United States District Court, S.D. New York
MANUEL LIZONDRO-GARCIA, LUIS CRUZ, JORGE GARCIA, JERALDO GONZALEZ, ALEKSANDER VELIC, JAVIER TOLEDO, OSCAR RAMIREZ, MOISES JIMENEZ, MARCO REAL, on behalf of themselves and others similarly situated, Plaintiffs,
KEFI LLC, doing business as KEFI RESTAURANT and KOSTANTINOS DAMANIOS, Defendants.
OPINION AND ORDER
HENRY PITMAN, Magistrate Judge.
Manuel Lizondro-Garcia, Luis Cruz, Jorge Garcia, Jeraldo Gonzalez, Aleksander Velic, Javier Toledo, Oscar Ramirez, Moises Jimenez and Marco Real ("plaintiffs"), on behalf of themselves and other similarly situated, commenced this action pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. and the New York Labor Law ("NYLL") §§ 191 et seq. to recover unpaid overtime and spread-of-hours compensation, reimbursement for improperly withheld tips and statutory damages.
On October 2, 2013, the parties informed the Court that they had reached a tentative settlement of the FLSA collective action and the NYLL class action, which they memorialized in the Settlement Agreement & Release ("Settlement Agreement").
Plaintiffs now move for preliminary approval of the settlement and other related relief. Specifically, the seek an Order (1) conditionally certifying a NYLL class pursuant to Rule 23(a) and (b)(3), (2) appointing Joseph & Kirschenbaum LLP as class counsel, (3) preliminarily approving the Settlement Agreement (4) approving plaintiffs' proposed Notice of Class Action Settlement (the "Proposed Notice") and (5) adopting the parties' proposed schedule for final approval of the Settlement Agreement (Notice of Motion, dated Nov. 5, 2013, (Docket Item 54)). The parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c) (Docket Item 51).
For the reasons set forth below, plaintiffs' motion is granted.
A. Relevant Factual and Procedural Background
Plaintiffs commenced this action on March 15, 2012. Their complaint alleges that plaintiffs, and members of the FLSA collective and putative NYLL class,  are or were employed by defendants as servers, bartenders, baristas, barbacks, bussers or runners. Plaintiffs allege that defendants failed to pay them overtime for hours they worked in excess of 40 hours and spreadof-hours pay for days they worked in excess of 10 hours. Plaintiffs also allege that defendants improperly forced plaintiffs to share their tips with a "manager/party planner" (Declaration of Josef Nussbaum, Esq., dated Nov. 5, 2013, (Docket Item 56) ("Nussbaum Decl.") at ¶ 6; Compl. ¶¶ 43-45).
In May 2012, the parties agreed to exchange only limited discovery in order to facilitate the prompt settlement of this matter. Defendants produced tip sheets, payroll records and clock-in reports for several of defendants' employees covering a sixteen-week period (Nussbaum Decl. at ¶¶ 7-8). After scrutinizing defendants' records, plaintiffs contend that they could estimate the total damages owed to the FLSA collective and the putative NYLL class (Nussbaum Decl. at ¶ 8).
On May 30, 2013, I conducted a settlement conference that was attended by counsel and by the parties. The parties were unable to resolve the case at that time.
After further fact discovery, counsel for plaintiffs lowered their estimate of plaintiffs' aggregate actual damages to roughly $280, 000 (Nussbaum Decl. at ¶ 11). Thereafter, the parties agreed on the terms of a settlement, which were memorialized in the Settlement Agreement accompanying the present motion (Nussbaum Decl. at ¶ 11 and Ex. 1 annexed thereto).
B. The Settlement Agreement
The Settlement Agreement provides that defendants, without conceding the validity of plaintiffs' claims and without admitting liability, agree to create a common fund of $315, 000 to be paid in two equal installments of $157, 500 (Ex. 1 to Nussbaum Decl. at ¶¶ 1.28, 3.1(B)). From the fund, the nine named plaintiffs will each receive $1, 000 service awards, a claims administrator will receive an estimated $15, 239.11 to set up and distribute monies from the fund and counsel for plaintiffs will receive attorney's fees and costs, subject to the Court's approval, and not to exceed $105, 000 (Ex. 1 to Nussbaum Decl. at ¶¶ 1.27, 3.2-3.3).
The Settlement Agreement states that the remainder will be divided up and awarded as follows: 25% to individuals who opt in to the FLSA collective action and 75% to individuals who remain in the NYLL class action (Nussbaum Decl. at ¶¶ 12-13). Each member of the FLSA collective will be paid a percentage of the 25%, calculated by dividing the number of hours he or she worked for defendants during the relevant period by the total number of hours that all members of the collective worked for defendants (Ex. 1 to Nussbaum Decl. at ¶ 3.4(B)(4)). Each member of the putative NYLL class will be awarded a percentage of the 75% according to the same formula (Ex. 1 to Nussbaum Decl. at ¶ 3.4(B)(3), (5)-(6)). No class member will receive an award of less than $100 (Ex. 1 to Nussbaum Decl. at ¶ 3.4(B)(2)). Any remaining monies will revert to defendants (Ex. 1 to Nussbaum Decl. at ¶¶ 3.1(I), 3.4(B)(8)). In return, each individual who opts into the collective action and the class will release defendants from all wage and hour claims brought or that could have been brought in this action (Ex. 1 to Nussbaum Decl. at ¶ 2.9(B)).
A. Conditional Certification of the NYLL Rule 23 Class
Plaintiffs first request that the Court conditionally certify, for the purpose of settlement only, a class pursuant to Rule 23(b)(3) consisting of all individuals who work or worked for defendants as "[s]ervers, [b]artenders, [b]aristas, [b]arbacks, ... [b]ussers" and "runners... from December 1, 2008 to June 30, 2013" (Pls.' Mem. at 8; Ex. 1 to Nussbaum Decl. at ¶ 1.6).
"Before certification is proper for any purpose - settlement, litigation, or otherwise - a court must ensure that the requirements of Rule 23(a) and (b) have been met." Denney v. Deutsche Bank AG , 443 F.3d 253, 270 (2d Cir. 2006); accord Cohen v. J.P. Morgan Chase & Co. , 262 F.R.D. 153, 157-58 (E.D.N.Y. 2009); Bourlas v. Davis Law Assocs. , 237 F.R.D. 345, 349 (E.D.N.Y. 2006).
Class certification is appropriate under Rule 23(a) if "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims... of the representative parties are typical of the claims... of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a).
If each of these four threshold requirements are met, class certification is appropriate if the action also satisfies one of the three alternative criteria set forth in Rule 23(b). In this case, plaintiffs argue that class certification is proper under Rule 23(b)(3), which provides that a class action may be maintained where:
the questions of law or fact common to class members predominate over any questions affecting only individual members, and [where] a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.
The party seeking class certification bears the burden of establishing each of these elements by a "preponderance of the evidence." Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc. , 546 F.3d 196, 202 (2d Cir. 2008); Amchem Prods., Inc. v. Windsor , 521 U.S. 591, 614 (1997); see Fedotov v. Peter T. Roach & Assocs., P.C. , 354 F.Supp.2d 471, 478 (S.D.N.Y. 2005) (Haight, D.J.). Although the Court of Appeals has "directed district courts to apply Rule 23 according to a liberal rather than a restrictive interpretation, " In re NASDAQ Mar-ket-Makers Antitrust Litig. , 169 F.R.D. 493, 504 (S.D.N.Y. 1996) (Sweet, D.J.), citing Korn v. Franchard Corp. , 456 F.2d 1206, 1208-09 (2d Cir. 1972), class certification should not be granted unless, after a "rigorous analysis, '" the court is satisfied that Rule 23's requirements have been met. Spagnola v. Chubb Corp. , 264 F.R.D. 76, 92 (S.D.N.Y. 2010), quoting In re Initial Pub. Offering Secs. Litig. , 471 F.3d 24, 33 (2d Cir. 2006). Doubts concerning the propriety of class certification should be resolved in favor of class certification. See Levitt v. J.P. Morgan Secs., Inc. , 710 F.3d 454, 464 (2d Cir. 2013) (on appellate review, less deference is given to decisions denying class certification than to decisions granting certification).
1. Rule 23(a)'s Requirements
Rule 23(a) requires that the members of the proposed class be "so numerous that joinder of all members is impracticable." Although precise calculation of the number of class members is not required, "numerosity is generally presumed when the prospective class consists of 40 members or more." Alcantara v. CNA Mgmt., Inc. , 264 F.R.D. 61, 64 (S.D.N.Y. 2009) (Jones, D.J.); Consol. Rail Corp. v. Town of Hyde Park , 47 F.3d 473, 483 (2d Cir. 1995). Counsel for plaintiffs has already identified 240 members of the NYLL class (Nussbaum Decl. at ¶ 14). Thus, the numerosity requirement is clearly met.
Rule 23(a) also requires the existence of questions of law or fact common to the class. The Supreme Court has recently emphasized that "[c]ommonality requires the plaintiff to demonstrate that the class members have suffered the same injury.'" Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, ___ , 131 S.Ct. 2541, 2551 (2011), quoting Gen. Tel. Co. v. Falcon , 457 U.S. 147, 157 (1982). "Since [a]ny competently crafted class complaint literally raises common "questions, "'" the court must assess whether the common questions are capable of "generat[ing] common answers apt to drive the resolution of the litigation." Wal-Mart Stores, Inc. v. Dukes, supra , 131 S.Ct. at 2551, quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-32 (2009). "[P]laintiffs may meet the commonality requirement where the individual circumstances of class members differ, but their injuries derive from a unitary course of conduct by a single system.'" Fox v. Cheminova, Inc. , 213 F.R.D. 113, 126 (E.D.N.Y. 2003), quoting Marisol A. v. Giuliani , 126 F.3d 372, 377 (2d Cir. 1997) (per ...