Basurto et al v. Tacos El Paisa Inc. et al

Filing 22

ORDER re: 15 Letter, filed by Amelia Basurto. The settlement agreement of the parties is hereby APPROVED. SO ORDERED. (Signed by Judge Vernon S. Broderick on 1/10/2022) (kv)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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AMELIA BASURTO,
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Plaintiff,
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-v:
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TACOS EL PAISA INC., et al.,
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Defendants. :
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20-CV-5483 (VSB)
ORDER

VERNON S. BRODERICK, United States District Judge:
The parties have advised me that they have reached a settlement agreement in this Fair
Labor Standards Act (“FLSA”) case. (Doc. 15.) Parties may not 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). In the absence of Department of
Labor approval, the parties must satisfy this Court that their settlement is “fair and reasonable.”
Velasquez v. SAFI-G, Inc., 137 F. Supp. 3d 582, 584 (S.D.N.Y. 2015). Because I find that the terms
of the settlement agreement, including the attorneys’ fees sought, are reasonable, the parties’
request that I approve their settlement agreement is GRANTED.
I.

Legal Standard

To determine whether a settlement is fair and reasonable under the FLSA, I “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
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product of arm’s-length bargaining between experienced counsel; and (5) the possibility of fraud or
collusion.” Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012) (internal
quotation marks omitted).
“In addition, if attorneys’ fees and costs are provided for in the settlement, district courts
will also evaluate the reasonableness of the fees and costs.” Fisher v. SD Prot. Inc., 948 F.3d 593,
600 (2d Cir. 2020). In requesting attorneys’ fees and costs, “[t]he fee applicant must submit
adequate documentation supporting the [request].” Id. The Second Circuit has described a
presumptively reasonable fee as one “that is sufficient to induce a capable attorney to undertake the
representation of a meritorious civil rights case.” Restivo v. Hessemann, 846 F.3d 547, 589 (2d Cir.
2017) (internal quotation marks omitted). A fee may not be reduced “merely because the fee would
be disproportionate to the financial interest at stake in the litigation.” Fisher, 948 F.3d at 602
(quoting Kassim v. City of Schenectady, 415 F.3d 246, 252 (2d Cir. 2005)). An award of costs
“normally include[s] those reasonable out-of-pocket expenses incurred by the attorney and which
are normally charged fee-paying clients.” Reichman v. Bonsignore, Brignati & Mazzotta P.C., 818
F.2d 278, 283 (2d Cir. 1987) (internal quotation marks omitted).
“When a district court concludes that a proposed settlement in a FLSA case is unreasonable
in whole or in part, it cannot simply rewrite the agreement, but it must instead reject the agreement
or provide the parties an opportunity to revise it.” Fisher, 948 F.3d at 597.
II.

Discussion

Pursuant to my Order of April 1, 2021, (Doc. 14), the parties have submitted a letter
detailing why they believe the settlement reached in this action, and the contemplated attorneys’
fees, are fair and reasonable. I have independently reviewed the settlement agreement and the
supporting evidence in order to determine whether the terms of the settlement agreement are fair,
reasonable, and adequate. I believe that they are, and therefore approve the settlement agreement of
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the parties.
A.

Settlement Amount

I first consider the settlement amount. The agreement provides for the distribution to
Plaintiff of $7,500, inclusive of attorney’s fees and expenses. (Doc. 15, at 2.) Counsel represents
that Plaintiff believes she is entitled to $7,065. (Id. at 1.) 1 Therefore, the total settlement amount is
more than 100% of Plaintiff’s expected recovery. Both parties seek to “avoid the legal and factual
risks of protracted litigation and trial.” (Id. at 2.) The parties engaged in arm’s length negotiation at
mediation through the Southern District of New York’s Mediation program. (Id.) Finally, there is
no basis for me to believe that there was any fraud or collusion involved in the settlement.
Therefore, based on the representations of the parties and my own analysis of the totality of the
circumstances present here, I find that the settlement agreement appears to be a fair and reasonable
resolution of this dispute.
B.

Release Provision

I next consider the other provisions in the proposed settlement agreement, paying close
attention to the release provision. “In FLSA cases, courts in this District routinely reject release
provisions that ‘waive practically any possible claim against the defendants, including unknown
claims and claims that have no relationship whatsoever to wage-and-hour issues.’” Gurung v.
White Way Threading LLC, 226 F. Supp. 3d 226, 228 (S.D.N.Y. 2016) (quoting Lopez v. Nights of
Cabiria, LLC, 96 F. Supp. 3d 170, 181 (S.D.N.Y. 2015)). The proposed settlement agreement
requires that Plaintiff release Defendants from claims “which concern allegations of unpaid
compensation . . . purportedly owed to Plaintiff under the FLSA, NYLL, New York City law, the
Equal Pay Act, or any other law, regulation, or ordinance regulating the payment of wages. . . .”
(Doc. 15-1, at ¶ 1.) I find that this release is appropriately tailored to the claims at issue in this

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This figure appears to reflect only back wages and not liquidated damages.

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action.
C.

Attorneys’ Fees

I finally consider the attorneys’ fees contemplated in the settlement agreement. Plaintiff’s
counsel claims to have accrued $6,045 in attorneys’ fees and $476 in costs, (Doc. 15-2, at 4), but
seeks only $2,817.33 in total, (Doc. 15, at 2). As an initial matter, courts regularly approve
attorneys’ fees of one-third of the settlement amount in FLSA cases. See Pinzon v. Jony Food
Corp., No. 18-CV-105 (RA), 2018 WL 2371737, at *3 (S.D.N.Y. May 24, 2018) (“When using a
‘percentage of the fund’ approach, ‘courts regularly approve attorney’s fees of one-third of the
settlement amount in FLSA cases.’” (quoting Meza v. 317 Amsterdam Corp., No. 14-CV-9007
(VSB), 2015 WL 9161791, at *2 (S.D.N.Y. Dec. 14, 2015)). The attorneys’ fees and costs in this
case represent 37.6 percent of the total $7,500 settlement amount. It is not immediately apparent
how Plaintiff’s counsel arrived at the $2,817.33 figure, and Plaintiff does not explain it. (See
generally Doc. 15.) One-third of $7,500 is only $2,500. Plaintiff’s counsel seeks $317.33 more
than $2,500, but Plaintiff’s counsel claims to have spent even more than that ($476) on the filing fee
and process server. (Doc. 15-2, at 4.) Regardless, because Plaintiff’s claimed lodestar is larger than
the requested attorneys’ fees, and because the Second Circuit has made clear that FLSA does not
limit attorneys’ fees to 33 percent of the settlement agreement, see Fisher, 948 F.3d at 603, I instead
turn to the documentation supporting the requested attorneys’ fees and costs.
While this case is still at an early stage, it is clear that Plaintiff’s counsel has expended time
on at least the following: drafting and filing the complaint; evaluating Plaintiff’s damages; and
preparing for and attending a successful mediation. (See Doc. 15-2.) Moreover, because courts in
this District typically approve hourly rates of approximately $175 to $450 for attorneys working on
FLSA litigation, the requested amount represents appropriate compensation for the 18 hours put
into this case. See, e.g., id. at *2; Trustees of N.Y.C. Dist. Council of Carpenters Pension Fund v.
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Richie Jordan Constr. Inc., No. 15-CV-3811, 2015 WL 7288654, at *5 (S.D.N.Y. Nov. 17, 2015)
(awarding fees to Plaintiff’s counsel of $175/hour of junior associate time); Anthony v. Franklin
First Fin., Ltd., 844 F. Supp. 2d 504, 507–08 (S.D.N.Y. 2012) (awarding fees to Plaintiffs’
counsel’s firm at rates of $175/hour for associate work and $350/hour for partner work); Ochoa v.
Prince Deli Grocery Corp., No. 18 CIV. 9417 (ER), 2021 WL 5235222, at *2 (S.D.N.Y. Nov. 8,
2021) (calling $450/hour the “prevailing maximum rate in the Southern District”). Indeed,
Plaintiff’s counsel claims that the lodestar is $6,521, (see Doc. 15, at 3–4), which means the
requested $2,817.33 award is only a fraction of the lodestar. Based on this analysis, I find the
attorneys’ fees contemplated in the settlement agreement to be fair and reasonable.
The settlement agreement of the parties is hereby APPROVED.
SO ORDERED.
Dated:

January 10, 2022
New York, New York

________________________________
Vernon S. Broderick
United States District Judge

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