UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK
December 12, 2011
JUAN VAZQUEZ, PABLO MARIN, CIRILO PACHECO, OSIEL VAZQUEZ, ALEJANDRO LOAEZA, EMITERIO PACHECO, HECTOR AVENDANO, EFREN PACHECO, AVELINO CRUZ, AND RENE PACHECO, ON BEHALF OF THEMSELVES AND ALL OTHER SIMILARLY SITUATED WORKERS, PLAINTIFFS,
LAMONT FRUIT FARM, INC., DEFENDANT.
The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
DECISION AND ORDER
Pending before this Court is the joint motion by the parties for approval of a proposed class action notice and for preliminary approval of a proposed settlement of this action. (Docket No. 58.) The parties also seek a scheduling order for further proceedings in the case. For the reasons set forth below, this Court will grant the parties' motion.
Plaintiffs brought this suit in 2006 against Defendant Lamont Fruit Farm, Inc., under the Fair Labor Standards Act, 29 U.S.C. § 216(b) ("FLSA"), (Compl. (Docket No. 1) ¶ 103), and under New York labor law. (Compl. ¶¶ 125-27.) Plaintiffs also asserted a putative class action claim on behalf of themselves and the other Workers for breach of contract. (Compl. ¶¶ 109-22.)
On September 30, 2011, this Court granted Plaintiffs' motion for class certification and for appointment of class counsel. (Docket No. 55.) This Court certified the following class under Federal Rule of Civil Procedure 23(b)(3) for purposes of Plaintiffs' breach of contract claim: "all individuals admitted to the United States pursuant to Section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act, 8 U.S.C. § 1101(a)(15)(H)(ii)(a) ('H-2A Workers') who were employed by Lamont Fruit Farm Inc. to pick apples during the 2000, 2001, 2002, 2003, 2004, and 2005 Upstate New York apple harvest seasons." (Id. at 21.) This Court appointed class counsel and directed the parties to file a mutually agreeable class notice containing the information required by Rule 23(c)(2)(B). (Id.)
On November 18, 2011, the parties filed the pending joint motion for approval of the proposed class notice and notice of settlement, for preliminary approval of a proposed class settlement, and for scheduling of further proceedings. (Docket No. 58.) It appears the parties have agreed to settle all of the pending claims in this matter, including those brought on behalf of the certified class.
A. Class Action Notice
The parties seek this Court's approval of the notice that will be provided to the class members. Rule 23(c)(2)(B) requires that, for any class certified under Rule 23(b)(3), "the court must direct to class members the best notice that is practicableunder the circumstances, including individual notice to all members who can be identified through reasonable effort." The notice "must clearly and concisely state in plain, easily understood language: (i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3)." Fed. R. Civ. P. 23(c)(2)(B).
In most respects, the proposed class notice satisfies Rule 23(c)(2)(B). Class counsel intends to send the notice by mail to the class members, along with a Spanish translation. (Decl. of Steven E. Cole, Esq. (Docket No. 58, Ex. 1) ("Cole Decl.") ¶¶ 12-13.) The notice is drafted in plain language that would easily be understood by its target audience.(See Class Notice (Docket No. 58, Ex. 3).) The notice defines a "class action" and describes those included in the class. (Id. at 2.) It describes the action as a lawsuit claiming that, from 2000-2005, Defendant failed to pay its foreign farm workers the required minimum wage, and also breached contracts with such workers by "failing to reimburse workers for transportation and subsistence costs to and from Mexico, and failing to provide adequate and safe housing and transportation." (Id.)
The notice also details the proposed settlement, informing the putative class members that "[y]our rights could be affected by this settlement so you should read this Notice carefully to decide whether you want to be part of the class and you think the settlement is fair." (Id. at 2.) The notice correctly provides that the recipient has the right to be excluded from the class and forfeit the right to recover any money from the settlement. Those who choose to opt-out are advised that they "will NEVER be able to make any claim for this settlement money; however, you may have the right to bring your own lawsuit against Lamont Fruit Farm[.]" (Id. at 3-4.) The notice then provides a January 30, 2012, deadline for opting out of the class and explains that "[i]f you fail to opt-out you will be bound by the settlement agreement and are eligible to file a claim for the settlement money." (Id. at 4.) The notice provides a December 30, 2012, deadline for filing claims for shares of the settlement fund. (Id. at 3.)
However, the class notice does not specifically state, as required by Rule 23(c)(2)(B), that a class member may enter an appearance in the action through an attorney if desired. The parties are directed to include language to this effect. Additionally, the notice provides an incorrect address for this Court. The new courthouse address is:
2 Niagara Square, Buffalo, New York, 14202.*fn1
In all other respects the proposed class notice will be approved as drafted.
B. Proposed Settlement
The parties also request this Court's preliminary approval of the proposed settlement agreement. Unlike settlements in ordinary suits, the settlement of a class action must be approved by the court. In re Initial Public Offering Sec. Litig., 243 F.R.D. 79, 82-83 (S.D.N.Y. 2007). The court owes a duty to class members to ensure that the proposed settlement is "fair, reasonable, and adequate." Id.; see Fed. R. Civ. P. 23(e)(2).
Preliminary approval is the first step in the settlement process, through which the district court determines the fairness of a proposed class action settlement, prior to the provision of class notice. Chin v. RCN Corp., 2010 WL 1257586, *2 (S.D.N.Y. Mar. 12, 2010) (report and recommendation) (citing 4 NEWBERG ON CLASS ACTIONS § 11:25 (4th ed.), and In re Prudential Sec. Inc. Ltd. Partnership Litig., 163 F.R.D. 200, 209 (S.D.N.Y. 2009)), adopted, 2010 WL 12557594 (S.D.N.Y. Mar. 29, 2010). In determining whether a settlement warrants preliminary approval, the court must discern whether "the proposed settlement contains 'obvious deficiencies, such as unduly preferential treatment of class representatives . . . or excessive compensation for attorneys,' or whether it 'appears to fall within the range of possible approval[.]'" Id. (quoting MANUAL FOR COMPLEX LITIGATION § 30.41 (4th ed.) (2004)). Preliminary approval of a class action settlement 'is not tantamount to a finding that the settlement is fair and reasonable.'" Id. (quoting In re Traffic Executive Ass'n-Eastern Railroads, 627 F.2d 631, 634 (2d Cir. 1980)).
The parties' proposed settlement provides that, within thirty days of
court approval of the settlement, Defendant will pay a lump sum of
$401,874.59 to Farmworkers Legal Services of New York for holding and
eventual distribution to the claimants. (Stipulation of Proposed
Settlement (Docket No. 58, Ex. 2) ¶ 3(a).) Of that amount, "[u]p to a
total of $256,874.59 will be paid to the class members who file timely
claims as provided for in this agreement and Stipulation."*fn2
(Stipulation ¶ 3(a)(i).)
A schedule of proposed payments to each individual class member is attached to the settlement agreement. According to counsel, each eligible class member will receive a payment that brings that worker's first-week wages in line with the federal minimum wage. (Cole Decl. ¶ 8.) Additionally, each class member will receive a 25% liquidated damages payment, along with 9% interest "payable to late 2010." (Cole Decl. ¶ 8.) A $20,000 lump sum payment will be made for alleged breaches of contract deriving from inadequate housing and transportation conditions, which "will be split among each class member according to years worked." (Cole Decl. ¶ 8.)
In addition to the sums to be paid to the individual class members, the named Plaintiffs are to receive $15,000 in additional lump-sum payments under the settlement agreement based on each Plaintiff's own participation in the lawsuit. (Stipulation ¶ 3(a)(ii).) Specifically, Plaintiff Pablo Marin is to be paid an additional $7,000; Plaintiff Juan Vazquez is to be paid an additional $3,000; and the remaining named Plaintiffs each will receive an additional $625. (Stipulation ¶ 3(a)(ii).) The class notice explains that the additional sums to be paid to Plaintiffs Marin and Vazquez are for their efforts in giving deposition testimony, drafting and signing documents, and communicating with class members. (Class Notice at 3.)
Additionally, $130,000 will be paid to class counsel, Farmworker Legal
Services of New York and Leclair Korona Giordano Cole LLP, for the
"attorneys' fees and costs and disbursements incurred with respect to
this action and the costs of administering this Settlement Agreement."
(Stipulation ¶ 3(a)(iii).) Counsel explain that "[t]his amount is
slightly less than one-third of the total settlement amount and
approximates the time billed by class counsel, along with expected
settlement administration fees, under the lodestar method."*fn3
(Cole Decl. ¶ 10.) Counsel intend to provide a detailed
accounting of attorneys' fees and costs in advance of the fairness
hearing regarding the settlement. (Cole Decl. ¶ 11.)
The settlement states that in the event a class member is deceased,
"payment shall be made to the heirs of the class member or recipient
in the following priority: (1) spouse;
(2) children; (3) parents; (4) siblings; and (5) other relatives."
(Stipulation ¶ 3(b).) The settlement also provides that any funds not
claimed by class members "in accordance with this Agreement" will be
donated to the Rural & Migrant Ministry in New York.*fn4
(Stipulation ¶ 3(c).)
Having reviewed the proposed settlement agreement and the attachments thereto, this Court finds no "obvious deficiencies" with respect to the agreement's treatment of the class members, named Plaintiffs, or class counsel. Chin, 2010 WL 1257586, at *2. The general terms of the agreement are "within the range of possible approval" and appear to be the result of arms'-length negotiations among the parties. Id. Accordingly, the parties' proposed settlement agreement will be approved on a preliminary basis, pending the distribution of class notice and the fairness hearing discussed below.
C. Schedule of Proceedings
The parties request a schedule of further proceedings and deadlines in this case. (Cole Decl. ¶ 13.) This Court finds the proposed schedule to be reasonable. The schedule for further proceedings will be as follows:
December 30, 2011: Deadline for mailing class notice to class members. February 17, 2012: Deadline for class members' submissions of objections to the settlement agreement.
February 17, 2012: Deadline for submission of opt-out statements.
March 2, 2012: Motion for final approval of the settlement agreement is due. March 15, 2012, 9:00 a.m. Fairness hearing under Federal Rule of Civil Procedure 23(e)(2) to be held in this Court.
December 30, 2012: Deadline for submission of claim forms by class members.
For the foregoing reasons, the proposed class notice is approved, with the following alterations: (1) the parties are directed to include language advising the class members that they may enter an appearance in the action through an attorney if they wish; and (2) the address of the courthouse should be corrected. The proposed settlement agreement is approved on a preliminary basis. The parties' proposed schedule of proceedings is approved as set forth above.
IT IS HEREBY ORDERED, the joint motion for approval of class notice, for preliminary approval of the settlement agreement, and for a schedule of further proceedings (Docket No. 58) is GRANTED with the following alterations: (1) the parties are directed to include language advising the class members that they may enter an appearance in the action through an attorney if they wish; and (2) the address of the courthouse should be corrected.
FURTHER, that the joint motion for preliminary approval of the settlement agreement (Docket No. 58) is GRANTED.
FURTHER, that the following schedule will apply to further proceedings in this action: December 30, 2011: Deadline for mailing class notice to class members. February 17, 2012: Deadline for class members' submissions of objections to the settlement agreement.
February 17, 2012: Deadline for submission of opt-out statements.
March 2, 2012: Motion for final approval of the settlement agreement is due. March 15, 2012, 9:00 a.m. Fairness hearing to be held in this Court. December 30, 2012: Deadline for submission of claim forms by class members.
William M. Skretny