Mata et al v. Riverdale Car Wash & Detail Center, Inc. et al

Filing 21

OPINION AND ORDER re: #20 LETTER addressed to Magistrate Judge Henry B. Pitman from Roman Avshalumov dated August 18, 2017 re: Parties' Request for Approval of the Revised Settlement Agreement. I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs. The Court shall retain jurisdiction to enforce the settlement agreement. See Hendrickson v. United States, 791 F.3d 354, 358 (2d Cir. 2015). 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 10/23/2017) Copies Transmitted By Chambers. (ras)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-----------------------------------x
OBDULIO ANTONIO CONTRERAS MATA,
RAFAEL AVILES PINEDA and FELIX
LOPEZ, individually and on behalf
of all others similarly situated,

16 Civ. 9100

(HBP)

OPINION
AND ORDER

Plaintiffs,
-againstRIVERDALE CAR WASH & DETAIL
CENTER, INC. d/b/a RIVERDALE CAR
WASH, MVP CAR WASH, LLC d/b/a
MVP CAR WASH, and PETER DELLA
MURA and SALVADOR DELLA MURA,
as individuals,
Defendants.

-----------------------------------x
PITMAN, United States Magistrate Judge:

This matter is before me on the parties'
tion to approve the their settlement agreement
("D.I.") 20).

joint applica-

(Docket Item

All parties have consented to my exercising

plenary jurisdiction pursuant to 28 U.S.C. § 636(c).
This is an action brought by three individuals who were
employed as car washers at defendants' car wash and detail shops
and seeks allegedly unpaid minimum wages and overtime premium
pay.

The action is brought under the Fair Labor Standards Act

(the "FLSA"), 29 U.S.C. §§ 201
Law.

et~.,

and the New York Labor

Plaintiffs also assert claims based on defendants' alleged

failure to maintain certain payroll records and to provide
certain notices as required by the Labor Law.
Each of the three plaintiffs worked for the defendants
for at least two years and each alleges that he worked approximately sixty hours per week, was paid a flat hourly rate and was
not paid the overtime premium rate for hours worked in excess of
forty hours each week.

Plaintiff Mata also alleges that his

hourly rate fell below the minimum wage during a 17-month period
of his employment, and plaintiff Lopez alleges that his hourly
rate fell below the minimum wage during the entire course of his
employment.

Defendants dispute plaintiffs' allegations.

De fen-

dants also argue that their businesses do not meet the
$500,000.00 gross sales threshold for enterprise coverage under
the FLSA.

They also argue that plaintiffs have exaggerated the

number of hours they worked and that defendants are entitled to a
tip credit which, when added to plaintiffs' wages, establish that
plaintiffs were paid the wages to which plaintiffs were legally
entitled.

Defendants also assert that they can produce witnesses

who will verify the amount of tips collected and the amount of
hours worked by plaintiffs.
I held a lengthy settlement conference with counsel and
the parties on April 24, 2017 that was attended by the parties
and their counsel.

After a protracted discussion of the
2

strengths and weaknesses of the parties' respective positions,
the parties agreed to resolve the dispute for a total amount of
$67,500.00.
The amounts claimed by each of the plaintiffs 1 and the
net amount that each will receive after deduction for legal fees
and costs are as follows:

Amount
Claimed

Net
Allocable
Share

Obdulio Antonio
Contreras Mata

$43,442.07

$15,000.00

Rafael Aviles
Pineda

$28,574.52

$12,460.00

Felix Lopez

$58,384.64

$17,000.00

$130,401.23

$44,460.00

Plaintiff

Total:

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, 12 Civ. 960
(S.D.N.Y. Apr. 4, 2013)

(HB), 2013 WL 1401887 at *1

(Baer, D.J.)

1

(alterations in original)

The amounts claimed are the allegedly unpaid wages,
exclusive of liquidated damages and exclusive of damages for the
Labor Law notice claims.
3

"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).

(Gorenstein, M.J.)

948 F. Supp.

(internal quota-

"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.

The

presumption of fairness in this case is bolstered by the caliber
of the parties' attorneys.

Based upon the submissions of counsel

in this case, it is clear to me that all parties are represented
by counsel who are knowledgeable regarding all issues in the case
and who are well suited to assess the risks of litigation and the
benefits of the proposed settlement.
In Wolinsky v. Scholastic Inc.,
335

900 F. Supp. 2d 332,

(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]
ment is fair and reasonable, a
the totality of circumstances,
ited to the following factors:
range of possible recovery; (2)
4

proposed [FLSA] settlecourt should consider
including but not lim(1) the plaintiff's
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.
(internal quotation marks omitted).

As discussed further below,

the settlement here satisfies the five criteria enumerated above.
First, after deduction of attorney's fees and costs,
the net settlement represents approximately 34.1% of the plaintiffs' estimated unpaid wages.

The amount of the settlement

allocated to plaintiff Mata represents 34.5% of his claimed
unpaid wages, the amount allocated to plaintiff Pineda represents
43.6% of his claimed unpaid wages and the amount allocated to
plaintiff Lopez represents 29.1% of his claimed unpaid wages.
Given the risks of litigation, as discussed in more detail below,
the settlement amount is reasonable.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.

Although the parties have

conducted some discovery, additional discovery will be needed in
order for to prepare for trial.

Settlement avoids the necessity

of conducting additional discovery and preparing for a trial.
Third, the settlement will enable plaintiffs to avoid
the risks of litigation.

As noted above, defendants argue that

their businesses do not meet the jurisdictional threshold for
5

coverage under the FLSA and have indicated that they have testimonial evidence that will establish that plaintiffs worked less
hours and received more tips than they allege.
therefore,

Plaintiffs,

face the risk that a fact finder may credit defen-

dants' arguments or evidence.

Thus, whether and how much plain-

tiffs would recover at trial is far from certain.
Domino's Pizza, LLC, No. 09-CV-2941
(E.D.N.Y. Jan. 16, 2015)

(Report

&

See Bodon v.

(SLT), 2015 WL 588656 at *6
Recommendation)

("[T]he

question [in assessing the fairness of a class action settlement]
is not whether the settlement represents the highest recovery
but whether it represents a reasonable one in

possible

light of the many uncertainties the class faces

" (inter-

nal quotation marks omitted)), adopted sub nom . .Qy, Bodon v.
Domino's Pizza,

Inc., 2015 WL 588680

Massiah v. MetroPlus Health Plan,
2012 WL 5874655 at *5

(E.D.N.Y. Feb. 11, 2015);

Inc., No. 11-cv-05669 (BMC),

(E.D.N.Y. Nov. 20, 2012)

("[W]hen a settle-

ment assures immediate 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, because I presided over the settlement conference that lead to the settlement, I know that the settlement is
the product of arm's-length bargaining between experienced
6

counsel.

Both counsel represented their clients zealously at the

settlement conference.
Fifth, there are no factors here that suggest the
existence of fraud.

The settlement was reached after a mediation

before the Court, further negating the possibility of fraud or
collusion.
The settlement agreement also provides that, after
deduction of $810.00 of counsel's out-of-pocket costs, approximately 33% of the remaining settlement amount will be paid to
plaintiffs' counsel as a contingency fee.

Contingency fees of

one-third in FLSA cases are routinely approved in this circuit.
See Santos v. EL Tepeyac Butcher Shop Inc., 15 Civ. 814
2015 WL 9077172 at *3 (S.D.N.Y. Dec. 15, 2015)

(RA),

(Abrams, D.J.)

("[C]ourts in this District have declined to award more than one
third of the net settlement amount as attorney's fees except in
extraordinary circumstances."), citing Zhang v. Lin Kumo Japanese
Rest.

Inc., 13 Civ.

Aug. 31, 2015)

(PAE), 2015 WL 5122530 at *4

(JMF), 2014 WL 1100135 at *3

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

Corp., No. 13 CV 3234
19, 2013)

(S.D.N.Y.

(Engelmayer, D.J.) and Thornhill v. CVS Pharm.,

Inc., 13 Civ. 507
2014)

6667

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

639 Grand St. Meat & Produce

(LB), 2013 WL 5308277 at *1

(E.D.N.Y. Sept.

(approving attorneys' fees of one-third of FLSA settle-

ment amount, plus costs, pursuant to plaintiffs' retainer agree7

ment, and noting that such a fee arrangement "is routinely
approved by courts in this Circuit"); Febus v. Guardian First
Funding Grp., LLC,
(Stein, D. J.)

870 F. Supp. 2d 337, 340

("[A]

(S.D.N.Y. 2012)

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. E*TRADE Fin. Corp., 10 Civ. 4030
(LAP) (DCF), 2012 WL 2384419 at *6-*7
(Freeman, M.J.).

(S.D.N.Y. June 22, 2012)

Therefore, the contingency fee is reasonable.

The settlement agreement also contains a mutual release.

The release is permissible because it is limited to the

wage-and-hour claims alleged in this action.
M. Spano Plumbing & Heating,

Inc., 15 Civ. 2899

1688014 at *3 (S.D.N.Y. Apr. 27, 2016)

(E.D.N.Y. Mar. 16, 2016)

adopted 12.y, 2016 WL 5390123

(CBA) (LB), 2016 WL

(Report & Recommendation),

(E.D.N.Y. Sept. 26, 2016); Martinez

v. Gulluoglu LLC, 15 Civ. 2727
(S.D.N.Y. Jan. 15, 2016)

(KMK), 2016 WL

(Karas, D.J.); Ocasio v.

Big Apple Sanitation, Inc., No. 13 CV 04758
5376241 at *2

See Boyle v. Robert

(PAE), 2016 WL 206474 at *2

(Engelmayer, D.J.).

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 Court

shall retain jurisdiction to enforce the settlement agreement.
8

See Hendrickson v. United States, 791 F.3d 354, 358
2015).

(2d Cir.

The Clerk of the Court is respectfully requested to mark

this matter closed.
Dated:

New York, New York
October 23, 2017
SO ORDERED

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

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