Mayhew v. Loved Ones In Home Health Care, LLC et al

Filing 314

MEMORANDUM OPINION AND ORDER directing that the 312 Joint Motion to Approve Settlement is granted; the parties are directed to disburse the settlement sum by payment to those entitled thereto by 4/24/2020, and file a final report that all sums have been so paid and the checks issued therefor have been cashed, which final report shall be filed by 5/26/2020; the 306 Motion in Limine is denied as moot. Signed by Senior District Judge John T. Copenhaver, Jr. on 3/26/2020. (cc: counsel of record; any unrepresented parties) (kew)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
PAMELA MAYHEW, BETSY FARNSWORTH,
on behalf of themselves and others
similarly situated,
Plaintiffs,
v.

Civil Action No. 2:17-cv-03844

LOVED ONES IN HOME CARE, LLC,
and DONNA SKEEN,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending are (1) plaintiff’s motion in limine, filed
August 14, 2019, and (2) the parties’ joint motion to approve
settlement, filed March 9, 2020.

I.

Background

On July 28, 2017, plaintiff Pamela Mayhew initiated an
individual action under the Fair Labor Standards Act (“FLSA”),
29 U.S.C. § 201 et seq., related to pay practices of defendant
Loved Ones In Home Care, LLC (“Loved Ones”) regarding their
payment of overtime wages.

ECF No. 1.

On August 30, 2017, Ms.

Mayhew filed her first amended complaint expanding her prior
claims to include a collective action under the FLSA.
6.

ECF No.

Betsy Farnsworth joined this action as a named plaintiff in

the second amended complaint, filed October 31, 2017.
17.

ECF No.

On January 23, 2019, the court permitted plaintiffs to file

a third amended complaint to include allegations of wrongdoing
stemming from certain arbitration agreements presented by the
defendants to the plaintiffs.

ECF No. 263.

The court conditionally certified the collective
action in this case on December 1, 2017 and granted final FLSA
collective action certification on June 10, 2019.
and 293.

ECF Nos. 23

The court’s June 10, 2019 order stated that the class

consists of current and former Loved Ones home health aides who
worked in both the private care program and the Medicaid waiver
program (“hybrid aides”) during the same pay period at any time
between July 28, 2014 and May 31, 2017.

ECF No. 293 at 5.

The parties have agreed to settle for the total
nominal sum of $100,000.00, of which $40,000.00 is to be paid in
fees and costs to plaintiffs’ counsel.

The balance of

$60,000.00 is in fact $52,292.32, from which there will
necessarily be deducted the customary employee’s share of social
security and Medicare taxes to be remitted to the government
along with any income tax withholding.1

1

The Exhibit attached to

The court is informed by plaintiffs’ counsel that the
employer’s share of social security and Medicare taxes and the
employer’s obligation to pay federal and state unemployment
taxes on the $52,292.32 aggregate $6,536.58.
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the pending joint motion provides the agreed expert’s
calculation of the gross amounts to be paid to each plaintiff as
payroll checks, totaling $52,292.32.

ECF No. 312-1.

The

parties agreed to this sum based on a compromise of one of
several time period calculations provided by the agreed expert.
The agreed time period reflects a calculation of unpaid wages
for the period beginning from the uncontested application date
of the revised regulations issued by the United States
Department of Labor (“DOL”) (November 15, 2015) up until
defendants contend that they corrected the offending payroll
practice (May 7, 2017).

II.

Legal Standard

“The FLSA establishes federal minimum-wage, maximumhour, and overtime guarantees that cannot be modified by
contract.”
(2013).

Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 69

Doing so would thwart the purpose of the Act, which is

“to protect all covered workers from substandard wages and
oppressive working hours, ‘labor conditions [that are]
detrimental to the maintenance of the minimum standard of living
necessary for health, efficiency, and general well-being of
workers.’”

Barrentine v. Arkansas-Best Freight Sys., 450 U.S.

728, 739 (1981) (alteration in original) (quoting 42 U.S.C.
§ 202(a)).

Consequently, FLSA claims for back wages can be
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settled in only two ways, only one of which is relevant here:
“When 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 Food Stores,

Inc. v. United States, 679 F.2d 1350, 1352-53 (11th Cir. 1982)
(citing D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 113 n.8
(1946), and Jarrard v. Se. Shipbuilding Corp., 163 F.2d 960, 961
(5th Cir. 1947)).
Because the Court of Appeals for the Fourth Circuit
has not yet had occasion to endorse a standard for approving
FLSA settlements, “district courts in this circuit typically
employ the considerations set forth by the Eleventh Circuit in
Lynn’s Food Stores.”

Duprey v. Scotts Co. LLC, 30 F. Supp. 3d

404, 407–08 (D. Md. 2014) (quoting Saman v. LBDP, Inc., No.
CIV.A. DKC 12-1083, 2013 WL 2949047, at *3 (D. Md. June 13,
2013)).

Thus, courts have stated that:

[t]he settlement must “reflect[] a fair and reasonable
resolution of a bona fide dispute over FLSA
provisions,” which includes a finding with regard to
(1) whether there are FLSA issues actually in dispute,
(2) the fairness and reasonableness of the settlement
in light of the relevant factors from Rule 23, and
(3) the reasonableness of the attorneys' fees, if
included in the agreement.
Id. (second alteration in original) (quoting Saman, 2013 WL
2949047, at *3); Lynn’s Food Stores, 679 F.2d at 1355.
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III. Discussion
A.

Bona Fide Dispute
“In deciding whether a bona fide dispute exists as to

a defendant's liability under the FLSA, courts examine the
pleadings in the case, along with the representations and
recitals in the proposed settlement agreement.”

Duprey, 30 F.

Supp. 3d at 408 (citing Lomascolo v. Parsons Brinckerhoff, Inc.,
No. 1:08CV1310(AJT/JFA), 2009 WL 3094955, at *16–17 (E.D. Va.
Sept. 28, 2009)).
Throughout this litigation, the parties have disputed
the time period for which plaintiff should receive unpaid
overtime wages together with the proper calculation of the
amount of wages owed.

Defendants argue that plaintiffs cannot

recover before the effective date of the new administrative rule
issued by the DOL in 2015.

Plaintiffs maintain that they were

covered by the FLSA’s protections at all relevant times and that
defendants cannot satisfy the conditions necessary to claim the
pre-2015 exemptions for in-home care providers.

The parties

also dispute the applicable statute of limitations date, with
plaintiffs arguing that a three-year statute of limitations
applies while defendants counter that the statute of limitations
does not exceed two years.

ECF No. 312 at 4–5.

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Accordingly,

the FLSA issue here reflects a bona fide dispute between the
parties.
B.

Fairness and Reasonableness
Next, the court turns to the relevant factors from

Rule 23’s assessment for fairness and reasonableness.

Those

factors are as follows:
(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 probability of
plaintiffs’ success on the merits and (6) the amount
of the settlement in relation to the potential
recovery.
Kirkpatrick v. Cardinal Innovations Healthcare Sols., 352 F.
Supp. 3d 499, 502–03 (M.D.N.C. 2018) (quoting Hargrove v. Ryla
Teleservices, Inc., No. 2:11cv344, 2013 WL 1897027, at *2 (E.D.
Va. 2013)); Patel v. Barot, 15 F. Supp. 3d 648, 656 (E.D. Va.
2014); see also Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th
Cir. 1975).
The parties have had the opportunity to conduct and
complete discovery in this matter, which was particularly
extensive insofar as defendants shared raw source payroll data
with the joint expert to permit accurate calculations of
overtime hours.

The parties litigated this matter extensively,

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filing over 25 motions since the lawsuit was originally filed
more than two and half years ago.

A trial was scheduled for

August 2019, before which the court held pretrial conferences in
July and August 2019 to facilitate a potential resolution.
There is no evidence or suggestion that fraud or
collusion impacted the settlement.

Litigation was “hotly

contested” and the parties negotiated the settlement at armslength, only reaching an agreement after previous discussions
broke down in Fall 2019.

See ECF No. 312 at 7, 14.

Plaintiffs’

counsel has extensive experience in wage and hour litigation.
Plaintiffs’ counsel and defendants’ counsel also state that they
believe that the settlement is fair and reasonable.
The individual settlement amounts allocated to each
plaintiff derive from the actual lost wages calculated by the
agreed expert.

Plaintiffs express confidence that they would

have prevailed at trial but preferred a settlement considering
the questions over what level of damages would have been
appropriate.

The parties reached the agreed settlement amount

based on one of the date-range scenarios included in the agreed
expert’s report.

Although the agreed expert estimated a maximum

recovery of $118,154.63, the agreed settlement exceeds
plaintiffs’ estimated recovery based on a strict application of
the two-year statute of limitations, which would have been

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limited to $38,522.03.

ECF No. 312–1 at 5.

Therefore, the

court finds the proposed settlement to be fair and reasonable.
C.

Attorney Fees
Under the FLSA, a prevailing plaintiff is entitled to

“a reasonable attorney’s fee to be paid by the defendant, and
costs of the action and costs.”

29 U.S.C. § 216(b).

In

evaluating attorney fees, the court first must calculate the
“lodestar” figure by multiplying the number of hours reasonably
expended by a reasonable rate.

See Robinson v. Equifax Info.

Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009) (citing Grissom
v. The Mills Corp., 549 F.3d 313, 320 (4th Cir.2008)); Randolph
v. Powercomm Constr., Inc., 715 F. App’x 227, 230 (4th Cir.
2017) (applying lodestar method to attorney fees request under
FLSA).

“To ascertain what is reasonable in terms of hours

expended and the rate charged,” the Fourth Circuit has applied
the following factors:
(1) The time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill
required to properly perform the legal services
rendered; (4) the attorney’s opportunity costs in
pressing the instant litigation; (5) the customary fee
for like work; (6) the attorney's expectations at the
outset of the litigation; (7) the time limitations
imposed by the client or circumstances; (8) the amount
in controversy and the results obtained; (9) the
experience, reputation, and ability of the attorney;
(10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and
length of the professional relationship between
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attorney and client; and (12) attorneys’ fees awards
in similar cases.
McAfee v. Boczar, 738 F.3d 81, 88 n.5 (4th Cir. 2013) (quoting
Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717–19
(5th Cir. 1974)).

In addition, “the court must ‘subtract fees

for hours spent on unsuccessful claims unrelated to successful
ones’” and “should award ‘some percentage of the remaining
amount, depending on the degree of success enjoyed by the
plaintiff.’”

Id. (quoting Johnson, 488 F.2d at 244); Randolph,

715 F. App'x at 230.
Plaintiffs’ counsel, Mark Toor, requests $40,000.00 in
attorney fees and costs of litigation, a modest request for his
having worked more than an estimated 470 hours in this case.
Plaintiffs benefited from Mr. Toor’s more than 30 years of
experience representing employment related matters, particularly
as the parties’ confronted the relatively novel complexities
regarding the effective date of the DOL revisions to the in-home
care exemption.

The requested fee is well below Mr. Toor’s

normal hourly rate and the comparable awards Mr. Toor received
in other recent FLSA settlements brought before this court.

See

Charles et al. v. State of West Virginia, Offices of the
Insurance Commissioner, No. 2:16-cv-10334 (S.D.W. Va. Dec. 4,
2018) (approving effective fee of $32,942.64 representing
$180.60 per hour); Lowers v. Valley Diagnostic Laboratories,

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Inc., et al., No. 2:16-cv-02785 (S.D.W. Va. Oct. 20, 2016)
(approving $22,000 fee award that equated to hourly rate of
nearly $260).

Therefore, the court finds that the requested

fees and costs are reasonable.

IV.

Conclusion

Based on the foregoing analysis, the court ORDERS that
the parties’ joint motion to approve the settlement be, and it
hereby is, granted.

The court further ORDERS that plaintiffs’

motion in limine be, and it hereby is, denied as moot.
The parties are directed to disburse the settlement
sum by payment to those entitled thereto on or before April 24,
2020, and file a final report that all sums have been so paid
and the checks issued therefor have been cashed, which final
report shall be filed on or before May 26, 2020.
The Clerk is directed to forward copies of this
memorandum opinion and order to all counsel of record and any
unrepresented parties.
ENTER: March 26, 2020

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