Dector et al v. RCI Plumbing Corp. et al

Filing 155

OPINION AND ORDER: re: 154 MOTION for Settlement filed by Alvaro Dector. Aside from the issues detailed above, the Court finds that the remainder of thesettlement agreement is fair and reasonable under Cheeks and does not include any overly restr ictive clauses, such as an over-broad release provision, see Lopez v. Nights of Cabiria, 96 F. Supp. 3d 170, 181 (S.D.N.Y. 2015), or non-disparagement clauses, see Flood v. Carlson Restaurants Inc., No. 14 Civ. 2740 (AT) (GWG), 2015 WL 4111668, at *1 (S.D.N.Y. July 6, 2015). Regardless, without more proof as to the reasonableness of the settlement amount and attorneys' fees, the Court will not approve the agreement. The parties may proceed in one of the following ways: 1. File a revised app lication for approval of the settlement agreement on or before August 24, 2020 that includes documentation of the settlement amount and attorneys' fees request; 2. File a joint letter on or before August 24, 2020 that indicates the parties' intention to abandon settlement and continue 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., ( Motions due by 8/24/2020.) (Signed by Judge Edgardo Ramos on 7/24/2020) (ama)

Case 1:17-cv-02269-ER Document 155 Filed 07/24/20 Page 1 of 5

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ALVARO DECTOR and WILSON ROMERO,
individually and on behalf of others similarly
situated,
Plaintiffs,
– against –

OPINION & ORDER
17 Civ. 2269 (ER)

CHRISTOPHER CHIERCHIO, RCI PLBG,
INC. and ROBERT DIMICELI,
Defendants.
Ramos, D.J.:
On March 29, 2017, Alvaro Dector and Wilson Romero brought the abovecaptained action against Christopher Chierchio, RCI PLBG, and Robert Dimiceli for
failure to pay overtime compensation 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 (amended at Doc. 9). ^e plaintiffs have submitted an application for
the Court to approve the parties’ settlement agreement on behalf of themselves and a
putative class. Doc. 154. Notably, the plaintiffs have not submitted any records
substantiating their calculation of the settlement amount or a way for the Court to
calculate the lodestar amount of attorneys’ fees. Accordingly, 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

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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
^e Agreement provides for a total settlement of $550,000. Doc. 154 Ex. 1

(“Agreement”) ¶ 2. ^e plaintiffs represent in their letter that this amount includes
approximately $225,000 in unpaid wage and overtime wages for the putative class,
approximately $28,000 in to compensate for allegations of wage theft under New York
law, approximately $5000 in costs, an attorney’s fee award of just over $183,000,
administration costs of $25,000, and $83,000 representing a 37% recovery of liquidated
damages. Doc. 154 at 3–4; see also Agreement ¶ 2(b).
In urging the Court to approve this award, the plaintiffs note that this amount
represents nearly all wages owed and a substantial portion of liquidated damages. Due to
the inherent risks of trial, they suggest, they and the putative class may receive a lesser
award if they were to proceed to trial. In addition, they point out that the ongoing
pandemic of COVID-19 could negatively affect the defendants’ finances and prevent
further recovery.
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While these contentions may be true, the Court “require[s] some evidence —
e.g., declarations, affidavits or exhibits — to evaluate the settlement.” Garcia v. Jambox,
Inc., No. 14 Civ. 3504 (MHD), 2015 WL 2359502, at *3 (S.D.N.Y. Apr. 27, 2015)
(emphasis added). ^e settlement application contains no information on the wages of
the members of the putative class, the number of overtime hours worked, or a calculation
of the potential liquidated damages for the class. Without some proof of the parties’
calculations, the Court cannot find that the range of the plaintiffs’ recovery is reasonable.
See id. (rejecting settlement for failing to include proof of range of recovery).
II.

ATTORNEYS’ FEES
In the same vein, the plaintiffs have failed to include proof that their requested

attorneys’ fees — one-third of the settlement amount — are reasonable. Although a onethird contingency fee is often determined to be reasonable in this Circuit, this Court must
also look 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)).
But the plaintiffs have failed to include any component of a proper fee request,
simply asserting their attorneys billed “in excess of $170,000 to date.” Doc. 154 at 7.
^is is a far cry from a proper fee request in this Circuit, which normally includes,
“contemporaneous billing records documenting, for each attorney, the date, the hours
expended, and the nature of the work done.” Garcia, 2015 WL 2359502, at *6; accord
Beckert v. Ronirubinov, No. 15 Civ. 1951 (PAE), 2015 WL 8773460, at *2 (S.D.N.Y. Dec.

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14, 2015) (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).
As with the reasonableness of the settlement amount, the Court cannot approve
the settlement without some documentation from the plaintiffs’ attorneys proving the
reasonableness of their fee.
III.

CONCLUSION
Aside from the issues detailed above, the Court finds that the remainder of the

settlement agreement is fair and reasonable under Cheeks and does not include any overly
restrictive clauses, such as an over-broad release provision, see Lopez v. Nights of
Cabiria, 96 F. Supp. 3d 170, 181 (S.D.N.Y. 2015), or non-disparagement clauses, see
Flood v. Carlson Restaurants Inc., No. 14 Civ. 2740 (AT) (GWG), 2015 WL 4111668, at
*1 (S.D.N.Y. July 6, 2015). Regardless, without more proof as to the reasonableness of
the settlement amount and attorneys’ fees, the Court will not approve the agreement.
^e parties may proceed in one of the following ways:
1. File a revised application for approval of the settlement agreement on or
before August 24, 2020 that includes documentation of the settlement amount
and attorneys’ fees request;
2. File a joint letter on or before August 24, 2020 that indicates the parties’
intention to abandon settlement and continue to trial, at which point the Court
will reopen the case and set down a date for a pre-trial conference; or

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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.
Dated:

July 24, 2020
New York, New York
Edgardo Ramos, U.S.D.J.

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