Amador v. The Brickman Group, LTD, LLC
Filing
119
MEMORANDUM (Order to follow as separate docket entry).Signed by Honorable Malachy E Mannion on 3/21/17. (bs)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
JONATHAN AMADOR ACEVEDO, :
MITCHELL BRATTON, JEREMY
BUSSE, STEPHEN PULLUM, ERIC :
MIGDOL, and JOSE GONZALEZ,
CIVIL ACTION NO. 3:13-2529
individually and on behalf of all
:
other similarly situated,
(JUDGE MANNION)
:
Plaintiffs,
:
v.
:
BrightView Landscapes, LLC,
(f/k/a/ THE BRICKMAN GROUP
:
LTD. LLC,)
:
Defendant.
:
MEMORANDUM
Currently before the court is the plaintiffs’ amended, unopposed motion
for preliminary approval of the parties’ settlement agreement. (Doc. 118).
Having reviewed and considered the motion, the memorandum in support of
the motion, the parties’ amended settlement agreement, the proposed notice
for class settlement, and pertinent portions of the entire record in this litigation
to date, the plaintiffs’ motion is GRANTED and the court will preliminarily
approve the parties’ amended settlement agreement. The court will also
preliminarily certify the State Settlement Class named in the parties’ amended
agreement. The plaintiffs’ original, unopposed motion for preliminary approval
of the original settlement agreement, (Doc. 104), and the parties joint motion
for a hearing to discuss changes to the original agreement, (Doc. 115), are
DENIED as moot.
I.
PROCEDURAL HISTORY & BACKGROUND
On October 8, 2013, named plaintiff, Jonathan Amador Acevedo
(“Amador”), filed a putative, class action complaint, (Doc. 1), against the
defendant, The Brickman Group Ltd. LLC (“Brickman”),1 a national
landscaping and snow removal company, alleging that, between October 8,
2010 and June 8, 2014, the defendant had a policy and practice of failing to
pay its employees who were paid on a fluctuating work week basis all
overtime compensation, in violation of the Fair Labor Standards Act, 29 U.S.C.
§201, et seq. (“FLSA”), and Pennsylvania state wage and hour laws. Amador,
on behalf of himself and all other similarly situated plaintiffs, sought all unpaid
overtime wages, plus liquidated and/or punitive damages, an injunction
requiring the defendant to cease unlawful practices under the state law
claims, and reasonable attorneys’ fees and costs. On December 20, 2013,
with permission from the court, the defendant filed an answer to the complaint
beyond the deadline to answer. (Doc. 21). The defendant denied all
1
The plaintiffs, in their motion, have advised the court that, due to recent
corporate changes, the proper defendant in this action is now the legal entity
BrightView Landscapes, LLC (“BrightView), formerly known as The Brickman
Group Ltd. LLC (“Brickman”). (Doc. 118-1, at 1 n. 1). The parties’ filings
continue to refer to the defendant as Brickman, while the amended agreement
refers to the defendant as BrightView. The court will direct the clerk to amend
the caption in its final order.
2
allegations and asserted that Amador was properly paid under the FLSA.
On February 7, 2014, the parties filed a joint motion to stay discovery,
to conditionally certify the FLSA claims as a collective action (the “Collective
Group”) under Section 16(b) of the FLSA, 29 U.S.C. § 216(b), to order notice
of the action, and to permit mediation. (Doc. 33). On February 14, 2014, the
court granted the joint motion and conditionally certified the FLSA claims in
the action, the Collective Group. (Doc. 35). The Collective Group was defined
as:
All current and former employees in the United States who have
worked for The Brickman Group and who, at any time between
October 8, 2010 and the present, were paid a salary, but only
received “fluctuating workweek”-type half-time overtime pay for
hours worked over 40 hours in a workweek (meaning at a rate
that decreased with each overtime hour worked, rather than at
time-and-a-half their hourly rate), including but not limited to
salaried landscape/crew/irrigation Supervisors and those in
similarly titled positions.
Notice, with an opt-in consent form, was then sent to 1,360 Collective Group
members. Ultimately, 417 Collective Group members filed opt-in consent
forms, though not all of these forms were sent in by the agreed upon deadline.
Meanwhile, in an effort to reach settlement, counsel for the parties
exchanged information and engaged in numerous discussions to address
several issues involving class certification, the merits of the claims in the
complaint, and the possibility of a class settlement. The parties also
participated three full-day sessions of mediation in Philadelphia, Atlanta, and
3
Los Angeles between July 2014 and February 2015 with the Honorable Joel
B. Rosen (Ret.), retired Magistrate Judge for the United States District Court
of the District of New Jersey, and Hunter Hughes, Esq. During this settlement
process, counsel for the plaintiff uncovered potential violations of wage laws
in various other states and identified five more named plaintiffs that could be
joined in the action, Mitchell Bratton, Jeremy Busse, Stephen Pullum, Eric
Migdol, and Jose Gonzalez.
The parties ultimately reached a settlement. On May 29, 2015, with the
concurrence of the defendant, the plaintiffs filed an amended complaint
asserting the additional state law claims and including the additional named
plaintiffs as class representatives of a putative state law class.2 (Doc. 103). On
the same day, the plaintiffs filed an unopposed motion to preliminarily approve
the settlement agreement, with the settlement agreement attached.
On December 11, 2015, the court held a telephone conference with
counsel for the parties to discuss several areas of concern regarding the
settlement agreement and subsequently ordered the parties to submit letter
briefs regarding these areas of concern. (Doc. 110). On July 6, 2016, the
2
The additional state law claims added to the amended complaint included
violations of the laws of Colorado, Connecticut, Delaware, Florida, Georgia,
Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oregon,
Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, and
Wisconsin, in addition to the claims asserted under the laws of Pennsylvania.
(Doc. 103, ¶4).
4
parties submitted an amended settlement agreement redlining proposed
changes to the original agreement. (Doc. 114).
On November 21, 2016, the court held another telephonic conference
with the parties to discuss their proposed changes and lingering areas of
concern regarding the amended agreement. At the end of that conference, the
court directed the parties to file a formal, amended motion for preliminary
approval of the settlement agreement after discussing and addressing the
court’s remaining issues with the agreement. On February 13, 2017, the
plaintiffs filed the current amended motion, attaching their amended
settlement agreement to the motion. (Doc. 118).
II.
TERMS OF THE AMENDED SETTLEMENT AGREEMENT
The terms of the amended settlement agreement are attached to the
current, amended motion as Exhibit 1. (Doc. 118-3). The amended agreement
includes the original FLSA Collective Group that was preliminarily certified as
a class and also includes a State Settlement Class. The Collective Group is
defined exactly as it was for preliminary certification purposes. The “State
Settlement Class,” as provided in the amended agreement, is defined as
follows:
[A]ll individuals in Groups 1 and 2 (who worked in the states of
Colorado, Connecticut, Delaware, Florida, Georgia, Illinois,
Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan,
Minnesota, Missouri, New Jersey, New York, North Carolina,
5
Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina,
Tennessee, Texas, Virginia, Washington, Wisconsin) unless
removed from the State Settlement Class by either (i) timely
opting-out of the Settlement, (ii) being identified by the Claims
Administrator as having his/her Notice of Settlement returned as
undeliverable (and not subsequently delivered prior to the Claim
Deadline following the Settlement Administrator's reasonable
efforts as outlined in Paragraph 20(b)(4)), or (iii) for Group 2
members only, Defendant’s decision to nullify this Settlement
Agreement as to Group 2 members as set forth in Paragraph 44.
(Id. ¶18(bb)). The proposed State Settlement Class takes into account the
added claims in the plaintiffs’ amended complaint and must be, at a minimum,
preliminarily certified before proceeding with the settlement.
A.
Settlement Groups and Distribution
The settlement divides all putative plaintiffs and named plaintiffs from
the above two classes into two groups, Group 1 and Group 2. Group 1
includes all FLSA Collective Group members who filed an opt-in form,
including all named plaintiffs, and all Collective Group members who worked
in Pennsylvania, regardless of their opt-in status. Group 1 consists of
approximately 476 individuals. Group 2 includes all remaining Collective
Group members who did not file an opt-in form and who did not work in
Pennsylvania. Group 2 is, essentially, a catch-all for all of those putative
plaintiffs in the Collective Group who did not file an opt-in form, other than
those who worked in Pennsylvania. Group 2 consists of approximately 839
individuals.
6
Settlement treatment per the parties’ agreement depends on inclusion
within a certain group. Group 1 members are guaranteed a minimum payment
without further action and will be excluded only if the member submits a timely
request for exclusion, thereby opting-out of the settlement. The defendant has
agreed to pay a maximum of $3.25 million for Group 1 claims. After deducting
class counsel attorneys’ fees and costs, administrator fees and costs, and
service awards, each Group 1 member is initially entitled to $150.00 as an
award. After this initial set-aside award, the settlement administrator will
determine how to distribute the remaining funds to Group 1 members by using
a formulation that creates a per dollar share, taking into account the members’
actual overtime pay during weeks the member was eligible to receive
“fluctuating workweek”-type half-time overtime pay for hours worked over forty
in a work week. This calculation will be based on the defendant’s payroll and
timekeeping data. The remaining funds will then be divided pro rata among
Group 1 members based on their per dollar share figure.
The defendant has agreed to pay a maximum of $3.7 million for Group
2 claims. However, the defendant’s actual gross payment for Group 2 claims
will be based on the percentage of Group 2 members who timely submit a
claim form—i.e., if 30% of individuals in Group 2 opt in, then only 30% of the
Group 2 maximum fund, or $1.11 million, would be the gross fund from which
a portion would be going to Group 2 members. The net fund would be
7
determined after deducting attorneys’ fees and costs, administrator fees and
costs, and service awards.
Only Group 2 members who timely submit a claim form will be eligible
to receive a settlement payment. Like Group 1 members, however, eligible
Group 2 members will receive a minimum $150.00 set aside from the Group
2 net fund. The settlement administrator will then determine a per dollar share
figure for eligible Group 2 members, which will be based on the defendant’s
previously produced payroll and timekeeping data. The settlement
administrator will distribute the remaining funds pro rata based on the net
amount in the Group 2 fund and each Group 2 member’s per dollar share
figure.
Also unlike the Group 1 settlement, the Group 2 settlement is subject to
the defendant’s unilateral option to void the agreement if more than thirty-one
percent of Group 2 members become eligible to receive a payment.
Paragraph forty-four of the parties agreement provides as follows:
In the event the Group 2 Calculated Gross Settlement Fund (“the
Gross Fund Total”) exceeds one million one hundred and fifty
thousand dollars ($1,150,000.00),3 Defendant shall have the
unilateral right to void this Settlement Agreement as to Group 2
members if it provides written notice of its intent to void as to
Group 2 members to Class Counsel . . . . If the right to void is
exercised in accord with the terms of this paragraph, all portions
of the Settlement Agreement shall apply only to Group 1
3
The void provision’s trigger amount divided by the maximum gross fund
allocated to Group 2 is thirty-one percent. $1,150,000.00/ $3,700,000.00 = .31
x 100 = 31%
8
members.
(Doc. 118-3, ¶44). The void provision, by its express terms, does not effect
Group 1 members. The defendant’s decision to void the agreement is
optional, not mandatory. It also requires written notice of the intent to void.
If the defendant exercises its right to void the Group 2 settlement, the
FLSA and state law claims of Group 2 members will be tolled up to forty days
after the defendant’s notice of intent to nullify the Group 2 settlement.
However, a tolling agreement entered into by the parties on October 7, 2014
would expire on the day of the notice with respect to Group 2. (Id. ¶11). During
the forty day extended tolling period, Group 2 members who submitted a claim
form will be given thirty (30) additional days to submit a form consenting to
join the collective action, i.e., the Collective Group. (Id. ¶44). Group 2
members who do not opt-in within thirty days will be placed in the same
position they were immediately before the original settlement motion was filed
on May 29, 2015 and their claim form will be null and void. (Id.). The parties
also stipulate that the amended complaint will be stricken and the original
complaint be reinstated with respect to Group 2. (Id. ¶10). Group 1 final
settlement will proceed, however.
Ultimately, Group 1 and Group 2 members who are eligible and
participate in the agreement, either by opting in or not opting out, will release
all FLSA claims and state law claims. Group 1 members would have to
9
explicitly opt-out to not be bound by the agreement, while Group 2 members
need not take any action to be excluded. Presuming the void provision does
not go into effect, Group 2 members who do not opt-in will not release any
claims.
B.
Notice, Tax Treatment, and Final Check Distribution
Within fourteen (14) days after the court’s order preliminary approving
the agreement, the defendant, in cooperation with class counsel, will provide
the settlement administrator with (a) a list setting forth the name, last known
address, and social security number of each of the Group 1 and Group 2
members previously identified; and (b) available payroll data already
produced. Class counsel will provide any updated addresses for Group 1 and
Group 2 members they may have received during the course of the action to
the settlement administrator. Before mailing the settlement notice and claim
form, the settlement administrator will also double check the accuracy of the
addresses received using the U.S. Postal Service’s National Change of
Address database and other public, electronic databases.
The settlement administrator will mail copies of the settlement notice to
all members and will include a claim form for all Group 2 members, with an
enclosed self-addressed postage prepaid return envelope. The forms will be
provided in both English and Spanish. Claim forms will also be available for
10
download by link on the settlement administrator’s website.
Any settlement notice returned to the settlement administrator with a
forwarding address will be re-mailed. In addition, twenty-one (21) days after
the settlement administrator initially mails the settlement notices, the
settlement administrator will mail a reminder notice to Group 2 members who
have not returned a claim form and have not requested exclusion from the
settlement.
Group 1 and Group 2 members will then have thirty (30) days from the
initial mailing of settlement notices and claim forms to object to the settlement
and may do so by providing a written statement to the settlement
administrator on or before the thirty day deadline. Those in the State
Settlement Class who wish to exclude themselves from the claims based on
state law may do so by providing a written statement to the settlement
administrator on or before the thirty day deadline. Group 2 members will have
sixty (60) days from the time the claim form is initially mailed by the settlement
administrator to submit an executed claim form needed to receive a
settlement award. Those eligible to receive an award will receive a check
fifteen (15) days after the effective date in the agreement. This effective date
is defined as thirty (30) days after final approval of the settlement agreement
or the first business day after affirmance on appeal and/or the settlement
approval decision is no longer subject to appeal and the time for reargument,
11
appeal, or review has expired.
Group 1 and Group 2 members will have their settlement award treated
the same for tax purposes. Fifty percent (50%) of the award will be treated as
wages and the settlement administrator will withhold federal and state income
and employment taxes. The remaining fifty percent (50%) will be treated as
non-wage liquidated damages reported on an IRS Form 1099. Release
language will also be included on all settlement checks as follows:
By signing and cashing this check, I hereby consent and agree to
join this lawsuit, and I hereby opt in to become a plaintiff in this
lawsuit and consent to be bound by the collective and class action
settlement. I further affirm my release of Brightview Landscapes,
LLC,4 (F/K/A The Brickman Group LTD, LLC) and any “releases”
of the “Released FLSA Claims” and the “Released State Law
Claims” as those terms are defined in the Settlement Agreement
approved by the Court . . . . I also affirm that I will not sue or
otherwise assert any of the “Released FLSA Claims” or the
“Released State Law Claims” against the Releasee.
(Id. ¶20).
Mailed checks will remain valid and negotiable for 180 days after
issuance and may be automatically cancelled if not cashed within that time.
If administratively feasible, funds from uncashed checks will be redistributed
to eligible Group 1 and Group 2 members. If it is not administratively feasible
to do so, uncashed check funds will revert to a qualified settlement fund.
Within 210 days from the date of issuance, the settlement administrator will
4
See n. 1, supra.
12
distribute the funds in the qualified settlement fund to plaintiffs’ counsel to be
held in a trust account for the applicable state statutory period for contract
claims. No amount from the uncashed checks would revert to the defendant.
The plaintiffs’ counsel would update the court within a year on the status of
unclaimed funds. (Id. ¶41).
C.
Fees, Costs, and Service Awards
The settlement administrator has been identified as Dahl Administration
(“Dahl”). Dahl has agreed to administer the settlement for fees not to exceed
$17,470.00. The original named plaintiff, Amador, will receive a service award
in the amount of $5,000.00. The remaining named plaintiffs will each receive
a $1,000.00 service award. These amounts will be taken pro rata from the
Group 1 and Group 2 qualified fund.5 If, however, the defendant exercises its
right to void the Group 2 settlement, the funds will be taken from the Group 1
qualified fund only. (Id. ¶30(a), (c)).
Class counsel will receive attorneys’ fees in an amount no more than
one-third of the Group 1 gross settlement amount from the Group 1 qualified
fund, with a maximum amount of $1,083,333.33. Class counsel will also
5
The gross fund will be labeled a qualified fund after it is handed over to the
settlement administrator. Upon receipt of the funds, the settlement
administrator will satisfy all Internal Revenue Service (“IRS”) regulations
needed to convert it into a “Qualified Settlement Fund” as defined by IRS
regulations. (Doc. 118-3, ¶28).
13
receive no more than one-third of the Group 2 calculated gross settlement
fund from the Group 2 qualified fund, which will be determined based on the
amount of Group 2 members who opt-in and become eligible. The court will
make a final determination of the attorney’s fees at the Final Approval
Hearing. If the defendant exercises its right to void the Group 2 settlement,
only the payment with respect to Group 1 will be distributed. (Id. ¶30(b)).
Class counsel will also receive reimbursement of their out-of-pocket
costs approved by the court in an amount not to exceed $65,000.00, which
will be paid pro rata from the Group 1 and Group 2 qualified funds. If the
defendant exercises its right to void the Group 2 settlement, the entire
payment of these costs will be taken from the Group 1 qualified fund. (Id.).
Class counsel will file a separate motion for approval of attorneys’ fees and
costs prior to the court’s final fairness hearing.
III.
LEGAL STANDARDS
A.
Preliminary Certification of a Rule 23 Class for Settlement
Federal Rule of Civil Procedure 23(d) enables a court to certify a Rule
23 class for settlement purposes. In re Gen. Motors Corp. Pick-Up Truck Fuel
Tank Products Liab. Litig., 55 F.3d 768, 794 (3d Cir. 1995). When presented
with a request for preliminary certification of a class and settlement of that
class simultaneously, the court should be mindful of the requirements of Rule
14
23(e). Rule 23(e) allows a settlement of a Rule 23 certified with class with
court approval only. FED. R. CIV. P. 23(e). Rule 23(e) also directs the court to
send notice to all class members who would be bound by the settlement. FED.
R. CIV. P. 23(e)(1).
The process for certification of a settlement class is not specified in the
rule. Court’s are often guided by the Judicial Center’s Manual for Complex
Litigation (Fourth) in directing these type of proceedings. See In re Nat’l
Football League Players Concussion Litig., 775 F.3d 570, 580–81 (3d Cir.
2014). Looking to the Manual for Complex Litigation, the Third Circuit Court
of Appeals has approved the court’s making a preliminary finding that the
proposed class meets the requirements of Rule 23. Id. at 582 (citing MANUAL
FOR
COMPLEX LITIGATION §21.632 (4th ed. 2004). This preliminary
determination allows the court to direct notice to the proposed class. “The
preliminary determination of a proposed class is therefore a tool for settlement
used by the parties to fairly and efficiently resolve litigation.” Id. at 583. A final
certification can then be issued at a later date, after notice has been provided
to those included in the proposed settlement class. Id. at 583.
B.
Preliminary Approval of Class Action Settlement Agreements
Preliminary approval of a class action settlement “establishes an initial
presumption of fairness when the court finds that: (1) the negotiations
15
occurred at arms’-length; (2) there was sufficient discovery; (3) the proponents
of the settlement are experienced in similar litigation; and (4) only a fraction
of the class objected.” In re Gen. Motors Corp., 55 F.3d at 785. While the
above factors specifically deal with settlement of a class action under Rule 23,
the court finds these factors equally applicable to the settlement of an FLSA
collective action as well. See In re Chickie’s & Pete’s Wage & Hour Litig., No.
12-6820, 2014 WL 911718, at *2–3 (E.D. Pa. Mar. 7, 2014) (looking to Rule
23 factors for final approval of an FLSA settlement agreement); Brown v.
TrueBlue, Inc., No. 1:10-cv-00514, 2013 WL 5408575, at *2 (M.D. Pa. Sept.
25, 2013) (same); Dino v. Pennsylvania, No. 1:08-cv-01493, at *3–4 (M.D. Pa.
2013) (same).
A preliminary approval is just that, preliminary. It is not a finding that
definitively
determines
the
elements
of
fairness,
adequacy,
and
reasonableness needed for final approval of class action settlements under
Girsch v. Jepsen, 521 F.2d 153 (3d Cir. 1975). Nor does it definitively
establish that the FLSA settlement, specifically, is a “fair and reasonable
resolution of a bonafide dispute” under Lynn’s Food Stores, Inc. v. United
States, 679 F.2d 1350, 1355 (11th Cir. 1982), a case often cited as the
standard for final approval of FLSA settlements. See id.; see also Brumley v.
Camin Cargo Control, Inc., Nos. 08-1798 (JLL), 10-2461 (JLL), 09-6128 (JLL),
2012 WL 1019337, at *2 (D.N.J. Mar. 26, 2012) (collecting cases applying
16
Lynn’s Food Stores for the appropriate standard to be applied to final approval
of FLSA settlement agreements).
IV.
DISCUSSION
A. Preliminary Certification of the State Settlement Class
The State Settlement Class included in the parties’ settlement
agreement appears, upon preliminary review, to meet the requirements of
Rule 23. In order to certify a settlement class under Federal Rule of Civil
Procedure 23, the court must find that the settlement class satisfies the
requirements of Rule 23. In re Gen. Motors Corp., 55 F.3d at 799. These
requirements include that of numerosity, commonality, typicality, and
adequacy of representation. See FED. R. CIV. P. 23(a); In re Warfarin Sodium
Antitrust Litig., 391 F.3d 516, 527 (3d Cir. 2004). In addition, the proposed
class must meet one of the requirements of Rule 23(b). In re Warfarin, 391
F.3d at 527.
The plaintiffs here seek certification under Rule 23(b)(3). This rule
allows certification where “questions of law or fact common to class members
predominate over any questions affecting only individuals members” and
where the court finds that “a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” FED. R. CIV. P.
23(b)(3). These two requirements are commonly referred to as predominance
17
and superiority. In re Constar Int’l Inc. Sec. Litig., 585 F.3d 774, 780 (3d Cir.
2009).
The State Settlement Class appears to satisfy the numerosity
requirement because it includes more than one thousand people who will
receive notice of the settlement. There are factual issues common to all State
Settlement Class members regarding the defendant’s overtime compensation
practices. The plaintiffs’ claims are typical of the State Settlement Class
Members’ claims, in that they and all other State Settlement Class Members
were allegedly subject to the defendant’s alleged improper overtime
compensation practices in violation of state law. The plaintiffs are adequate
class representatives who appear to have no conflicts with the State
Settlement Class members. Therefore, the State Settlement Class appears
to satisfy the requirements of Rule 23(a).
The superiority and predominance requirement of Rule 23(b)(3) also
appear satisfied. Treatment of this litigation as a class action is superior to
resolution through hundreds of separate individual proceedings throughout a
variety of different states. Class treatment enhances judicial efficiency and will
likely maximize recovery. With respect to predominance, the court recognizes
that the class claims include state law claims under a variety of laws—27 state
law regimes to be exact. However, there is no suggestion that the claims
under this different regimes are novel or complex. See Knepper v. Rite Aid
18
Corp., 675 F.3d 249, 259 (3d Cir. 2012) (holding that opt-in FLSA collective
claims are not inherently incompatible with opt-in Rule 23 class claims based
on state law that are joined in the same action). Further, when certifying a
settlement class, the court “need not inquire whether the case, if tried, would
present intractable management problem” as directed by Rule 23(b)(3)(D).
Amchem Prod. Inc. v. Windsor, 521 U.S. 591, 620 (1997). Thus, it is probable
that the State Settlement Class will satisfy the requirements of Rule 23(b)(3),
in addition to the requirements of Rule 23(a).
In light of the above, the court will preliminarily certify the State
Settlement Class for settlement purposes and for the purpose of sending
notice under Rule 23(e). The court reserves its finding on final certification
until after the fairness hearing. A more thorough certification analysis will be
provided after the State Settlement Class members have been provided with
notice of the action and have had an opportunity to object to the settlement.
B.
Preliminary Approval of the Amended Settlement Agreement
The court will also preliminarily approve the amended settlement
agreement. (Doc. 118-3). In making this determination, the court has
considered the following: (1) the negotiations occurred at arms’-length; (2)
there was sufficient discovery; and (3) the proponents of the settlement are
experienced in similar litigation. In re Gen. Motors Corp., 55 F.3d at 785.
19
The parties have engaged in lengthy mediation over a period of three
full days with the Honorable Joel B. Rosen (Ret.) and Hunter Hughes, Esq. In
addition, the parties have held two telephonic conferences with the court to
address the outcome of those settlement discussions and the agreement
reached. The parties have made amendments to their original agreement in
an effort to reach a fair compromise and have spent significant time reaching
and drafting the current agreement.
There was also sufficient discovery to reach a fair compromise. The
amended agreement itself states that the defendant produced the following
information during the settlement process:
(1)
[A]n electronic spreadsheet setting forth the dates of
employment in which Collective Group members worked in
the position at issue;
(2)
Employee Earnings Detail history Reports and weekly pay
data for each calendar year in which an employee worked
in the position at issue during the applicable time period;
(3)
[A]ll documents summarizing or describing the policies and
procedures for compensating Collective Group members in
the form of wages, bonuses, overtime compensation, and
all other forms of compensation during the applicable
period;
(4)
[P]olicies or practices applicable to Collective Group
members with respect to time-keeping and compensation;
(5)
[J]ob descriptions for the Collective Group members;
(6)
Department of Labor audit, evaluations, and reports; and
(7)
[A] sample of personnel files.
20
(Doc. 118-3, ¶4). The court finds that the information exchanged would allow
the parties to come to a fair agreement in this particular wage law dispute with
the defendant.
The court is also satisfied that the attorneys in this action are
experienced in this particular type of litigation. Class counsel Shanon J.
Carson with the law firm Berger & Montague, P.C. provided a declaration to
the court with the firm’s resume attached as an exhibit. (Doc. 118-4). Attorney
Carson currently serves as lead or co-counsel in employment and collective
actions in federal courts around the country. (Id. ¶3). Berger & Montague, P.C.
has represented clients in major class action cases for over 40 years. (Id. ¶3).
The firm’s resume attached as an exhibit supports this finding. (Id. Ex. A).
Attorney Carson believes that the amended settlement agreement is fair to the
plaintiffs and offers significant advantages over continued litigation. (Id. ¶11).
Plaintiffs’ co-counsel with the law firm Head Law Firm, LLC did not provide the
court with a similar declaration or firm resume. The court is confident,
however, that the plaintiffs interests were adequately represented during
settlement given the expertise of Attorney Carson and Berger & Montague,
P.C. in this type of litigation.
The court finds that the amended settlement agreement should be
preliminarily approved based on the information provided to the court and
21
finds that the agreement was reached in an extensive, arms’-length process
that occurred with the experience of counsel after sufficient discovery.6 The
court will schedule a final fairness hearing needed to evaluate the amended
settlement agreement under the standard set forth in Girsch and Lynn’s Food
Stores.
C.
Proposed Schedule and Notice
Lastly, the court will preliminarily approve Dahl as the settlement
administrator to proceed with the settlement process agreed to by the parties
and as set forth in their proposed schedule for completing settlement. The
court will also direct notice to Group 1 and Group 2 members as set forth in
the parties proposed notices.
The court finds that the proposed notice to class members satisfies the
requirements of Rule 23(c)(2)(B) and Rule 23(e)(1). The parties attached the
proposed notice form and Group 2 opt-in form with their motion. (Doc. 118-3,
Exs. A–C). A different form will be mailed to those members in Group 1 as
compared to members in Group 2. The forms advise the members about the
settlement and release, how to object or opt-out, and, in the case of Group 2,
6
The court is not able to evaluate the final factor in its preliminary
determination: whether only a fraction of class members objected. In re Gen.
Motors Corp., 55 F.3d at 785. The court will reassess this factor in its final
determination after notice is provided to class members, in addition to the
factors set forth in Girsch and Lynn’s Food Stores.
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what must be done in order to become eligible for a settlement award. It also
provides information for class counsel in the event a member has questions.
The court also notes that notice was sent to 1,360 of the defendant’s
employees specifically for the FLSA action, the Collective Group, in February
2014. In light of these circumstances, the court finds that the proposed notice
is the best practicable form of notice to inform the members of the state law
settlement and to proceed with the settlement for all claims in a timely and
efficient manner.
V.
CONCLUSION
Accordingly, the plaintiffs’ amended, unopposed motion for preliminary
approval of the parties’ settlement agreement, (Doc. 104), is GRANTED. The
parties’ amended settlement agreement is preliminarily approved and the
State Settlement Class named in the agreement is preliminarily certified as a
Rule 23 class. A final fairness hearing will be scheduled by the court. In
accordance with the parties proposed schedule, ten days prior to the final
fairness hearing, the parties shall file an motion for final approval, at which
time the parties should also seek final certification of the FLSA Collective
Group and State Settlement Class. The plaintiffs’ original, unopposed motion
for preliminary approval of the parties’ settlement agreement, (Doc. 104), and
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the parties joint motion for a hearing to discuss changes to the original
agreement, (Doc. 115), are DENIED as moot.
s/ Malachy E. Mannion
MALACHY E. MANNION
United States District Judge
DATED: March 21, 2017
O:\Mannion\shared\MEMORANDA - DJ\CIVIL MEMORANDA\2013 MEMORANDA\13-2529-01.wpd
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