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Bedasie v. Mr. Z Towing, Inc.

United States District Court, E.D. New York

January 9, 2018

VIJAY BEDASIE et al., Plaintiffs,
v.
MR. Z TOWING, INC. et al, Defendants.

          MEMORANDUM AND ORDER

          CHERYL L. POLLAK UNITED STATES MAGISTRATE JUDGE.

         Currently before the Court is the parties' joint motion to approve the settlement in this wage and hour case brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the New York Labor Law ("NYLL") § 650 et seq. As explained more fully below, the Court held a fairness hearing on January 5, 2018 and concludes that the proposed settlement is fair and reasonable based on the parties' submissions and the Court's familiarity with this case acquired through extensive involvement in the litigation over the past four years.

         The parties' motion to approve the settlement is therefore granted.

         BACKGROUND

         This case has an extensive background extending over four years of litigation, with which the Court assumes familiarity. See generally Bedasie v. Mr. Z Towing. Inc., No. 13 CV 5453, 2017 WL 1135727 (E.D.N.Y. Mar. 24, 2017); Bedasie v. Mr. Z Towing. Inc., No. 13 CV 5453, 2017 WL 5665858 (E.D.N.Y. Nov. 27, 2017); Bedasie v. Mr. Z Towing. Inc., No. 17-2922, 2017 WL 6520477 (2d Cir. Dec. 4, 2017); Bedasie v. Mr. Z Towing. Inc.. No. 13 CV 5453, 2017 WL 6816331 (E.D.N.Y. Dec. 21, 2017).

         On December 22, 2017, the parties filed their joint motion for approval of the settlement agreement. (See Mot. for Approval, Dec. 22, 2017, ECF No. 107). Defendants filed a notice of appeal with respect to the Court's November 27, 2017 Order awarding attorneys' fees and the Court's December 21, 2017 Order granting the motion to reduce the damages award. (See Not. of Appeal, Dec. 26, 2017, ECF No. 108). The parties subsequently filed a stipulation to withdraw the appeal under Second Circuit Local Rule 42.1, which was "so ordered" by the Second Circuit Court of Appeals. (See Ct. of Appeals Order, Jan. 3, 2018, ECF No. 110).[1] The Court held a fairness hearing on January 5, 2018. (See Minute Entry, ECF No. 112).

         DISCUSSION

         A. Legal Standard

         "[A]n employee may not waive or otherwise settle an FLSA claim for unpaid wages for less than the full statutory damages unless the settlement is supervised by the Secretary of Labor or made pursuant to a judicially supervised stipulated settlement." Wolinsky v. Scholastic, Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012). Accordingly, the Second Circuit has held that the FLSA is an "applicable federal statute" that precludes voluntary dismissal under Rule 41 of the Federal Rules of Civil Procedure absent court order, and therefore FLSA settlements must be approved by the court or the Department of Labor. See Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015).

         In deciding whether to approve a settlement, "courts must consider whether the agreement reflects a reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought about by the employer's overreaching." Mosquera v. Masada Auto Sales. Ltd., No. 09 CV 4925, 2011 WL 282327, at *1 (E.D.N.Y. Jan. 25, 2011) (citation omitted). The fundamental inquiry is whether the settlement's terms are fair and reasonable under the circumstances. In conducting that inquiry, courts consider the totality of the circumstances, which generally include a review of the following factors: (1) the range of plaintiffs possible recovery; (2) the extent to which the proposed settlement will allow the parties to avoid anticipated burdens and expenses associated with further litigation; (3) the seriousness of the risks faced by the parties if they continue to litigate; (4) whether the settlement is the product of arm's-length negotiation between counsel, including whether a neutral mediator facilitated the proposed settlement; and (5) the possibility of fraud or collusion. Wolinsky v. Scholastic. Inc., 900 F.Supp.2d at 335; see also Misiewicz v. D'Onofrio Gen. Contractors Corp.. No. 08 CV 4377, 2010 WL 2545439, at *4 (E.D.N.Y. May 17, 2010) (identifying nine factors).

         Where the settlement provides for payment of attorneys' fees, the court must also determine the reasonableness of the proposed fee award. See 29 U.S.C. § 216(b) (providing that "[t]he Court... shall, in addition to any judgment... allow a reasonable attorney's fee") (emphasis added); Wolinsky v. Scholastic. Inc., 900 F.Supp.2d at 336 (collecting cases). However, "there is a greater range of reasonableness for approving attorney's fees in an individual action where the parties settled on the fee through negotiation." Misiewicz v. D'Onofrio Gen. Contractors Corp., 2010 WL 2545439, at *5.

         B. Analysis

         1. The Proposed Settlement Agreement

         The proposed settlement agreement (the "Agreement") provides for a total payment of $225, 000, of which $101, 105.15 is allocated among the individual plaintiffs, and the remainder is dedicated to attorneys' fees and costs. (See Mot. for Approval at 2; see generally Settlement Agreement, Dec. 22, 2017, ECF No. 107-1). The settlement will be paid out over the course of approximately 21 months, with a significant initial payment of $112, 000, of which more than $72, 000 is directed to plaintiffs, with the remainder to their counsel. (See Mot. for Approval at 2 n.1; Settlement Agreement ΒΆ 2(a)). The majority of attorneys' ...


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