Romero et al v. Fluff N Fold Laundry Services LLC et al
Filing
37
OPINION AND ORDER: This matter is before me on the parties' joint application to approve their settlement (Proposed Amendment to the Proposed Settlement Agreement ("Proposed Amendment"), annexed as Ex. 1 to the Letter of Colin Mulholland, Esq., to the undersigned, dated May 17, 2018 (Docket Item ("D.I.") 36); Proposed Settlement Agreement, dated Nov. 14, 2016 (D.I. 34) ("Proposed Agreement")). All parties have consented to my exercising plenary juris diction pursuant to 28 U.S.C. § 636(c); as further set forth herein. Accordingly, for all the foregoing reasons, I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs. The Clerk is respectfully requested to mark this matter closed. (Signed by Magistrate Judge Henry B. Pitman on 6/8/2018) (mro)
USDCSDNY
DOCUMENT
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------x
" ELECTRONICALLY FILED
DOC:#:
---:::::~--~-f-.'::""7~/:-7""'DATE FILED:
fa/f-/1(;:
MARIA ROMERO, et al.,
Plaintiffs,
15 Civ. 9535 (HBP)
OPINION
AND ORDER
-against-
FLUFF N FOLD LAUNDRY SERVICES
LLC, et al.,
Defendants.
-----------------------------------x
PITMAN, United States Magistrate Judge:
This matter is before me on the parties' joint application to approve their settlement (Proposed Amendment to the
Proposed Settlement Agreement ("Proposed Amendment"), annexed as
Ex. 1 to the Letter of Colin Mulholland, Esq., to the undersigned, dated May 17, 2018
(Docket Item ("D.I.") 36); Proposed
Settlement Agreement, dated Nov. 14, 2016 (D.I. 34)
Agreement")).
("Proposed
All parties have consented to my exercising
plenary jurisdiction pursuant to 28 U.S.C.
§
636(c).
This is an action brought by two plaintiffs who worked
at defendants' laundromat.
Plaintiffs commenced this action
under the Fair Labor Standards Act (the ''FLSA"), 29 U.S.C.
et~.,
§
201
and the New York Labor Law (the "NYLL"), to recover
unpaid minimum wages and overtime premium pay.
Plaintiffs also
claim that defendants failed keep certain records and provide
certain notices under the NYLL.
Plaintiff Maria Romero was
employed by defendants from approximately April 2013 through
approximately November 2015.
Throughout her employment, Romero
worked approximately 60 hours per week and was paid a weekly
salary that fluctuated between $400.00 and $420.00.
Plaintiff
Claudia Gonzalez worked for defendants from approximately January
2011 through November 2015. 1
Gonzalez was paid a weekly salary
that varied between $410.00 and $500.00 throughout her employment; she alleges that she typically worked 60 hours per week.
Plaintiffs' total alleged damages, exclusive of pre-judgment
interest, are $97,796.66. 2
Of this amount, Romero claims that
she is owed $48,265.00, and Gonzalez claims that she is owed
$49,531.66.
Using these damages figures, Romero's pro rata share
of the total damages is approximately 49.4% and Gonzalez's is
approximately 50.6%.
Defendants sharply dispute plaintiffs' claims.
As an
initial matter, defendants argue that, at all times relevant to
1
There were breaks in Gonzalez's employment between July 4,
2011 and approximately October 2011, and between approximately
October 2012 and October 2013.
2
This amount includes:
(1) $43,898.33 in total unpaid
minimum and overtime wages; (2) $43,898.33 in total liquidated
damages and (3) $10,000.00 for statutory penalties under the
NYLL.
2
plaintiffs' claims, they had an annual gross volume of sales less
than $500,000.00 and, therefore, were not employers within the
meaning of the FLSA.
See 29 U.S.C. §§ 203(s) (1) (A), 206(a).
In
addition, defendants contend that plaintiffs were paid in compliance with the law.
Defendants also assert that plaintiffs never
worked in excess of 45 hours per week.
Defendants claim that
they maintained records that will support these positions.
Defendants further claim that they would be unable to pay the
amount plaintiffs seek given their current financial situation.
I presided over a settlement conference in this matter
on November 7, 2016, during which the parties did not reach a
settlement.
However, the parties agreed to the essential terms
of a settlement on December 6, 2016 during a subsequent telephonic conference, over which I also presided.
My knowledge of
the underlying facts and the justification for the settlement is,
therefore, limited to counsel's representations in their letters
submitted prior to the settlement conference, their letters in
support of the settlement and their statements during the settlement and telephonic conferences.
This is the fourth time that the parties have sought
judicial approval of a proposed settlement.
Most recently, I
rejected the parties' revised proposed settlement agreement
submitted for approval on November 14, 2017
3
(the "Proposed
Agreement") because it contained an impermissible general release
(see Proposed Agreement; Order of the undersigned, dated Apr. 18,
2018 (D.I. 35)).
Rather than resubmitting an entirely new
proposed settlement agreement, the parties submitted an amendment
to Proposed Agreement on May 17, 2018, modifying the release
(see Proposed Amendment).
Under the Proposed Agreement, as amended, defendants
agree to pay plaintiffs $40,000.00 in full and final satisfaction
of plaintiffs' claims. 3
The amount of alleged damages, exclusive
of pre-judgment interest, and the net amount that will be received by each are as follows:
Plaintiff
Amount
Claimed
Net Settlement
Amount
Maria Romero
$48,265.00
$20,000.00
Claudia Gonzalez
$49,531.66
$20,000.00
Total
$97,796.66
$40,000.00
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
3
Under Proposed Agreement, "the parties expressly agree to
bear their own attorneys' fees and costs and disbursements
incurred in this litigation .
" (Proposed Agreement ~ 8).
4
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." Id. (Ci ting Lynn's Food Stores, Inc. v. United
States, 659 F.2d 1350, 1358 n.8 (11th Cir. 1982)).
Agudelo v. E & D LLC, 12 Civ. 960
(S.D.N.Y. Apr. 4, 2013)
(HB), 2013 WL 1401887 at *1
(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 quota-
tion marks omitted).
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 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).
fies these criteria.
5
The settlement here satis-
First, plaintiffs' total settlement represents approximately 40.9% of their total alleged damages, including liquidated
damages, exclusive of pre-judgment interest.
Defendants dispute
the number of hours plaintiffs claim they worked and the amount
of wages plaintiffs claim they were paid and assert that they
have documents supporting their positions.
As discussed in more
detail below, given the risks these issues present, the settlement amount is reasonable.
Second, the settlement will entirely avoid the expense
and aggravation of litigation.
As noted above, defendants
dispute plaintiffs' claim that they regularly worked 60 hours per
week; plaintiffs have no documentary evidence supporting their
position.
Thus, trial preparation would likely require deposi-
tions to explore these issues.
The settlement avoids the neces-
sity of conducting these depositions.
Third, the settlement will enable plaintiffs to avoid
the risk of litigation.
To prevail on their FLSA claims, plain-
tiffs must establish that defendants' "annual gross volume of
sales made or business done is not less than $500,000."
U.S.C.
§§
203(s) (1) (A), 206(a) . 4
28
Defendants contend that plain
4
There is no such requirement in order for a plaintiff to
state a claim under the NYLL.
See Sai Qin Chen v. East Market
Rest., Inc., 13 Civ. 3902 (HBP), 2018 WL 340016 at *5 (S.D.N.Y.
(continued ... )
6
tiffs would be unable to establish either prerequisite.
Further-
more, to prevail on their overtime claims, plaintiffs must prove
(1) that they were entitled to overtime premium pay and (2) that
they did not receive the full amount to which they were entitled.
Given the lack of documentary evidence supporting plaintiffs'
position, and the fact that plaintiffs bear the burden of proof,
it is unclear whether plaintiffs will succeed at trial.
Even if
plaintiffs were able to overcome these hurdles, it is unclear how
much plaintiffs would collect after trial given defendants' claim
of limited financial resources.
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)
( 11 [T]he question [in assess-
ing 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
uncertainties the class faces .
11
(internal quotation marks
omitted)), adopted sub nom . .Qy, Bodon v. Domino's Pizza, Inc.,
2015 WL 588680 (E.D.N.Y. Feb. 11, 2015); Massiah v. MetroPlus
Health Plan, Inc., No. ll-cv-05669 (BMC), 2012 WL 5874655 at *5
( E. D. N. Y. Nov. 2 0, 2012)
( 11 [W] hen a settlement assures immediate
4
( • • • continued)
Jan. 9, 2018) (Pitman, M.J.); Liang Huo v. Go Sushi Go 9th Ave.,
13 Civ. 6573 (KBF), 2014 WL 1413532 at *3 (S.D.N.Y. Apr. 10,
2014) (Forrest, D.J.).
7
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)).
Fourth, having presided over both the settlement
conference and the telephonic conference during which counsel
ultimately reached the essential terms of settlement,
I know that
the settlement is the product of arm's length bargaining between
experienced counsel who represented their clients zealously.
Fifth, there are no factors here that suggest the
existence of fraud.
As noted above, the material terms of the
settlement were reached following a judicially supervised telephonic conference, which was preceded by a judicially supervised
settlement conference.
This fact further negates the possibility
of fraud or collusion.
The difference between each plaintiff's individual
allocable share of the total alleged damages is approximately
1.2%.
Pursuant to the Proposed Agreement, plaintiffs will split
the settlement funds evenly.
Accordingly, the method of distri-
bution of settlement funds to plaintiffs is both fair and reasonable.
The parties have also executed the Proposed Amendment,
which modifies the release set out in Paragraph 7 of the Proposed
8
Agreement (see Proposed Amendment) . 5
Specifically, the Proposed
Amendment provides, in pertinent part, that plaintiffs agree to
release "[d]efendants from all or any manner of actions, causes
whatsoever at law or in equity"
and causes of action, suits
(Proposed
Amendment~
l(a)).
In return, defendants agree to
release "plaintiffs, their heirs, executors, administrators and
assigns" from the same (Proposed Amendment to Proposed Agreement
~
l(b)).
A general release in an FLSA settlement is consistent
with the "primary remedial purpose" of the FLSA only if it is
truly mutual.
199, 207
Cheeks v. Freeport Pancake House, Inc., 796 F.3d
(2d Cir. 2015); see Gonzales v. 27 W.H. Bake, LLC, 15
Civ. 4161 (PAC) (HBP), 2018 WL 1918623 at *3 n.4
20, 2018)
(S.D.N.Y. Apr.
(Pitman, M.J.); Chowdhury v. Brioni Am., Inc., 16 Civ.
344 (HBP), 2017 WL 5125535 at *3 (S.D.N.Y. Nov. 1, 2017)
M.J.).
(Pitman,
A general release is truly mutual where, as here, "plain-
tiffs receive a general release from all persons and entities to
whom plaintiffs provide a general release."
Bake, LLC, supra, 2018 WL 1918623 at *3 n.4.
Gonzales v. 27 W.H.
Accordingly, I find
the release agreed to by the parties permissible.
5
See Cionca v.
The Proposed Agreement expressly permits written amendments
and modifications to it, so long as such amendments and
modifications are "executed by the party against whom the
amendment [or] modification .
. is sought" (Proposed Agreement
~ 11; see Proposed Amendment).
9
Interactive Realty, LLC, 15 Civ. 5123 (BCM), 2016 WL 3440554 at
*3-*4 (S.D.N.Y. June 10, 2016)
(Moses, M.J.); Lola v. Skadden,
Arps, Meagher, Slate & Flom LLP, 13 Civ. 5008 (RJS), 2016 WL
922223 at *2 (S.D.N.Y. Feb. 3, 2016)
65 St. Marks Bistro, 15 Civ. 327
(S.D.N.Y. Nov. 5, 2015)
(Sullivan, D.J.); Souza v.
(JLC), 2017 WL 7271747 at *5
(Cott, M.J.).
Accordingly, for all the foregoing reasons, I approve
the settlement in this matter.
In light of the settlement, the
action is dismissed with prejudice and without costs.
The Clerk
is respectfully requested to mark this matter closed.
Dated: New York, New York
June 8, 2018
SO ORDERED
HE{R~N-#~
United States Magistrate Judge
Copies Transmitted to:
All Counsel
10
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