Fitzgerald v. P.L. Marketing, Inc.
Filing
104
ORDER granting 97 Motion for Final Settlement Approval; granting 98 Motion for Attorney Fees and Costs. Signed by Judge Samuel H. Mays, Jr on 7/2/2020. (Mays, Samuel)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
TOREY FITZGERALD, KENNETH
MCCOY, and ALAN MOORE,
individually and on behalf of
all others similarly
situated,
Plaintiffs,
v.
P.L. MARKETING, INC.,
Defendant.
No. 2:17-cv-02251-SHM-cgc
ORDER
Before the Court is Plaintiffs’ May 15, 2020 Unopposed
Motion
for
Final
Approval
Settlement
Agreement
Approval”).
(ECF No. 97.)
of
(the
Class
“Motion
and
Collective
for
Final
Action
Settlement
Also before the Court is Plaintiffs’
May 15, 2020 Unopposed Motion for Approval of Service Payments,
Attorney’s Fees, and Costs (the “Motion for Attorney’s Fees and
Costs”).
(ECF No. 98.)
The Court held a fairness hearing on June 4, 2020, at which
it heard arguments by counsel.
No one appeared in opposition.
For the following reasons, the Motion for Final Settlement
Approval is GRANTED.
is GRANTED.
The Motion for Attorney’s Fees and Costs
I.
Background
This dispute arises from Defendant P.L. Marketing, Inc.’s
(“PLM”) alleged failure to pay overtime compensation to certain
employees.
PLM provides in-store merchandise display work in
Kroger Co. (“Kroger”) grocery stores.
(ECF No. 97 at 1-2.)
Inter alia, PLM conducts store “sets” and “resets.”
(Id.)
During store sets and resets, PLM employees travel to various
Kroger stores and arrange products and pricing on shelves and
displays.
(Id.) Two types of PLM employees participate in store
sets and resets: (1) Set/Reset Team Members (“STMs”) and (2)
Set/Reset Team Leads (“STLs”).
(Id.)
Until December 2016, PLM
classified STMs as salaried employees exempt from federal and
state overtime laws.
(Id. at 2.)
Beginning in December 2016,
PLM reclassified STMs as hourly employees who are not exempt
from federal and state overtime laws.
(Id.)
PLM continues to
classify STLs as salaried employees exempt from federal and state
overtime laws.
(Id.)
On April 13, 2017, Plaintiff Torey Fitzgerald filed a
Complaint in this action (the “Initial Complaint”).
1.)
(ECF No.
In the Initial Complaint, Fitzgerald, a PLM employee,
alleged that PLM had failed to pay overtime compensation to him
and other similarly situated STMs and STLs as required under the
Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq.
(Id.
¶ 1.)
Fitzgerald
alleged
2
that
PLM
had
incorrectly
classified STMs and STLs as exempt from the federal overtime
laws.
(Id. ¶¶ 1, 30.)
Fitzerald sought to represent himself
and other similarly situated STMs and STLs in a collective action
under the FLSA.
(Id. ¶ 39.)
On November 3, 2017, pursuant to an October 6, 2017 joint
stipulation entered into by the parties, this Court conditionally
certified the following set of similarly situated plaintiffs for
the FLSA collective action asserted in the Initial Complaint:
Any person who worked for Defendant as a Set/Reset
Team Member, a Set Team Leader, a Surge Set Team Member
or Surge Set Team Leader internally classified and/or
paid or treated by Defendant as exempt from overtime
pay requirements, and was paid on that basis for one
or more weeks for that work by salary (not hourly) on
a pay date occurring within the period beginning three
(3) years prior to August 18, 2017 through the date of
judgment.
(ECF No. 42 ¶ 5; ECF No. 50.) At the same time, and also pursuant
to the October 6, 2017 joint stipulation entered into by the
parties, this Court approved the distribution of notice and optin consent forms to putative members of the collective action.
(ECF No. 42 ¶ 6; ECF No. 50.)
The approved notice and opt-in
consent forms were distributed and 161 individuals opted in to
the collective action.
(ECF No. 97 at 5.)
On May 8, 2018, the parties engaged in a mediation session
with a third-party mediator.
was unsuccessful.
(Id.)
(Id. at 3.) That mediation session
On July 10, 2019, the parties engaged
3
in a second mediation session with the same mediator, during
which the parties reached a settlement.
(Id. at 4.)
On October 31, 2019, Fitzgerald and Plaintiffs Kenneth McCoy
and
Alan
Moore
(collectively,
“Plaintiffs”
or
“Named
Plaintiffs”) filed, for settlement purposes, the First Amended
Complaint (the “Amended Complaint”).
(ECF No. 86.)
Complaint alleges three causes of action.
The Amended
First, Plaintiffs
allege that PLM failed to pay overtime compensation to Plaintiffs
and similarly situated STMs and STLs as required under the FLSA.
(Id. ¶¶ 1, 42-53.)
Second, Plaintiff Moore alleges that PLM
failed to pay overtime compensation to Moore and a putative class
of Ohio-based STMs under Ohio’s overtime laws.
64.)
(Id. ¶¶ 2, 54-
Third, Plaintiff McCoy alleges that PLM failed to pay
overtime compensation to McCoy and a putative class of Kentuckybased STMs under Kentucky’s overtime laws.
On
October
Preliminary
31,
Settlement
Settlement Agreement.
2019,
Plaintiffs
Approval
and
(Id. ¶¶ 3, 65-74.)
filed
the
a
Motion
parties’
(See ECF Nos. 88, 88-1.)
for
proposed
The Settlement
Agreement proposes a settlement (the “Settlement”) of all claims
asserted in the Amended Complaint on behalf of the members of
the FLSA opt-in collective action (the “FLSA Collective”), the
members of the putative class of Ohio-based STMs (the “Ohio
Class”), and the members of the putative class of Kentucky-based
STMs (the “Kentucky Class”).
(See ECF No. 88-1.) The Settlement
4
Agreement defines the FLSA Collective, the Ohio Class, and the
Kentucky Class as:
FLSA Collective: All individuals who filed Consents
in the Litigation that were not withdrawn as of the
July 10, 2019 mediation date, and who work or worked
for
PLM
as
Set/Reset/Surge
Team
Members
or
Set/Reset/Surge Team Leaders and who were paid as
exempt for that work.
Ohio Class: All individuals reflected on the parties’
agreed upon class list as of the July 10, 2019
mediation and who worked for PLM as Set/Reset/Surge
Team Members and who were paid as exempt for that work
within the period beginning August 18, 2015, through
the December 4, 2016 pay date.
Kentucky Class:
All individuals reflected on the
parties’ agreed upon class list as of the July 10,
2019
mediation
and
who
worked
for
PLM
as
Set/Reset/Surge Team Members and who were paid as
exempt for that work within the period beginning August
18, 2012, through the December 4, 2016 pay date.
(Id. ¶ 3.)
The Settlement Agreement provides that PLM shall establish
a Settlement Fund of $1,575,000.
(Id. ¶ 6.)
The Settlement
Fund will first be used to pay attorney’s fees, litigation costs
and expenses, notice and administration expenses, and service
payments to Fitzgerald, Moore, and McCoy.
(Id. ¶¶ 7-10.)
The
remaining amount will be distributed pro rata among the members
of the FLSA Collective, the Ohio Class, and the Kentucky Class
on a point-based system.
(See id. ¶ 10.)
No amount of the
Settlement Fund will revert to PLM under any circumstances. (Id.
¶ 6.)
Pro
rata
shares
from
the
5
Settlement
Fund
will
be
distributed to the collective and class members by mailed checks.
(Id. ¶ 13.)
The Settlement Agreement provides that the members of the
FLSA Collective will release PLM from all wage and hour claims
under state and federal law arising out of the allegations stated
in the Amended Complaint through July 10, 2019.
(Id. ¶ 15.)
The members of the Ohio Class and the Kentucky Class will release
PLM from all wage and hour claims under state law arising out of
the allegations stated in the Amended Complaint through July 10,
2019.
(Id.)
Fitzgerald, Moore, and McCoy will release PLM from
any and all claims arising out of their employment with PLM
through the date of the Settlement Agreement.
(Id.)
PLM will
release the collective and class members from “any claims it may
have against participating settlement members that arise out of
their
assertion
of
the
claims,
receiving a settlement payment.”
joining
the
litigation,
or
(Id.)
On February 13, 2020, the Court granted Plaintiffs’ Motion
for Preliminary Settlement Approval.
(See ECF No. 95.)
The
Court conditionally approved the Settlement as fair, reasonable
and
adequate.
(Id.
at
39
¶ 1.)
The
certified the Ohio and Kentucky Classes.
Court
conditionally
approved
Moore
Court
conditionally
(Id. at 39 ¶ 4.)
and
McCoy
as
The
class
representatives (hereafter, the “Class Representatives”) for the
Ohio Class and the Kentucky Class, respectively.
6
(Id. at 40
¶ 6.)
The Court approved C. Andrew Head and the Head Law Firm,
LLC as class counsel.
(Id. at 40 ¶ 7.)
The Court approved the
form and substance of Plaintiffs’ proposed class and collective
notices and directed that notice of the proposed settlement be
provided to the collective and class members.
3, 8.)
(Id. at 39-40 ¶¶
The Court provided a procedure for collective and class
members to request exclusion from the FLSA Collective, the Ohio
Class, or the Kentucky Class.
scheduled
a
fairness
(Id. at 41 ¶ 12.)
hearing
and
provided
a
The Court
procedure
for
collective and class members to appear at the fairness hearing
and be heard in support of, or in opposition to, the Settlement.
(Id. at 42-43 ¶¶ 15-16.)
On March 5, 2020, the settlement administrator, RG/2 Claims
Administration LLC (hereafter, the “Settlement Administrator”),
issued 211 notices of the proposed settlement to the collective
and class members in the form and manner approved by the Court
in its February 13, 2020 Order.
No. 97-1 ¶ 13.)
undeliverable.
a
forwarding
(Settlement Admin. Decl., ECF
Seven of the 211 notices were returned as
(Id. ¶ 17.)
address
and
The Settlement Administrator used
skip-tracing
procedures
to
locate
updated addresses for the collective and class members whose
notices were returned, and resent notices to those individuals
that were not returned.
(Id.)
The collective and class notices
7
were published on a publicly accessible case settlement website
maintained by the Settlement Administrator.
(Id. ¶ 15.)
The deadline for timely exclusion from the FLSA Collective,
the Ohio Class, or the Kentucky Class was April 20, 2020.
No. 95 at 41 ¶ 12; ECF No. 97-1 ¶¶ 13-14.)
class members requested exclusion.
(ECF
No collective or
(ECF No. 97-1 ¶ 18.)
The
deadline for the filing of timely objections to the Settlement
was May 14, 2020.
(See ECF No. 95 at 42-43 ¶¶ 15-16.)
collective or class members filed objections.
No
(ECF No. 97-1
¶ 19.)
On June 4, 2020, the Court held a fairness hearing, where
it heard arguments by counsel for both sides.
(See ECF No. 103.)
No one appeared in opposition.
II.
Jurisdiction
Plaintiffs allege violations of the FLSA.
This Court has
subject matter jurisdiction over the FLSA claims under the
general grant of federal question jurisdiction in 28 U.S.C.
§ 1331.
Plaintiffs Moore and McCoy allege violations of Ohio and
Kentucky
overtime
laws,
respectively.
This
Court
has
supplemental jurisdiction over the Ohio and Kentucky state law
claims under 28 U.S.C. § 1367(a).
Those claims derive from a
“common nucleus of operative fact” with Plaintiffs’ FLSA claims.
United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966);
8
Soehnlen v. Fleet Owners Ins. Fund, 844 F.3d 576, 588 (6th Cir.
2016).
III. Standard of Review
A.
Collective Action Settlements Under the FLSA
Section 216(b) of the FLSA permits an employee to recover
unpaid overtime compensation by suing an employer “in behalf of
himself or themselves and other employees similarly situated.”
29 U.S.C. § 216(b).
Unlike class actions under Federal Rule of
Civil Procedure 23, when an employee sues his employer in a
representative
capacity
under
§ 216(b),
similarly
situated
plaintiffs choose whether to “opt into” the suit, which is known
as a “collective action.”
Comer v. Wal-Mart Stores, Inc., 454
F.3d 544, 546 (6th Cir. 2006).
The FLSA’s overtime compensation provisions are “mandatory
and, except as otherwise provided by statute, are generally not
subject to being waived, bargained, or modified by contract or
by settlement.”
Kritzer v. Safelife Solutions, LLC, No. 2:10-
cv-0729, 2012 WL 1945144, at *5 (S.D. Ohio May 30, 2012) (citing
Dillworth v. Case Farms Processing, Inc., No. 5:08-cv-1694, 2010
WL 776933, at *5 (N.D. Ohio Mar. 8, 2010), and Brooklyn Sav.
Bank v. O’Neil, 324 U.S. 697 (1945)).
There are two ways in
which claims for back wages arising under the FLSA can be settled
or compromised.
See Lynn’s Food Stores, Inc. v. United States,
679 F.2d 1350, 1352-53 (11th Cir. 1982).
9
First, the Department
of Labor can supervise a settlement.
See Collins v. Sanderson
Farms, Inc., 568 F. Supp. 2d 714, 719 (E.D. La. 2008) (citing 29
U.S.C. § 216(c)).
Second, “[w]hen employees bring a private
action for back wages under the FLSA, and present to the district
court a proposed settlement, the district court may enter a
stipulated
judgment
after
scrutinizing
the
settlement
for
fairness.”
Lynn’s, 679 F.2d at 1353 (citing Schulte, Inc. v.
Gangi, 328 U.S. 108, 113 n.8 (1946)).
Before approving a proposed collective action settlement,
the court should determine whether the members of the putative
collective are similarly situated plaintiffs under the FLSA. See
Bredbenner v. Liberty Travel, Inc., Nos. 09-cv-905, 09-cv-1248,
09-cv-4587, 2011 WL 1344745, at *16-17 (D.N.J. Apr. 8, 2011);
Burkholder v. City of Ft. Wayne, 750 F. Supp. 2d 990, 993-94
(N.D.
Ind.
2010).
The
court
should
review
the
proposed
settlement to ensure that it is “a fair and reasonable resolution
of a bona fide dispute over FLSA provisions.”
Lynn’s, 679 F.2d
at 1355.
B.
Class Action Settlements Under Rule 23
“The claims, issues, or defenses of a certified class -- or
a class proposed to be certified for purposes of settlement -may be settled, voluntarily dismissed, or compromised only with
the court’s approval.”
Fed. R. Civ. P. 23(e).
10
Rule 23(a), (b), and (g) set out the criteria for certifying
a class action in federal court, including a settlement class.
The
Rule
requires
demonstrate
that:
a
party
(1)
seeking
the
class
proposed
certification
class
and
to
class
representatives meet all of the requirements of Rule 23(a); (2)
the case fits into one of the categories of Rule 23(b); and (3)
class counsel meets the requirements of Rule 23(g).
William B.
Rubenstein, Newberg on Class Actions (“Newberg”) § 3:1 (5th ed.
2020).
A district court must give undiluted, even heightened,
attention to Rule 23 protections before certifying a settlement
class.
UAW v. Gen. Motors Corp., 497 F.3d 615, 625 (6th Cir.
2007).
Rule 23(e)(2) establishes the standard for the court’s
approval of a proposed class action settlement.
Under Rule
23(e)(2), the court must review whether the proposed settlement
is “fair, reasonable, and adequate after considering whether”:
(A) the class representatives and class counsel have
adequately represented the class;
(B) the proposal was negotiated at arm’s length;
(C) the relief provided for the class is adequate,
taking into account:
(i) the costs, risks, and delay of trial and
appeal;
(ii) the effectiveness of any proposed method of
distributing relief to the class, including the
method of processing class-member claims;
11
(iii) the terms of any proposed award of
attorney’s fees, including timing of payment; and
(iv) any agreement required
under Rule 23(e)(3); and
(D) the proposal treats
relative to each other.
class
to
be
members
identified
equitably
Fed. R. Civ. P. 23(e)(2)(A)-(D).1
C.
Attorney’s Fees and Costs
“In a certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law
or by the parties’ agreement.”
Fed. R. Civ. P. 23(h).
When
parties to a class action seek attorney’s fees and costs, they
must comply with the following:
(1) A claim for an award must be made by motion under
Rule 54(d)(2), subject to the provisions of this
subdivision (h), at a time the court sets. Notice of
the motion must be served on all parties and, for
motions by class counsel, directed to class members in
a reasonable manner.
(2) A class member, or a party from whom payment is
sought, may object to the motion.
(3) The court may hold a hearing and must find facts
and state its legal conclusions under Rule 52(a).
1
Before 2018, Rule 23(e)(2) directed courts to determine whether
proposed class action settlements were “fair, adequate, and
reasonable,” but did not provide a standard for courts to apply.
See Fed. R. Civ. P. 23(e)(2) (2017). Historically, courts applied
judicially developed standards when deciding whether proposed class
action settlements were fair. See Newberg § 13:48; UAW, 497 F.3d at
631 (discussing the Sixth Circuit’s traditional multifactor test).
Effective December 1, 2018, Rule 23(e) was substantially amended to
provide an enumerated “shorter list of core concerns” for courts to
focus on when evaluating whether a proposed class action settlement
is fair. See Fed. R. Civ. P. 23(e)(2), 2018 Advisory Committee
Notes.
12
(4) The court may refer issues related to the amount
of the award to a special master or a magistrate judge,
as provided in Rule 54(d)(2)(D).
Id.
“In
general,
there
are
two
methods
for
calculating
attorney’s fees: the lodestar and the percentage-of-the-fund.”
Van Horn v. Nationwide Prop. & Cas. Ins. Co., 436 F. App’x 496,
498 (6th Cir. 2011). “District courts have discretion ‘to select
the more appropriate method for calculating attorney’s fees in
light of the unique circumstances of class actions in general,
and of the unique circumstances of the actual cases before
them.’”
Id. (quoting Rawlings v. Prudential-Bache Props., Inc.,
9 F.3d 513, 516 (6th Cir. 1993)).
The award of attorney’s fees
is within the court’s discretion.
Bowling v. Pfizer, Inc., 102
F.3d 777, 779-80 (6th Cir. 1996).
In
exercising
their
discretion,
district
courts
often
address the “Ramey factors”:
(1) the value of the benefit rendered to the plaintiff
class; (2) the value of the services on an hourly
basis; (3) whether the services were undertaken on a
contingent fee basis; (4) society’s stake in rewarding
attorneys who produce such benefits in order to
maintain an incentive to others; (5) the complexity of
the litigation; and (6) the professional skill and
standing of counsel involved on both sides.
Moulton v. U.S. Steel Corp., 581 F.3d 344, 352 (6th Cir. 2009)
(quotation
marks
and
citation
omitted);
see
also
Ramey
v.
Cincinnati Enquirer, Inc., 508 F.2d 1188, 1196 (6th Cir. 1974).
13
IV.
Analysis
A.
FLSA Collective Action
1.
Similarly Situated Plaintiffs
Members of the FLSA Collective must be similarly situated
plaintiffs under the FLSA.
See Bredbenner, 2011 WL 1344745, at
*16-17.
The standard for a collective action under the FLSA is “less
stringent” than the standard for class certification under Rule
23.
O’Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 584-85
(6th Cir. 2009), abrogated on other grounds by Campbell-Ewald
Co. v. Gomez, 136 S. Ct. 663 (2016).
The Sixth Circuit has not
set out “comprehensive criteria for informing the similarlysituated analysis.”
Id. at 585.
However, the Sixth Circuit has
made clear that, inter alia, plaintiffs may be similarly situated
where
“their
claims
were
unified
by
common
theories
of
defendants’ statutory violations, even if the proofs of these
theories are inevitably individualized and distinct.”
Id.
The members of the FLSA Collective are current and former
STMs and STLs who seek overtime compensation for weeks they
worked on set and reset projects while classified as salaried,
non-exempt PLM employees.
(See ECF No. 97 at 12.)
They allege
common violations of the FLSA: PLM’s policy of classifying STMs
and STLs as salaried, non-exempt employees.
(Id.)
The members
of the FLSA Collective are similarly situated under the FLSA.
14
2.
Settlement Approval
The Settlement must be “a fair and reasonable resolution of
a bona fide dispute over FLSA provisions.”
Lynn’s, 679 F.2d at
1355.
The Settlement resolves a bona fide dispute over FLSA
provisions. The parties disputed whether PLM properly classified
STMs
as
exempt
from
the
FLSA’s
overtime
provisions
before
December 2016, and whether PLM’s continued classification of
STLs as exempt is correct.
(See ECF No. 97 at 12; see also
Answer, ECF No. 29 at 9 ¶¶ 8-10.)
The parties disputed whether
the job duties of STMs and STLs were sufficiently similar to
satisfy the standard for a collective action by “similarly
situated plaintiffs” under the FLSA.
No. 29 at 1 ¶ 1.)
(See ECF No. 97 at 12; ECF
They disputed whether overtime damages for
the members of the FLSA Collective should be calculated using
the “half-time” method or the “time-and-a-half” method, both of
which find colorable support in case law.
(See ECF No. 97 at
13); see also Mitchell v. Abercrombie & Fitch, Co., 428 F. Supp.
2d 725, 732-734 (S.D. Ohio 2006) (noting “[t]he FLSA generally
requires employees to be paid at a rate of one and one-half times
their ‘regular rate’ for hours worked in excess of 40 in one
week,” but that the Supreme Court and the Sixth Circuit have
approved
an
alternative
“fluctuating
workweek
method
of
calculating an employee’s ‘regular rate’” that would result in
15
overtime payments at a rate of one-half the employee’s regular
pay) (citing Overnight Motor Transp. Co. v. Missel, 316 U.S.
572, 580 (1942), and Highlander v. K.F.C. Nat’l Mgmt. Co., 805
F.2d 644, 647-48 (6th Cir. 1986)).
The Settlement provides for a Settlement Fund of $1,575,000.
(ECF No. 88-1 ¶ 6.)
The Settlement is fair and reasonable.
“Courts consider several factors when determining whether a
proposed FLSA settlement is fair and reasonable: (1) the risk of
fraud or collusion behind the settlement; (2) the complexity,
expense, and likely duration of the litigation; (3) the amount
of discovery completed; (4) the likelihood of plaintiff’s success
on the merits; and (5) the public interest in settlement.”
Clevenger v. JMC Mech., Inc., No. 2:15-cv-2639, 2015 WL 12681645,
at *1 (S.D. Ohio Sept. 25, 2015) (citing Padilla v. Pelayo, No.
3:14-cv-305, 2015 WL 4638618, at *1 (S.D. Ohio Aug. 4, 2015),
and UAW, 497 F.3d at 631).
Each of those factors supports settlement.
There are no
concerns about fraud or collusion. The Settlement is the product
of three years of contested litigation and two mediation sessions
with a respected third-party mediator.
(ECF No. 97 at 2-4, 13-
14; Class Counsel Decl., ECF No. 97-2 ¶¶ 17-24.)
was complex.
The litigation
It presented difficult legal questions about
whether PLM’s classifications were correct and what measure of
damages would apply to Plaintiffs’ claims.
16
(See ECF No. 97 at
12-13.)
Due to substantial gaps, discrepancies, and omissions
in PLM’s payroll recordkeeping during the period covering the
FLSA
Collective’s
claims,
the
Settlement
involved
issues of data extrapolation requiring expert review.
difficult
(ECF No.
97 at 3; ECF No. 97-2 ¶¶ 21, 23.)
The parties engaged in significant fact discovery that led
to the production of, inter alia, PLM’s personnel policies, the
personnel files of the members of the FLSA Collective, timesheet
records, mileage reimbursement records, car allowance records,
and bonus records.
(ECF No. 97-2 ¶ 20.)
trial would not have been assured.
issues about liability and damages.
Plaintiffs’ success at
There were contested legal
(ECF No. 97 at 12-13.)
There were contested factual issues about the number of hours
for which Plaintiffs would be owed overtime compensation.
No. 97-2 ¶ 22.)
actions.
(ECF
Public policy favors settlement of collective
See Barnes v. Winking Lizard, Inc., No. 1:18-cv-952,
2019 WL 1614822, at *4 (N.D. Ohio Mar. 26, 2019) (citing Hainey
v. Parrott, 617 F. Supp. 2d 668, 679 (S.D. Ohio 2007)).
The
Settlement is a fair and reasonable resolution of a bona fide
dispute over FLSA provisions.
B.
Ohio and Kentucky Class Actions
1.
Certification
The first issue is certification of the Ohio and Kentucky
Classes (collectively, the “Classes”). Fed. R. Civ. P. 23(c)(1).
17
Rule 23 requires a party seeking class certification to
demonstrate
that:
(1)
the
proposed
class
and
class
representatives meet all of the requirements of Rule 23(a); (2)
the case fits into one of the categories of Rule 23(b); and (3)
class counsel meets the requirements of Rule 23(g).
Rule
23(a)
requires
a
party
seeking
class
action
certification to demonstrate that the proposed class and class
representatives
meet
the
requirements
commonality, typicality, and adequacy.
of
numerosity,
Fed. R. Civ. P. 23(a).
Courts consider two additional, implicit criteria: whether the
class
is
definite
or
ascertainable
and
representatives are members of the class.
whether
the
Newberg § 3:1.
The Classes meet the requirements of Rule 23(a).
sufficiently numerous.
97-2 ¶ 28.)
class
The Ohio Class has 35 members.
The Kentucky Class has 48 members.
(Id.)
They are
(ECF No.
They are
small classes, but not too small to satisfy the numerosity
requirement, particularly because the members of the Classes are
geographically dispersed and may have claims that are too small
to justify individual litigation.
(See ECF No. 95 at 17-19.)
Rule 23(a)’s other requirements are easily satisfied.
Classes are definite.
The
The members of the Classes are known.
(See ECF No. 88-1 at 15-18.)
The Class Representatives are
members of their respective Classes.
(See ECF No. 86 ¶¶ 21-22.)
The members of the Classes present common questions of law and
18
fact about whether PLM misclassified them as salaried, non-exempt
employees.
(See id. ¶¶ 54, 65.)
Class Representatives’ claims
are typical of the claims of the members of the Classes.
id.
¶¶ 54-74.)
Moore
representatives.
and
McCoy
are
adequate
(See
class
They do not have conflicts of interest with
the class members.
They seek the same relief based on the same
legal theory.
A case must fit at least one Rule 23(b) category to be
maintained as a class action.
Fed. R. Civ. P. 23(b).
contend that this action fits category 23(b)(3).
97 at 11-12.)
Plaintiffs
(See ECF No.
A Rule 23(b)(3) class action may be maintained if
Rule 23(a) is satisfied and if the court finds that the questions
of law or fact common to class members predominate over any
questions affecting only individual members, and that a class
action is superior to other available methods for fairly and
efficiently adjudicating the controversy.
Fed. R. Civ. P.
23(b)(3).
The Classes meet the requirements of Rule 23(b)(3).
Classes’
common
issues
predominate
over
individual
The
issues.
Plaintiffs allege that PLM engaged in the same course of illegal
conduct for all members of the Classes by misclassifying them as
exempt from Ohio and Kentucky overtime laws.
(See ECF No. 86
¶¶ 54-74.) Although there might be individualized damages issues
given the data extrapolation necessary to calculate the overtime
19
pay due to each individual member of the Classes (see ECF No. 97
at 2-4), the common questions predominate.
A class action is
the
Classes’
claims.
Plaintiffs allege a common course of wrongful conduct.
It would
superior
form
of
adjudicating
the
not be economically feasible for the members of the Classes to
pursue individual claims.
Rule 23(g) provides that “a court that certifies a class
must appoint class counsel.”
When only one applicant seeks
appointment as class counsel, a court should consider the work
counsel has done in the case, counsel’s experience, counsel’s
knowledge of the applicable law, and the resources class counsel
will
commit
to
representing
the
class.
Fed.
R.
Civ.
P.
23(g)(1)(A).
C. Andrew Head and the Head Law Firm, LLC seek appointment
as class counsel.
After considering the 23(g)(1)(A) factors,
the Court approved Head and the Head Law Firm, LLC as class
counsel in its February 13, 2020 Order granting Plaintiffs’
Motion for Preliminary Settlement Approval.
25-27, 40.)
(See ECF No. 95 at
For the reasons stated in that Order, Head and the
Head Law Firm, LLC (hereafter, “Class Counsel”) are adequate
class
counsel
under
Rule
23(g).
certification requirements of Rule 23.
20
The
Classes
meet
the
2.
Settlement Approval
The Court must determine whether the Settlement is “fair,
reasonable, and adequate.”
Fed. R. Civ. P. 23(e)(2).
A court may approve a class action settlement “only after
a hearing and only on finding that it is fair, reasonable, and
adequate after considering whether”:
(A) the class representatives and class counsel have
adequately represented the class;
(B) the proposal was negotiated at arm’s length;
(C) the relief provided for the class is adequate,
taking into account:
(i) the costs, risks, and delay of trial and
appeal;
(ii) the effectiveness of any proposed method of
distributing relief to the class, including the
method of processing class-member claims;
(iii) the terms of any proposed award of
attorney’s fees, including timing of payment; and
(iv) any agreement required
under Rule 23(e)(3); and
(D) the proposal treats
relative to each other.
class
to
be
members
identified
equitably
Fed. R. Civ. P. 23(e)(2)(A)-(D).
The Court held a fairness hearing on June 4, 2020.
ECF
No.
103.)
Named
Plaintiffs,
Class
representatives, and PLM’s counsel were present.
(See
Counsel,
PLM
(See id.)
The
Court heard arguments from counsel on both sides about whether
the Settlement is fair, reasonable, and adequate.
21
The members
of the FLSA Collective and the Classes were informed of the
fairness hearing’s date, time, and location in settlement notices
issued by the Settlement Administrator in March 2020.2
(See ECF
No. 97-1 ¶ 13; see also ECF No. 88-2 at 10-11; ECF No. 88-3 at
8-9.)
No member of the collective or classes filed opposition
or appeared in opposition to the Settlement.
The Settlement provides for a Settlement Fund of $1,575,000.
(ECF No. 88-1 ¶ 6.)
Rule 23(e)(2).
adequately
The Settlement meets the requirements of
Class Representatives and Class Counsel have
represented
the
Classes.
Class
Representatives
assisted in the litigation by participating in client interviews
and conferences with Class Counsel and by providing relevant
documents.
(See ECF No. 97-2 ¶¶ 38-39.)
Class Counsel did
significant work investigating Plaintiffs’ claims, developing
Plaintiffs’ legal theories, participating in fact discovery with
PLM, directing expert review of PLM’s employee data, mediating
the case, and negotiating the Settlement Agreement.
¶¶ 20-25, 46-49.)
(See id.
Class Counsel has substantial experience with
2
The fairness hearing was originally scheduled as an in-person
hearing. (ECF No. 96.) Because of the current health emergency,
the Court conducted the hearing by videoconference instead. (ECF
No. 101.) A telephone number was posted to the Court’s publicly
available docket for use by members of the collective or classes to
appear in support of, or in opposition to, the Settlement. (See
id.)
22
complex wage and hour litigation and brought that experience to
bear.
(See id. ¶¶ 4-16.)
The Settlement Agreement was negotiated at arm’s length.
It
was
reached
after
substantial
discovery
negotiations that lasted several years.
and
adversarial
(See id. ¶¶ 19-24.)
It
is the product of two mediation sessions with a respected thirdparty mediator.
(Id.)
At the fairness hearing, counsel from
both sides represented that the terms of the Settlement were
vigorously
debated.
There
are
no
concerns
about
fraud
or
collusion.
The relief provided for the Classes is adequate. The costs,
risks, and delay of trial would have been substantial. Difficult
legal questions about liability and damages and factual questions
about data extrapolation would have been presented at trial.
Plaintiffs’
success
would
not
have
been
assured.
Even
if
Plaintiffs succeeded, trial would not likely have occurred for
several
more
years,
and
an
appeal
might
have
followed.
Plaintiffs avoid an uncertain and delayed outcome by settling.
The Settlement is favorable to Plaintiffs.
The Settlement
provides for a Settlement Fund of $1,575,000.
(ECF No. 88-1
¶ 6.)
[their]
It
potential
provides
back
Plaintiffs
wages”
using
with
“100%
Plaintiffs’
of
preferred
total
damages
calculation, and 320% of their total potential back wages using
PLM’s preferred damages calculation.
23
(ECF No. 97-2 ¶ 28.)
The distribution method is effective.
“[T]he goal of any
distribution method is to get as much of the available damages
remedy
to
class
members
as
possible
expedient a manner as possible.”
and
in
as
simple
Newberg § 13:53.
and
Ten days
after the entry of this Order, the Settlement Administrator will
pay the claims of the members of the Classes.
1 ¶ 13.)
of
mailed
(See ECF No. 88-
The settlement distribution will be made in the form
checks.
(Id.)
Uncashed
check
funds
will
redistributed to participating class members pro rata.
be
(Id.)
The distribution method is simple and direct.
The terms of Plaintiffs’ proposed award of attorney’s fees,
as discussed infra, see section IV.C.1, is appropriate.
The
parties have identified no agreements made in connection with
the
Settlement
that
would
conflict
with
or
supplement
the
Settlement Agreement.
The Settlement Agreement treats class members equitably
relative to one another.
It apportions settlement awards to
members of the FLSA Collective, the Ohio Class, and the Kentucky
Class
using
a
point-based
system
that
weights
individual
collective and class members’ awards by the number of weeks
worked as an STM or STL during the relevant time while accounting
for: (1) the additional commitment undertaken by the opt-in
members of the FLSA Collective as compared to absent members of
the Ohio Class and the Kentucky Class; (2) the greater risks at
24
trial for members of the Ohio Class and the Kentucky Class as
compared to members of the FLSA Collective; (3) the availability
of liquidated damages under the FLSA and Kentucky overtime law,
but not under Ohio overtime law; and (4) additional executive
exemption arguments PLM could make at trial about the STL members
of the FLSA Collective.
allocations are fair.
(See ECF No. 88-1 ¶ 10.)
The proposed
The Settlement is fair, reasonable, and
adequate.
C.
Attorney’s Fees and Costs
“In a certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law
or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Plaintiffs
seek approval for attorney’s fees, service payments for the Named
Plaintiffs, and other costs.
(ECF No. 98.)
The procedural
requirements of Rules 23(h) and 54(d)(2) are met.
have moved for attorney’s fees and costs.
(Id.)
Plaintiffs
In the Court-
approved class notice, the Settlement Administrator informed the
class members that Plaintiffs would seek fees and costs and
specified the amounts they would seek.
(Id. at 2.)
No one has
objected to the requested fees and costs.
1.
Attorney’s Fees
A district court has discretion to choose between the
percentage-of-the-fund
method
awarding attorney’s fees.
and
method
when
Van Horn, 436 F. App’x at 498.
“The
25
the
lodestar
lodestar method better accounts for the amount of work done,
while the percentage of the fund method more accurately reflects
the results achieved.”
Rawlings, 9 F.3d at 516.
The court
“generally must explain its ‘reasons for adopting a particular
methodology and the factors considered in arriving at the fee.’”
Van Horn, 436 F. App’x at 498 (quoting Moulton, 581 F.3d at 352).
In the Sixth Circuit, the court may base its fee award on
the percentage-of-the-fund calculation and cross-check it with
the lodestar method.
See Bowling, 102 F.3d at 780.
The
“percentage of the fund has been the preferred method for common
fund cases, where there is a single pool of money and each class
member is entitled to a share (i.e., a ‘common fund’).”
Lonardo
v. Travelers Indem. Co., 706 F. Supp. 2d 766, 789 (N.D. Ohio
2010).
case.
The percentage-of-the-fund method is appropriate in this
The Court will cross-check it with the lodestar method.
The Settlement provides for a Settlement Fund of $1,575,000.
(ECF No. 88-1 ¶ 6.) Class Counsel request $525,000 in attorney’s
fees, equal to one-third (33 1/3%) of the gross amount of the
Settlement Fund.
(ECF No. 98 at 1, 4-13; ECF No. 97-2 ¶ 44.)
That fee is “reasonable under the circumstances.”
F.3d at 352.
Moulton, 581
It accords with general practice in common fund
class action settlements.
See In re Se. Milk Antitrust Litig.,
No. 2:07-cv-208, 2012 WL 12875983, at *2 (E.D. Tenn. July 11,
2012)
(collecting
cases
and
noting
26
that
a
33.33
percent
attorney’s fee “is certainly within the range of fees often
awarded in common fund cases, both nationwide and in the Sixth
Circuit”); Gokare v. Fed. Express Corp., No. 2:11-cv-2131, 2013
WL 12094887, at *4 (W.D. Tenn. Nov. 22, 2013) (collecting cases
in which courts in this Circuit have approved attorney’s fee
awards in common fund cases ranging from 30% to 33% of the total
fund).
The Ramey factors support approving the fee.
the benefit to the Classes is substantial.
The value of
The members of the
Classes will receive cash payments equal to 100% of their total
potential
back
calculation.
wages
under
Plaintiffs’
(See ECF No. 97-2 ¶ 28.)
preferred
damages
As discussed infra in
the lodestar cross-check, the value of Class Counsel’s services
on an hourly basis is reasonable.
on a contingent fee basis.
Class Counsel took this case
Society benefits by encouraging
counsel to take on difficult class actions.
and factually complex.
The case was legally
Counsel for both sides are able and
respected.
The lodestar cross-check supports approving the fee.
The
lodestar is “the product of reasonable hours times a reasonable
rate.”
Pennsylvania v. Del. Valley Citizens’ Council for Clean
Air, 478 U.S. 546, 565 (1986).
applied
to
account
for
the
Lodestar multipliers may be
risk
that
counsel
assumes
in
undertaking a case, the quality of the work product, and the
27
public benefit achieved.
Rawlings, 9 F.3d at 516.
In wage and
hour collective and class actions, lodestar multipliers between
1 and 3 are common.
See Arledge v. Domino’s Pizza, Inc., No.
3:16-cv-386, 2018 WL 5023950, at *5 (S.D. Ohio Oct. 17, 2018)
(approving award of attorney’s fees in wage and hour collective
and class action at a 2.57 lodestar multiplier); Castillo v.
Morales, Inc., No. 2:12-cv-650, 2015 WL 13021899, at *7 (S.D.
Ohio Dec. 22, 2015) (approving award of attorney’s fees in wage
and hour collective and class action at a lodestar multiplier of
approximately 2.5, which “is typical of lodestar multipliers in
similar cases”).
Class Counsel have submitted their hours and hourly rates
for this litigation.
(ECF No. 102.)
total of 606 hours to the case.
(See id. ¶ 3.)
hourly rates range from $325 to $600.
rates are reasonable.
Class Counsel devoted a
(See id.)
Class Counsel’s
The hours and
The resulting lodestar is $284,887.
(See
id.) Class Counsel requests an attorney’s fee of $525,000.
(ECF
No. 98 at 1, 4-13; ECF No. 97-2 ¶ 44.)
a lodestar multiplier of 1.84.
The requested fee yields
That multiplier is reasonable.
It reflects a good result achieved in a contingency fee case
where
Class
nonrecovery.
Counsel
with
Plaintiffs
the
risk
of
It accords with multipliers commonly awarded in
other class actions.
of
shared
multipliers
See Newberg § 15:87 (“Empirical evidence
across
many
cases
28
demonstrates
that
most
multipliers are in the relatively modest 1-2 range.”).
Class
Counsel’s requested attorney’s fee of $525,000, equal to onethird of the gross amount of the Settlement Fund, is reasonable.
2.
Service Payments
Incentive awards are appropriate in some class actions. See
Hadix v. Johnson, 322 F.3d 895, 897-98 (6th Cir. 2003).
Within
this Circuit, district courts have recognized that, “where the
settlement
agreement
provides
for
incentive
awards,
class
representatives who have had extensive involvement in a class
action litigation deserve compensation above and beyond amounts
to which they are entitled . . . by virtue of class membership
alone.”
Lonardo, 706 F. Supp. 2d at 787.
The Settlement Agreement provides a payment of $7,500 to
Fitzgerald for his service as named Plaintiff for the FLSA
Collective and payments of $2,500 each to Moore and McCoy for
their service as Class Representatives for the Ohio Class and
the Kentucky Class, respectively.
service
payments
are
(See ECF No. 88-1 ¶ 8.) Those
appropriate.
Named
Plaintiffs
substantially assisted in the litigation by participating in
client interviews and conferences with Class Counsel and by
providing relevant documents. (See ECF No. 97-2 ¶¶ 38-39.) They
actively represented the interests of the collective and classes.
The service payments Named Plaintiffs seek are similar to other
collective and class action incentive awards approved by courts
29
in this Circuit.
See, e.g., Salinas v. U.S. Xpress Enters.,
Inc., No. 1:13-cv-00245, 2018 WL 1477127, at *10 (E.D. Tenn.
Mar. 8, 2018) (collecting cases in which courts approved service
payments to named plaintiffs between $7,500 and $10,000), adopted
by 2018 WL 1475610 (E.D. Tenn. Mar. 26, 2018); Osman v. Grube,
Inc., No. 3:16-cv-00802, 2018 WL 2095172, at *2 (N.D. Ohio May
4, 2018) (approving $7,500 service payment to named plaintiff in
FLSA collective action).
The requested service payments are
appropriate and reasonable.
3.
Other Costs
A court may award “reasonable . . . nontaxable costs that
are authorized by law or by the parties’ agreement.”3
Fed. R.
Civ. P. 23(h). “[N]ontaxable costs are those reasonable expenses
that are normally charged to a fee paying client.”
Newberg
§ 16:5; see also In re Cardizem CD Antitrust Litig., 218 F.R.D.
508, 534-35 (E.D. Mich. 2003) (in a common fund class action,
awarding costs that were “the type routinely billed by attorneys
to paying clients in similar cases”) (citing In re Synthroid
Mktg. Litig., 264 F.3d 712, 722 (7th Cir. 2001)).
Class
Settlement
Counsel
request
Administrator
awards
for
the
of:
costs
(1)
of
$29,750
the
to
the
previously
completed FLSA Collective opt-in notice administration and the
3
Nontaxable costs are costs that cannot be taxed to the opposing
party under 28 U.S.C. § 1920. See Newberg §§ 16:2, 16:5.
30
class
and
collective
$25,937.87
settlement
to
Counsel
Class
notice
for
administration;
advanced
costs
paid
(2)
to
Plaintiffs’ data extrapolation expert; and (3) $15,000 to Class
Counsel for advanced litigation costs and expenses, “including
filing fees, pro hac vice fees, service fees, mediator fees, and
required mediation travel expenses.”
(ECF No. 98 at 3-4, 13-
14.)
Class
Counsel’s
requested
costs
Settlement Agreement contemplates them.
9.)
are
reasonable.
The
(See ECF No. 88-1 ¶¶ 7,
The costs requested are the type typically billed by
attorneys to paying clients.
See, e.g., Johnson v. W2007 Grace
Acquisition I, Inc., No. 13-cv-2777, 2015 WL 12001269, at *14
(W.D. Tenn. Dec. 4, 2015) (awarding expenses in class action for
“research costs, expert fees, and administrative costs”).
The
requested costs are reasonable.
V.
Conclusion
For the foregoing reasons, the Motion for Final Settlement
Approval is GRANTED.
is GRANTED.
1.
The Motion for Attorney’s Fees and Costs
The Court ORDERS that:
The following FLSA Collective is CERTIFIED for final
settlement purposes only:
All individuals
that were not
mediation date,
Set/Reset/Surge
Leaders and who
who filed Consents in the Litigation
withdrawn as of the July 10, 2019
and who work or worked for PLM as
Team Members or Set/Reset/Surge Team
were paid as exempt for that work.
31
2.
The
following
Classes
are
CERTIFIED
for
final
settlement purposes only:
Ohio Class: All individuals reflected on the parties’
agreed upon class list as of the July 10, 2019
mediation and who worked for PLM as Set/Reset/Surge
Team Members and who were paid as exempt for that work
within the period beginning August 18, 2015, through
the December 4, 2016 pay date.
Kentucky Class:
All individuals reflected on the
parties’ agreed upon class list as of the July 10,
2019
mediation
and
who
worked
for
PLM
as
Set/Reset/Surge Team Members and who were paid as
exempt for that work within the period beginning August
18, 2012, through the December 4, 2016 pay date.
3.
Plaintiff Moore is appointed representative for the
Ohio Class.
4.
Plaintiff McCoy is appointed representative for the
Kentucky Class.
5.
Andrew C. Head and the Head Law Firm, LLC are appointed
Class Counsel.
6.
The
$1,575,000.
Settlement
provides
for
That amount is approved.
a
Settlement
Fund
of
The Settlement is fair,
reasonable, and adequate pursuant to the FLSA and Federal Rule
of
Civil
Procedure
incorporated
into
23(e)(2).
this
The
Order
and
Settlement
finally
Agreement
approved
in
is
its
entirety.
7.
The record shows that settlement notices have been
distributed to the members of the FLSA Collective and the Classes
in the manner approved in the Court’s February 13, 2020 Order
32
granting Plaintiffs’ Motion for Preliminary Settlement Approval.
The notices distributed: (1) constitute the best practicable
notice under the circumstances; (2) constitute notice that was
reasonably calculated, under the circumstances, to apprise all
members of the FLSA Collective and the Classes of the pendency
of this litigation, the terms of the Settlement, their right to
object to the Settlement, their right to exclude themselves from
the FLSA Collective or the Classes, and their right to appear at
the June 4, 2020 fairness hearing; (3) constitute due, adequate,
and sufficient notice to all persons or entities entitled to
receive notice; and (4) meet the requirements of the Federal
Rules of Civil Procedure and due process.
8.
No member of the FLSA Collective or the Classes has
requested exclusion from the FLSA Collective or the Classes.
9.
No member of the FLSA Collective or the Classes has
objected to the Settlement.
10.
Each member of the FLSA Collective and the Classes is
bound by this Order, including, without limitation, the release
of claims as set forth in the Settlement Agreement.
11.
PLM
is
bound
by
this
Order,
including,
without
limitation, the release of claims as set forth in the Settlement
Agreement.
12.
The parties are directed to implement and consummate
the Settlement according to the terms and provisions of the
33
Settlement
Agreement,
including
but
not
limited
to
the
establishment of the Settlement Fund.
13.
PLM will pay into the Settlement Fund the sum of
$1,575,000.
14.
Plaintiffs’
Collective
and
the
claims
Classes
and
the
against
claims
PLM
the
FLSA
DISMISSED
are
of
WITH
PREJUDICE.
15.
Class Counsel is awarded attorney’s fees in the amount
of $525,000, equal to one-third (33 1/3%) of $1,575,000, the
gross
amount
of
the
Settlement
Fund,
to
be
paid
from
the
costs
for
Settlement Fund.
16.
Class
Counsel
is
awarded
$40,937.87
in
advanced expert fees and litigation expenses, to be paid from
the Settlement Fund.
17.
Plaintiff Fitzgerald is awarded a service payment in
the amount of $7,500, to be paid from the Settlement Fund.
18.
Plaintiffs
Moore
and
McCoy
are
awarded
service
payments in the amount of $2,500 each, to be paid from the
Settlement Fund.
19.
The Settlement Administrator is awarded $29,750 for
the costs of the previously completed FLSA Collective opt-in
notice administration and the class and collective settlement
notice administration, to be paid from the Settlement Fund.
34
20.
The
Court
retains
continuing
and
exclusive
jurisdiction over all matters relating to the administration,
consummation, enforcement, and interpretation of the Settlement
Agreement, the Settlement, and this Order.
So ordered this 2nd day of July, 2020.
/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
35
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?