Li v. Hiro Sushi at Ollie's Inc. et al
OPINION AND ORDER: I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice (except as to defendant Phelan) and without costs. The Clerk of the Court is respectfully requested to mark this matter closed, and as further set forth herein. (Signed by Magistrate Judge Henry B. Pitman on 10/25/2017) Copies Transmitted By Chambers. (ras)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DATE Fl-f.-ED_:_IO_f_1..:._5_/_1 .
16 Civ. 6800
HIRO SUSHI AT
OLLIE'S INC. , et al. ,
PITMAN, United States Magistrate Judge:
This matter is before me on the parties' joint application to approve their settlement (Docket Item ("D. I.")
parties, with the exception of defendant Christopher J. Phelan
("Phelan") , 1 have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C.
The plaintiff and defendants other than Phelan (the
"Settlement Defendants"), reached a proposed settlement agreement
shortly after a mediation session was held and before I could
schedule a settlement conference.
Therefore, my knowledge of the
Plaintiff alleges that Phelan is the "principal or
majority shareholder" of defendants Hiro Sushi at Ollie's
Incorporated, 160 Restaurant Concepts LLC, and Freedom Place Rest
Plaintiff served Phelan with a summons and complaint at
Phelan's actual place of business on September 6, 2016; it was
accepted by defendant Cindy Rong, an employee of Phelan's
(Affidavit of Service of Summons and Complaint, dated September
13, 2016 (D.I. 12)).
Phelan has failed to make an appearance or
file an answer in this case.
underlying facts and the justification for the settlement is
limited to the complaint and counsels' representations in their
motion seeking settlement approval
(Complaint, dated Aug. 30,
2016 (D.I. 1); Letter of John Troy to the undersigned, dated Feb.
("Troy Letter"), Ex. 1).
Plaintiff formerly worked as a deliveryman at defendants' two restaurants from approximately January 2015 until his
termination on April 10, 2016.
Plaintiff brings this action
under the Fair Labor Standards Act
(the "FLSA"), 29 U.S.C.
et al., and the New York Labor Law ("NYLL"), and seeks to recover
allegedly unpaid minimum wage, overtime pay, spread-of-hours pay,
equipment costs, misappropriated meal credits and penalties for
failure to provide wage statements and notices under the NYLL.
Plaintiff brought the action as a collective action, but reached
a proposed settlement with the Settlement Defendants prior to
Plaintiff claims that, throughout the course of his
employment with defendants, defendants knowingly and willfully
paid him less than the minimum wage. 2
Moreover, plaintiff al-
Plaintiff alleges that when he began working for
defendants around January 2015, he was paid $5.65 an hour.
Plaintiff alleges that he was paid at an hourly rate of $7.00
beginning May 1, 2015 until September 2015.
that his hourly rate dropped to $6.00 on October 1, 2015, and to
(continued ... )
leges that defendants took unlawful "meal credit" deductions from
his wages in order to make a profit and unlawfully took a tip
Exclusive of liquidated damages and penalties for
statutory violations, plaintiff claims that he is entitled to
$21,861.25 (Troy Letter, Ex. 2).
However, plaintiff's counsel
erred in calculating plaintiff's damages.
The FLSA and NYLL are
compensatory in nature and, therefore, plaintiff's actual damages
are measured by the difference between the hourly rate plaintiff
actually received and the greater of the state or federal minimum
Chowdhurry v. Hamza Exp. Food Corp., No. 14-CV-150 (JBW),
2015 WL 5541767 at *6 n.7
(E.D.N.Y. Aug. 21, 2015)
("In order to
avoid double recovery of damages, courts generally do not award
damages under both federal and state law for the same hours
In addition, a successful plaintiff in an action
alleging violation of the FLSA and NYLL is entitled to recover
liquidated damages under one statute or the other, but not under
Chowdhurry v. Hamza Exp. Food Corp., supra, 2015 WL
5541767 at *8.
When this correction to plaintiff's damages
calculations is made, plaintiff's actual damages for minimum
( • • • continued)
$5.00 on January 1, 2016.
He was paid
hour until April 10, 2016, when he was
and New York State hourly minimum wage
and $8.75, respectively.
In 2016, New
rose to $9.00 an hour.
at the rate of $5.00 per
rates in 2015 were $7.25
York State minimum wage
wage, overtime and spread-of-hour violation, exclusive of liquidated damages, are $14,533.00.
Defendants deny plaintiff's allegations.
the defendants argue that plaintiff was paid for all hours that
he worked and was exempt from the FLSA and the NYLL.
defendants argue that they are not "employers" within the meaning
of the FLSA or the NYLL.
Finally, defendants claim that they
kept time records and provided the notices required by the NYLL.
The parties have agreed to a total settlement of
The parties have also agreed that $1,075.00 of the
settlement figure will be allocated to reimburse plaintiff's
counsel for their out-of-pocket costs,
mately 33%) of the remaining $10,925.00 will be paid to plaintiff's counsel as fees and the remaining $7,283.33 will be paid
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 settle3
Settlement Defendants do not explain why plaintiff is
exempt from the FLSA and/or the NYLL.
The bulk of plaintiff's counsel's out-of-pocket costs are
attributable to service fees.
Plaintiff had to serve nine
defendants (Troy Letter, Ex. 1)
ment." 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
(S.D.N.Y. Apr. 4, 2013)
(HB), 2013 WL 1401887 at *1
(alterations in original)
"Generally, there is a strong presumption in favor of finding a
[because] the Court is generally not in as good
a position as the parties to determine the reasonableness of an
Lliguichuzhca v. Cinema 60, LLC,
2d 362, 365 (S.D.N.Y. 2013)
tion marks omitted).
948 F. Supp.
"Typically, courts regard the adversarial
nature of a litigated FLSA case to be an adequate indicator of
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, supra,
679 F.2d at 1353-54.
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 bar5
gaining 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 net settlement amount, after
deduction of costs and legal fees,
represents roughly half (or
50.1%) of plaintiff's allegedly unpaid minimum wage, overtime pay
and spread-of-hour pay, that fact does not render it deficient.
Defendants allegedly kept records of the hours plaintiff worked.
Additionally, defendants argue plaintiff was exempt from the
minimum wage and overtime pay provisions of the FLSA and NYLL.
As discussed in further detail below, given the risks these
issues present, the settlement amount is reasonable.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.
The settlement was
reached prior to any extensive documentary discovery, depositions
and dispositive motions.
The settlement avoids the necessity of
undertaking these tasks.
Third, the settlement will enable plaintiff to avoid
the risks of litigation.
As noted above, defendants contend that
plaintiff was compensated appropriately.
argue that plaintiff was an exempt employee and, therefore, not
entitled to minimum wage and/or overtime pay.
ently documented the number of hours that plaintiff worked.
Thus, how much, or whether, plaintiff would recover at trial is
far from certain.
See Bodon v. Domino's Pizza, LLC, No. 09-CV-
2941 (SLT), 2015 WL 588656 at *6 (E.D.N.Y. Jan. 16, 2015)
(" [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 repre-
sents a reasonable one in light of the many uncertainties the
(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. 20,
(" [W] hen a settlement assures immediate payment of substan-
tial amounts to class members, even if it means sacrificing
speculative payment of a hypothetically larger amount years down
the road, settlement is reasonable .
Fourth, counsel represents that the settlement is the
product of arm's-length bargaining between experienced counsel
and that counsel advocated zealously on behalf of their respective clients during negotiations.
Fifth, there are no factors here that suggest the
existence of fraud.
The material terms of the settlement were
agreed upon at the end of a mediation session.
This fact further
negates the possibility of fraud or collusion.
The settlement agreement also contains a mutual release.
It provides that plaintiff releases "defendants from
federal and New York state wage and hour claims, which plaintiff
has been [sic] alleged in the Complaint or which could have been
alleged in the same against defendants.
This release is limited
solely and only to claims that have arisen on, or prior to, the
date this Agreement is executed and transmitted .
Letter, Ex. 1
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