United States District Court, S.D. New York
ALEXANDRU SURDU, DINO TITO, ANASTASIA MAYFAT, CIPRIAN GROSU and LUIS LOPEZ, on behalf of themselves and those similarly situated, et al., Plaintiffs,
MADISON GLOBAL, LLC, d/b/a NELLO, NELLO BALAN and THOMAS MAKKOS, Defendants.
OPINION AND ORDER
PITMAN UNITED STATES MAGISTRATE JUDGE.
Alexandru Surdu, Dino Tito, Anastasia Mayfat, Ciprian Grosu
and Luis Lopez, on behalf of themselves and all others
similarly situated, commenced this action pursuant to the
Fair Labor Standards Act (the "FLSA"), 29 U.S.C.
§§ 201 et seq., and the New York Labor Law
(the "NYLL") §§ 190 et. seq.
against defendants Madison Global, LLC d/b/a Nello
("Nello"), Nello Balan and Thomas Makkos to recover
unpaid minimum wages, misappropriated gratuities, uniform
purchase and maintenance costs and penalties for failure to
provide wage statements and notices. Plaintiffs brought the
action as a collective action pursuant to 29 U.S.C. §
216(b) with respect to the FLSA claims and as a class action
with respect to the NYLL claims. Following the filing of the
complaint, opt-in plaintiffs Gulnaz Badakshanova, Constantine
Haralabopolous, Bilguun Ganhuyag, Francesco Desideri, Gian
Maria Montoro, Stefano Naia, Adnan Dibra, Susanna De Martino,
Luca Federico and Juan Carlos Rios consented to join the FLSA
letter to the Honorable Paul G. Gardephe, United States
District Judge, dated September 30, 2016, the parties
informed the Court that they had reached a settlement of the
FLSA collective action and the NYLL class action (Letter from
Noel P. Tripp, Esq., to Judge Gardephe, dated Sept. 30, 2016
(Docket Item ("D.I.") 49)). The parties
subsequently memorialized their agreement in a written
settlement agreement (the "Settlement Agreement").
now move for preliminary approval of the Settlement Agreement
and other related relief. Specifically, plaintiffs seek an
order (1) conditionally certifying a NYLL class pursuant to
Rule 23(a) and (b)(3); (2) appointing the Klein Law Group,
P.C. as class counsel; (3) preliminarily approving the
Settlement Agreement; (4) approving plaintiffs' proposed
Notice of Class Action Settlement (the "Proposed
Notice") and (5) scheduling a Fairness Hearing to
consider the parties' motion for final approval of the
settlement, attorneys' fees and costs and a service award
to Surdu, Tito, Mayfat, Grosu and Lopez (Notice of
Plaintiffs' Renewed Motion for Preliminary Approval of
Class Action Settlement, dated July 28, 2017 (D.I. 66);
Memorandum of Law in Support of Plaintiffs' Renewed
Motion for Preliminary Approval of Settlement, dated July 28,
2017 (D.I. 67) ("Pl.'s Mem."), at 1). The
parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c).
reasons set forth below, plaintiffs' motion is granted.
Relevant Factual and Procedural Background
Tito, Mayfat, Grosu and Lopez commenced this action on August
19, 2015. The complaint alleges that the members of the FLSA
collective and the putative NYLL class are or were employed
by defendants as tipped "food service workers, "
which the complaint defines as "servers, bussers,
runners, and bartenders" (Class and Collective Action
Complaint, dated Aug. 11, 2015 (D.I. 1) ("Compl.")
¶¶ 1, 18).The complaint further alleges that
defendants (1) failed to pay the minimum wage by improperly
applying the FLSA and NYLL's tip credit allowance; (2)
unlawfully retained portions of the food service workers'
tips and distributed them to non-tip-eligible employees; (5)
failed to reimburse food service workers for uniform purchase
and maintenance costs and (6) failed to provide food service
workers with wage statements and notices as required by the
NYLL (Compl. ¶¶ 31-98). Plaintiffs filed an amended
complaint on May 10, 2016, adding retaliation claims on
behalf of Surdu and Tito (Stipulation Regarding
Plaintiffs' Proposed Amendment of Complaint, dated May 9,
2016 (D.I. 38), Ex. A ("Amended Compl.")
¶¶ 75-88, 113-33) .
parties engaged in extensive discovery to develop their
claims and defenses. Plaintiffs produced approximately 1, 500
pages of documents, including tip sheets, pay stubs,
schedules, employee handbooks, dry cleaning receipts,
disciplinary write-ups and tax forms (Declaration of Darren
P.B. Rumack, Esq., dated July 28, 2017 (D.I. 68)
("Rumack Decl.") ¶ 15). Defendants produced
approximately 2, 000 pages of documents, including pay stubs,
schedules and personnel files for the named and opt-in
plaintiffs (Rumack Decl. ¶ 16). According to
plaintiffs' calculations, plaintiffs and the putative
class members are owed approximately $375, 000.00 in
misappropriated tips (Rumack Decl. ¶ 22). Plaintiffs
have not submitted any estimate of the class's other
elements of damages.
September 2016, the parties engaged in an arm's-length
negotiation during an hours-long mediation session with
mediator Ralph S. Berger, whom plaintiffs' counsel
describes as an "experienced and well-known
mediator" in wage and hour cases (Rumack Decl.
¶¶ 17-19). At the mediation, following
"several hours of negotiations, " the parties
reached an agreement on the settlement amount (Rumack Decl.
¶ 19). The parties thereafter negotiated the remaining
terms of the settlement, which are memorialized in the
Settlement Agreement (Rumack Decl. ¶ 23; Letter from
Darren Rumack, Esq., to the undersigned, dated Aug. 25, 2017
(D.I. 72) ("Rumack Letter"), Ex. A).
The Settlement Agreement
Settlement Agreement provides that defendants, without
conceding the validity of plaintiffs' claims or admitting
liability, agree to create a common settlement fund of $342,
500.-00 (Rumack Letter, Ex. A § 3.1(A)). From the
settlement fund, Surdu, Tito, Mayfat, Grosu and Lopez will
each receive an $8, 500.00.00 service award, a settlement
claims administrator will receive a fee to administer the
settlement and counsel for plaintiffs will receive no more
than $114, 166.66, or one-third of the total settlement
amount, in attorneys' fees and costs, subject to the
Court's approval (Rumack Letter, Ex. A §§ 1.10,
2.2(B), 3.3(A), 3.4(A)).
Settlement Agreement provides that the claims administrator
will allocate the remainder of the settlement proceeds to
those class members who validly file a claim form
("Authorized Claimants") as follows:
(2) All Class Members will receive one point for each week
worked for Nello between August 19, 2009 and the date [the]
Agreement is signed[.]
(3) The Net Settlement Fund will be divided by the aggregate
number of points accrued by all of the Class Members during
the period of August 19, 2009 through the date this Agreement
is signed. ("Point Value").
(4) Each Authorized Claimant's total points will be
multiplied by the Point Value to determine his or her
Individual Settlement Amount.
(5) No Authorized Claimant shall receive less than $100.00.
If any Authorized Claimant's Individual Settlement Amount
under this formula is less than $100.00, that Authorized
Claimant's Individual Settlement Amount will be increased
to $100. O[O], with the difference subtracted from the Net
Settlement Fund, and all other Authorized Claimants'
Individual Settlement Amounts recalculated according to the
formula set forth above to account for the difference.
(Rumack Letter, Ex. A §§ 1.2, 3.5(A)). Any portion
of the net settlement amount not claimed by class members
will revert to defendants (Rumack Letter, Ex. A §
3.5(B)). For tax purposes, settlement checks paid to class
members will be allocated 33% to W-2 wage payments and 67% to
1099 non-wage payments for interest, liquidated damages and
statutory penalties (Rumack Letter, Ex. A § 3.6(A)).
the Settlement Agreement provides that upon final approval of
the Settlement Agreement, each individual who does not opt
out of the class, including those who do not submit a claim
form, will release defendants from all wage and hour claims
that were brought, or could have been brought, in this action
through the date of this Order (Rumack Letter, Ex. A
§§ 1.28, 4.1(A)).
Settlement Agreement also provides that neither side shall
make any statement to the media about the settlement, other
than "' [t]he matter has been resolved'"
(Rumack Letter, Ex. A § 4.2 (B)) .
the Settlement Agreement provides that either party has the
right to terminate the Settlement Agreement if I decline to
preliminarily or finally approve the Settlement Agreement,
except if the denial is solely due to attorneys' fees
(Rumack Letter, Ex. A § 2.8(A)). Additionally,
defendants have the right to terminate the Settlement
Agreement if ten percent or more of the putative class
members opt out (Rumack Letter, Ex. A § 2.8(B)).
Conditional Certification of the NYLL Rule 23 Class
request that the Court conditionally certify, for the purpose
of settlement only, a class pursuant to Rule 23 consisting of
individuals who worked as servers, runners, bussers and
bartenders and who received tips at Nello from August 19,
2009 through the date of this Order.
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."
Penney v. Deutsche Bank AG, 443 F.3d 253, 270 (2d
Cir. 2006); accord Manley v. Midan Rest. Inc., 14
Civ. 1693 (HBP), 2016 WL 1274577 at *3 (S.D.N.Y. Mar. 30,
2016) (Pitman, M.J.); Long v. HSBC USA Inc., 14 Civ.
6233 (HBP), 2015 WL 5444651 at *5 (S.D.N.Y. Sept. 11, 2015)
(Pitman, M.J.); Cohen v. J.P. Morgan Chase &
Co., 262 F.R.D. 153, 157-58 (E.D.N.Y. 2009). Class
certification under Rule 23(a) requires that
(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.
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)." Long v. HSBC USA Inc., supra,
2015 WL 5444651 at *5; accord Manley v. Midan
Rest. Inc., supra, 2016 WL 1274577 at *3;
Lizondro-Garcia v. Kefi LLC, 300 F.R.D. 169, 174
(S.D.N.Y. 2014) (Pitman, M.J.). Here, 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 ... a class action is superior to other
available methods for fairly and efficiently adjudicating 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); see Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 614 (1997); Fedotov v. Peter T. Roach &
Assocs., P.C., 354 F.Supp.2d 471, 478 (S.D.N.-Y. 2005)
(Haight, D.J.). Although the Second Circuit has
"directed district courts to apply Rule 23 according to
a liberal rather than a restrictive interpretation, "
In re NASDAQ Market-Makers Antitrust Litiq., 169
F.R.D. 493, 504 (S.D.N.Y. 1996) (Sweet, D.J.),
citing, inter alia, 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.
Spaqnola v. Chubb Corp., 264 F.R.D. 76, 92 (S.D.N.Y.
2010) (Baer, D.J.), quoting In re Initial Pub. Offerings
Sec. Litiq., 471 F.3d 24, 33 (2d Cir. 2006). Any doubts
concerning the propriety of class certification should be
resolved in favor of class certification. Long v. HSBC
USA Inc., supra, 2015 WL 5444651 at *6,
citing Levitt v. J.P. Morgan Sec, Inc., 710 F.3d
454, 464 (2d Cir. 2013).
Rule 23(a)'s Requirements
23(a) requires that the members of the proposed class be
"so numerous that joinder of all members is
impracticable." Here, plaintiffs' counsel represents
that it has identified more than 82 members of the putative
class (Rumack Decl. ¶ 20). This clearly meets the
numerosity requirement. Alcantara v. CNA Mgmt.,
Inc., 264 F.R.D. 61, 64 (S.D.N.Y. 2009) (Jones, D.J.)
("[N]umerosity is generally presumed when the
prospective class consists of 40 members or more."),
citing Iglesias-Mendoza v. La Belle Farm, Inc., 239
F.R.D. 363, 370 (S.D.N.Y. 2007) (McMahon, D.J.); accord
Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d
473, 483 (2d Cir. 1995); Lizondro-Garcia v. Kefi
LLC, supra, 300 F.R.D. at 174.
(a) also requires the existence of questions of law or fact
common to the class. The Supreme Court has emphasized that
"[c]ommonality requires the plaintiff to demonstrate
that the class members 'have suffered the same
injury.'" Wal-Mart Stores, Inc. v. Dukes,
564 U.S. 338, 349-50 (2011), quoting General Tel. Co. v.
Falcon, 457 U.S. 147, 157 (1982). "[S]ince [a]ny
competently crafted class complaint literally raises common
questions, " I 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, 564 U.S. at
349-50 (emphasis and second alteration in original; internal
quotation marks omitted); accord Lizondro-Garcia v. Kefi
LLC, supra, 300 F.R.D. at 175.
"[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. ...