Huang et al v. Chiang et al
Filing
17
OPINION AND ORDER OF DISMISSAL re: 16 JOINT MOTION for Settlement for approval of FLSA settlement, filed by Ai Chiu Chiang, WOK 88, Inc. Accordingly, I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs. The Clerk of the Court is requested to mark this matter closed. (Signed by Magistrate Judge Henry B. Pitman on 10/14/2016) (cla)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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USDCSDNY
DOCUMENT
ELECI'RONICALLY FILED
DOC#: ________~-DATE FILED: (o {lq /{6
ZENG XIANG HIANG, YUNSHENG LI
and WEI JIANG
Plaintiffs,
16 Civ. 1129 (HBP)
OPINION AND
ORDER OF DISMISSAL
-againstAI CHU CHIANG, JOHN DOE
and JANE DOE as shareholders
and corporate officers, and
WOK 88, INC, d/b/a WOK 88,
Defendants.
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PITMAN, United States Magistrate Judge:
This matter is before me on the parties' joint application to approve the parties' settlement (Docket Item (D.I. 16).
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 formerly worked as delivery persons at a small Chinese restaurant in
Manhattan for allegedly unpaid wages and overtime and spread-ofhours pay brought under the Fair Labor Standards Act ("FLSA"), 29
U.S.C.
§§
201 et seq. and the New York Labor Law.
Plaintiffs
also assert claims based on defendants' alleged failure to
maintain certain records and provide certain notices as required
by New York State law and defendant's alleged failure to reim-
burse plaintiffs for the cost of bicycles that plaintiffs used to
make deliveries.
Despite the fact that the matter was never
conditionally certified as a collective action, a third former
employee, Wei Jiang, filed a consent to sue on July 22, 2016
(Docket Item 15) and asserts claims similar to those asserted by
the plaintiffs who commenced the action.
Because (1) Wei Jiang
attended the settlement conference described below,
(2) the
settlement negotiations included the resolution of his claims,
(3) Wei Jiang has signed the settlement agreement and (4) defendants have consented to the inclusion of Wei Jiang in the settlement, I deem the complaint to have been constructively amended to
include Wei Jiang as a plaintiff.
Plaintiffs allege that they worked for defendants
delivering food and performing certain side tasks such as putting
sauces in containers that were delivered with customers' orders.
Among other things, plaintiffs claim that they were not paid the
minimum wage for all the hours they worked.
Part of their claim
is based on their allegation that defendants improperly paid them
at the reduced tip-credit rate despite the fact defendants did
not meet all the conditions necessary for an employer could take
advantage of the tip credit.
Exclusive of liquidated damages,
Zeng Xiang Hiang claims that he is owed a total of $62,747 in
unpaid wages and statutory penalties, Yunsheng Li claims that he
2
is owed a total of $24,918.67 in unpaid wages and statutory
penalties and Wei Jiang claims that he is owed a total of
$42,110.68 in unpaid wages and statutory penalties.
If liqui-
dated damages are included, Zeng Xiang Hiang claims that he is
owed a total of $114,494.00, Yunsheng Li claims that he is owed a
total of $39,462.33 and Wei Jiang claims that he is owed a total
of $71,221.36.
Using the damages figures that include liquidated
damages, Zeng Xiang Hiang's pro rata share of the total damages
claimed is 50.85%, Yunsheng Li's pro rata share of the total
damages claimed is 17.52% and Wei Jiang's pro rata share of the
total damages claimed is 31.63%.
Defendants vigorously dispute the plaintiffs' claims,
contending that the hours claimed by plaintiffs are grossly
inflated and that defendants properly paid plaintiffs at tipcredit rate.
Defendants contend that if plaintiffs are owed any
unpaid wages at all, the total amount owed is $20,871.33
The parties have agreed to a total a settlement of
$170,000 payable as follows:
$25,925
(or 15%) to be paid within
thirty days of the dismissal of the action, the balance to be
paid in twelve equal monthly installments of $12,006.25.
The
total settlement amount represents 131% of plaintiffs' unpaid
wages and statutory penalties.
The settlement proceeds will be
distributed to plaintiffs on a pro rata basis based on the
3
proportion of each plaintiff 1 s individual claim to the total of
all three plaintiff 1 s claims. 1
I held a lengthy settlement conference on May 10, 2016
that was attended by the principals and their counsel.
The
parties were able to agree on the terms outlined above at that
conference.
Court approval of an FLSA settlement is appropriate
11 when [the settlement] [is] reached as a result of
contested litigation to resolve bona fide disputes. 11
Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376,
11 lf the proposed
at *12 (S.D.N.Y. Sept. 16, 2011).
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement.11
Id. (citing Lynn 1 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.).
11 Generally, there is a
strong presumption in favor of finding a settlement fair,
[be-
cause] the Court is generally not in as good a position as the
parties to determine the reasonableness of an FLSA settlement. 11
Lliguichuzhca v. Cinema 60, LLC, 948 F. Supp. 2d 362, 365
(S.D.N.Y. 2013)
(Gorenstein, M.J.)
citations omitted) .
(inner quotation marks and
11 Typically, courts regard the adversarial
nature of a litigated FLSA case to be an adequate indicator of
1
1 summarize here only the most material terms of the
settlement agreement.
4
the fairness of the settlement."
F.R.D. 467, 476 (S.D.N.Y. 2013)
Beckman v. Keybank, N.A., 293
(Ellis, M.J.), citing Lynn's Food
Stores, Inc. v. United States, 679 F.2d 1350, 1353-54 (11th Cir.
1982).
The presumption of fairness in this case is bolstered by
he caliber the parties' counsel.
All parties are represented by
counsel who are known to me to be extremely knowledgeable regarding wage and hour matters and who are well suited to assess the
risks of litigation and the benefits of the proposed settlement.
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.
(Inner quotations and citations omitted)
The settlement here
satisfies these criteria.
The total damages sought by all three plaintiffs,
including liquidated damages, are $225,177.69.
5
Thus, the settle-
ment represents approximately 75.5% of the total amount sought by
plaintiffs.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.
Plaintiffs' case rests
entirely on plaintiffs' oral testimony, and litigating the case
would require the taking of several depositions.
The settlement
avoids the expense and burden of depositions.
Third, the settlement will enable plaintiffs to avoid
the risk of litigation.
Unlike many FLSA defendants, the defen-
dants here maintained payroll records which appear to be facially
correct and substantially strengthen their contention
plaintiffs were properly paid.
that
Plaintiffs, all of whom have an
obvious interest in the outcome, appear to have no evidence to
support their claims from their oral testimony.
Although plain-
tiffs' testimony is sufficient to prove their claims, Anderson v.
Mt. Clemmons Pottery Co., 328 U.S. 680, 686-88
(1946), there is
no way to predict the weight that a jury would afford their
testimony.
Fourth, because I presided over the settlement conference, I know that the settlement is the product of arm's-length
bargaining between experienced counsel.
Both counsel represented
their clients zealously at the settlement conference.
6
Fifth, there are no factors here that suggest the
existence of fraud.
The fact that the settlement was reached at
a mediation before the Court further negates the possibility of
fraud or collusion.
The settlement agreement also provides that one-third
of the settlement will be paid to plaintiffs' counsel as a
contingency fee after deduction of out-of pocket costs of $500.
Contingency fees of one third in FLSA cases are routinely approved in this Circuit.
15 Civ. 814
Santos v. EL Tepeyac Butcher Shop Inc.,
(RA), 2015 WL 9077172 at *3
(Abrams, D.J.)
(S.D.N.Y. Dec. 15, 2015)
("courts in this District have declined to award
more than one third of the net settlement amount as attorney's
fees except in extraordinary circumstances"); Rangel v. 639 Grand
St. Meat & Produce Corp., No. 13-CV-3234
*1 (E.D.N.Y. Sept. 19, 2013)
(LB), 2013 WL 5308277 at
(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 the courts in this Circuit"); Febus v. Guardian First Funding Group, LLC, 870 F. Supp.
2d 337, 340-41 (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.
7
E*TRADE Fin. Corp., 10 Civ. 4030
(S.D.N.Y. June 22, 2012)
(LAP), 2012 WL 2384419 at *6
(Preska, D.J.).
Accordingly, I approve the settlement in this matter.
In light of the settlement, the action is dismissed with prejudice and without costs.
The Clerk of the Court is requested to
mark this matter closed.
Dated:
New York, New York
October 14, 2016
SO ORDERED
H~7rnz:/~
United States Magistrate Judge
Copies transmitted to:
All Counsel
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