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Beckman v. Keybank, N.A.

United States District Court, Second Circuit

April 29, 2013

ERIC BECKMAN, et al., Plaintiffs,
v.
KEYBANK, N.A., Defendant.

OPINION AND ORDER

RONALD L. ELLIS, Magistrate Judge.

I. INTRODUCTION

Plaintiffs Eric Beckman, Steve Bunch, Jeri Griffin, Ivana Harrington, Jack Leiva, Teri Parke, Thomas Walker, Pete Wiseman, Renee Braun, Elizabeth Scott, Veronica Morgan, and Theresa Forrest (together, "Plaintiffs") are individuals who worked as Relationship Managers (RMs) for Defendant KeyBank, N.A. ("KeyBank" or "Defendant"). On October 19, 2012,

Plaintiffs commenced this action as a putative class action under Federal Rule of Civil Procedure 23 and as a collective action under 29 U.S.C. § 216(b), claiming that KeyBank failed to pay them overtime wages to which they were entitled under the wage and hour laws of New York, Ohio, Colorado, Washington, Oregon and Maine, and the Fair Labor Standards Act ("FLSA"). Plaintiffs sought unpaid overtime wages, attorneys' fees and costs, interest, liquidated damages, and injunctive and declaratory relief. Before the Court are Plaintiffs' motions for certification of settlement class, final approval of the class action settlement, approval of the FLSA settlement, and approval of attorney's fees, reimbursement of expenses, and service awards.

Having considered the Motion for Final Approval, the Motion for Attorneys' Fees and Reimbursement of Expenses, the Motion for Service Awards, and the supporting declarations, the oral argument presented at the March 19, 2013 fairness hearing, and the complete record in this matter, for the reasons set forth therein and stated on the record at the March 19, 2013 fairness hearing, and for good cause shown,

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

CERTIFICATION OF THE SETTLEMENT CLASS

The Court certifies the following sub-classes under Federal Rule of Civil Procedure 23(e), for settlement purposes (the "Rule 23 Class Members"):

(1) all individuals who were employed as RMs in the State of New York from June 13, 2006 to December 11, 2012;
(2) all individuals who were employed as RMs in the State of Ohio from June 13, 2009 to December 11, 2012;
(3) all individuals who were employed as RMs in the State of Colorado from June 13, 2009 to December 11, 2012;
(4) all individuals who were employed as RMs in the State of Washington from June 13, 2009 to December 11, 2012;
(5) all individuals who were employed as RMs in the State of Oregon from June 13, 2009 to December 11, 2012; and
(6) all individuals who were employed as RMs in the State of Maine from June 13, 2009 to December 11, 2012.

II. BACKGROUND

After exchanging informal discovery to enable Plaintiffs to calculate damages and undertaking extensive and vigorous negotiations, the parties reached a settlement totaling $4.9 million. Decl. of Justin M. Swartz in Supp. of Pls.' Mot. for Certification of the Settlement Class, Final Approval of the Class Action Settlement, and Approval of the FLSA Settlement ("Swartz Decl.") ¶¶ 4-13. The parties reached this settlement after a formal mediation under the supervision of an experienced employment law mediator, David Rotman, Esq. Id. ¶ 11. At the mediation, the parties reached agreement on the settlement amount and several other key terms. Id. ¶ 11 During the next several months, the parties negotiated the remaining terms of the settlement, which were memorialized in a formal settlement agreement ("Settlement Agreement"). Id. ¶ 12.

On December 11, 2012, this Court entered an Order preliminarily approving the settlement on behalf of the class set forth therein (the "Class" or the "Class Members"), conditionally certifying the settlement class, appointing Outten & Golden LLP and Shavitz Law Group P.A. as Class Counsel, and authorizing notice to all Class Members. ECF No. 13.

On December 31, 2012, a claims administrator sent Court-approved notices to all Class Members informing them of their rights under the settlement, including the right to opt out or object to the settlement for Class Members in the six states where Rule 23 claims were brought, and of Class Counsel's intention to seek up to one-third of the settlement fund for attorneys' fees, and their out-of-pocket expenses. Swartz Decl., Ex. B (Gyomber Decl.) ¶ 6. No Class Members objected to the settlement, and eight opted out of the settlement. Id. ¶¶ 12-13. On March 4, 2013, Plaintiffs filed a Motion for Certification of the Settlement Class, Final Approval of the Class Action Settlement, and Approval of the FLSA Settlement ("Motion for Final Approval"). That same day, Plaintiffs also filed Motions for Approval of Attorneys' Fees and Reimbursement of Expenses ("Motion for Attorneys' Fees") and for Service Awards ("Motion for Service Awards"). Defendants took no position with respect to any of these motions and did not object to the requests for attorneys' fees, costs, or service payments. The Court held a fairness hearing on March 19, 2013. No Class Member objected to the settlement at the hearing.

III. DISCUSSION

Plaintiffs meet all of the requirements for class certification under Federal Rule of Civil Procedure 23(a) and (b)(3). Plaintiffs satisfy Federal Rule of Civil Procedure 23(a)(1) because there are approximately 1, 735 Rule 23 Class Members and, thus, joinder is impracticable. See Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995) ("[N]umerosity is presumed at a level of 40 members."). The proposed class also satisfies Federal Rule of Civil Procedure 23(a)(2), the commonality requirement. Plaintiffs and the Class Members share common issues of fact and law, including whether Defendant misclassified them as exempt employees, failed to pay them overtime wages in violation of state wage and hour laws, and failed to keep accurate records of time worked. See Morris v. Affinity Health Plan, Inc., 859 F.Supp.2d 611, 615-16 (S.D.N.Y. 2012) (commonality satisfied where, among other allegations, plaintiffs claimed that defendant had a policy of not paying all class members overtime pay); Clark v. Ecolab Inc., No. 07 Civ. 8623 (PAC), 2010 WL 1948198, at 3 (S.D.N.Y. May 11, 2010) (common issues that help to satisfy Rule 23 commonality requirement include "whether [Defendant] failed to pay Plaintiffs and the state settlement Class Members overtime premium pay for all hours they worked over 40 in a workweek; and... whether [Defendant] maintained accurate time records of the hours Plaintiffs and the state settlement Class Members worked").

Plaintiffs satisfy Federal Rule of Civil Procedure 23(a)(3), typicality, because Plaintiffs' claims arose from the same factual and legal circumstances that form the bases of the class members' claims. See Morris, 859 F.Supp.2d at 616 (typicality satisfied where "[p]laintiffs' claims for overtime pay [arose] from the same factual and legal circumstances that form[ed] the bases of the [c]lass [m]embers' claims"). Plaintiffs also satisfy Federal Rule of Civil Procedure 23(a)(4) because there is no evidence that the Plaintiffs' and the class members' interests are at odds. Id. at 616; Johnson v. Brennan, No. 10 Civ. 4712 (CM), 2011 WL 4357376, at *5 (S.D.N.Y. Sept. 16, 2011).

In addition, the lawyers at Outten & Golden LLP "have substantial experience prosecuting and settling employment class actions, including wage and hour class actions[, ] and are well-versed in wage and hour law and class action law." Guaman v. Ajna-Bar NYC, No. 12 Civ. 2987, 2013 WL 445896, at *3 (S.D.N.Y. Feb. 5, 2013). Likewise, Plaintiffs' Counsel Shavitz Law Group, P.A. ("Shavitz Law Group") has acted as lead counsel or co-counsel on dozens of wage and hour class and collective actions. See Palacio v. E*TRADE Fin. Corp., No. 10 Civ. 4030, 2012 WL 1058409, at *2 (S.D.N.Y. Mar. 12, 2012) (appointing the Outten and Golden LLP and Shavitz Law Group as Class Counsel based on their experience in "numerous wage and hour class and collective actions").

Plaintiffs also satisfy Rule 23(b)(3). Plaintiffs' common factual allegations and a common legal theory - that Defendant violated federal and state wage and hour laws by misclassifying Plaintiffs as exempt administrative employees and failing to pay them for premium overtime hours - predominate over any factual or legal variations among class members. See Torres v. Gristede's Corp., No. 04 Civ. 3316, 2006 WL 2819730, at *16 (S.D.N.Y. Sept. 29, 2006) (plaintiffs "introduced sufficient proof that Defendants engaged in a common practice to deny employees overtime pay, " and "this issue predominates over any individual calculations of overtime wages").

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 Reyes v. Altamarea Grp., LLC, No. 10 Civ. 6451, 2011 WL 4599822, at *3 (S.D.N.Y. Aug. 16, 2011). Plaintiffs and Class Members have limited financial resources with which to prosecute individual actions. Concentrating the litigation in this Court is desirable because the allegedly wrongful conduct occurred within its jurisdiction. Employing the class device here will not only achieve economies of scale for class members, but will also conserve judicial resources and preserve public confidence in the integrity of the system by avoiding the waste and delay repetitive proceedings and preventing inconsistent adjudications. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1023 (9th Cir. 1998) (class action superior when individual claims would burden judiciary, be inefficient for plaintiffs, and yield inconsistent results); see also Morris, 859 F.Supp.2d at 617; Damassia v. Duane Reade, Inc., 250 F.R.D. 152, 161, 164 (S.D.N.Y. 2008).

A. Approval of Settlement Agreement

Rule 23(e) requires court approval for a class action settlement settlement to ensure that it is procedurally and substantively fair, reasonable, and adequate. Fed.R.Civ.P. 23(e). To determine procedural fairness, courts examine the negotiating process leading to the settlement. Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96, 116 (2d Cir. 2005); D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001). To determine substantive fairness, courts determine whether the settlement's terms are fair, ...


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