Alberto Nicolas et al v. 701 Deli Inc. et al
Filing
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OPINION AND ORDER: The Court will not approve the Agreement as currently written. The parties may proceed in one of the following ways: 1. File a revised settlement agreement on or before October 30, 2019 that relates any class action or other releas e to the factual predicate of this lawsuit, and that removes or tailors the release provisions as described in this Order; 2. File a joint letter on or before October 30, 2019 that indicates the parties' intention to abandon settlement and conti nue to trial, at which point the Court will reopen the case and set down a date for a pre-trial conference; or 3. Stipulate to dismissal of the case without prejudice, which the Court need not approve under current Second Circuit case law. See Cheeks, 796 F.3d at 201 n.2. It is SO ORDERED. (Signed by Judge Edgardo Ramos on 10/17/2019) (kv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
MANUEL ALBERTO NICOLAS, individually
and on behalf of others similarly situated,
Plaintiff,
– against –
OPINION AND ORDER
16 Civ. 7699 (ER)
701 DELI INC. (d/b/a 701 DELI), FOUAD
HIZAM MUSAID, ABDULLAH MUSAID, and
MAKI DOE,
Defendants.
Ramos, D.J.:
On September 30, 2015, plaintiff Manuel Alberto Nicolas brought the above-captained
action against 701 Deli Inc. (d/b/a 701 Deli), Fouad Hizam Musaid, Abdullah Musaid, and Maki
Doe (collectively, “Defendants”) for failure to pay overtime compensation, failure to pay
overtime premiums, failure to pay a wage higher than the statutory minimum, and failure to
furnish accurate wage statements and notices in violation of the Fair Labor Standards Act
(“FLSA”) and New York Labor Law (“NYLL”). Doc. 1. Nicolas has submitted an application
for the Court to approve the parties’ Settlement Agreement (the “Agreement”). Doc. 70. For the
reasons set forth below, the application is DENIED.
In this Circuit, parties cannot privately settle FLSA claims with prejudice absent the
approval of the district court or the Department of Labor. See Cheeks v. Freeport Pancake
House, Inc., 796 F.3d 199, 200 (2d Cir. 2015). �e parties therefore must satisfy the Court that
their agreement is “fair and reasonable.” Beckert v. Ronirubinov, No. 15 Civ. 1951 (PAE), 2015
WL 8773460, at *1 (S.D.N.Y. Dec. 14, 2015).
In determining whether the proposed 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.
Felix v. Breakroom Burgers & Tacos, No. 15 Civ. 3531 (PAE), 2016 WL 3791149, at *2
(S.D.N.Y. Mar. 8, 2016) (quoting Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y.
2012)).
I.
THE SETTLEMENT AMOUNT AND FEES
�e Agreement provides for a total settlement of $50,000. Agreement ¶ 1. �e Court is
satisfied that the parties have adequately justified the dollar amounts constituting the settlement.
Counsel’s estimated range of recovery was about $143,000. Doc. 70 at 2. Although the
settlement is only about one-third of the maximum recovery, Nicolas’ counsel indicates that
“conflicting evidence, the quality of the evidence and counsel and the allocation of the burden of
proof on” Nicolas together suggest that this settlement is fair and reasonable. Doc. 70 at 3. �e
Court agrees, especially in light of the fact that the parties were prepared to go to trial within a
week of when they reported a settlement in principle to the Court.
Regarding the reasonableness of attorneys’ fees requested, the Court looks to “the
lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by
the case–which creates a presumptively reasonable fee.” Zhang v. Lin Kumo Japanese Rest.,
Inc., No. 13 Civ. 6667 (PAE), 2015 WL 5122530, at *2 (S.D.N.Y. Aug. 31, 2015) (quoting
Stanczyk v. City of New York, 752 F.3d 273, 284 (2d Cir. 2014)). Under the proposed settlement
agreement, Nicolas’ attorneys will retain $16,666.67 — one-third of the total settlement amount.
In line with the requirements for FLSA settlement approval in this Circuit, Nicolas’ counsel has
submitted billing records detailing the type of work performed and hours logged by each attorney
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or staff member in this matter so that the Court may calculate reasonable fees under the
“lodestar” method. See Garcia v. Jambox, Inc., No. 14 Civ. 3504 (MHD), 2015 WL 2359502, at
*6 (S.D.N.Y. Apr. 27, 2015) (“In this circuit, a proper fee request entails submitting
contemporaneous billing records documenting, for each attorney, the date, the hours expended,
and the nature of the work done. �at requirement extends to parties seeking approval of a
settlement that allocates a portion of the proceeds to the attorney.” (internal quotation marks and
citations omitted)); see also Beckert, 2015 WL 8773460, at *2 (evaluating the reasonableness of
plaintiff’s request for fees of one-third of the settlement amount by reviewing the reasonable
hours worked multiplied by reasonable hourly rates, i.e. the lodestar method).
Here, Plaintiff’s counsel’s lodestar calculation is $8745.00 and $1366.00 in costs for a
total of $10,111.00. Doc. 70, Ex. 3. �is work includes drafting court documents, calculating
damages, attending mediation, trial preparation, and settlement negotiations. �e total amount of
hours billed by all individuals is 29.95 hours. Id. �e Court is satisfied with the billing rates that
counsel assigned to each biller and the number of hours spent for each task. 1 Based on these
sums, the Court finds that the requested attorneys’ fees and costs of $16,667, one-third of the
settlement, are objectively reasonable.
II.
THE RELEASE PROVISIONS
�e Agreement, however, contains a provision preventing Nicolas from “opt[ing]-in to
any current or future lawsuit against Defendants alleging violations of the FLSA and [requiring
him to] also affirmatively opt-out of any current or future lawsuit against Defendants alleging
violations of the New York Labor law.” Agreement ¶ 6(b). Although class action releases in this
�e lodestar amount was calculated at a rate of $400 an hour for attorney Michael Faillace, $175 an hour for
attorney Sara Isaacson, $350 an hour for attorney Paul Hershan, $200 an hour for attorney Marisol Santos, and $100
an hour for “PL” (presumably a paralegal), who performed miscellaneous research.
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