Opinion
6:20-cv-06782 EAW
2023-06-12
Corey INFANTINO, on behalf of himself and all others similarly situated, Plaintiffs, v. SEALAND CONTRACTORS, CORP., and Daniel J. Bree, Defendants.
Jeffrey Robert Maguire, Stevenson Marino LLP, White Plains, NY, John R. Stevenson, Justin Robert Marino, Stevenson Marino LLP, New York, NY, for Plaintiffs. Maureen T. Bass, Sharon P. Stiller, Abrams, Fensterman, LLP Ferrara & Wolf, LLP, Rochester, NY, for Defendants.
Jeffrey Robert Maguire, Stevenson Marino LLP, White Plains, NY, John R. Stevenson, Justin Robert Marino, Stevenson Marino LLP, New York, NY, for Plaintiffs. Maureen T. Bass, Sharon P. Stiller, Abrams, Fensterman, LLP Ferrara & Wolf, LLP, Rochester, NY, for Defendants.
DECISION AND ORDER
ELIZABETH A. WOLFORD, Chief Judge
BACKGROUND
Named plaintiff Corey Infantino ("Infantino") commenced this action on October 1, 2020, alleging that defendants Sealand Contractors Corp. and Daniel Bree ("Defendants") failed to pay overtime wages to Plaintiff and to others similarly situated, in violation of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (the "FLSA") and the New York Labor Law (the "NYLL") and its associated regulations. (Dkt. 1). On December 15, 2020, the Court referred the case to United States Magistrate Judge Marian W. Payson for all pretrial matters excluding dispositive motions. (Dkt. 13).
On February 19, 2021, Plaintiff filed a motion to conditionally certify a collective action pursuant to 29 U.S.C. § 216(b). (Dkt. 20). On March 29, 2021, Defendants filed their opposition to Plaintiff's motion and cross-moved to compel arbitration or, alternatively, to dismiss. (Dkt. 33). On May 11, 2021, Magistrate Judge Payson issued a Decision and Order and Report and Recommendation (the "R&R"), granting Plaintiff's motion for conditional certification and denying Defendants' cross-motion to dismiss. (Dkt. 46). On September 30, 2021, the Court adopted Judge Payson's R&R in its entirety. (Dkt. 72).
In addition to named-plaintiff Infantino, 20 individuals opted-in to participation in this lawsuit, including Antonio Hepburn, Monica Froman, Jeffrey Ritter, Ronald Jacobs, Leah Baker, Victor Moore, Henry Hunter, Michael Rollo, Raul Carrasquillo, Kevin Dobell, James Koloski, Sean Carden, Tomas Detrick, Marissa Hunt, Tracy Washington, Andrew Bintliff, Myra Williams, Lori Asaro, Ronda Emery, and Rebecca Young (collectively, the "Opt-In Plaintiffs"). (Dkt. 4; Dkt. 51 through Dkt. 69). See Myers v. Hertz Corp., 624 F.3d 537, 542 (2d Cir. 2010) ("Unlike in traditional 'class actions' maintainable pursuant to Federal Rule of Civil Procedure 23, plaintiffs in FLSA representative actions must affirmatively 'opt in' to be part of the class and to be bound by any judgment.").
Plaintiffs' counsel represents that, despite multiple efforts to contact Opt-In Plaintiff Rebecca Young, they have been unable to reach her, or to obtain a signed settlement agreement from her. (See Dkt. 120 at 1 n.2). As noted above, Ms. Young signed an opt-in form consenting to join the lawsuit, and the opt-in form signed by Ms. Young states that she authorizes Plaintiffs' counsel "to act on [her] behalf in all matters relating to this action, including any settlement of my claims." (See Dkt. 66). However, she has not approved the proposed settlement agreement, and therefore she is not bound by it at this juncture. See, e.g., Marichal v. Attending Home Care Servs., LLC, 432 F. Supp. 3d 271, 281 (E.D.N.Y. 2020) (explaining that for opt-in plaintiffs to be bound by settlement agreement, they must be given notice and the opportunity to opt-in affirmatively and consent to the agreement).
Presently before the Court is Plaintiffs' Motion for Settlement Approval of their FLSA claims. (Dkt. 120). Plaintiffs' counsel also seeks attorney's fees in the amount of one-third of the total net settlement amount—$25,260.80. (Id. at 2). Plaintiffs' counsel also seeks $1,017.60 as reimbursement for out-of-pocket litigation expenses, which includes the filing fee, service costs, mediation, and postage. (Id. at 2, 5). Plaintiffs attach to their motion the Settlement Agreement and Release signed by each Opt-In Plaintiff (Dkt. 120-1 (hereinafter, the "Settlement Agreement")), as well as records detailing their billing records and expenses (Dkt. 120-2; Dkt. 120-3). The Court has reviewed the negotiated Settlement Agreement, and approves it as to all Opt-In Plaintiffs, except as to Opt-In Plaintiff Rebecca Young, for the reasons set forth below.
Plaintiffs state that "[c]opies of the twenty-one fully-executed settlement agreements are attached" to their motion papers (Dkt. 120 at 1), but given that Rebecca Young failed to sign a settlement agreement, there are actually only 20 settlement agreements attached the Plaintiffs' motion papers (Dkt. 120-1 at 2-101).
DISCUSSION
The Settlement Agreement does not impact the rights of any non-parties, and the Court need not consider whether the requirements to maintain a class action are satisfied. See Scott v. Chipotle Mexican Grill, Inc., 954 F.3d 502, 520 (2d Cir. 2020) ("[T]he requirements for certifying a class under Rule 23 are unrelated to and more stringent than the requirements for 'similarly situated' employees to proceed in a collective action under § 216(b)."), cert. denied, — U.S. —, 142 S. Ct. 639, 211 L.Ed.2d 421 (2021); Surdu v. Madison Glob., LLC, No. 15 CIV. 6567 (HBP), 2018 WL 1474379, at *6 (S.D.N.Y. Mar. 23, 2018) ("[S]ettlement of a collective action does not implicate the same due process concerns as the settlement of a class action because, unlike in Rule 23 class actions, the failure to opt in to an FLSA collective action does not prevent a plaintiff from bringing suit at a later date."). Instead, as an initial matter, the Court must satisfy itself that the Opt-In Plaintiffs are "similarly situated" to Infantino before it can finally determine that a collective action is appropriate. See Marichal v. Attending Home Care Servs., LLC, 432 F. Supp. 3d 271, 277 (E.D.N.Y. 2020) ("The Court can conclude that the opt-in plaintiffs are in fact similarly situated, either following motion practice by the parties or through its review of a proposed settlement agreement[.]").
Further, "an 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," and in the latter case, "before a district court enters judgment, it must scrutinize the settlement agreement to determine that the settlement is fair and reasonable." Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012). Such analysis is frequently referred to as a Cheeks analysis, in reference to Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). In performing the Cheeks analysis, the Court considers the totality of the circumstances, including the following factors:
(1) the plaintiff's range of possible recovery; (2) the extent to which the settlement will enable the parties to avoid anticipated burdens and expenses in establishing their respective claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; and (5) the possibility of fraud or collusion.Wolinsky, 900 F. Supp. 2d at 335 (quotation omitted). "There is a strong presumption in favor of finding a settlement fair, as the Court is generally not in as good a position as the parties to determine the reasonableness of an FLSA settlement." Cabrera v. CBS Corp., No. 17-CV-6011 (CM) (BCM), 2019 WL 502131, at *5 (S.D.N.Y. Feb. 8, 2019) (quotation and citation omitted).
The Court initially notes that, based on the record before it, it is satisfied that Infantino, the named plaintiff, and the Opt-In Plaintiffs are "similarly situated" such that final certification of the collective action is warranted. See Scott, 954 F.3d at 516 ("to be 'similarly situated' means that named plaintiffs and opt-in plaintiffs are alike with regard to some material aspect of their litigation."). Both Infantino and the Opt-In Plaintiffs claim that they were employed by Defendants and that Defendants did not pay them all wages due for overtime work.
With respect to the terms of the Settlement Agreement, the Court notes that "the named plaintiff and his counsel in a collective action cannot settle a case on behalf of an opt-in plaintiff: the affirmative assent of each opt-in plaintiff—as a party to the case—is required." Marichal, 432 F. Supp. 3d at 279. Courts often satisfy this requirement by using "a two-tiered procedure: first, the parties file a motion for preliminary approval of the settlement and request approval of a notice . . . . As a second step, the parties file a motion for final approval, and the Court conducts a final fairness hearing, giving all opt-in plaintiffs the opportunity to be heard by the Court." Id. at 280. However, such a two-step procedure is not necessary in every case; for example, it is not required where each opt-in plaintiff has assented to the terms of the proposed settlement. See id. at 282 n.4.
Each of the Opt-In Plaintiffs—with the exception of Rebecca Young—has signed the Settlement Agreement. Further, the Settlement Agreement provides that Opt-In Plaintiffs release their claims against Defendants by signing a release and associated tax documents. (See, e.g., Dkt. 120-1 at 2-3, ¶¶ 1 & 2). On the specific facts of this case, the Court finds this procedural mechanism sufficient to ensure that the Opt-In Plaintiffs (except for Rebecca Young) have consented to the terms of the Settlement Agreement. See, e.g., Ramirez v. Soc. 8th Ave Corp., No. 18-CV-2061 (OTW), 2019 WL 1382711, at *1 (S.D.N.Y. Mar. 26, 2019) (approving settlement of FLSA collective action in single-step process); Souza v. 65 St. Marks Bistro, No. 15-CV-327 (JLC), 2015 WL 7271747, at *3 (S.D.N.Y. Nov. 6, 2015) ("Since Cheeks was decided, courts have taken a number of approaches to the approval of wage-and-hour settlements. For example, many judges in this District now require the parties (to the extent they are seeking to dismiss the action with prejudice) to file a joint letter-motion requesting approval of the settlement agreement (or alternatively provide documentation of DOL approval) on the public docket and explaining why the proposed settlement is fair and reasonable. Once such letter-motions are filed, the court then evaluates the settlement, and assuming it concludes it is fair and reasonable, approves the settlement in a docketed order without holding a formal hearing.").
With respect to the required Cheeks analysis, the Court finds the Settlement Agreement fair and reasonable. As to the first factor, the total settlement amount in this matter is $76,800.00. Plaintiffs contend that they initially made a demand for $197,925.00, representing actual and liquidated damages for five overtime hours each workweek. (Dkt. 120 at 3). The parties ultimately agreed to settle the action for $76,800.00, representing actual damages for two and one-half hours each workweek, and 50 percent liquidated damages based on those same hours. (Id.). This recovery represents approximately 39 percent of their maximum recovery. Considered in the context of the time and expense associated with continuing to litigate this matter and the defenses asserted by Defendants, the Court finds the proposed settlement amount acceptable. See, e.g., Cronk v. Hudson Valley Roofing & Sheetmetal, Inc., 538 F. Supp. 3d 310, 322-23 (S.D.N.Y. 2021) (approving settlement of $20,000, which represented "just under 13% of Plaintiff's potential recovery at trial"); Lara v. Air Sea Land Shipping & Moving Inc., No. 19-CV-8486 (PGG) (BCM), 2019 WL 6117588, at *2 (S.D.N.Y. Nov. 18, 2019) (approving settlement of FLSA overtime claim for approximately 30 percent of potential recovery where "damages would be vigorously contested, making a compromise figure appropriate for settlement").
Plaintiffs state that "recovery of $40,000.00 represents 39% of Plaintiffs' maximum recovery of their estimated damages." (Dkt. 120 at 3). The Court assumes that the reference to $40,000.00 is a typographical error, and that statement should read that "recovery of $76,800.00 represents 39% of Plaintiffs' maximum recovery of their estimated damages." The $76,800.00 figure is approximately 38.8 percent of $197,925.00.
As to the second and third factors, based on the record before the Court, it appears that the costs and risks to Plaintiffs of continuing with this litigation are very real. The parties have already engaged in motion practice relating to various discovery matters (see, e.g., Dkt. 87; Dkt. 89; Dkt. 90), and Plaintiffs represent that had a settlement not been reached at this stage, the parties would have been obligated to engage in ESI discovery, depositions, subsequent motion practice, and a trial—and that the costs of such an undertaking would be significant and "might even outweigh some of Plaintiffs' recovery" (Dkt. 120 at 4); Zamora v. One Fifty Fifty Seven Corp., No. 14 Civ. 8043 (AT), 2016 WL 1366653, at *1 (S.D.N.Y. Apr. 1, 2016) ("Beyond establishing claims and defenses at trial, proceeding with litigation would require further discovery and motion practice.").
Furthermore, turning to the fourth and fifth factors, the Settlement Agreement was negotiated at arm's-length by experienced counsel, and there is no indicia of fraud or collusion. "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) (noting that "the settlement was the result of arm's-length negotiation involving vigorous back and forth," and "[d]uring the entire process, Plaintiffs and Defendant were represented by counsel experienced in wage and hour law."); see also Santos v. Yellowstone Props., Inc., No. 15 Civ. 3986 (PAE), 2016 WL 2757427, at *3 (S.D.N.Y. May 10, 2016) ("As to the fourth and fifth factors, there are no signs of fraud or collusion, and the settlement here was the product of arms'-length bargaining by experienced counsel.").
The Settlement Agreement also does not include certain types of provisions that courts have found problematic in the FLSA context, such as a confidentiality or non-disparagement clause.
Finally, the Court considers Plaintiffs' request for attorneys' fees in the amount of $25,260.80, which is approximately one-third of the total settlement amount. (See Dkt. 120 at 4). In accordance with Cheeks, the Court reviews a request for attorneys' fees to ensure that it is reasonable. See Hernandez v. Boucherie LLC, No. 18-CV-7887 (VEC), 2019 WL 3765750, at *3 (S.D.N.Y. Aug. 8, 2019). "In determining a fee award, the typical starting point is the so-called lodestar amount, that is 'the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.' " Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)).
The Court has reviewed the billing records submitted by counsel. Regarding the lodestar calculation, Plaintiffs' counsel states that the attorneys working on the case bill at a rate of $250 per hour, and when multiplying the attorney hours spent on the case by these hourly rates, the lodestar figure is well above the $25,260.80 requested fee. (Dkt. 120 at 5; see also Dkt. 120-2); Cunningham v. Suds Pizza, Inc., 290 F. Supp. 3d 214, 232 (W.D.N.Y. 2017) (discussing hourly rate of $250 for a partner in FLSA litigation as reasonable). Further, the Court finds that the one-third fee is reasonable in light of the work performed. Plaintiffs' counsel has been involved in this case since October 2020, and their representation has involved motion practice, engaging in discovery, participating in conferences with the court and opposing counsel, and negotiating a settlement on behalf of their clients. Given the work performed and that counsel's fee is contingent upon the success of the case, the Court also finds the one-third fee award fair and reasonable. See Massiah v. MetroPlus Health Plan, Inc., No. 11-cv-05669 (BMC), 2012 WL 5874655, at *8 (E.D.N.Y. Nov. 20, 2012) (one-third recovery is "presumptively reasonable" where "Counsel's fee entitlement is entirely contingent upon success"). Finally, the Court has reviewed the records reflecting litigation expenses (see Dkt. 120-3 at 2), and finds that they are reasonable and that payment in the amount of $1,017.60 is warranted.
The billing records indicate that the amount billed based on a rate of $250 per hour totaled $38,125.00. (Dkt. 120-2 at 22).
CONCLUSION
For the reasons set forth above, the Court hereby grants the Motion for Settlement Approval as to all the Opt-In Plaintiffs, except as to Opt-In Plaintiff Rebecca Young.
As to Opt-In Plaintiff Rebecca Young, Plaintiffs' counsel has represented that Ms. Young has not communicated with them despite repeated attempts to reach her, including with regard to her approval of the Settlement Agreement. The Court will issue an Order to Show Cause, directing Opt-In Plaintiff Rebecca Young to show cause in writing as to why her claims should not be dismissed for failure to prosecute.
SO ORDERED.