Fosdick v. Berkeley County

Filing 41

ORDER and OPINION: The Court GRANTS the Parties' joint motion for court approval of settlement (Dkt. No. 40) and DISMISSES the action WITH PREJUDICE.AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 8/28/24.(ltap, ) Modified document type on 8/29/2024 (sshe, ).

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Loretta Fosdick, on Behalf of Herself
and All Others Similarly Situated,

Case No. 2:23-cv-03375-RMG

Plaintiff,

v.

ORDER AND OPINION

Berkeley County,
Defendant.
This matter is before the Court on the Parties’ revised joint motion for settlement approval.
(Dkt. No. 40). For the reasons set forth below, the Court grants the motion and dismisses this case
with prejudice.
I.

Background

Plaintiffs are former Berkeley County Convenience Center Operators who allege
Defendant failed to pay overtime wages stemming from work they were required to perform prior
to the start and following the end of their shifts. (Dkt. No. 1-1, ¶¶ 29-41). Plaintiff Loretta Fosdick
alleges she typically worked at least two (2) additional hours per week that were not compensated.
(Id., ¶ 42). Plaintiff Allison Barry subsequently joined the case as an opt-in Plaintiff. (Dkt. No. 40
at 1). The Complaint alleges violations of the Fair Labor Standards Act and South Carolina
Payment of Wages Act. (Dkt. No. 1-1). The Parties have engaged in written discovery and several
depositions, and jointly move to settle this case following successful mediation. (Dkt. No. 40).
II.

Legal Standard

Parties are typically permitted to reach private settlements, but settlement agreements
under the FLSA differ because they are not exclusively private transactions and federal courts are
charged with the responsibility of scrutinizing FLSA settlements for fairness. See Walton v. United
1

Consumers Club, Inc., 786 F.2d 303, 306 (7th Cir. 1986) (“Once the Act makes it impossible to
agree on the amount of pay, it is necessary to ban private settlements of disputes about pay.”);
Lynn's Food Stores, Inc. v. United States ex rel. U.S. Dep't of Labor, Emp't Standards Admin.,
Wage & Hour Div., 679 F.2d 1350, 1353 (11th Cir. 1982). The FLSA's provisions are generally
not subject to waiver, but a district court may approve a settlement if the settlement reflects a
“reasonable compromise of disputed issues” rather than “a mere waiver of statutory rights brought
about by an employer's overreaching.” Lynn's Food Stores, Inc., 679 F.2d at 1354.
III.

Discussion

To determine whether to approve the proposed settlement, the Court must determine (i)
whether the award reflects a fair and reasonable compromise over the issues in dispute, and (ii)
whether the proposed award of attorney's fees and costs is reasonable. Although the Fourth Circuit
has not directly addressed what factors courts should consider when analyzing proposed FLSA
settlements, courts tend to follow the Eleventh Circuit's analysis in Lynn's Food Stores, which asks
whether there is a bona fide dispute and whether the proposed settlement is fair and reasonable.
See, e.g., Corominas v. ACI Holdings, LLC, No. 2:15-CV-4372-PMD, 2016 WL 10520235, at *2
(D.S.C. 2016); Saman v. LBDP, Inc., Civ. No. 12-1083, 2013 WL 2949047, at *2 (D. Md. 2013).
Plaintiffs allege Defendant failed to pay them overtime wages. Defendant denies these allegations.
A bona fide dispute exists.
This Court has previously articulated the following factors to assess whether a settlement
is fair and reasonable: “(1) the extent of discovery that has taken place; (2) the stage of the
proceedings, including the complexity, expense and likely duration of the litigation; (3) the
absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented
the plaintiffs; (5) the opinions of class counsel and class members after receiving notice of the
2

settlement whether expressed directly or through failure to object; and (6) the probability of
plaintiffs’ success on the merits and the amount of the settlement in relation to the potential
recovery.” Irvine v. Destination Wild Dunes Mgmt., Inc., 204 F. Supp. 3d 846, 849 (D.S.C. 2016)
(citing Lomascolo v. Parsons Brinckerhoff, Inc., No. 1:08CV131 0(AJT/JF A), 2009 WL 3094955,
at *10 (E.D. Va. 2009)).
The Parties have agreed to a total settlement amount of $28,000.00 (the “Settlement
Amount”). (Dkt. No. 40 at 2). Plaintiff Loretta Fosdick would recover $10,000.00, reflecting
“almost 90% of what Fosdick alleges she is owed applying a three-year statute of limitations” as
well as $5,000.00 in liquidated damages. (Id. at 3). Plaintiff Allison Barry would recover $500.00,
comprising “100% and slightly more than Barry alleges she is owed applying a two-year statute
of limitations” and $250.00 in liquidated damages. (Id.). The Parties explain that “Plaintiffs’
allocation of settlement funds is based on an individual determination using the duration of time
each was employed by the County during the applicable statute of limitations period for the
relevant time.” (Id. at 3-4).
The settlement also includes $17,500.00 in costs and fees awarded to Marybeth Mullaney,
Esq., Plaintiffs’ counsel.

(Id. at 6).

The Parties explain this amount is “reasonable and

appropriate” where “Plaintiffs’ Counsel’s total fees and costs were $55,959.51 . . . includ[ing]
$3,682.01 in costs and $52,277.50 in fees for approximately 155.7 hours at an hourly rate of
$350.00.” (Id.; see also Dkt. Nos. 40-2, 40-4). The Parties represent they “based the amount of
the fee award on the hourly rates and work Plaintiffs’ counsel performed on behalf of Plaintiffs
rather than a percentage-of-the-fund method” and “[a]ccordingly, Plaintiffs’ counsel fees are not
reducing the amounts to be paid to the Plaintiffs for their alleged unpaid wages and liquidated
damages.” (Id. at 6-7).
3

The Court finds the settlement is fair and reasonable. To begin with, the amount and
calculations reflect a fair and reasonable amount and a beneficial outcome for Claimants.
Sufficient discovery has taken place concerning Claimants’ claims. The Parties have engaged in
continuous arms-length negotiations and there is no evidence of fraud or collusion. Further,
without settlement, the case would likely continue to be expensive. Given the length of time, the
discovery exchanged, and the extent to which both Parties’ attorneys are familiar with the case,
they are in a good position to evaluate their claims and defenses and the likelihood of success at
trial. Counsel in this case are experienced, with both Parties’ counsel having extensive experience
in wage-and-hour litigation. (Id. at 6). Further, the amount of the award, which represents alleged
unpaid wages, is clearly fair and reasonable. Considering the stage of litigation, absence of fraud,
settlement amount, experience of counsel, and uncertainties as to success, the Court finds the
Settlement Amount to be fair and reasonable.
Finally, $17,500.00 for attorney's fees and costs is reasonable and, as it was negotiated
separately from the Settlement Amount discussed above, permissible under the FLSA. (Id.).
Reviewing the twelve factors articulated by Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir.
1978): (1) Plaintiffs’ counsel expended 155.7 hours litigating and negotiating Claimants’ claims
and based on Plaintiffs’ counsel typical hourly rate of $350.00, would be a lodestar amount of
$52,277.50, and had $3,682.01 in out-of-pocket costs (Dkt. No. 40-2, ¶ 14); (2) the case involved
difficult issues, implicating damages calculations and discovery; (3) the negotiation of this
settlement required and was benefited by skilled counsel with FLSA experience; (4) Plaintiffs’
counsel was precluded from pursuing other employment because of the roughly 155.7 hours spent
working on this case; (5) the customary fee for 155.7 hours of legal work generally exceeds
$17,500.00, and represents an hourly rate below Plaintiff's counsel's regular hourly rates of
4

$350.00, which would equal a lodestar of $52,277.50; (6) Plaintiffs’ counsel is not deriving a
contingency fee from the settlement funds in this case; (7) while there is no indication of any time
limits imposed by Claimants, the statute of limitations in FLSA actions required fast action by
Plaintiffs’ counsel; (8) as discussed above, Plaintiffs’ counsel negotiated a very beneficial result
for Claimants; (9) Plaintiffs’ counsel has extensive experience in FLSA litigation; (10) there is no
indication this case was particularly undesirable for a wage and hour claim, though the Court notes
the difficulty and risk of taking on FLSA litigation in general; (11) this case was filed in July 2023
and therefore Plaintiffs’ attorney and Claimants have a longstanding relationship; (12) while
Plaintiffs’ counsel’s fee is relatively substantial when viewed as a percentage of the total settlement
amount (62.5%), her fee was negotiated separately from the Settlement Amount and does not
deprive Plaintiffs of settlement funds. See DeWitt v. Darlington County, No. 4:11–cv–00740–
RBH, 2013 WL 6408371, at *9 (D.S.C. 2016). Therefore, under the Barber factors, the proposed
attorneys’ fees are reasonable.
IV.

Conclusion

In light of the foregoing, the Court GRANTS the Parties’ joint motion for court approval
of settlement (Dkt. No. 40) and DISMISSES the action WITH PREJUDICE.
AND IT IS SO ORDERED.

_s/Richard M. Gergel_
Richard Mark Gergel
United States District Judge
August 28, 2024
Charleston, South Carolina

5