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Fujiwara v. Sushi Yasuda Ltd.

United States District Court, S.D. New York

November 12, 2014

SAKIKO FUJIWARA, et at., Plaintiffs,
v.
SUSHI YASUDA LTD., et at., Defendants

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For Plaintiffs: Brent E. Pelton, Esq., Taylor B. Graham, Esq., Pelton & Associates, P.C., New York, NY.

For Defendants: Anna Kolontyrsky, Esq., Christopher A. Parlo, Esq., Melissa C. Rodriguez, Esq., Morgan, Lewis & Bockius LLP, New York, NY; Vincent E. Bauer, Esq., Law Offices of Vincent E. Bauer, New York, NY.

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MEMORANDUM & ORDER

WILLIAM H. PAULEY III, United States District Judge.

In 1938, Congress enacted the Fair Labor Standards Act (FLSA) to guarantee workers " [a] fair day's pay for a fair day's work" and to guard against " the evil of 'overwork' as well as 'underpay.'" Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 578, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942) (quoting 81 Cong. Rec. 4983 (1937) (message of President Roosevelt)).

Recent years have witnessed an explosion in FLSA litigation. FLSA cases constitute nearly 9% of the civil cases filed in the Southern District of New York so far this year. And this district is no outlier. Nationwide, annual FLSA filings are up over 400% fro 2001.[1]

A law is only effective to the extent it is enforced, and this increased litigation has been a positive development for many low-wage workers. The same is true for their lawyers. The danger to workers from underpayment by their employers is clear. The danger of overpaying their lawyers is more subtle.

When cases settle, " the adversarial process melts away." S.E.C. v. Bear, Stearns & Co., 626 F.Supp.2d 402, 403 (S.D.N.Y. 2009). Settling defendants tend to lose interest in how settlement monies are distributed. And a natural tension arises between

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plaintiffs' attorneys and the class they represent, in that both must jockey for payment from a common fund. Often, it is judges alone who are left to safeguard the interests of the class.

Courts typically rely on the adversarial process to strike a balance between competing interests. But the vacuum created by proposed FLSA class action settlements has permitted plaintiffs' attorneys to write much of the law on what constitutes a reasonable attorney's fee. Those fees, effectively paid by the class, at times provide lawyers with more than a fair day's pay for a fair day's work.

As is often the case, Plaintiffs in this FLSA and New York Labor Law (NYLL) action move, unopposed, for final approval of a class settlement. Their lawyers have expertly guided the case to this point and obtained an excellent settlement for the class. For the following reasons, Plaintiffs' motion for final approval is granted, but the requested attorney's fees are reduced and the application for service awards for Class Representatives is denied.

BACKGROUND

In 2011, Eric Asimov, the chief wine critic for the New York Times, wrote that Sushi Yasuda, " with its devotion to sushi in its purist form, unalloyed with other Japanese cuisines or American twists,. . . occupies a singular position in New York's sushi landscape." Eric Asimov, Quiet Please: Sushi Being Served, N.Y. Times, Nov. 16, 2011 at D8. He noted the restaurant " excelled back in 2000, and . . . continues to meet its high standards." But even three-star restaurants are not immune to wage and hour claims.

Plaintiffs Sakiko Fujiwawra, Mayumi Imoto, and Satoko Nagai (" Named Plaintiffs" ) filed this action in December 2012 against Sushi Yasuda and its owners.[2] The Named Plaintiffs were current and former wait staff of Sushi Yasuda. They alleged that wait staff, bussers, and sushi chefs were not paid minimum wage during their training period, premiums for overtime work, spread of hours premiums for days in which they worked over ten hours or a split shift, or the gratuities left by customers. Haruko Fujimoto, Kana Harayama, and Kiyoe Takada (together with the Named Plaintiffs, " Class Representatives" ) joined the suit as FLSA opt-in plaintiffs shortly thereafter.

Not to long after this suit was filed, Sushi Yasuda made a well-publicized decision to raise its prices and eliminate tipping. See Patrick McGeehan, Tip 15. 20 or 25 Percent? Here. They Strongly Suggest Zero, N.Y. Times, June 6, 2013, at A21. While most of the reportage emphasized the restaurant's desire to follow Japanese customs and create a more pleasant customer experience, it appears this lawsuit may also have prompted the move. See Ryan Sutton, NYC's Sushi Yasuda Eliminates Tipping. Gratuities No Long Accepted (Updated) [sic], The Price Hike, http://thepricehike.com/post/52308734397/nycs-sushi-yasuda-eliminatestipping-gratuities-no (noting Sushi Yasuda's owner stated " [t]he laws around tipping and how they're divided get really convoluted and there aren't really clear guidelines on how to tally it up." ).

After taking initial discovery, Plaintiffs moved for class certification of their NYLL claims in September 2013. Before Sushi Yasuda filed any opposition, the parties entered mediation and settled in principle. They finalized the settlement in

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April 2014, and this Court authorized notice to the class on May 14, 2014.

I. The Settlement

Defendants are paying $2.4 million to settle the case on a classwide basis.[3] They are joining Plaintiffs' motion to certify a class consisting of all persons who worked 90 days or more at Sushi Yasuda between December 3, 2006 and May 12, 2013 as sushi chefs, bussers, and/or wait staff. The parties originally proposed the $2.4 million settlement be distributed as follows:

1. $20,000 services awards to each of the six Class Representatives;
2. $800,000 in fees and costs to Plaintiffs' counsel;
3. $100,000 to create an Administration & ...

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