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Aquino v. Fort Washington Auto Body Corp.

United States District Court, S.D. New York

May 23, 2017

YUNIOR AQUINO, on behalf of himself, individually, and on behalf of all others similarly situated, et al., Plaintiffs,
v.
FORT WASHINGTON AUTO BODY CORP., et al., Defendants.

          OPINION AND ORDER

          HENRY PITMAN United States Magistrate Judge.

         This matter is before me on a joint application to approve a settlement between plaintiff Ismael Santana and defendants and a separate settlement between the remaining plaintiffs and defendants (Docket Item ("D.I.") 29, 31). All parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c).

         This is an action brought by seven individuals who were or are employed by defendants. Plaintiffs allege that they were not paid for overtime work and did not receive proper wage statements. Plaintiffs assert their claims under the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201 et seq., and various provisions of the New York Labor Law (the "NYLL"). The action was commenced as a collective action with respect to the FLSA claim, and the parties stipulated to the matter proceeding as a collective action.

         Defendants deny plaintiffs' allegations. They contend that plaintiffs' salaries covered all hours worked and included an additional amount for their overtime hours. Defendants also dispute the number of hours that plaintiffs claim to have worked. In addition, defendants assert that Santana was a manager and, thus, was exempt from the federal and state overtime requirements .

         I held a lengthy settlement conference on September 29, 2016 that was attended by Santana and his counsel. At the conference, Santana claimed he was owed either $58, 133.86 or $239, 802.19 in unpaid wages, depending on whether the wages he received were intended to compensate him for all hours worked or only for the first forty hours. After a protracted discussion of the strengths and weaknesses of the parties' respective positions, Santana and defendants agreed to resolve his claim for a total settlement of $38, 500.00. The parties have also agreed that $230.21 of the settlement amount will be allocated to reimburse Santana's counsel for their out-of-pocket costs, $12, 833.33 (or approximately one-third) of the remaining $38, 269.79 will be paid to Santana's counsel and the balance of $25, 436.46 will be paid to Santana.

         The remaining plaintiffs and defendants have agreed to a total settlement of $170, 000.00, to be distributed among the plaintiffs on a pro rata basis. The parties have also agreed that, after deduction of out-of-pocket costs, plaintiffs' counsel will receive one-third of the total settlement amount as attorneys' fees. The amounts claimed by each of the remaining plaintiffs, [1] the gross amount of the settlement fund allocable to each plaintiff and the net amount that will be received by each plaintiff after deduction for legal fees and costs are as follows:

Plaintiff

Amount Claimed

Gross Allocable Share

Allocable Share of Costs

Allocable Share of Fees

Net Allocable Share

Yunior Aquino

25, 395.48

37, 878.62

277.78

12, 626.21

24, 974.63

Ramon Sanchez

27, 274.21

40, 695.13

298.43

13, 565.04

26, 831.66

Dominguez Celso

18, 318.07

30, 566.61

224.15

10, 188.87

20, 153.59

Dony Almanzar

19, 242.86

30, 220.50

221.62

10, 073.50

19, 925.38

Jairo Pujols

955.56

6, 602.18

48.41

2, 200.73

4, 353.04

Antonio Diaz

12, 155.56

24, 036.96

176.27

8, 012.32

15, 848.37

TOTAL

103, 341.74

170, 000.00

1, 246.66

56, 666.67

112, 086.67

         This settlement was reached prior to the settlement conference I conducted between Santana and defendants.

         I refused to approve an earlier draft of the settlement agreement between Santana and defendants because it contained a general release (D.I. 30). Specifically, the provision not only barred all claims against defendants themselves, but also against unaffiliated persons or entities. I ordered the parties to limit the persons or entities covered by the general release. I also noted that Santana's counsel sought a 40% contingency fee and that such a high fee required justification and documentation.

         I also refused to approve an earlier draft of the settlement agreement between the remaining plaintiffs and defendants (D.I. 30). While counsel had listed each plaintiff's maximum potential recovery in their submission seeking settlement approval, they provided a calculation of damages within the FLSA's three-year statute of limitations only, not within the NYLL's six-year statutory period. I ordered the parties to resubmit a damages calculation for the six-year period that preceded the filing of the complaint so that I could assess whether the estimate of plaintiffs' maximum potential recoveries was accurate.

         The parties have addressed each of these issues; they have limited the general release and reduced the contingency fee sought in Santana's settlement agreement, and they have submitted a damages calculation for the six-year period that preceded the filing of the complaint for the remaining plaintiffs.

         Court approval of an FLSA settlement is appropriate

"when [the settlement] [is] reached as a result of contested litigation to resolve bona fide disputes." Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376, at '*12 (S.D.N.Y. Sept. 16, 2011). "If the proposed settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." .Id. (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 n.8 (11th Cir. 1982)).

Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1 (S.D.N.Y. Apr. 4, 2013) (Baer, D.J.) (alterations in original). "Generally, there is a strong presumption in favor of finding a settlement fair, [because] the Court is generally not in as good a position as the parties to determine the reasonableness of an FLSA settlement." Lliquichuzhca v. Cinema 60, LLC, 948 F.Supp.2d 362, 365 (S.D.N.Y. 2013) (Gorenstein, M.J.) (internal quotation marks omitted). "Typically, courts regard the adversarial nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement." Beckman v. KeyBank, N.A., 293 F.R.D. 467, 476 (S.D.N.Y. 2013) (Ellis, M.J.), citing Lynn's Food Stores, Inc. v. United States, supra, 679 F.2d at 1353-54. The presumption of fairness in this case is bolstered by the caliber of the parties' attorneys. Based upon their performance at the settlement conference that was held, it is clear to me that ...


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