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Lazaro Chavarria, et al v. New York Airport Service

June 25, 2012


The opinion of the court was delivered by: Go, United States Magistrate Judge:


Plaintiffs, current and former transportation "ticket agents" for defendants, bring this collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and class action under sections 190 and 650 et seq. of the New York State Labor Law ("NYS Labor Law") alleging that defendants failed to pay them overtime. After consenting to having me hear all matters in this action pursuant to 28 U.S.C. § 636(c), the parties have moved for final certification of the provisionally certified class pursuant to Fed. R. Civ. P. 23(a) and (b) and final approval of the settlement of this class action pursuant to Fed. R. Civ. P. 23(e).


On April 29, 2010, plaintiff Lazaro Chavarria commenced this action on behalf of himself and current and former ticket agents (hereinafter "plaintiffs") who worked at John F. Kennedy and LaGuardia Airports selling tickets to airline passengers for bus transportation to Manhattan. Plaintiffs allege that defendants failed to pay plaintiffs overtime for hours worked over 40 hours per week in violation of the FLSA and NYS Labor Law. Plaintiffs initially sued the New York Airport Service, Jacob Marmurstein and Zev Marmurstein (collectively "New York Airport Service defendants"). Plaintiffs added defendants Contract Transportation Inc. and Janet West (collectively "Contract defendants") in an amended complaint filed on April 23, 2010. In their answers, both sets of defendants asserted the defense that plaintiffs were subject to the "outside sales" persons exemption of the wage and/or hour provisions of applicable federal and state law. See ct. docs. 24 (Answer to Amended Complaint and Counterclaim of Contract defendants ¶ 52), 25 (Answer to Amended Complaint by New York Airport Service defendants ¶ 48). On November 5, 2010, Judge Weinstein denied the plaintiffs' motion to dismiss the counterclaims of the Contract defendants. At a settlement conference held on February 8, 2011, the attorneys reached an agreement in principle to settle on a class wide basis for $150,000. See Cafaro Aff. dated December 8, 2011 ("Cafaro Aff.") (ct. doc. 76) ¶ 9, Exh. 1.

The plaintiffs filed their motion for preliminary approval of the settlement on May 6, 2011. At the hearing on the motion, the parties advised that different plaintiffs had filed another FLSA collective action against defendant Contract Transportation raising similar claims. See Clarke v. Contract Transportation, Inc., et al., Docket No. 2011-CV-0780 (MDG). After negotiations among the parties in both cases, their counsel advised at the June 3, 2011 conference that the four Clarke plaintiffs had reached an agreement with the Contract defendants to settle their claims for $16,000, and that the settlement in the instant action would be reduced by $16,000.*fn1 Accordingly, plaintiffs' counsel withdrew the motion to certify and for preliminary approval of the class settlement (ct. doc. 59).

Plaintiff filed a new motion for provisional certification of the class action and for preliminary approval of the class settlement on June 21, 2011 (ct. docs. 62, 63, 64). At a hearing held on July 19, 2011 and in a Preliminary Approval Order, this Court: (1) conditionally certified the proposed class for settlement purposes; (2) granted preliminary approval of the settlement agreement; (3) appointed plaintiffs' counsel as class counsel; and (4) approved the proposed class notice of settlement of the litigation. See ct. doc. 67.

At a conference held on August 30, 2011, the parties informed the Court that Contract Transportation had discovered additional employee records and had determined that 64 additional employees were within the definition of the class. The newly discovered employees fell within three categories: 1) 29 employees did not work any overtime hours during the relevant time period; 2) 14 employees worked some overtime hours during the relevant time period; and 3) for the remaining 22 employees, defendants' records did not show that they worked any overtime hours. See Declaration of Janet West dated September 13, 2011 (ct. doc. 70-8). However, the extant records for the third category of employees showed that all worked for less than one year and all earned less than $2,000 during their employment.

Id. ¶ 7. After conferring, the parties moved to modify the provisional class certification and the settlement (ct. docs. 70, 71). In their new settlement, the parties agreed to increase the settlement fund by $1,750 and to redefine the class to include the second category of newly discovered employees and to exclude the first and third categories. The parties further agreed that the NYS Labor Law claims would be tolled from the date the action was filed, April 12, 2010, to the date the class was amended, September 13, 2011, and the FLSA claims would be tolled from the date of the original agreement, February 8, 2011, to the amendment date, September 13, 2011.

On September 28, 2011, I granted the parties' request to modify the Preliminary Approval Order to reflect the proposed new definition of the class. I observed that: "[a]lthough the modified definition of the class is narrowed to include only employees for whom the defendants have records reflecting overtime hours, the original settlement effectively provided for payment only for those employees for whom there were records of overtime." See Docket Entry dated Sept. 28, 2011. I thus concluded that the narrowed definition would "protect the rights of those employees who would have been included in the previous definition but would not have received payment." Id.

On December 8, 2011, the parties jointly filed their motion for final approval of the Class Settlement indicating that 38 percent of the proposed class members had filed a claim and that no one objected (ct. docs. 74, 75 and 76). At the fairness hearing held on December 19, 2011, I directed the Claims Administrator to make one further attempt to contact a claimant who had failed to sign his claim form and extended his time to submit a claim form to January 6, 2012.

On January 9, 2012, plaintiff's counsel filed a request on consent to extend the deadline nunc pro tunc for submission of claims to January 6, 2012 so as to include nine additional class members. See ct. doc. 77. Counsel indicated that after the fairness hearing, it was discovered that nine plaintiffs had opted into the FLSA collective action and filed consent forms with this Court but not the settlement claims administrator. See Supplemental Affirmation of William Cafaro in Support dated January 9, 2012 ("Cafaro Supp. Aff.") (ct. doc. 77) ¶ 1. Counsel explained that of the nine class members, all nine had executed the claim forms and sent them to the settlement claims administrator after the November 29, 2011 deadline originally set. See id. ¶ 4.

Under the proposed settlement, defendants agree to pay the plaintiff class $135,750.00. From the gross settlement amount, plaintiff proposes that $11,698.27 be allocated to the settlement administrator, $5,000.00 to the named plaintiff and $45,250.00 to class plaintiffs' counsel. Plaintiff and each class member would receive a pro rata share of the remaining settlement proceeds of $73,801.73 for overtime wages and liquidated damages owed as determined according to the formula set forth in the Settlement Agreement. Essentially, the total number of hours, as well as the number of overtime hours each class member worked, would be based on the records of defendants. In light of the claims received by the settlement administrator by January 9, 2012, counsel estimates that each pro rata share that the participating class member will be awarded would be at least 100% of the unpaid wages for overtime hours and 59% of all potential damages, including liquidated damages.


I. Final Certification of the Settlement Class

The Court certifies the following class under Fed. R. Civ. P. 23(e), for settlement purposes:

Named Plaintiff[s] and other current and former Ticket Agents working at New York's LaGuardia or John F. Kennedy airports while employed by the Defendants at any time during the period from April 29, 2004 through the present for whom the Defendants have employment records indicating that he or she worked overtime hours in such capacity, as defined as more than 40 hours per calendar week during such period.

This Court finds that Plaintiffs meet all of the requirements for class certification under Fed. R. Civ. P. 23(a) and (b)(3).

Plaintiffs satisfy Fed. R. Civ. P. 23(a)(1) because there are more than 200 Class Members and therefore joinder is impracticable. See Consol. Rail. Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995) ("numerosity is presumed at a level of 40 members").

Plaintiffs satisfy Fed. R. Civ. P. 23(a)(2), because Plaintiffs and the Class Members share common issues of fact and law, including whether Defendants failed to pay Plaintiffs and the Class Members for all of the overtime they worked.

Plaintiffs satisfy Fed. R. Civ. P. 23(a)(3), typicality, because plaintiffs' claims arise from the same factual and legal circumstances that form the bases of the class members' claims. See Prasker v. Asia Five Eight LLC, No. 08 Civ. 5811(MGC), 2010 WL 476009, at *2 (S.D.N.Y. Jan. 6, 2010). Plaintiffs held identical positions, worked under similar conditions and suffered the same injuries as a result of defendants' methods of calculating and paying wages.

Plaintiffs satisfy Fed. R. Civ. P. 23(a)(4), adequacy, because plaintiffs' interests are not antagonistic or at odds with the class members. See Diaz v. Eastern Locating Servs., Inc., No. 10 Civ. 4082(JCF), 2010 WL 2945556, at *2 (S.D.N.Y. July 22, 2010); Prasker, 2010 WL 476009, at *2.

Plaintiffs also satisfy Rule 23(b)(3). The common factual allegations that Defendants failed to pay Class Members for all overtime they worked and plaintiffs' common legal claims predominate over any factual or legal variations among class members. See Diaz, 2010 WL 2945556, at *2; Prasker, 2010 WL 476009, at *2. Class adjudication of this case is superior to individual adjudication because it will conserve judicial resources and is more efficient for class members, particularly those who lack the resources to bring their claims individually. See Diaz, 2010 WL 2945556, at *2.

II. Approval of the Settlement Agreement

In evaluating a proposed settlement under Rule 23(e) of the Federal Rules of Civil Procedure, the Court must determine whether the settlement, taken as a whole, is fair, reasonable and adequate. See Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072, 1079 (2d Cir. 1995). Settlements are strongly favored as a matter of policy, because "[b]y lessening docket congestion, settlements make it possible for the judicial system to operate more efficiently and more fairly while affording plaintiffs an opportunity to obtain relief at an earlier time." Evans v. Jeff D., 475 U.S. 717, 761 n.15 (1986). Thus, "[s]ettlement approval is within the Court's discretion, which 'should be exercised in light of the general judicial policy ...

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