in the united states district court for the middle ... › archive › flsa888.pdfcase 3:14-cv-02005...
TRANSCRIPT
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
SHELLEY PAINE, on behalf of
HERSELF and All Others Similarly
Situated,
Plaintiff,
v.
INTREPID U.S.A., INC.,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
COLLECTIVE ACTION
CASE NO. 3:14-cv-02005
JUDGE CRENSHAW
MAGISTRATE JUDGE HOLMES
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF’S UNOPPOSED MOTION
FOR APPROVAL OF SETTLEMENT OF COLLECTIVE ACTION UNDER THE FLSA
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 1 of 22 PageID #: 1879
i
TABLE OF CONTENTS
I. INTRODUCTION ...............................................................................................................1
II. HISTORY OF THE LITIGATION .....................................................................................2
III. THE FLSA SETTLEMENT SHOULD BE APPROVED BY THE COURT .....................3
A. The Standard for Judicial Approval of FLSA Settlements ......................................3
B. The Settlement Resolves a Bona Fide Dispute under the FLSA .............................5
C. The Amount of the Settlement Is Reasonable when Weighed Against the
Risk of Continuing to Litigate .................................................................................6
D. The Settlement Was the Product of Informed, Arm’s-Length Negotiations ...........7
E. The Complexity, Expense, and Likely Duration of the Litigation Favors
Settlement ................................................................................................................8
F. The Amount of Discovery Completed .....................................................................9
G. The Public Interest Favors Approval .....................................................................11
IV. The Service Payments Sought Are Appropriate in this Action .........................................11
V. The Cy Pres Distribution Should Be Approved ................................................................15
VI. THE REQUESTED AWARD OF ATTORNEYS’ FEES AND EXPENSES IS
PRESUMPTIVELY REASONABLE AND SHOULD BE APPROVED BY THE
COURT ..............................................................................................................................15
VII. CONCLUSION ..................................................................................................................18
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 2 of 22 PageID #: 1880
1
I. INTRODUCTION
The parties to this Fair Labor Standards Act collective action have vigorously litigated this
matter for the past two years. From the outset, Defendant challenged the Court’s jurisdiction both in
the district court and, thereafter, in the Sixth Circuit Court of Appeals via the filing of a Petition for
Writ of Mandamus. Plaintiff then sought, and Defendant opposed, conditional class certification.
Ultimately, 558 individuals joined the conditionally certified class, and the parties engaged in written
discovery, convened depositions, and analyzed copious payroll and timekeeping documents to
inform their respective valuations of Plaintiff’s claims. After several months of mediator-assisted
settlement negotiations, the Parties reached a settlement that will provide $1 million to the Plaintiffs.
This $1 million sum represents the total unpaid overtime premium wages Plaintiffs could have
recovered at trial had they demonstrated that they each worked approximately 8.3 additional unrecorded
hours each week during the relevant period. Plaintiff respectfully submits this memorandum of law in
support of her motion for approval of the Settlement.1
The Settlement provides for the payment by Defendant of $1.75 million to the Plaintiffs,
consisting of the following: (i) the payment of $1,000,000.00 divided amongst all 559 Plaintiffs
based upon their individual pro rata shares of the Total Gross Earnings as set forth in the Settlement
Agreement (SA § 1); (ii) attorneys’ fees and litigation expenses of up to $730,000.00 payable to
Plaintiff’s Counsel (SA § 7); (iii) a Service Award payment of $10,000.00 payable to Originating
Plaintiff Paine (SA § 8); and (iv) Service Award payments to certain Plaintiffs totaling $10,000.00
collectively as a result of their time and effort devoted to this Action (SA § 9). The Settlement was
the result of arm’s-length negotiations, including mediation and continued informal negotiations
1 The Settlement Agreement is attached as Exhibit 1 to Plaintiff’s Motion seeking approval of
the Settlement. All capitalized terms not otherwise defined herein shall have the same meanings as
set forth in the Settlement Agreement (“SA”). All “§” refer to a Section in the SA.
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 3 of 22 PageID #: 1881
2
over several months while discovery was ongoing, which ultimately resulted in the Parties’
acceptance of a mediator’s proposal by a nationally-respected neutral mediator, Mark Rudy.
As explained below, the Settlement is a fair and reasonable resolution of bona fide disputes
over Plaintiff’s claims; the Service Awards are reasonable and consistent with those approved by
other courts, including this Court; and the agreed-to fees and expenses are reasonable. Therefore,
Plaintiff submits the Settlement should be approved by the Court.
II. HISTORY OF THE LITIGATION
This Action was originally filed on October 21, 2014. (ECF No. 1). On December 18, 2014,
Originating Plaintiff Shelley Paine (“Plaintiff” or “Ms. Paine”) moved for conditional certification
and for the issuance of court-supervised notice. (ECF No. 20). On February 2, 2015, Plaintiff filed a
motion for equitable tolling of the FLSA statute of limitations (ECF No. 34); the Defendant
responded on February 17, 2015 (ECF No. 42); and Plaintiff replied on February 25, 2015 (ECF No.
46). On January 23, 2015, the Defendant filed a motion to dismiss or in the alternative to transfer
venue (ECF No. 31), to which the Plaintiff filed a response in opposition (ECF No. 37) and the
Defendant filed a reply (ECF No. 41).
After full briefing, on June 15, 2015 Magistrate Judge Griffin issued a report and
recommendation (“R&R”), recommending that Defendant’s motion to dismiss or to transfer venue
be denied. (ECF No. 51). The Magistrate also denied Plaintiff’s motion for equitable tolling,
without prejudice to being refiled after Defendant’s motion to dismiss was finally resolved. (ECF
No. 50). On June 19, 2015, the Plaintiff filed a motion for review on the Magistrate’s denial of her
motion for equitable tolling (ECF No. 52), and on June 29, 2015, the Defendant sought de novo
review of the Magistrate’s R&R recommending denial of its motion to dismiss. (ECF No. 54).
On July 31, 2015, the Court issued an order adopting the Magistrate’s R&R on Defendant’s
motion to dismiss or in the alternative transfer venue and denied the motion. (ECF No. 69). The
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 4 of 22 PageID #: 1882
3
Defendant subsequently filed a petition for writ of mandamus (“Petition”) with the Sixth Circuit on
August 7, 2015 (ECF No. 78), along with an emergency motion to stay the case pending resolution
of the Petition, which was denied by the Court the same day. (EFC No. 79). Per the order denying
the stay, the Defendant then filed its response in opposition to Plaintiff’s motion for conditional
certification on August 17, 2015 (ECF No. 84), the same day the Sixth Circuit denied its Petition.
(ECF No. 83). After the Plaintiff replied (ECF No. 85) and the Court heard oral argument, the Court
granted Plaintiff’s motion for conditional certification and for the issuance of court-supervised notice
on August 31, 2015 and granted Plaintiff’s motion for equitable tolling of the statute of limitations.
(ECF No. 86).
On May 18, 2016, the Parties conducted an in-person mediation in San Francisco, California,
with a neutral, nationally-respected mediator, Mark Rudy. (ECF No. 114). See also Declaration of
Jerry Martin (“Martin Decl.”) ¶ 5, filed contemporaneously herewith. While those efforts were
unsuccessful at that time (ECF No. 117), the Parties continued to negotiate on an informal basis,
which ultimately resulted in the Parties accepting a mediator’s proposal made by Mr. Rudy and the
resolution of this Action on the terms set forth in the Settlement Agreement. (Id.).
III. THE FLSA SETTLEMENT SHOULD BE APPROVED BY THE COURT
A. The Standard for Judicial Approval of FLSA Settlements
It is well settled that compromises of disputed claims are favored by the courts. Williams v.
First Nat’l Bank, 216 U.S. 582, 595 (1910). “‘Settlement agreements should therefore be upheld
whenever equitable and policy considerations so permit.’” Robinson v. Shelby Cty. Bd. of Educ., 566
F.3d 642, 648 (6th Cir. 2009) (quoting Ford Motor Co. v. Mustangs Unlimited, Inc., 487 F.3d 465,
469 (6th Cir. 2007)).
A settlement of a collective action under the FLSA is subject to court approval. See
Thompson v. United Stone, LLC, No. 1:14-CV-224, 2015 WL 867988, at *1 (E.D. Tenn. Mar. 2,
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 5 of 22 PageID #: 1883
4
2015). However, the standard for approval of a FLSA settlement is lower than that for a Rule 23
settlement because collective settlements under the FLSA do not implicate the same due process
concerns. See, e.g., Massiah v. Metroplus Health Plan, Inc., 2012 WL 5874655, at *5 (E.D.N.Y.
Nov. 20, 2012); Trauth v. Spearmint Rhino Cos. Worldwide, 2012 WL 4755682, at *5 (C.D. Cal.
Oct. 5, 2012). C.f. Pritchard v. Dent Wizard Int’l Corp., 210 F.R.D. 591, 594 (S.D. Ohio 2002)
(“The procedural protections of Rule 23 are unnecessary in a Section 216(b) class action because of
the statute’s ‘opt-in’ requirement. A plaintiff who ‘opts in’ presumably has decided that the benefits
of joining the class outweigh any benefits of bringing an individual action.”).
In reviewing a proposed collective settlement under the FLSA, “a court must scrutinize the
proposed settlement for fairness, and determine whether the settlement is a ‘fair and reasonable
resolution of a bona fide dispute over FLSA provisions.’” Bartlow v. Grand Crowne Resorts of
Pigeon Forge, No. 3:11–CV–400, 2012 WL 6707008, at *1 (E.D. Tenn. Dec. 26, 2012) (quoting
Lynn’s Food Stores, Inc. v. United States, 697 F.2d 1350 (11th Cir.1982)); see also Kritzer v.
Safelite Sols., LLC, No. 2:10-CV-0729, 2012 WL 1945144, at *5 (S.D. Ohio May 30, 2012) (“Where
there is a bona fide dispute under the FLSA, a district court may be satisfied that ‘the parties are not,
via settlement of the plaintiffs’ claims, negotiating around the clear FLSA requirements of
compensation for all hours worked, minimum wages, maximum hours, and overtime.’”) (citation
omitted).
Where, as here, the employees are represented by counsel who can protect their rights under
the FLSA, there is a presumption the settlement is reasonable. As the Eleventh Circuit held in
Lynn’s Food Stores,
Settlements may be permissible in the context of a suit brought by employees under
the FLSA for back wages because initiation of the action by the employees provides
some assurance of an adversarial context. The employees are likely to be represented
by an attorney who can protect their rights under the statute. Thus, when the
parties submit a settlement to the court for approval, the settlement is more likely to
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 6 of 22 PageID #: 1884
5
reflect a reasonable compromise of disputed issues than a mere waiver of statutory
rights brought about by an employer’s overreaching.
Lynn’s Food Stores, 697 F.2d at 1354 (emphasis added). If the court finds the Settlement reflects a
reasonable compromise of FLSA issues in dispute, then “‘the district court [may] approve the
settlement in order to promote the policy of encouraging settlement of litigation.’” Bartlow, 2012
WL 6707008, at *1 (quoting Lynn’s Food Stores, 697 F.2d 1350).
Additionally, after finding the existence of a bona fide dispute, some courts also consider the
following factors in determining whether a proposed FLSA settlement is fair and reasonable: “the
risk of fraud or collusion, the complexity, expense, and likely duration of the litigation, the amount
of discovery completed, the likelihood of success on the merits, and the public interest in
settlement.” Schneider v. Goodyear Tire & Rubber Co., No. 5:13CV2741, 2014 WL 2579637, at *2
(N.D. Ohio June 9, 2014) (citing Crawford v. Lexington–Fayette Urban Cnty. Gov., Civil Action No.
06–299–JBC, 2008 WL 4724499, at *2 (E.D. Ky. Oct. 23, 2008)).
Here, the proposed Settlement is fair and reasonable and resolves a bona fide dispute over
FLSA provisions and should be approved by the Court. Moreover, analysis of the additional factors
considered by some courts further demonstrates that the Settlement merits this Court’s final
approval.
B. The Settlement Resolves a Bona Fide Dispute under the FLSA
“At the outset, the Court [must] find[] that the instant action presented bona fide disputes” of
FLSA issues. Schneider, 2014 WL 2579637, at *2. Here, the Parties plainly have bona fide disputes
over (i) whether the Plaintiffs were wrongly classified as exempt from overtime under the FLSA;
(ii) whether the Plaintiffs performed uncompensated work; (iii) the amount of the Plaintiffs’
recoverable damages, if any; and (iv) whether, under Section 216(b), there is sufficient similarity to
permit Plaintiffs to proceed to trial collectively. The Parties have contested these issues and would
continue to do so absent a settlement. (Martin Decl. ¶ 7).
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 7 of 22 PageID #: 1885
6
Under these circumstances, and particularly where Plaintiffs are represented by counsel with
extensive experience in FLSA cases, there is little question that the Settlement resolves bona fide
disputes under the FLSA. See, e.g., Lynn’s Food Stores, 697 F.2d at 1354 (“[W]hen the parties
submit a settlement to the court for approval [where the employees were represented by counsel who
could protect their rights], the settlement is more likely to reflect a reasonable compromise of
disputed issues than a mere waiver of statutory rights brought about by an employer’s
overreaching.”); Thompson, 2015 WL 867988, at *2 (“It appears there are bona fide disputes
regarding FLSA coverage and the amount of back pay in this case.”). See also Martin Decl. ¶ 9
(“Therefore, based upon my personal supervision of this Action, and upon my extensive experience
in litigating numerous cases such as this one, I respectfully submit the Settlement resolves bona fide
disputes of FLSA issues.”).
C. The Amount of the Settlement Is Reasonable when Weighed Against the Risk of
Continuing to Litigate
In this case, as in any class or collective settlement, the most important factor in determining
reasonableness is the scope of the relief, as measured against the risk of continuing to litigate. In re
Ira Haupt & Co., 304 F. Supp. 917, 934 (S.D.N.Y 1969) (“[I]f settlement has any purpose at all, it is to
avoid a trial on the merits because of the uncertainty of the outcome.”). In this case, Plaintiffs who
opted into the collective action will receive a total of $1.75 million in total benefits, including $1 million
in direct payments if this Settlement is approved.
Under the proposed Settlement, the 559 Plaintiffs will receive substantial payments out of the $1
million net settlement fund. (SA § 1). This $1 million net recovery for Plaintiffs under the settlement is
an excellent result. (Martin Decl. ¶ 13). Utilizing the Department of Labor’s “half time” piece rate
formula set forth at 29 C.F.R. §778.111, this $1 million represents the total unpaid overtime premium
wages Plaintiffs could have recovered at trial had they demonstrated that they each worked
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 8 of 22 PageID #: 1886
7
approximately 8.3 additional unrecorded hours each week during the relevant period. (Id.). Out of the
$1 million allocated to the Plaintiffs, the average settlement payment will total approximately
$1,788, less withheld employment taxes, and over 50 Plaintiffs will receive more than $5,000, less
withheld employment taxes. (Id.). Each Plaintiff’s settlement payment will be paid half as wages,
subject to all standard withholdings, and half as liquidated damages, not subject to withholdings. (SA
§ 1).
If Plaintiff continued to litigate these collective FLSA claims through to trial, there is no
guarantee that the opt-in plaintiffs would receive more money than the significant amount of money
they will be receiving through the Settlement, and there is a real risk that they would receive less
money or no money at all. Moreover, while Plaintiff is reasonably confident that she would be able
to establish Defendant’s liability through either a motion for summary judgment or at trial, Plaintiff
and her counsel are also aware that continuing to litigate is never without risk. See, e.g. Henry v.
Quicken Loans, Inc., 698 F.3d 897 (6th Cir. 2012) (affirming a jury verdict, reached after eight years
of litigation, that mortgage bankers were properly classified as exempt from the overtime pay
requirements of the FLSA). Considering this inherent risk in continuing to litigate, coupled with the
uncertainty of recovering any more money than is currently on offer, a settlement at this juncture is
in the best interest of all Plaintiffs and provides an immediate and guaranteed recovery.
D. The Settlement Was the Product of Informed, Arm’s-Length Negotiations
One procedural factor that courts sometimes consider is whether there is any indication that the
settlement was in any way collusive. In re Se. Milk Antitrust Litig., No. 2:07-CV-208, 2012 WL
2236692, at *12 (E.D. Tenn. June 15, 2012) (“The Court must also make sure that any settlement is the
product of arm’s length negotiations as opposed to collusive bargaining.”). Courts presume the absence
of such collusion unless there is evidence to the contrary. Granada Invest., Inc. v. DWG Corp., 962
F.2d 1203, 1205 (6th Cir.1992) (“Absent evidence of fraud or collusion, such settlements are not to be
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 9 of 22 PageID #: 1887
8
trifled with.”). Here, no such evidence exists. The Plaintiff and the Defendant have been represented in
negotiations by experienced attorneys. See Williams v. Vukovich, 720 F.2d 909, 921 (6th Cir. 1983)
(noting that courts, in assessing the fairness of a proposed settlement, are entitled to rely on the opinion
of competent counsel). Additionally, courts recognize that a “mediator’s involvement in . . . settlement
negotiations helps to ensure that the proceedings were free of collusion and undue pressure.” See
D’Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001). As noted above, the Parties utilized a
neutral and experienced mediator, Mark Rudy, who is based in San Francisco, California. After
conducting a day-long mediation with Mr. Rudy, the parties and Mr. Rudy continued to engage in
informal negotiations over several months while proceeding with discovery, ultimately resulting in the
Parties’ acceptance of Mr. Rudy’s final mediator’s proposal. These negotiations were done at arm’s-
length, and the Settlement that emerged was not collusive. (Martin Decl. ¶ 5).
E. The Complexity, Expense, and Likely Duration of the Litigation Favors
Settlement
Courts have also consistently held that “the expense and possible duration of litigation are
major factors to be considered in evaluating the reasonableness of a settlement.” In re Delphi Corp.
Sec., 248 F.R.D. 483, 497 (E.D. Mich. 2008). Collective claims under the FLSA are often inherently
complicated. E.g. Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 743 (1981) (“FLSA
claims typically involve complex mixed questions of fact and law” and issues must be resolved “in
light of volumes of legislative history and over four decades of legal interpretation and
administrative rulings.”); Renfro v. Indiana Michigan Power Co., No. 1:99-CV-877, 2005 WL
4882704, at *8 (W.D. Mich. Jan. 25, 2005) (same). This is especially true in this case, where the
Defendant vigorously argued it was not the Plaintiffs’ employer and, even if it was, all Plaintiffs
were properly classified as exempt employees.
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 10 of 22 PageID #: 1888
9
In the absence of a Settlement, the Parties would continue litigating these and other issues
through to summary judgment, likely through to trial, and probably through an appeal.2 Taking into
account the likelihood of appeal, such litigation would probably continue for years, regardless of the
efforts of the Court and the Parties to advance the case efficiently. See In re Chambers Dev. Sec.
Litig., 912 F. Supp. 822, 837 (W.D. Pa. 1995) (“It is safe to say, in a case of this complexity, the end
of that road might be miles and years away.”). Accordingly, the time and complexity involved in
continuing to litigate also weighs heavily in favor of the proposed Settlement.
F. The Amount of Discovery Completed
To ensure that plaintiffs have access to sufficient information to evaluate their case and to
assess the adequacy of the settlement proposal, the extent of discovery is another factor to be
considered in determining the fairness of a settlement. In re Telectronics Pacing Sys., 137 F. Supp.
2d 985, 1015 (S.D. Ohio 2001); Kogan v. AIMCO Fox Chase, L.P., 193 F.R.D. 496, 502 (E. D.
Mich. 2000). Approval of settlements is favored where plaintiffs’ counsel have conducted sufficient
analysis to assist in the negotiation of the settlement itself and to satisfy themselves that the
settlement would be in the best interest of the class. Telectronics, 137 F. Supp. 2d at 1015. Although
the amount of discovery completed is a factor to be considered in the settlement approval process,
there is no minimum or definitive amount of discovery that must be undertaken to satisfy this factor.
In re Jiffy Lube Sec. Litig., 927 F.2d 155, 159 (4th Cir. 1991); In re Packaged Ice Antitrust Litig.,
No. 08-MDL-01952, 2011 WL 6209188, at *13 (E.D. Mich. Dec. 13, 2011) (concluding “the
absence of extensive discovery does not weigh against final approval” of the settlement where the
parties had proceeded with document discovery but the case was still in “a relatively early stage . . .
2 See In re Broadwing, Inc. ERISA Litig., 252 F.R.D. 369, 373-74 (S.D. Ohio 2006)
(explaining “the difficulty Plaintiffs would encounter in proving their claims, the substantial
litigation expenses, and a possible delay in recovery due to the appellate process, provide
justifications for this Court’s approval of the proposed Settlement”).
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 11 of 22 PageID #: 1889
10
before class certification and before the initiation of discovery in earnest”). Indeed, under some
circumstances, discovery may not be necessary at all. Jiffy Lube, 927 F.2d at 159 (approving
settlement after four months of litigation and prior to any formal discovery).
Plaintiff and Defendant engaged in significant discovery prior to resolving this Action.
Plaintiff’s Counsel issued comprehensive interrogatories, requests for production of documents, and
requests for admission. (Martin Decl. ¶ 11). Defendant responded to this discovery and produced
nearly 7,000 pages of responsive documents at the time. (Id.). Subsequently, by agreement in
anticipation of mediation, Defendant produced all employee time logs from three (3) different facilities
for three (3) randomly-selected pay periods. (Id.). Defendant also produced electronic pay data for
nearly all 559 of the opt-in plaintiffs, as well as full personnel files for a subset of the opt-in plaintiffs.
(Id.). In all, this discovery included thousands of pages of produced documents, including
spreadsheets with tens of thousands of cells of relevant information. (Id.). Throughout this litigation,
Plaintiff’s Counsel also interviewed dozens of opt-in plaintiffs by telephone. (Id.). Finally, Plaintiff’s
Counsel surveyed approximately 40% of the opt-in plaintiffs concerning the amount of alleged
unrecorded work they typically performed in any given work week. (Id.).
Plaintiff’s Counsel devoted significant time to reviewing these documents and processing this
information. (Id. ¶ 12). As a result, taking Plaintiff’s allegations as true (which Defendant denies),
Plaintiff’s Counsel was able to identify each opt-in plaintiff’s amount of alleged unpaid time on a
weekly basis. (Id.). Through this extensive process, Plaintiff’s Counsel developed a sufficient
understanding of a potential range of damages suffered by the Plaintiffs to meaningfully inform
settlement discussion with the assistance of an experienced mediator. (Id.).
Accordingly, given the extent of Plaintiff’s Counsel’s investigation and the information
exchanged through discovery and by agreement, Plaintiff’s Counsel (and Defendant’s Counsel) was
“well informed of the facts, evidence, and legal issues present in this case prior to the mediation
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 12 of 22 PageID #: 1890
11
during which the Settlement was reached.” Swigart v. Fifth Third Bank, No. 1:11-CV-88, 2014 WL
3447947, at *3 (S.D. Ohio July 11, 2014).
G. The Public Interest Favors Approval
Where, as in this Action, “the settlement reflects a reasonable compromise over issues
actually disputed, such as FLSA coverage or computation of back wages, a court may approve a
settlement to ‘promote the policy of encouraging settlement of litigation.’” Crawford v. Lexington-
Fayette Urban Cty. Gov’t, No. CIV. A. 06-299-JBC, 2008 WL 4724499, at *9 (E.D. Ky. Oct. 23,
2008) (quoting Lynn's Food Stores, 679 F.2d at 1353). Therefore, because the Settlement
Agreement is a reasonable compromise over disputed FLSA issues, the public interest factor
strongly supports approval.
IV. The Service Payments Sought Are Appropriate in this Action
Plaintiff also requests (and the Defendant does not oppose) that this Court approve service
awards to Originating Plaintiff Shelly Paine and to ten (10) collective members who actively
participated in the litigation.
In the employment context, the Sixth Circuit has specifically recognized the importance of
rewarding employees who protest unlawful employment practices and seek to secure rights for other
victimized employees. Thornton v. East Texas Motor Freight, 497 F.2d 416, 420 (6th Cir. 1974)
(“We also think there is something to be said for rewarding those drivers who protest and help to
bring rights to a group of employees who have been the victims of [unlawful employment
practices]”). Thus, service payments are common and are intended to compensate the originating
plaintiff and participating plaintiffs for their willingness to serve the collective action, for the
services they rendered, for the risks they bore, and for the opportunities they sacrificed to ensure a
favorable result. Dillworth v. Case Farms Processing, Inc., No. 5:08-CV-1694, 2010 WL 776933,
at *7 (N.D. Ohio Mar. 8, 2010) (“Such awards are not uncommon, and ‘courts routinely approve
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 13 of 22 PageID #: 1891
12
incentive awards to compensate named plaintiffs for the services they provided and the risks they
incurred during the course of the class action litigation.’”) (quoting Cullen v. Whitman Med. Corp.,
197 F.R.D. 136, 145 (E.D.Pa.2000)).
Plaintiff requests that the Court award the following in service payments to the Originating
Plaintiff and to the ten (10) other plaintiffs who actively participated in this litigation before the
parties entered into the proposed Settlement:
$10,000 to Originating Plaintiff Shelley Paine;
$5,500 to participating plaintiff Vicky Tataryn; and
$500 each to the following nine (9) participating plaintiffs: Stephanie Colbert-Scott,
Tammy Humble, Donna Quimby-Edwards, Pam Robertson, Sara Czora (Mosher),
Karrie Bagley-Ernester, Katie Heflin, Deborah Lentz and Jessica Lyons.
As detailed in the Declaration of lead counsel Jerry E. Martin, the Originating Plaintiff and
these ten (10) participating plaintiffs spent significant time and energy actively supporting the
prosecution of this collective action.
Shelly Paine chose to file this lawsuit, and she has served as the Originating Plaintiff and
Class Representative for more than two years now. (ECF No. 1). During the pendency of this
Action, Ms. Paine has participated in numerous meetings with Plaintiff’s Counsel (both in person
and by telephone); has traveled roundtrip from Lewisburg to Nashville on multiple occasions for
meetings with counsel and for her deposition; has offered a detailed declaration in support of
conditional certification (ECF No. 22); has completed detailed written discovery responses; has sat
for a day-long deposition in Nashville that required an overnight stay in Nashville; and has actively
engaged in the multi-month resolution process. (Martin Decl. ¶ 16). Simply put, Ms. Paine has
devoted significant time to this collective action. (Id.) Without Ms. Paine’s significant efforts, this
lawsuit would not have existed and would not have resulted in an outstanding settlement for 559
people. (Id.).
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 14 of 22 PageID #: 1892
13
Plaintiff Vicky Tatayrn joined this Action as an opt-in Plaintiff just three (3) days after
Plaintiff Paine filed the Complaint. (See ECF No. 6, Notice of Consent to Become Party Plaintiff).
Thereafter, Ms. Tataryn participated in numerous meetings with Plaintiff’s Counsel (both in person
and by telephone), offered a detailed declaration in support of conditional certification (ECF No. 23),
and completed detailed written discovery responses. (Martin Decl. ¶ 17). In addition, Ms. Tataryn
is the only Plaintiff besides Originating Plaintiff Paine who sat for a deposition. (Id.). As a result,
Ms. Tataryn devoted significantly more time to the prosecution of this lawsuit than any other
Plaintiff except for Named Plaintiff Shelley Paine.
Participating Plaintiffs Stephanie Colbert-Scott, Tammy Humble, Donna Quimby-Edwards,
Pam Robertson, Sara Czora (Mosher), Karrie Bagley-Ernester, Katie Heflin, Deborah Lentz, and
Jessica Lyons each devoted time to the advancement of this litigation. (Id. ¶ 18). Each of these
individuals assisted in Plaintiff’s Counsel’s investigation of the allegations stated in the Complaint
by providing information and/or documents to Plaintiff’s Counsel before Plaintiff Paine filed the
Complaint or in the first months thereafter. (Id.) Two of these individuals—Ms. Colbert-Scott and
Ms. Humble—provided declarations in support of conditional certification. (EFC Nos. 24-25). In
addition, Ms. Quimby-Edwards, Ms. Robertson, Ms. Bagley-Ernester, Ms.Heflin, Ms. Lentz, and
Ms. Lyons all worked with Plaintiff’s Counsel towards completing written interrogatory responses
and towards providing documents in response to written discovery requests that the Defendant
served on each individual. (Id.).
These proposed service payment amounts are well within the range of what has been
approved by this Court and other district courts in this Circuit. See, e.g., Abadeer v. Tyson Foods,
Inc., Case No. 3:09-cv-00125, slip. op. at 1 (M.D. Tenn. Oct. 17, 2014) (Sharp, J.) (approving
service awards of up to $11,500.00) (citing to Exhibit 2 of Settlement Agreement, DE 411.1 at 57);
Johnson v. Midwest Logistics Sys., 2013 WL 2295880, at *5 (S.D. Ohio May 24, 2013) (“[A]lthough
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 15 of 22 PageID #: 1893
14
there is a substantial incentive award of $12,500 to the named plaintiff in this case, relief to un-
named class members is not perfunctory” where class members will receive either $260 or 1,000
each and “[t]he Court therefore finds that the incentive award does not undermine the fairness of the
settlement.”); Dallas v. Alcatel-Lucent USA, Inc., No. 09-14596, 2013 WL 2197624, at *11 (E.D.
Mich. May 20, 2013) (incentive payments justified where plaintiffs responded to discovery requests,
including document productions; participated in many conferences with Plaintiffs’ counsel; and took
the risk of joining this litigation at an early stage.); Brent v. Midland Funding, LLC, 2011 WL
3862363, at *15 (N.D. Ohio Sept. 1, 2011) (finding incentive payments “justified” and not to present
risk of collusion). In fact, Named Plaintiff Paine has performed more work in support of this lawsuit
than certain other named plaintiffs who have also received $10,000 service awards in this judicial
district. See Carroll v. Guardian Home Care Holdings, Inc., Case No. 3:14-cv-01722, slip. op. at 4
(M.D. Tenn. Aug. 31, 2015) (Haynes, J.) (approving service award of $10,000.00 for named plaintiff
who did not sit for a deposition).
Not only are the individual service payment amounts reasonable, but the total amount of the
service payments is also reasonable. In the aggregate, the $20,000 in service payments represents
1.1% of the total $1,750,000 in relief, which is far less than those approved by other courts in this
District in FLSA cases. See, e.g., Kritzer, 2012 WL 1945144, at *8 (FLSA case approving service
awards representing 3.3% of total settlement); Vigna v. Emery Fed. Credit Union, No. 1:15-CV-51,
2016 WL 7034237, at *6 (S.D. Ohio Dec. 2, 2016) (approving service awards of 2.4% of total
settlement in FLSA case). These requested service payments are well-tailored to the risks and efforts
the proposed recipients have undertaken in advancing this Action, do not represent unfair
preferential treatment, and therefore should be approved by the Court.
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 16 of 22 PageID #: 1894
15
V. The Cy Pres Distribution Should Be Approved
The Settlement Agreement also provides that if any checks remain uncashed 180 days after
the date upon which the checks originally are issued, the settlement fund administrator may issue a
stop payment on the checks and issue a check to Disabled American Veterans. SA § 6. It is unlikely
that there will be any significant unclaimed funds, however, because the Settlement Administrator is
required to re-mail any checks returned by the Postal Service with a forwarding address. Id. If the
Postal Service returns any check without a forwarding address, Plaintiff’s Counsel and the
Settlement Administrator will make all good faith and reasonable efforts to obtain the Plaintiff’s
current mailing address and will promptly re-mail the check to any updated address. Therefore,
because any remaining funds will represent only a tiny fraction of the Settlement Fund, courts in this
District in similar cases have approved nearly identical cy pres awards. Swigart, 2014 WL 3447947,
at *5 (Approving award where “any funds to the cy pres beneficiary will amount to only a small
fraction of the total settlement amount.”); Kritzer v. Safelite Sols., LLC, No. 2:10-CV-0729, 2012
WL 1945144, at *10 (S.D. Ohio May 30, 2012) (approving distribution of uncashed settlement
checks to cy pres beneficiaries).
VI. THE REQUESTED AWARD OF ATTORNEYS’ FEES AND EXPENSES IS
PRESUMPTIVELY REASONABLE AND SHOULD BE APPROVED BY THE
COURT
As part of the excellent Settlement for the Plaintiffs, which provides each Plaintiff with
damages that equate in the aggregate to the total unpaid overtime premium wages Plaintiffs could have
recovered at trial had they demonstrated that they each worked approximately 8.3 additional unrecorded
hours each week during the relevant period, the Parties have also agreed to resolve Plaintiff’s claim
for attorneys’ fees and costs (collectively, “Fee & Cost Award”) pursuant to 29 U.S.C. § 216(b) for a
total of $730,000. The FLSA has a fee-shifting provision that provides that the prevailing party shall
recover reasonable attorneys’ fees and litigation costs. 29 U.S.C. § 216(b). “Indeed, an ‘award of
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 17 of 22 PageID #: 1895
16
attorneys’ fees under the FLSA is mandatory, with the amount of fees within the discretion of the
court.’” Thompson, 2015 WL 867988, at *2 (citations omitted). As the Sixth Circuit has repeatedly
noted, “the purpose of the FLSA attorney fees provision is ‘to insure effective access to the judicial
process by providing attorney fees for prevailing plaintiffs with wage and hour grievances.’” Fegley
v. Higgins, 19 F.3d 1126, 1134 (6th Cir. 1994) (quoting United Slate, Tile & Composition Roofers,
Damp and Waterproof Workers Ass’n, Local 307 v. G & M Roofing and Sheet Metal Co., 732 F.2d
495, 501 (6th Cir.1984)).
The starting point in calculating a “reasonable” attorney fee is typically the determination of
the fee applicant’s “lodestar,” which is the proven number of hours reasonably expended on the case
by an attorney, multiplied by his court-ascertained reasonable hourly rate. Adcock-Ladd v. Sec’y of
Treasury, 227 F.3d 343, 349 (6th Cir. 2000) (citing Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)).
The court may then adjust the lodestar to reflect relevant considerations peculiar to the subject
litigation, Reed v. Rhodes, 179 F.3d 471-72 (6th Cir. 1999), through consideration of the Johnson
factors.3
In this case, analysis of the Johnson factors is unnecessary because the requested Fee & Cost
Award of $730,000 will result in approximately a 10% reduction of Plaintiff’s Counsel’s recovered
attorneys’ fees as compared to Plaintiff’s Counsel’s actual attorneys’ fees. (Martin Decl. ¶ 26).
Specifically, the $730,000 agreed Fee & Cost Award, if approved, will pay approximately $678,000
in attorneys’ fees to Plaintiff’s Counsel, after reimbursement of the $52,000 in litigation expenses
3 The Johnson factors are“ (1) the time and labor required by a given case; (2) the novelty and
difficulty of the questions presented; (3) the skill needed to perform the legal service properly; (4)
the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee;
(6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the
circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and
ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature and length of the
professional relationship with the client; and (12) awards in similar cases.” Reed, 179 F.3d at 471–72
n. 3 (citing Johnson, 488 F.2d at 717–19).
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 18 of 22 PageID #: 1896
17
that Plaintiff’s Counsel will have paid by the completion of this matter.4 However, Plaintiff’s
Counsel’s actual lodestar to date totals $745,649.005, and Plaintiff’s Counsel expects to accrue
significant additional attorneys’ fees during the administration of the Settlement. (Id. ¶ 24-25).
Thus, the $678,000 in attorneys’ fees that Plaintiff’s Counsel will receive out of the $730,000 Fee &
Cost Award represents approximately a 10% reduction below Plaintiff’s Counsel’s anticipated final
lodestar fee. This reduction confirms that the requested fee and expense award does “not produce [a]
windfall[]” to Plaintiff’s Counsel and confirms its reasonableness. Blum v. Stenson, 465 U.S. 886,
897 (1984) (citations omitted).
In short, there is a strong presumption that the lodestar represents a reasonable fee and an
even stronger presumption exists where, as here, the fee requested is below the lodestar amount. As
the Supreme Court has held, “there is a ‘strong presumption’ that the lodestar figure is reasonable[.]”
Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554, 130 S. Ct. 1662, 1673, 176 L. Ed. 2d 494
(2010). See also Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546,
565, 106 S. Ct. 3088, 3098, 92 L. Ed. 2d 439 (1986), supplemented, 483 U.S. 711, 107 S. Ct. 3078,
97 L. Ed. 2d 585 (1987) (“A strong presumption that the lodestar figure-the product of reasonable
hours times a reasonable rate-represents a ‘reasonable’ fee is wholly consistent with the rationale
behind the usual fee-shifting statute[.]”); McCutcheon v. Finkelstein Kern Steinberg & Cunningham,
No. 3-11-0696, 2013 WL 4521016, at *1 (M.D. Tenn. Aug. 27, 2013) (“[T]here is “a ‘strong
presumption’ that the lodestar ‘represents a reasonable fee.’”) (Sharp, J.) (citation omitted); Mathis v.
4 Plaintiff’s Counsel will have paid approximately $52,000 in litigation expenses at the
completion of this litigation. (Id. at ¶ 25). To date, Plaintiff’s Counsel has paid $37,217.80 in
litigation expenses, and the third-party settlement administrator selected to administer this settlement
estimates that it will charge approximately $15,000 to administer the settlement. (Id. at ¶ 25).
5 These reasonable fees and expenses were incurred during more than two years of extremely
contentious litigation, including multiple disputed motions, including a Petition for Writ of
Mandamus to the Sixth Circuit, including copious, time-consuming discovery, and including
protracted settlement negotiations.
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 19 of 22 PageID #: 1897
18
Wayne Cty. Bd. of Educ., No. 1:09-0034, 2011 WL 3320966, at *8 (M.D. Tenn. Aug. 2, 2011)
(Trauger, J), aff'd, 496 F. App'x 513 (6th Cir. 2012) (“If the requested fee is essentially in line with
the ‘lodestar,’ then there is a strong presumption that the requested fee is reasonable and
recoverable.”) (footnote omitted); C.f. Adcock-Ladd, 227 F.3d at 351(“[A] trial judge’s ‘discomfort’
with the total amount of the supported reasonable lodestar fee earned by the subject lawyer
comprises a legally insufficient rationale for the reduction of that fee.”).
Accordingly, this strong presumption that the lodestar represents a reasonable fee, coupled
with the fact that the requested fee here is less than Plaintiff’s Counsel’s lodestar, overwhelmingly
confirms the reasonableness of the Fee & Cost Award. See, e.g., Williams v. Bevill, No. 4:14-CV-
82-TRM-SKL, 2016 WL 773230, at *2 (E.D. Tenn. Feb. 8, 2016), report and recommendation
adopted, No. 4:14-CV-82, 2016 WL 792417 (E.D. Tenn. Feb. 29, 2016) (FLSA fee reasonable
where “the attorneys represent[ed] that they have reduced their fees in order to effect settlement.”);
Thompson, 2015 WL 867988, at *2 (FLSA fee reasonable where based on reduced loadstar); Kritzer,
2012 WL 1945144, at *10 (Because the fee sought was less than lodestar calculation “strongly
favors the fee requested by Plaintiffs' counsel.”) (emphasis added); Gentrup v. Renovo Servs., LLC,
No. 1:07CV430, 2011 WL 2532922, at *4 (S.D. Ohio June 24, 2011) (Approving fee as part of
FLSA settlement where “Plaintiffs’ counsel will be paid significantly less than the lodestar amount
in this case.”). Therefore, Plaintiff’s Counsel respectfully submits the requested fee and expense
award is fair and reasonable and should be approved.
VII. CONCLUSION
Based on the foregoing, as well as the Declarations of Jerry E. Martin and R. Andrew
Santillo and the entire record in this Action, Plaintiff respectfully submits the Settlement is
appropriate and reasonable in all aspects and should be approved by the Court.
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 20 of 22 PageID #: 1898
19
Date: January 6, 2017 Respectfully submitted,
/s/ Jerry E. Martin
JERRY E. MARTIN (No. 20193)
DAVID W. GARRISON (No. 24968)
TIMOTHY L. MILES (No. 21605)
SCOTT P. TIFT (No. 27592)
SETH M. HYATT (No. 31171)
JOSHUA A. FRANK (No. 33294)
BARRETT JOHNSTON MARTIN & GARRISON, LLC
Bank of America Plaza
414 Union Street, Suite 900
Nashville, TN 37219
Telephone: (615) 244-2202
Facsimile: (615) 252-3798
PETER WINEBRAKE*
R. ANDREW SANTILLO*
WINEBRAKE & SANTILLO, LLC
715 Twining Road, Suite 211
Dresher, PA 19025
Telephone: (215) 884-2491
Facsimile: (215) 884-2492
* Admitted Pro Hac Vice
Attorneys for Plaintiffs
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 21 of 22 PageID #: 1899
20
CERTIFICATE OF SERVICE
I hereby certify that a true and exact copy of the foregoing Memorandum of Law in Support
of Plaintiff’s Unopposed Motion for Approval of Settlement of Collective Action Under the FLSA has
been served on the following via the Court’s ECF filing system on January 6, 2017:
C. Eric Stevens
Littler Mendelson, PC - Nashville
333 Commerce Street, Suite 1450
Nashville, TN 37201
Phone: 615-383-3033
Fax: 615-383-3323
Sherry L. Travers
Kimberly R. Miers
Russell R. Zimmerer
Littler Mendelson, P.C.
2001 Ross Avenue, Suite 1500
Dallas, TX 75201
Phone: (214) 880-8148
Fax: (214) 880-0181
/s/ Jerry E. Martin
JERRY E. MARTIN
BARRETT JOHNSTON
MARTIN & GARRISON, LLC
Case 3:14-cv-02005 Document 125 Filed 01/06/17 Page 22 of 22 PageID #: 1900