Lackie v. U.S. Well Services, LLC
REPORT AND RECOMMENDATIONS re 112 Joint MOTION for Order to Grant Final Approval of Settlement. Magistrate Judge recommends the final settlement be approved and the case DISMISSED with prejudice. Objections to R&R due by 3/15/2017. Signed by Magistrate Judge Elizabeth Preston Deavers on 3/1/17. (ew)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
JEFF LACKIE, et al.,
CASE NO. 2:15-cv-695
JUDGE GEORGE C. SMITH
ELIZABETH PRESTON DEAVERS
PROPOSED FINAL ORDER AND
Plaintiffs Jeff Lackie and William Crandell and Defendant U.S. Well Services, Inc.
U.S. WELL SERVICES, INC.
(“U.S. Well Services” or “Defendant”) have moved the Court to grant final approval of
their proposed class and collective action settlement and enter final judgment in this
action. In its Order Granting Preliminary Approval of Settlement (Doc. #110)
(“Preliminary Approval Order”), the Court preliminarily approved the proposed
Settlement pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b),
certified a proposed Settlement Class pursuant to Fed. R. Civ. P. 23, and preliminarily
approved the proposed settlement of Settlement Class members’ state-law claims
pursuant to Fed. R. Civ. P. 23(e). Notice was given to members of the Settlement Class,
and a Fairness Hearing was held on March 1, 2017.
Wherefore, upon the parties’ Joint Motion for Final Approval of Settlement, the
accompanying exhibits, and the whole of the record, the Undersigned RECOMMENDS
GRANTING final approval of the Settlement and entering judgment as follows:
Plaintiffs filed their Class and Collective Action Complaint against
Defendant (ECF #1) on February 23, 2015, and an Amended Complaint was filed on
March 10, 2015 (ECF #7). Plaintiffs alleged that U.S. Well Services miscalculated
employees’ overtime compensation in violation of the FLSA and state law by excluding
safety and compliance bonuses as well as performance bonuses from the calculation of
overtime pay. Defendant denied Plaintiffs’ claims and asserted affirmative defenses.
See Answer to Complaint (ECF. #9).
On March 4, 2015, Plaintiffs moved the Court to conditionally certify the
case as a collective action under the Fair Labor Standards Act, 29 U.S.C. § 216(b) (ECF
#4). Defendant initially opposed Plaintiffs’ motion for conditional certification (ECF
#22). Defendant later withdrew that opposition, and Plaintiffs filed an unopposed
motion for conditional certification (ECF #29) on June 12, 2015.
On August 7, 2015, the Court granted Plaintiffs’ unopposed motion,
conditionally certifying the case as an FLSA collective action and approving notice to
similarly situated persons pursuant to pursuant to 29 U.S.C. § 216(b).
Notice was issued and 139 persons opted into the case by submitting
consent forms filed with the Court.
Pursuant to the Court’s Preliminary Pretrial Order (ECF #26), discovery
was to be conducted in two phases. Phase One, which was to be completed by
November 30, 2015, was to include facts and documents pertaining to the named
plaintiffs, facts and documents relating to the requirements for Rule 23 certification of
the proposed Ohio and Pennsylvania Classes, and information, documents, and ESI
relating to merits issues. Phase Two was to begin with the joint filing of a supplemental
discovery plan providing for expeditious completion of any additional discovery. The
supplemental discovery plan was filed on December 7, 2015 (ECF #78).
Extensive discovery was conducted by both sides over the course of many
months. Initial Disclosures were exchanged in June 2015. Plaintiffs propounded
discovery requests to Defendant on June 24 and August 4, 2015, and Defendant served
responses on July 31 and August 28, respectively. On August 18 and 19, 2015, Plaintiffs
took depositions in Houston of Defendant’s Human Resources Director and a former
officer, as well as a consultant at Achilles Group who drafted the bonus plan at issue in
this case. Plaintiffs took additional depositions of Defendant’s managers in Bridgeport,
West Virginia on January 25, 2015. Defendant deposed the named Plaintiffs on January
On September 28, 2015, in accordance with the Court’s Order, Plaintiffs
moved for certification of proposed Ohio and Pennsylvania Classes pursuant to Fed. R.
Civ. P. 23(a) and (b)(3) (ECF #46). Defendant opposed the motion on October 29, 2015
(ECF #70), and Plaintiffs filed a reply memorandum on November 16, 2015 (ECF #75).
On February 15, 2016, Defendant filed a motion for partial summary
judgment on the issue of good faith (ECF #84). Plaintiffs filed an opposition
memorandum with evidentiary exhibits on March 10, 2016 (ECF #92), and Defendant
filed a reply memorandum on March 29, 2016 (ECF #95).
Both the Rule 23 motion and the motion for partial summary judgment
were pending before the Court at the time of the mediation and resulting Settlement.
Settlement negotiations commenced with a day-long mediation session
with Mediator Jerome F. Weiss on June 8, 2016. That session failed to achieve
agreement, but the Parties agreed to continue negotiating through separate phone
conferences with the Mediator. Many further discussions with Mediator Weiss took
place in the ensuing weeks, culminating with a mediator’s proposal on August 9, 2016.
That proposal, with some modifications, was accepted by the parties.
The Settlement resolves all claims involving the exclusion of “safety and
compliance bonuses” and “performance bonuses” from the calculation of employees’
overtime pay, while expressly excluding claims for the exclusion of per diem payments
as well as an additional carve-out for another pending lawsuit. The per diem issue is
the subject of a companion case—Case No. 2:15-cv-03078 (also captioned Lackie v. U.S.
Well Services, LLC)—which the parties will continue to litigate. Except for the specific
carve out for the two pending cases, the Settlement includes a release of all federal and
state wage-and-hour claims, rights, demands, liabilities, and causes of action, including
but not limited to claims for unpaid wages, unpaid overtime compensation, liquidated
damages, interest, attorneys' fees, and expenses pursuant to the FLSA and any
applicable state wage statutes.
The Settlement will provide individual settlement payments to the
Plaintiffs, Opt-Ins, and Settlement Class members representing a substantial percentage
of their claimed damages, including liquidated damages. The proposed method of
allocation is fair to all, while recognizing the additional risks and commitment
undertaken by the Plaintiffs and Opt-Ins in bringing the case or affirmatively opting in.
The shares are proportionate to the individuals’ respective workweeks during the Class
Period, with the shares of the Plaintiffs and Opt-Ins weighted “one” and those of
Settlement Class members weighted “one-half.” Allocations based on this method are
listed in the Table of Individual Payments (Exhibit 1 to Joint Motion for Final
The issues in this case were hotly contested, as the Court is aware from the
extensive motion practice and briefing. The Settlement was achieved only after armslength and good faith negotiations between the Parties and their counsel, who have
extensive experience litigating FLSA and other wage-and-hour claims, including the
types of wage-and-hour claims asserted in this Action.
The Court finds that the proposed Settlement satisfies the standard for
approval of an FLSA collective action settlement under 29 U.S.C. § 216(b). There is “a
bona fide dispute between the parties as to the employer’s liability under the FLSA”
and that the Settlement “is fair, reasonable, and adequate.” Kritzer v. Safelite Solutions,
LLC, 2012 U.S. Dist. LEXIS 74994, at *19 (S.D. Ohio May 30, 2012).
In its Preliminary Approval Order, the Court certified a Settlement Class
pursuant to Fed. R. Civ. P. 23, consisting of:
All hourly non-exempt employees or former employees of Defendant in
Ohio and Pennsylvania, including Jeff Lackie and William Crandell, who
(1) received a safety or performance bonus, (2) worked for more than forty
hours in a workweek in which a bonus was earned, and (3) have not
already opted into the instant case pursuant to 29 U.S.C. § 216(b).
The Court approved a Notice to Settlement Class members and directed
that it be sent “by first-class United States mail to their last-known addresses as shown
in the records of Defendant and updated by the settlement administrator through the
National Change of Address database.”
Plaintiffs’ Counsel have filed a declaration confirming that the Notice was
mailed to the Settlement Class members as directed. Settlement Services, Inc. was
retained as Settlement Administrator, and the Court-approved Notice was mailed to
Settlement Class members on December 15, 2016. Fifty-four notices were returned as
undeliverable. The Settlement Administrator took further steps to determine those
class members’ current whereabouts, and the Notice was remailed to forty-three class
The Notice gave Settlement Class members sixty days in which to request
exclusion from the Settlement Class, object to the Settlement, or submit a consent form
to receive a settlement payment. No class member opted out of the Settlement Class or
objected to the Settlement. Thirty-seven Settlement Class members submitted consent
forms to receive a settlement payment.
The Undersigned finds that the Notice given to Settlement Class members
was reasonable and the best notice practicable, and satisfied the requirements of Civ. R.
23(e) and due process.
The Fairness Hearing was held on March 1, 2017.
The Court finds that the proposed settlement of Settlement Class
members’ state-law claims is “fair, reasonable, and adequate” to all participants and
qualifies for approval pursuant to Fed. R. Civ. P. 23(e).
The Undersigned recommends approving the Settlement and ordering
that it be implemented according to its terms and conditions and as directed herein.
The Undersigned recommends finding that the Total Settlement Amount,
as well as the proposed distributions to Plaintiffs, Opt-Ins, and Settlement Class
members listed in the Table of Individual Payments, are fair and reasonable. A total of
178 persons are listed in the Table, consisting of the two Plaintiffs, 139 Opt-Ins, and
thirty-seven Settlement Class members. The Individual Payments vary between $100
and $8,894. Under the terms of the Settlement Agreement, the Individual Payments will
be subject to taxes and withholdings determined by the Settlement Administrator and
reported as Form W-2 payments.
The Undersigned recommends approving the Table of Individual
Payments and orders that such payments be distributed in the manner, and subject to
the terms and conditions, set forth in the Settlement Agreement.
The Undersigned recommends approving the proposed service awards to
Lackie and Crandell, and orders that such payments be made in the manner, and
subject to the terms and conditions, set forth in the Settlement Agreement.
The Undersigned recommends approving the payment of attorneys’ fees
and expense reimbursements to Plaintiffs’ counsel as provided in the Settlement
Agreement, and orders that such payments be made in the manner, and subject to the
terms and conditions, set forth in the Settlement Agreement.
The Undersigned RECOMMENDS DISMISSAL of this case with
By agreement of the Parties, the Court retains jurisdiction to enforce the
terms of the Settlement Agreement and any disputes thereunder.
PROCEDURE ON OBJECTIONS
If any party seeks review by the District Judge of this Report and
Recommendation, that party may, within fourteen (14) days, file and serve on all parties
objections to the Report and Recommendation, specifically designating this Report and
Recommendation, and the part in question, as well as the basis for objection. 28 U.S.C.
§ 636(b)(1); Fed. R. Civ. P. 72(b). Response to objections must be filed within fourteen
(14) days after being served with a copy. Fed. R. Civ. P. 72(b).
The parties are specifically advised that the failure to object to the Report and
Recommendation will result in a waiver of the right to de novo review by the District
Judge and waiver of the right to appeal the judgment of the District Court. See, e.g.,
Pfahler v. Nat’l Latex Prod. Co., 517 F.3d 816, 829 (6th Cir. 2007) (holding that “failure to
object to the magistrate judge’s recommendations constituted a waiver of [the
defendant’s] ability to appeal the district court’s ruling”); United States v. Sullivan, 431
F.3d 976, 984 (6th Cir. 2005) (holding that defendant waived appeal of district court’s
denial of pretrial motion by failing to timely object to magistrate judge’s report and
recommendation). Even when timely objections are filed, appellate review of issues not
raised in those objections is waived. Robert v. Tesson, 507 F.3d 981, 994 (6th Cir. 2007)
(“[A] general objection to a magistrate judge’s report, which fails to specify the issues of
contention, does not suffice to preserve an issue for appeal . . . .”) (citation omitted)).
Date: March 1, 2017
/s/ Elizabeth A. Preston Deavers
ELIZABETH A. PRESTON DEAVERS
UNITED STATES MAGISTRATE JUDGE
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