Chung v. Wyndham Vacation Resorts, Inc.
Filing
77
OPINION AND ORDER - THAT: a. The settlement of this collective action is APPROVED as it represents afair and reasonable settlement of a bona fide dispute under the FLSA. b. The parties shall in good faith carry out all the terms of the Agreement. c. Without affecting the finality of the Judgment, the Court will retain jurisdiction over any disputes pertaining to the enforcement of the settlement. d. This action is hereby DISMISSED WITH PREJUDICE. e.Defendant's Motion to Dismiss Untimely Consents (Doc. 64) is DENIED AS MOOT.f. The Clerk of Court is directed to CLOSE this case. Signed by Honorable Robert D. Mariani on 6/15/15. (jfg)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
LEIGHTON CHUNG et aI.,
Plaintiffs,
v.
3:14·CV·00490
(Judge Mariani)
WYNDHAM VACATION RESORTS, INC. :
Defendant.
OPINION AND ORDER
Presently before the Court is Plaintiffs' Unopposed Motion for Approval of Collective
Action Settlement (Doc. 72). The settlement stems from a class/collective action lawsuit
alleging that Defendant Wyndham Vacation Resorts, Inc. violated the Fair Labor Standards
Act ("FLSA"), 29 U.S.C. §§ 201, et seq., and the Pennsylvania Minimum Wage Act
("PMWA"), 43 P.S. §§ 333.101, et seq., by "mandat[ing] that Plaintiff and other Sales
Employees report 40 or fewer work hours per week even though these employees actually
work[ed] over 40 hours" and that "on those workweeks when Plaintiff and other Sales
Employees actually entered more than 40 hours into the company timekeeping system,
Defendant's managers usually would alter the timekeeping entries to eliminate the overtime
work." (Doc. 1,111112-13). Originating plaintiff Leighton Chung, individually and on behalf of
the opt-in plaintiffs, and Defendant have now agreed to settle the above-captioned action on
f
i
!
the terms and conditions set forth in the "Settlement Agreement and Release" (hereinafter
lithe Agreement") (Doc. 72-3).
On September 9,2014, the Court issued a memorandum opinion and order
conditionally certifying, pursuant to Section 16(b) of the Fair Labor Standards Act, 29 U.S.C.
§ 216(b), a putative FLSA collective consisting of "[a]1I sales employees (including, inter alia,
Sales Representatives) employed by Defendant at the Wyndham Vacation Resorts
Shawnee Village ('the Shawnee Facility') during any workweek within the past three years."
(Docs. 44, 45). The order also approved the proposed notice and consent forms and
several other notice protocols. The notice process resulted in an FLSA collective of 35
plaintiffs, including Chung. Following discovery and "weeks of arms-length negotiations", a
settlement was reached. (PI.'s Brief in Supp. of Mot., Doc. 74, at 2).
On May 19, 2015, the Court held a hearing to determine whether the settlement
constituted afair and reasonable resolution of a bona fide dispute.
The Court, having heard argument in support of the settlement, and upon
consideration of Plaintiffs Motion (Doc. 72), the Agreement (Doc. 72-3), the Declaration of
Peter Winebrake (Doc. 73), the accompanying brief (Doc. 74), and all other submissions
presented with respect to the settlement, enters the following 'findings:
1. The Court has jurisdiction over the subject matter and personal jurisdiction over the
parties to this action, including the members of the class, pursuant to 29 U.S.C. §
I
216(b) and 28 U.S.C. § 1331.
f
l
2
2. The Court confirms for settlement purposes the certification of this action as a
collective action and the collective as those who previously joined the action
pursuant to 29 U.S.C. § 216(b). The collective is defined as the individuals identified
in Exhibit A of the Agreement. This group consists of all sales employees employed
by Defendant at the Wyndham Vacation Resorts Shawnee during any workweek he
or she was employed as a salesperson after March 14,2011.
3. The Agreement and all of its exhibits (as filed with the Court) are incorporated into
this Final Opinion and Order, including all definitions and terms set forth in the
Agreement.
4. The total settlement amount is $180,000.00 in accordance with the terms of the
Agreement of which Plaintiffs will share in $115,000.00. The settlement fund is nonreversionary.
5. The payment amount equates to $54.61 for every week that a plaintiff worked, which
is the equivalent of 2.5 hours of paid overtime per week. The average individual
payment is $3,285.71 and median individual payment is $2,457.34.
6. In response to the memoranda mailed to each collective member on May 1, 2015,
describing the settlement and his or her anticipated individual payment amount, no
opt-in plaintiff objected to the settlement agreement. (See Declaration of Peter
Winebrake, Doc. 73, 1Mf 24-25).
3
t
!
7. After considering the factors set forth in Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975)
t
and discussed extensively by counsel for Plaintiff during the fairness hearing, the
I
Court approves the settlement with respect to the payment of $115,000.00 to the
Plaintiffs as fair and reasonable. The Girsh factors include:
(1) the complexity, expense and likely duration of the litigation; (2) the
reaction of the class to the settlement; (3) the stage of the proceedings
and the amount of discovery completed; (4) the risks of establishing
liability; (5) the risks of establishing damages; (6) the risks of maintaining
the class action through the trial; (7) the ability of the defendants to
withstand a greater judgment; (8) the range of reasonableness of the
settlement fund in light of the best possible recovery; (9) the range of
reasonableness of the settlement fund to a possible recovery in light of all
the attendant risks of litigation.
Girsh, 521 F.2d at 157 (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 463
I
t
I
t
1
(2d Cir. 1974) (internal quotations and alterations omitted)).
8. In particular, the Court notes the signi'ficant risk that Plaintiffs face in proving
damages given the potential difficulties in establishing those weeks in which a
Plaintiffs actual work hours exceeded the 40-hour overtime threshold; a problem
which Plaintiffs' counsel characterized as the "fundamental weakness in this case" at
I
I
I
the fairness hearing.
9. Absent settlement, Plaintiffs risk this Court rendering one or more decisions in favor
of Defendant. Currently pending before the Court is Defendant's Motion to Dismiss
Untimely Consents (Doc. 64), resolution of which may result in one opt-in plaintiff
i
being dismissed. Defendant also asserts that it would move to decertify the
I
4
i
,
I
t
collective, and is confident it would be successful. Defendants may additionally file a
motion for summary judgment. The multitude of motions, complexity of the issues
they raise, and the length of time the parties would wait for each motion to be
resolved, as well as the potential difficulties Plaintiffs admit they would face in
establishing liability and avoiding decertification of the collective, all strengthen
counsel's submission to the Court that this is a fair and reasonable settlement and is
in the best interests of the plaintiffs.
I
10. While the Court notes that the ability of the defendant to withstand a greater
judgment weighs against approval of the settlement, in light of the considerations
enumerated by the plaintiffs in both the brief in support of the motion and those
I
I
stated by Plaintiffs' counsel during the fairness hearing, this particular factor is of
little consequence to the approval of the settlement agreement.
11. Plaintiff's request that Chung receive a $3,000.00 service award, which is included
in the proposed settlement agreement, is approved as reasonable and well-within
the realm of service awards in similar actions. Chung has purportedly "been a
reliable and diligent representative of the collective" and counsel for Plaintiff
represented to the Court at the fairness hearing that Chung worked to inform his co
workers of the case, thereby allowing Plaintiff's counsel to obtain declarations and
further support his motion for conditional certification of the collective.
,
I
I
5
I
l
12. The application by Winebrake &Santillo, LLC for $65,000.00 in attorney's fees,
litigation expenses, and claims administration expenses is approved. Pursuant to
Third Circuit precedent, this Court has considered
(1) the size of the fund created and the number of persons benefitted;
(2) the presence or absence of substantial objections by members of
the class to the settlement terms and/or fees requested by counsel; (3)
the skill and efficiency of the attorneys involved; (4) the complexity and
duration of the litigation; (5) the risk of nonpayment; (6) the amount of
time devoted to the case by plaintiffs' counsel; and (7) the awards in
similar cases.
See, In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 300 (3d Cir. 2005) (citing Gunter
v. Ridgewood Energy Corp., 223 F.3d 190, 195 n.1 (3d Cir. 2000)). The Court also
I
I
I
I
f
performed a "cross-check" of the percentage fee award against the "lodestar"
method as recommended by the Third Circuit. See id. at 305 (citing In re Prudential
Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 333 (3d Cir. 1998)).
Here, Plaintiffs counsel has represented that the expenses total $7,844.00, leaving
$57,156.00 for payment of the requested attorney's fees. (Doc. 74, at 11). These
fees equal 31.75% of the total settlement fund. This percentage is consistent with
Middle District Courts' prior decisions in similar cases as well as with comparable
cases throughout the Third Circuit. See, e.g., Creed v. Benco Dental Supply Co.,
2013 WL 5276109, at *6 (M.D. Pa. 2013) ("an award of one-third of the settlement is
consistent with similar settlements throughout the Third Circuit"); see also Marlin v.
Foster Wheeler Energy Corp., 2008 WL 906472, at *5 (M.D. Pa. 2008) (collecting
6
I
I
~
l
•
i
I
~
cases). The firm has already successfully argued for conditional certification of the
collective, engaged in discovery which included Defendant's production of
timekeeping and payroll data for each plaintiff, and participated in settlement
negotiations, all of which resulted in over 191 attorney hours. Counsel's skill and
experience, provided on a pure contingency fee basis and applied to a case that
would present a multitude of complex, risky, and lengthy motions and proceedings,
along with the lack of any objections by members of the collective to the settlement
terms, all justify the firm's requested fees. Furthermore, the requested fee of
$57,156.00 is significantly lower than the firm's fee lodestar of $101,195.00,
supporting a determination of the reasonableness of counsel's fees.
13. The Court recognizes that Defendant has denied and continues to deny every
allegation of liability and wrongdoing asserted in the Complaint as well as any
violation of state or federal law related to the payment of wages. The Agreement,
this Opinion and Order, all papers related to the settlement, and the settlement itself,
shall not be used as a finding or conclusion by the Court or an admission by
Defendant of any fault, wrongdoing, or liability.
14. Upon agreement by the parties at the fairness hearing, the COLIrt'S approval of the
Settlement Agreement would render Defendant's Motion to Dismiss Untimely
Consents (Doc. 64) moot.
1
!
7
i
15. ACCORDINGLY, THIS ~ DAY OF JUNE, 2015, IT IS HEREBY ORDERED
THAT:
a. The settlement of this collective action is APPROVED as it represents a fair
and reasonable settlement of a bona fide dispute under the FLSA.
b. The parties shall in good faith carry out all the terms of the Agreement.
c. Without affecting the finality of the Judgment, the Court will retain jurisdiction
over any disputes pertaining to the enforcement of the settlement.
d. This action is hereby DISMISSED WITH PREJUDICE.
e. Defendant's Motion to Dismiss Untimely Consents (Doc. 64) is DENIED AS
MOOT.
f. The Clerk of Court is directed to CLOSE this case.
I
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?