Singh et al v. MDB Construction Management Inc. et al

Filing 32

OPINION AND ORDER: 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. SO ORDERED. (Signed by Magistrate Judge Henry B. Pitman on 1/22/2019) Copies Transmitted By Chambers. (ne)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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ELECTRONICn.LLY FILED
DOC#:

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DATE FILED:

(/4?2/19

JASWANT SINGH, et al.,
Plaintiffs,

16 Civ. 5216 (HBP)

-against-

OPINION
AND ORDER

MOB CONSTRUCTION MANAGEMENT,
INC. , et al.,
Defendants.
-----------------------------------x

PITMAN, United States Magistrate Judge:

This matter is before me on the parties'
tion to approve their settlement

joint applica-

( Docket Item ( "D. I.")

31) .

All

parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c).
Plaintiffs allege that they were jointly employed by
MOB Construction Management,

Inc.

("MOB") , a construction com-

pany, and Fine Art Construction & Painting Corporation ("Fine
Art"), a sub-contractor of MDB's.

1

under the Fair Labor Standards Act

1

/

Plaintiffs bring this action
(the "FLSA"), 29 U.S.C. §§ 201

According to plaintiffs, MOB and Fine Art each controlled
certain aspects of their employment such that both defendants
exercised "formal control."
Plaintiffs claim that Fine Art
specifically recruited them to work on a project for MOB and that
they received their salaries from Fine Art, but that MOB had the
power to hire and fire them, supervised their day-to-day work and
set their work schedules.
See generally Goldberg v. Whitaker
House Co-op., Inc., 366 U.S. 28, 32 (1961) (setting forth the
factors to be considered in determining whether a person is an
"employer" within the meaning of the FLSA).

et

.§_§_g.,

and the New York Labor Law (the "NYLL"), and seek to

recover unpaid minimum wage and overtime premium pay.

Plaintiffs

also assert claims based on defendants' alleged breach of an
agreement to pay plaintiffs an hourly rate of $31.25 and defendants' failure to pay plaintiffs on a weekly basis as required
for "manual workers."

See N. Y. Lab. Law

§

191 (a).

MOB argues that plaintiffs were employees of Fine Art,
not MOB, and that MOB did not supervise plaintiffs, did not have
the power to hire or fire plaintiffs and did not set their rate
of pay.

MOB has asserted several cross-claims against Fine Art

for breach of contract and seeks $104,530.16 in damages from Fine
Art.

To date, Fine Art has not answered plaintiffs' complaint

and has not participated in this litigation in any way.

Plain-

tiffs intend to dismiss their claims without prejudice against
Fine Art so that they can re-file those claims at a later time.
I held a lengthy settlement conference on January 26,
2017 that was attended by the parties and their counsel, with the
exception of Fine Art.

Although a settlement was not reached at

the conclusion of the conference, the parties and I engaged in a
protracted discussion of the strengths and weaknesses of the
parties' respective positions, and the parties agreed to continue
negotiations.

On May 19, 2017, I received a letter informing me

that plaintiffs and MOB had agreed to settle plaintiffs' claims

against MOB (Letter of Abdul K. Hassan, Esq., to the undersigned,

2

dated May 19, 2017

(O.I. 25)).

On November 30, 2017,

I received

the settlement agreement and the parties' joint application for
court approval of the settlement (Letter of Abdul K. Hassan,
Esq., to the undersigned, dated Nov. 30, 2017
2017 Letter")).

(D.I. 26)

("Hassan

The parties agreed to resolve the matter for

$20,000 -- with $2,500 being paid to each of the four plaintiffs
and the remaining $10,000 being paid to plaintiffs' counsel as
attorneys' fees and costs (Hassan 2017 Letter, Ex. 1-4) . 2
I was unable to approve the settlement at that time
because (1) although the plaintiffs each alleged substantially
different damage amounts, each was being awarded the sum of
$2,500 without explanation and (2) plaintiff's counsel requested
almost half of the total settlement for attorneys' fees and
costs.

See Singh v. MOB Constr. Mgmt., Inc., 16 Civ. 5216 (HBP),

2018 WL 2 3 3 2 0 71

( S. 0. N. Y. May 2 3, 2018) .

On June 24, 2018, the parties submitted a revised
settlement agreement, and advised me that they had modified it to
conform to my earlier Opinion and Order (Letter of Abdul K.
Hassan, Esq., to the undersigned, dated June 24, 2018
("Hassan June 2018 Letter")).

(O.I. 29)

Under the revised agreement, MOB

agreed to pay a total amount of $20,000.01 -- $3,399.49 to be

2

The parties provided separate written settlement agreements
for each of the four plaintiffs, attached to the Hassan 2017
Letter as Exhibits 1, 2, 3 and 4, respectively.
The material
provisions of each of the agreements were identical.
3

paid to plaintiff Jaswant Singh,
tiff Jatinder Singh,

$3,432.30 to be paid to plain-

$3,180.53 to be paid to Amrik Singh,

$2,974.68 to be paid to plaintiff Varinderpal Singh and $7,013.01
to be paid to plaintiffs' counsel as attorneys'
(Hassan June 2018 Letter, Exs.

1-4).

fees and costs

Although plaintiffs'

counsel properly revised his requested attorneys'

fee to

$6,493.01, i-~-, one-third of the total settlement amount after
the deduction of out-of-pocket costs,

I was still unable to

approve the revised settlement agreement because each plaintiff's
share of the net settlement amount bore no relationship to each
plaintiff's pro rata share of the total amount of damages without
explanation or justification.
Inc.,

16 Civ.

5216

(HBP),

See Singh v. MOB Constr. Mgmt.,

2018 WL 6920698

(S.D.N.Y. Nov.

15,

2018) .
On December 14, 2018, the parties submitted the proposed settlement agreement currently before me,

claiming to have

revised it in accordance with my November Opinion and Order
(Letter of Abdul K. Hassan, Esq., to the undersigned, dated Dec.
14, 2018

(D.I.

31)

("Hassan Dec. 2018 Letter")).

Under the

proposed agreement, MOB agrees to pay a total amount of
$20,000.00 -- $3,896.10 to be paid to plaintiff Jaswant Singh,
$4,025.97 to be paid to plaintiff Jatinder Singh,
paid to Arnrik Singh,

$3,180.53 to be

$2,974.68 to be paid to plaintiff

Varinderpal Singh and $5,922.72 to be paid to plaintiffs' counsel

4

as attorneys' fees and costs

(Hassan Dec. 2018 Letter at 2).

In

essence, plaintiffs' counsel reduced his requested attorneys' fee
from $6,493.01 to $5,922.72 to allow for plaintiff Jaswant Singh
and plaintiff Jatinder Singh to receive a more equitable share of
the $14,077.28 net settlement amount
1).

(Hassan Dec. 2018 Letter at

Thus, based on the amount claimed by each plaintiff,

3

each

plaintiff's equitable pro rata share of the total claimed damages
and the percentage of the net settlement amount each will receive
are as follows:
Percentage
Received
Under the
Settlement

Plaintiff

Amount
Claimed

Share of
Total
Damages

Jaswant Singh

$13,723.44

30%

27%

Jatinder Singh

$14,224.06

31%

2 9%

Arnrik Singh

$10,382.81

23%

23%

$7,242.19

16%

21%

Varinderpaul Singh
Total

$45,572.50

Although there is still some discrepancy between the
percentages each plaintiff will receive, the revised distribution
"bear[s] a rational relationship to the amount claimed by each
plaintiff," and plaintiff's counsel explained that any further
reduction in plaintiff Arnrik Singh's or plaintiff Varinderpal

3

The amount claimed by each plaintiff includes unpaid wages,
exclusive of liquidated damages (Hassan 2017 Letter at 1-2).
5

Singh's already agreed upon share "may jeopardize the entire
settlement"

(Hassan Dec. 2018 Letter at 1).

Country Chicken, LLC,

16 Civ. 2916

* 1 ( S. D. N. Y. Aug. 11, 201 7)

See Flores v. Hill

(AT) (HBP),

2017 WL 3448018 at

(Pitman, M. J. ) .

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,
(S.D.N.Y. Apr.

12 Civ.

4, 2013)

(Baer,

960

(HB),

D.J.)

2013 WL 1401887 at *l

(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."
2d 362, 365

Lliguichuzhca v. Cinema 60, LLC,

(S.D.N.Y. 2013)

tion marks omitted).
Supp. 2d 332,

(Gorenstein, M.J.)

948 F. Supp.

(internal quota-

In Wolinsky v. Scholastic Inc.,

900 F.

335 (S.D.N.Y. 2012), the Honorable Jesse M.

United States District Judge,

Furman,

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
6

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).

The settlement here satis-

fies these criteria.
First, plaintiffs' net settlement -- $14,077.28 after
attorneys' fees -- represents approximately 31% of their total
alleged damages.

This percentage is reasonable.

Cassway Contracting Corp., 16 Civ. 3502
*2

(S.D.N.Y. Oct. 18, 2017)

See Redwood v.

(HBP), 2017 WL 4764486 at

(Pitman, M.J.)

(net settlement of

29.1% of FLSA plaintiffs' maximum recovery is reasonable);
Chowdhury v. Brioni America, Inc., 16 Civ. 344
5953171 at *2

(S.D.N.Y. Nov. 29, 2017)

(HBP), 2017 WL

(Pitman, M.J.)

(net

settlement of 40% of FLSA plaintiffs' maximum recovery is reasonable); Felix v. Breakroom Burgers
2016 WL 3791149 at *2

&

Tacos, 15 Civ. 3531

(S.D.N.Y. Mar. 8, 2016)

(PAE),

(Engelmayer, D.J.)

(net settlement of 25% of FLSA plaintiff's maximum recovery is
reasonable).
Second, the settlement will entirely avoid the expense
and aggravation of litigation.

The factual and legal issues in

this matter would have led to protracted and costly litigation,
likely involving multiple depositions and extensive document
discovery.

The settlement avoids this burden.

Third, the settlement will enable plaintiffs to avoid

7

the risk of litigation.

The main factual dispute in this case is

whether plaintiffs were employees of MOB.

MOB claimed that it

did not supervise plaintiffs, did not have the power to hire or
fire plaintiffs and did not set their rate of pay.

Given these

defenses and the fact that plaintiffs bear the burden of proof,
it is uncertain whether, or how much, plaintiffs would recover at
trial.
Fourth, because I presided over the settlement conference that preceded the parties' settlement agreement, 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.
Fifth, there are no factors here that suggest the
existence of fraud.
Plaintiffs also agree in the settlement to release
their wage-and-hour claims against MOB.

I find this release

permissible because it is narrowly tailored to wage-and-hour
issues.

See Redwood v. Cassway Contracting Corp., supra, 2017 WL

4764486 at *3 (release of defendants "from any and all wage and
hour and/or notice claims" that could have been brought permissible "because it is limited to claims relating to wage and hour
issues"); Yunda v. SAFI-G, Inc., 15 Civ. 8861 (HBP), 2017 WL
1608898 at *3 (S.D.N.Y. Apr. 28, 2017)

(Pitman, M.J.)

(release

that is "narrowly-tailored to plaintiffs' wage-and-hour claims"

8

permissible); see also Santos v. Yellowstone Props.,
Civ. 3986
2016)
8706

(PAE),

2016 WL 2757427 at *1, *3

( Engelmayer,
(AJN),

(Nathan,

D. J. ) ; Hyun v.

Inc.,

(S.D.N.Y. May 10,

Ippudo USA Holdings,

2016 WL 1222347 at *3-*4

15

14 Ci v.

(S.D.N.Y. Mar. 24,

2016)

D.J.).
Finally, the proposed settlement agreement provides

that $520 will be paid to plaintiffs' counsel for out-of-pocket
costs and $5,402.72 will be paid to plaintiffs' counsel as a
contingency fee

(Hassan Dec. 2018 Letter at 1-2).

Plaintiffs'

counsel's request for $520 for filing fees and service fees is
reasonable,
Plan v.

and I approve it.

See Nat'l Integrated Grp.

Dunhill Food Equip. Corp.,

887222 at *10
adopted at,

(E.D.N.Y. Jan.

2014 WL 883893

6,

11 Civ. 3652

2014)

(MKB),

Pension

2014 WL

(Report & Recommendation),

(E.D.N.Y. Mar.

6,

2014)

("Filing fees

and service of process are specifically included in the statute,
and therefore plaintiffs here may recover them."),

u.s.c.

citing 28

§ 1920.
I also find plaintiff's counsel's request for $5,402.72

-- less than one-third of the total settlement after the deduction of approved costs
contingency fee.

to be a reasonable and appropriate

See Santos v. EL Tepeyac Butcher Shop Inc., 15

Civ. 814

(RA),

2015 WL 9077172 at *3

(S.D.N.Y.

Dec. 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

9

fees except in extraordinary circumstances."), citing Zhang v.
Lin Kumo Japanese Rest. Inc., 13 Civ.
at *4

(S.D.N.Y. Aug. 31, 2015)

v. CVS Pharm.,

(JMF), 2014 WL 1100135 at *3

(Furman, D.J.); Rangel v.

Meat & Produce Corp., 13 CV 3234
(E.D.N.Y. Sept. 19, 2013)

(PAE), 2015 WL 5122530

(Engelmayer, D.J.) and Thornhill

Inc., 13 Civ. 507

(S.D.N.Y. Mar. 20, 2014)

6667

639 Grand St.

(LB), 2013 WL 5308277 at *1

(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").

Thus, plain-

tiff's counsel is awarded $5,402.72 as a contingency fee and $520
in out-of-pocket costs, for a total of $5,922.72.
Accordingly, for all the foregoing reasons,
the settlement in this matter.

I approve

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
January 22, 2019
SO ORDERED

r

HENRY PITMAN
United States Magistrate Judge
Copies transmitted to:
All Counsel

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