposal.").
The notice must describe:
(i) the nature of the action; (ii) the definition of
the class certified; (iii) the class claims, issues, or
defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v)
that the court will exclude from the class any member
who requests exclusion; (vi) the time and manner for
requesting exclusion; and (vii) the binding effect of a
class judgment on members under Rule 23(c)(3).
Fed.R.Civ.P. 23(c)(2)(B).
I have reviewed the Proposed Notice and conclude that
the process described by counsel for providing notice to the NYLL
class comports with Rule 23(c)(2)(B).
As to the form and content of the Proposed Notice, I
find that a majority of the Rule 23(c)(2)(B) requirements are
satisfied.
However, plaintiffs are directed to add language
informing recipients that they may enter an appearance through an
attorney and that the Court will exclude any member of the class
28
who requests exclusion.
I direct that this information be added
to the section entitled "WHAT ARE YOUR OPTIONS?" on pages four
and five of the Proposed Notice.
I also direct that the class
definition in the Proposed Notice be amended to comport with the
class definition set forth at page 18 above.
Because the Proposed Notice will be sent to individuals
who can opt in to the FLSA collective action, counsel for plaintiffs is also directed to append an opt-in form to the Proposed
Notice that contains language defining the FLSA collective and
describing when and how an individual may opt in to the collective action.
The Proposed Notice and attached opt-in form shall
also state that individuals may opt in to the collective action
within 45 days after the mailing date.
Subject to the above-referenced modifications, the
Proposed Notice is approved.
IV.
Conclusion
Accordingly, for all the foregoing reasons, plaintiffs'
motion (Docket Item 54) is granted.
1.
It is hereby ORDERED that:
The proposed NYLL class is conditionally certified
pursuant to Rule 23(a) and (b)(3).
Manuel Lizondro-Garcia,
Luis Cruz, Jorge Garcia, Jeraldo Gonzalez, Aleksander Velic,
Javier Toledo, Oscar Ramirez, Moises Jimenez and Marco Real
29
are appointed class representatives and Joseph &
Kirschenbaum LLP is appointed class counsel.
2.
The Settlement Agreement is approved preliminarily.
3.
The Proposed Notice is approved subject to the
above-referenced revisions.
Members of the NYLL class will
have 45 days after the date the revised notices are mailed
to opt out of or object to the settlement.
Individuals
eligible to join the collective action will have 45 days
after the date the revised notices are mailed to submit an
opt-in form.
4.
Within 7 days from the date of this Order, defen-
dants shall provide the claims administrator with a list, in
electronic form, of the names, last known addresses, and
telephone numbers of the FLSA collective and the NYLL class.
5.
Within 14 days from the date of this Order, the
claims administrator shall mail the revised Proposed Notice
to the FLSA collective and the NYLL class using the information provided by defendants.
6.
The Court shall hold a fairness hearing on Septem-
ber 12, 2014, at 2:00 p.m. at the United States District
Court for the Southern District of New York, 500 Pearl
Street, Courtroom 18A, New York, New York, 10007.
30
7.
No later than August 29, 2014, counsel for plain
tiffs shall move and file a memorandum of law in support of
final approval of the Settlement Agreement, an award of
attorney's fees and costs, and service payments to the
plaintiffs.
Dated:
New York, New York
May 29, 2014
SO ORDERED
United States Magistrate Judge
Copies transmitted to:
Daniel M. Kirschenbaum, Esq.
Charles E. Joseph, Esq.
Yosef Nussbaum, Esq.
Joseph & Kirschenbaum LLP
5th Floor
233 Broadway
New York, New York 10017
Felice B. Ekelman, Esq.
Jason A. Zoldessy, Esq.
Jackson Lewis LLP
29th Floor
666 Third Avenue
New York, New York 10017
31