Collado v. Apex Supply Co., Inc. et al

Filing 32

OPINION AND ORDER re: 31 LETTER MOTION to Expedite Motion for Settlement Approval addressed to Magistrate Judge Henry B. Pitman from Plaintiff's Counsel Abdul K. Hassan, Esq. dated October 11, 2017, filed by Luis Collado, 30 LETTER. This matter is before me on the parties' joint application to approve their settlement (Docket Item ("D.I.") 30, 31). 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. (Signed by Magistrate Judge Henry B. Pitman on 10/19/2017) Copies Transmitted By Chambers. (ras) Modified on 10/19/2017 (ras).

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UNITED STATES DISTRICT COURT
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-----------------------------------x
LUIS COLLADO,

17 Civ. 727

(HBP)

Plaintiff,
OPINION
AND ORDER

-againstAPEX SUPPLY CO., INC., et. al.,
Defendants.

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

This matter is before me on the parties'
application to approve their settlement
31).

joint

(Docket Item ("D.I.")

30,

All parties have consented to my exercising plenary

jurisdiction pursuant to 28 U.S.C.

§

636(c).

Plaintiff alleges that he was formerly employed by
defendants Apex Supply Corporation ("Apex"), a hardware equipment
and supply retail business, and its shareholders -- Ian Lynch
("Lynch") and Matthew Taragano ( "Taragano") .

Plaintiff seeks to

recover allegedly unpaid overtime wages pursuant to the Fair
Labor Standards Act

(the "FLSA"), 29 U.S.C.

the New York Labor Law (the "NYLL").

§§

201 et

.§.Sill.,

and

Plaintiff also asserts a

claim based on defendants' failure to provide certain notice and
wage statements as required by the NYLL.

Plaintiff commenced

this action as a collective action with respect to the FLSA

claims, but the parties reached a settlement before conditional
certification.
Plaintiff alleges that he was employed by Apex, Lynch
and Taragano from approximately March 2013 until his termination
on January 24, 2017, and that, during that time, he worked
2,758.5 hours of overtime without compensation.

He claims that

his overtime rate of pay was approximately $17.44.

Exclusive of

liquidated or statutory damages, plaintiff claims that he is owed
approximately $44,969.00 in unpaid overtime pay.

Plaintiff

claims that he is entitled to a total of approximately $99,938.00
for unpaid overtime wages, liquidated damages and statutory
damages for alleged violations of the NYLL.
Defendants deny plaintiff's allegations.

Apex contends

that plaintiff worked fewer hours at a lower hourly rate than he
alleges.

Further, Apex argues that it has already paid plaintiff

the overtime wages to which he is entitled and that any overtime
worked by plaintiff for which he was not compensated is de
minimis.

Apex kept detailed hourly worksheets, daily logs, and

calendars that document the number of hours worked by and wages
owed to plaintiff.

Lynch and Taragano argue they were not

plaintiff's employers.
I held a lengthy settlement conference on June 23, 2017
that was attended by the parties and their counsel.
2

After a

protracted discussion of the strengths and weaknesses of the
parties' respective positions, the parties agreed to resolve the
dispute for a total settlement of $30,000 (Letter of Abdul
Hassan, Esq., to the undersigned, dated June 6, 2017
30) ("Hassan Letter"), Ex. 1).

(D.I.

The agreement also provides that

plaintiff's counsel will receive $550.00 for his out-of-pocket
expenses, $9,815.00 (or approximately 33%) of the remaining
$29,450.00 will be paid to plaintiff's counsel as fees and the
remaining $19,635.00 will be paid to plaintiff.
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.)

(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."

Lliguichuzhca v. Cinema 60, LLC,

2d 362, 365 (S.D.N.Y. 2013)
quotation marks omitted).

(Gorenstein, M.J.)

948 F. Supp.

(internal

In Wolinsky v. Scholastic Inc.,

3

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 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 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

satisfies these criteria.
First, plaintiff's net settlement represents
approximately 43.6% of his allegedly unpaid overtime pay.

Apex

disputes the number of hours plaintiff worked and contends that
plaintiff's hourly rate of pay was lower than plaintiff alleges.
Moreover, Apex kept time and wage records detailing how many
hours plaintiff worked and how much compensation he was entitled
to.

As discussed in more detail below, given the risks these

issues present, plaintiff's settlement is reasonable.
Second, the settlement will entirely avoid the expense
and aggravation of litigation.

There is a dispute among the

parties with respect to plaintiff's hourly rate of pay and the

4

number of hours plaintiff actually worked.

Trial preparation

would probably require additional depositions to explore these
issues.

The settlement avoids the necessity of conducting these

depositions.
Third, the settlement will enable the plaintiff to
avoid the risk of litigation.

Apex disputes plaintiff's

entitlement to any unpaid overtime, the rate at which any
overtime should be calculated and the number of hours plaintiff
actually worked.

Apex maintained employee records that allegedly

captured the days plaintiff was absent from work, the number of
hours plaintiff worked and the weekly salary plaintiff was
entitled to.

Given the documentary evidence, it is uncertain

whether, or how much, plaintiff would recover at trial.
Bodon v. Domino's Pizza, LLC, No. 09-CV-2941
at *6 (E.D.N.Y. Jan. 16, 2015)

(Report

&

See

(SLT) 2015 WL 588656

Recommendation)

("[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 represents a reasonable one in

light of the uncertainties the class faces

" (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, 2012)
5

("[W]hen a settlement

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 .

II

(internal quotation marks omitted)).

Fourth, because I presided over the settlement
conference that immediately preceded plaintiff's acceptance of
the settlement, 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.

The settlement was reached at the end of the

settlement conference.

This fact further negates the possibility

of fraud or collusion.
The settlement agreement also contains a release
(Hassan Letter, Ex. 1

~

4).

It provides that plaintiff releases

defendants "from any actions, causes of action, suits,

. in

law or equity, which he may have against Defendants as of the
date of execution of this Agreement, whether known or unknown,
asserted or unasserted, arising out of their wage and/or
wage/hour claims .

II

(Hassan Letter, Ex. 1

~

4).

Although the

release is unlimited in duration and contains both known and
unknown claims, it is permissible because it is limited to claims
6

relating to wage and hour issues.
Inc., 15 Civ. 8861
28, 2017)

See

~.g.,

Yunda v. SAFI-G,

(HBP), 2017 WL 1608898 at *3 (S.D.N.Y. April

(Pitman, M.J.); Santos v. Yellowstone Props., Inc., 15

Civ. 3986 (PAE), 2016 WL 2757427 at *1, *3 (S.D.N.Y. May 10,
2016)

(Engelmayer, D. J.)

(approving release that included both

known and unknown claims and was limited to wage and hour
claims); Hyun v. Ippudo USA Holdings, 14 Civ. 8706 (AJN), 2016 WL
1222347 at *3-*4

(S.D.N.Y. Mar. 24, 2016)

(Nathan, D.J.)

(approving release that included both known and unknown claims
through the date of the settlement that was limited to wage and
hour issues; rejecting other release that included both known and
unknown claims and claims through the date of the settlement that
were not similarly limited); cf. Alvarez v. Michael Anthony
George Constr. Corp., No. 11 CV 1012 (DRH) (AKT), 2015 WL 10353124
at *1 (E.D.N.Y. Aug. 27 2015)

(rejecting release of all claims

"whether known or unknown, arising up to and as of the date of
the execution of this Agreement" because it included "the release
of claims unrelated to wage and hour issues"

(internal quotation

marks omitted)).
Finally, the settlement agreement provides that onethird of the settlement fund, after the deduction of plaintiff's
counsel's out-of-pocket expenses, will be paid to plaintiff's
counsel.

Contingency fees of one-third in FLSA cases are
7

routinely approved in this Circuit.
Shop Inc., 15 Civ. 814
15, 2015)

Santos v. EL Tepeyac Butcher

(RA), 2015 WL 9077172 at *3 (S.D.N.Y. Dec.

(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
2015)

(PAE), 2015 WL 5122530 at *4

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

(Engelmayer, D.J.) and Thornhill v. CVS Pharm., Inc., 13

Civ. 507

(JMF), 2014 WL 1100135 at *3 (S.D.N.Y. Mar. 20, 2014)

(Furman, D.J.); Rangel v. 639 Grand St. Meat & Produce Corp., No.
13-CV-3234

(LB), 2013 WL 5308277 at *1 (E.D.N.Y. Sep. 19, 2013)

(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"); Febus v. Guardian First Funding Grp.,
LLC, 870 F. Supp. 2d 337, 340 (S.D.N.Y. 2012)

(Stein, D.J.)

("[A]

fee that is one-third of the fund is typical" in FLSA cases);
accord Calle v. Elite Specialty Coatings Plus, Inc., No. 13-CV6126 (NGG) (VMS), 2014 WL 6621081 at *3 (E.D.N.Y. Nov. 21, 2014);
Palacio v. E*TRADE Fin. Corp., 10 Civ. 4030
2384419 at *6-*7

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

(LAP) (DCF), 2012 WL

(Freeman, M.J.).

Accordingly, for all the foregoing reasons,
the settlement in this matter.

I approve

In light of the settlement, the
8

action is dismissed with prejudice and without costs.

The Clerk

is respectfully requested to mark this matter closed.

Dated:

New York, New York
October 19, 2017
SO ORDERED

United States Magistrate Judge
Copies transmitted to:
All Counsel

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