Williams v. 74th Street Magic, LLC et al

Filing 26

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 Court shall retain jurisdiction to enforce the settlemen t 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 in this order. (Signed by Magistrate Judge Henry B. Pitman on 10/24/2017) (ap)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-----------------------------------x
LINDA WILLIAMS, individually and
on behalf of all others similarly
situated,
16 Civ.

9834

(HBP)

Plaintiffs,
OPINION
AND ORDER

-againstMAGIC MANAGEMENT, LLC d/b/a 74th
STREET MAGIC, LLC and WENDY LEVEY,
Defendants.

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

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

(Docket Item ( "D. I.")

2 5) .

All parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c).
Plaintiff Linda Williams alleges that from approximately 1999 through 2015, she worked in defendants' nursery
school as a non-exempt teacher.
Fair Labor Standards Act

The action is brought under the

(the "FLSA"), 29 U.S.C. §§ 201 et

.§Sill.,

and the New York Labor Law for allegedly unpaid overtime premium
pay.

Plaintiff also asserts claims based on defendants' alleged

failure to provide certain notices as required by the Labor Law.

The parties reached their proposed settlement before
the Honorable Kevin Nathaniel Fox, United States Magistrate
Judge, and therefore, my knowledge of the underlying facts and
the justification for the settlement is limited to the parties'
pleadings, the ex parte letters the parties submitted to Judge
Fox in advance of the settlement conference and counsels' representations in the letter submitted in support of settlement
approval.

Plaintiff asserts that when she was employed by

defendants,

she worked five days a week, between 45 and 50 hours

per week, and that defendants paid her the same amount for all
hours worked.

Plaintiff alleges that she is owed $11,437.50 in

unpaid overtime wages as well as liquidated damages and attorney's fees.

Defendants deny plaintiff's allegations and assert

that they have records that demonstrate that plaintiff did not
work as many hours as she claims in her Amended Complaint.
Defendants also assert that plaintiff took thirty-minute meal
breaks each day during which she was not working.
The parties have agreed to a total settlement of
$10,000.00.

The parties have also agreed that $540.49 of the

settlement figure will be allocated to reimburse plaintiffs'
counsel for their out-of-pocket costs, $3,153.17

(or one-third)

of the remaining $9,459.51 will be paid to plaintiff's counsel as
fees and the remaining $6,306.34 will paid to plaintiff (see
2

Letter from Gennadiy Yaydenskiy, Esq. to the Undersigned, dated
June 26, 2017

(D.I. 25)

("Yaydenskiy Letter"); Settlement Agree-

ment and General Release, annexed as Ex. A to Yaydenskiy Letter
("Settlement Agreement")).
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 Is Food Stores
Inc. v. United
States, 679 F.2d 1350, 1353 n.8 (11th Cir. 1982)).
r

Agudelo v. E & D LLC, 12 Civ.
(S.D.N.Y. Apr.

4, 2013)

960

(Baer,

(HB),

D.J.)

2013 WL 1401887 at *1

(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).

(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.
Stores,

467,

476

(S.D.N.Y. 2013)

Beckman v. KeyBank, N.A.,

293

(Ellis, M.J.), citing Lynn's Food

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.

The parties are represented by
3

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.,

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.
(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 55.1% of the plaintiff's estimated 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.

4

The case settled early on

in the litigation, before the conclusion of the discovery period.
Settlement avoids the necessity of completing discovery, preparing and filing dispositive motions and preparing for a trial.
Third, the settlement will enable plaintiff to avoid
the risks of litigation.

As noted above, defendants argue that

plaintiff has exaggerated the number of hours that she worked.
Plaintiff, therefore, faces the risk that a fact finder may
credit defendants' assertions and their documentary evidence.
Thus, whether and how much plaintiff would recover at trial is
far from certain.
2941
&

See Bodon v. Domino's Pizza, LLC, No. 09-CV-

(SLT), 2015 WL 588656 at *6 (E.D.N.Y. Jan. 16, 2015)

Recommendation)

(Report

(" [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
class faces .

II

(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,
No. ll-cv-05669
2012)

(BMC), 2012 WL 5874655 at *5

Inc.,

(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

5

the road, settlement is reasonable .

"

(internal quotation

marks omitted)).
Fourth, because Judge Fox 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 counsel.
Fifth, there are no factors here that suggest the
existence of fraud or collusion.

The settlement was reached

after a mediation before the Court, further negating the possibility of fraud or collusion.
The settlement agreement also contains a release
(Settlement Agreement

~

5).

However, it is permissible because

it is limited to the wage-and-hour claims at issue in this
action.

Boyle v. Robert M. Spano Plumbing & Heating,

Civ. 2899 (KMK), 2016 WL 1688014 at *3

Inc., 15

(S.D.N.Y. Apr. 27, 2016)

(Karas, D.J.); Ocasio v. Big Apple Sanitation, Inc., No. 13 CV
04758

(CBA) (LB), 2016 WL 5376241 at *2

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

(Report & Recommendation), adopted b.y, 2016 WL 5390123

(E.D.N.Y.

Sept. 26, 2016); Martinez v. Gulluoglu LLC, 15 Civ. 2727
2016 WL 206474 at *2

(S.D.N.Y. Jan. 15, 2016)

(PAE),

(Engelmayer, D.J.)

The agreement also contains a mutual non-disparagement
clause (Settlement Agreement

~

9).

However, it states that

plaintiff "will be permitted to disclose her claims asserted in
6

[this litigation] and her experience in the litigation"
ment Agreement

9).

~

(Settle-

A non-disparagement clause in an FLSA

settlement that includes such a carve-out for truthful statements
regarding the facts underlying the case is permissible.
Lopez v. Nights of Cabiria, LLC,
(S.D.N.Y. 2015)

16 Civ. 5060 (JLC),

(S.D.N.Y. Feb. 28, 2017)

2016)

96 F. Supp. 3d 170, 180 n.65

(Kaplan, D.J.); accord Howard v. Don Coleman

Advertising Inc.,

15 Civ. 8167

See

2017 WL 773695 at *2

(Cott, M.J.); Weng v. T&W Rest.,

(PAE) (BCM), 2016 WL 3566849 at *4

(Moses, M.J.); see Lopez v. Ploy Dee,

(AJN), 2016 WL 1626631 at *3

Inc.,

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

Inc., 15 Civ.

(S.D.N.Y. Apr. 21, 2016)

647

(Nathan,

D.J.).
As noted above, the settlement agreement also provides
that, after deduction of counsel's out-of-pocket costs, approximately 33% of the remaining settlement amount will be paid to
plaintiff's 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.

6667

(PAE), 2015 WL 5122530 at *4
7

(S.D.N.Y.

Aug. 31, 2015)

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

Inc., 13 Civ. 507
2014)

(JMF), 2014 WL 1100135 at *3

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

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

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

639 Grand St. Meat

&

Produce

(LB), 2013 WL 5308277 at *l (E.D.N.Y. Sept.

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

ment amount, plus costs, pursuant to plaintiffs' retainer agreement, and noting that such a fee arrangement "is routinely
approved by courts in this Circuit"); Febus v. Guardian First
Funding Grp., LLC, 870 F. Supp. 2d 337, 340
(Stein, D. J. )

(S.D.N.Y. 2012)

(" [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. 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.

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 24, 2017
SO ORDERED

United States Magistrate Judge
Copies transmitted to:
All Counsel

9