United States District Court, E.D. New York
For Alan Archer, Plaintiff: Abdul Karim Hassan, LEAD ATTORNEY, Law Office of Abdul K. Hassan, Queens Village, NY.
For TNT USA Inc., Defendant: Jeffrey W. Pagano, LEAD ATTORNEY, Crowell & Moring, New York, NY; Ira M. Saxe, Crowell & Moring LLP, New York, NY.
MEMORANDUM AND ORDER
SANDRA L. TOWNES, United States District Judge.
In a Memorandum and Order dated January 24, 2013, and entered January 28, 2013 (the " Prior M& O" ), this Court declined to " so order" a Stipulation of Dismissal which would have dismissed this action with prejudice; directed that the stipulation be stricken; and directed that the parties submit additional documentation if they wished to dismiss this action with prejudice. Plaintiff now moves for reconsideration of the Prior M& O, principally relying on a Fifth Circuit case for the proposition that judicial approval of settlements of claims under the Fair Labor Standards Act is not required. For the reasons set forth below, plaintiff's motion is denied.
In March 2012, plaintiff Alan Archer, a former employee of defendant TNT USA, Inc., commenced this action pursuant to the Fair Labor Standards Act, as amended, 29 U.S.C. § § 201 et seq. (" FLSA" ), alleging, inter alia, that he had not been paid overtime compensation for a period of years. On January 18, 2013, plaintiff's counsel informed Magistrate Judge Levy that the parties had " reached a settlement of this action." Letter to Hon. Robert Levy, USMJ, from Abdul K. Hassan. Esq., dated Jan. 18, 2013. On January 22, 2013, at the direction of Judge Levy, the parties filed a proposed " Stipulation and Order Dismissing the Complaint against TNT USA Inc. with Prejudice Pursuant to Rule 41 of the Federal Rules of Civil Procedure" (the " Stipulation" ) for this Court to " so order."
This Court declined to " so order" the Stipulation. Relying on district court opinions from this Circuit, this Court held that " [t]here are only two ways in which back wage claims arising under the FLSA can be settled or compromised by employees." Prior M& O at 2 (quoting Joo v. Kitchen Table, Inc., 763 F.Supp.2d 643, 644 (S.D.N.Y. 2011), and Manning v. New York Univ., No. 98 Civ. 3300 (NRB), 2001 WL 963982, at *13 (S.D.N.Y. Aug. 22, 2001)). First, this Court noted that 29 U.S.C. § 216(c) expressly authorizes the Secretary of Labor " to supervise the payment of the unpaid minimum wages or the unpaid overtime compensation owing to any employee or employees . . . ." Id. Second, this Court quoted Joo and Manning, supra, for the proposition that " 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." Id. (quoting Joo, 763 F.Supp.2d
at 644; Manning, 2001 WL 963982, at *13). This Court noted that while the parties were tacitly requesting Court approval of their settlement, they had not " provided the Court with a copy of the Settlement Agreement or with a memorandum explaining why the settlement is fair." Id. Accordingly, this Court directed that the Stipulation be stricken and that the parties " submit, at a minimum, (1) a copy of the Settlement Agreement and (2) a joint memorandum of law explaining why the proposed settlement is fair and should be approved." Id.
The Instant Motion for Reconsideration
Plaintiff now moves for reconsideration of the Prior M& O. In a two-page letter dated January 28, 2013 (the " Reconsideration Request" ), plaintiff principally argues that " the FLSA in fact does not require court approval" of settlements. Reconsideration Request at 1. The Reconsideration Request tacitly acknowledges that some district courts have taken the position that court approval is required to settle an FLSA case, but asserts that these courts have " confused the ability to use a settlement as an affirmative defense in a subsequent case . . . with the ability of the parties to settle an FLSA case without court approval in the first place . . . ." Id. at 1-2. Plaintiff also implies that these district courts are expressing a minority view, stating, " Based on my experience of actively litigating FLSA cases for over a decade, more than 95 percent of FLSA settlements in this Court have never been approved by the Court." Id. at 2.
The Reconsideration Request does not cite to any cases from this Circuit in support of these arguments. Indeed, the only case which plaintiff cites in his Reconsideration Request is Martin v. Spring Break '83 Productions, L.L.C., 688 F.3d 247 (5th Cir.), cert. denied, 133 S.Ct. 795, 184 L.Ed.2d 583 (2012), which plaintiff reads as taking " the position that court approval was not required." Reconsideration Request at 2. While the Reconsideration Request cites to, and attaches, a brief which plaintiff's counsel submitted to the Second Circuit in another case, Cabrera v. Nassau Medical Services, P.C., in which counsel attempted to raise the issue of whether parties can settle FLSA claims without court approval, that brief itself cites to only five cases other than Martin : two out-of-Circuit cases, one district court case from the United States District Court for the Southern District of New York, and two Supreme Court cases-- Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945), and D. A. Schulte, Inc. v. Gangi, 328 U.S. 108, 66 S.Ct. 925, 90 L.Ed. 1114 (1946).
After arguing that the FLSA does not require Court approval of settlements, plaintiff ends his Reconsideration Request by suggesting that it is not necessary to resolve this issue. Specifically, plaintiff states:
[T]he parties are not seeking court approval of the FLSA settlement--this is why only a stipulation of dismissal was filed with the Court. While courts generally so-order stipulations of discontinuance and while defendants generally expect such so-ordering, a stipulation of dismissal signed by all parties results in a dismissal of the case without the need for a court order or so-ordering. See FRCP 41(a)(1)(A)(ii). This is not a case involving an infant or class action that would otherwise require court approval for different reasons.
Reconsideration Request at 2. Plaintiff nonetheless seeks a decision on the issue of whether court approval of a settlement is necessary, noting that this is " an issue that transcends this case" and needs to be clarified " for the benefit of the court, the bar and the public." Id.
The Legal Standard
The determination of whether to " grant or deny a motion for reconsideration lies squarely within the discretion of the district court." Murphy v. First Reliance Standard Life Ins. Co., No. 08-CV-3603 (DRH)(WDW), 2010 WL 2243356, at *3 (E.D.N.Y. June 1, 2010). However, a motion for reconsideration " is generally not favored and is properly granted only upon a showing of exceptional circumstances." Marrero Pichardo v. Ashcroft, 374 F.3d 46, 55 (2d Cir. 2004). " [R]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked . . . that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995); see Local Civ. R. 6.3. Moreover, a motion for reconsideration is not a vehicle for a " moving party seek[ing] solely to relitigate an issue already decided." Shrader, 70 F.3d at 257 (alterations added); see also Nussbaum v. Spider, Inc., No. 09-CV-2025 (JS)(ETB), 2009 WL 3756668, at *1 (E.D.N.Y. Oct. 30, 2009) (citing United States v. Gross, No. 98-CR-0159, 2002 WL 32096592, at *4 (E.D.N.Y. Dec. 5, 2002) (" A party may not use a motion to reconsider as an opportunity to reargue the same points raised previously." ). Accordingly, parties may not advance " new arguments or issues that could have been raised on the original motion." Kalamas v. Consumer Solutions REO, LLC, No. 09-CV-5045 (SJF), 2011 WL 6026303, at *1 (E.D.N.Y. Nov. 30, 2011) (citing Corines v. Am. Physicians Ins. Trust, 769 F.Supp.2d 584, 593-94 (S.D.N.Y. 2011)).
In this case, plaintiff's Reconsideration Request itself does not cite to any " controlling decisions" which this Court might have overlooked. The only decision cited in the Reconsideration Request itself is Martin v. Spring Break '83 Productions, L.L.C., supra, a Fifth Circuit decision. Decisions from outside the Second Circuit are not controlling on this Court. See, e.g., Shub v. Westchester Cmty. Coll., No. 06 Civ. 8324 (WCC), 2008 WL 1957731, at *4 n. 2 (S.D.N.Y. Apr. 28, 2008) (" Circuit decisions outside the Second Circuit are not controlling law and need not be considered on a motion for reconsideration." )
In addition, four of the six cases cited in plaintiff's brief in Cabrera v. Nassau Medical Services, P.C., which is incorporated by reference in the Reconsideration Request, are not controlling. Two of the six cases-- Martin v. Spring Break '83 Productions, L.L.C., supra, and Lynn's Food Stores, Inc. v. U.S. Department of Labor, 679 F.2d 1350 (11th Cir. 1982)--are Circuit decisions from outside of the Second Circuit. Two other cases-- Sampaio v. Boulder Rock Creek Developers, Inc., No. CV-07-153 (ETB), 2007 WL 5209390 (E.D.N.Y. Sept. 6, 2007), and Dees v. Hydradry, Inc., 706 F.Supp.2d 1227 (M.D. Fla. 2010)--are district court decisions, which are also not controlling on this Court. See Ades v. Deloitte & Touche, 843 F.Supp. 888, 892 (S.D.N.Y. 1994) (decisions of other district courts not controlling).
The two remaining cases-- Brooklyn Savings Bank v. O'Neil, supra, and D. A. Schulte, Inc. v. Gangi, supra --do not support plaintiff's claim that the FLSA does not require Court approval of settlements. In O'Neil, the Supreme Court consolidated appeals in three separate cases relating to the interpretation of Section 16(b) of the FLSA, 29 U.S.C. § 216(b): Brooklyn Savings Bank v. O'Neil, Dize v. Maddrix, and Arsenal Building Corporation v. Greenberg. The first two cases raised the question of " whether an employee subject to the terms of the Act can waive or release his right to receive from his employer
liquidated damages under Section 16(b)." O'Neil, 324 U.S. at 698. The third case raised the issue of " whether in a suit brought pursuant to the provisions of Section 16(b) the employee is entitled to interest on sums recovered as wages and liquidated damages under that section." Id. Since the latter issue is not germane to this case, the following discussion focuses solely on the first two cases.
Brooklyn Savings Bank v. O'Neil
In O'Neil, a bank became aware in 1942 that a night watchman, who was employed for a two-year period ending in 1940, was entitled to overtime compensation under section 7 of the FLSA, 29 U.S.C. § 207. The bank calculated the statutory overtime compensation, and offered its former employee a check for that amount in return for a release of all the employee's rights under the FLSA. Although the employee signed the release, he subsequently sued in state court to recover the liquidated damages provided for in Section 16(b). After the state courts ruled that he was entitled to the liquidated damages, the Supreme Court granted certiorari on the question of whether the release was " a defense to an action subsequently brought solely to recover liquidated damages." O'Neil, 324 U.S. at 701.
Before addressing this question, however, the Supreme Court raised another, " preliminary question" of whether the release " was given in settlement of a bona fide dispute between the parties with respect to coverage or amount due under the Act or whether it constituted a mere waiver of his right to liquidated damages." Id. at 703. The Court recognized that this was a factual question which the state courts had not addressed, but undertook to examine the evidence itself " for the purpose of determining what facts reasonably might be and presumably would be found therefrom by the state court." Id. After concluding that the record showed " that the release was not given in settlement of a bona fide dispute between employer and employee," id., the Supreme Court recast the question presented as follows: " whether in the absence of a bona fide dispute between the parties as to liability, respondent's written waiver of his right to liquidated damages under Section 16(b) bars a subsequent action to recover liquidated damages." Id. at 704.
The Court answered this question in the negative. It began by noting that it had previously held that " a statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such waiver or release contravenes the statutory policy." Id. (citing Midstate Horticultural Co. v. Pennsylvania R.R. Co., 320 U.S. 356, 361, 64 S.Ct. 128, 88 L.Ed. 96 (1943), and A.J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 35 S.Ct. 444, 59 L.Ed. 774 (1915)). Since Congress had not specifically considered the waiver issue, the Supreme Court found it " necessary to resort to a broader consideration of the legislative policy behind this provision as evidenced by its legislative history and the provisions in and structure of the Act." Id. at 706.
After considering the legislative history behind the FLSA, the Supreme Court concluded that " Congress did not intend that an employee should be allowed to waive his right to liquidated damages." Id. The Court stated:
The legislative history of the Fair Labor Standards Act shows an intent on the part of Congress to protect certain groups of the population from substandard wages and excessive hours which endangered the national health and well-being and the free flow of goods in interstate commerce. The statute was a
recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce. To accomplish this purpose standards of minimum wages and maximum hours were provided. Neither petitioner nor respondent suggests that the right to the basic statutory minimum wage could be waived by any employee subject to the Act. No one can doubt but that to allow waiver of statutory wages by agreement would nullify the purposes of the Act. We are of the ...