United States District Court, D. Arizona
HONORABLE ROSEMARY MARQUEZ UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff's Unopposed Motion and
Memorandum for Approval of the Parties' FLSA Collective
Action Settlement (Doc. 55) and Plaintiff's Motion for
Award of Attorneys' Fees, Reimbursement of Costs and
Expenses, and Award of Collective Representative Service
Payments (Doc. 56). Also before the Court is Defendant's
Stipulated Request for a Telephonic Status Conference (Doc.
59). Because the Court does not find that a telephonic status
conference would assist in the resolution of the pending
motions, the Court will deny the request for a telephonic
status conference. The remaining motions will be granted in
part; the Collective Action Settlement will be approved.
Peggy Quintana filed the operative Collective Action
Complaint (Doc. 41) on January 2, 2019. Plaintiff, who was
Defendant's employee, alleges on behalf of herself and a
collective of 1, 117 similarly situated persons that
Defendant failed to pay overtime in violation of the Fair
Labor Standards Act, 29 U.S.C. § 201, et seq.
(“FLSA”). Specifically, Plaintiff alleges that
she and other employees at Defendant's call centers were
required to perform work before and after scheduled shift
times, for which they were not paid. Specifically, Plaintiff
estimates that she and other similarly situated employees
performed between 10 and 15 minutes of unpaid overtime work
each day. Throughout the pendency of this action, seven
additional plaintiffs have consented to join the lawsuit
(“Opt-in Plaintiffs”). (See Docs. 17,
19, 22, 45.) The Parties engaged in a full-day mediation but
were unsuccessful at settling their claims at that time.
(See Doc. 30.)
January 31, 2019, the Court issued a Scheduling Order setting
deadlines for the first phase of FLSA discovery.
(See Doc. 52.) Meanwhile, Defendant sought to compel
arbitration of the dispute (Doc. 43), but on February 2,
2019, before the Motion to Compel was fully briefed, the
Parties notified the Court that a settlement had been reached
(Doc. 53). The instant motions followed.
Collective Action Settlement
unopposed motion seeks (1) approval of the proposed
settlement agreement on behalf of Plaintiff and a collective,
(2) certification of a collective action for settlement
purposes only, (3) approval of the notice of collective
action settlement, and (4) appointment of (a) Plaintiff's
attorneys as collective action counsel, (b) Plaintiff as
collective representative, and (c) Analytics LLC as the
third-party administrator. (See Doc. 55 at 5.)
Standard for Judicial Approval of FLSA Settlements
“The FLSA establishes federal minimum-wage,
maximum-hour, and overtime guarantees that cannot be modified
by contract.” Genesis Healthcare Corp. v.
Symczyk, 569 U.S. 66, 69 (2013). Court approval is
required for settlement of private FLSA claims. Jones v.
Agilysis, Inc., No. C 12-03516 SBA, 2014 WL 108420, *2
(N.D. Cal. Jan. 10, 2014) (citing Lynn's Food Stores,
Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.
1982)). “In reviewing an FLSA settlement, the district
court's obligation is not to act as caretaker but as
gatekeeper; rather, it must ensure that private FLSA
settlements are appropriate given the FLSA's purposes and
that such settlements do not undermine the Act's
purposes.” Id. (internal quotation marks and
modifications omitted). Because the Ninth Circuit has not
provided guidance for determining whether an FLSA collective
action settlement should be approved, district courts in this
Circuit look to the Eleventh Circuit's standard,
requiring the settlement to be “a fair and reasonable
resolution of a bona fide dispute.” Quiroz v. City
of Ceres, No. 1:17-CV-00444-DAD-BAM, 2019 WL 1005071, at
*2 (E.D. Cal. Mar. 1, 2019) (citing Dunn v. Teacher's
Ins. & Annuity Ass'n of Am., No.
13-CV-05456-HSG, 2016 WL 153266, at *3 (N.D. Cal. Jan. 13,
2016)); see also Lynn's, 679 F.2d at 1352-53.
a bona fide dispute, “[t]here must be ‘some doubt
. . . that the plaintiffs would succeed on the merits through
litigation of their [FLSA] claims.'” Selk v.
Pioneers Mem. Healthcare Dist., 159 F.Supp.3d 1164, 1172
(S.D. Cal. 2016) (quoting Collins v. Sanderson
Farms, 568 F.Supp.2d 714, 719-20 (E.D. La. 2008)
(alterations by Selk)). “If there is no
question that the FLSA entitles plaintiffs to the
compensation they seek, then a court will not approve a
settlement because to do so would allow the employer to avoid
the full cost of complying with the statute.”
found a bona fide dispute, some district courts in this
Circuit have looked by analogy to Federal Rule of Civil
Procedure 23 to consider the fairness of the collective
action settlement. Jones, 2014 WL 108420, at *2
(citing In re Bank of America Wage & Hour Emp.
Litig., No. 10-MD-2138-JWL, 2013 WL 6670602, at *2 (D.
Kan. Dec. 18, 2013)); see also Selk, 159 F.Supp.3d
at 1172-73. The Supreme Court, however, has instructed that
“Rule 23 actions are fundamentally different from
collective actions under the FLSA, ” Genesis,
569 U.S. at 74, and the Ninth Circuit has discussed at length
the differences between FLSA collective actions and class
actions under Rule 23, Campbell v. City of Los
Angeles, 903 F.3d 1090, 1112 (9th Cir. 2018)
(“Collective actions and class actions are creatures of
distinct texts-collective actions of section 216(b), and
class actions of Rule 23-that impose distinct
requirements.”). In order to account for the limited
relevance of the Rule 23 standards, some district courts
employ a “totality of circumstances approach that
emphasizes the context of the case and the unique importance
of the substantive labor rights involved.”
Selk, 159 F.Supp.3d at 1173 (citing Wolinsky v.
Scholastic, Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y.
2012)); see e.g. Kerzich v. Cty. of
Tuolumne, No. 1:16-cv-01116-DAD-SAB, 2019 WL 1755496, at
*4 (E.D. Cal. Apr. 19, 2019) (adopting the Selk
totality of the circumstances approach); Banks v. Pyramid
Consulting, Inc., No. 3:18-CV-00078-H-JLB, 2019 WL
338493, at *2-3 (S.D. Cal. Jan. 28, 2019) (same). The Court
finds the totality of the circumstances approach of more
relevance, and will employ it here.
district court employing a totality of the circumstances
approach considers the following factors to determine whether
the settlement is a reasonable compromise of the dispute:
(1) the plaintiff's range of possible recovery; (2) the
stage of proceedings and amount of discovery completed; (3)
the seriousness of the litigation risks faced by the parties;
(4) the scope of any release provision in the settlement
agreement; (5) the experience and views of counsel and the
opinion of participating plaintiffs; and (6) the possibility
of fraud or collusion.
Selk, 159 F.Supp.3d 1173. After consideration of the
factors, the Court may approve the settlement “in order
to promote the policy of encouraging settlement of
litigation.” Id. at 1173-74 (quoting
McKeen-Chaplin v. Franklin Am. Mortg. Co., No. C
10-5243 SBA, 2012 WL 6629608, *2 (N.D. Cal. Dec. 19, 2012))
(internal quotation marks omitted).
Parties agreed to settle this matter for $447, 500.00,
“which includes settlement payments to eligible
claimants; attorneys' fees and costs directly related to
the case; and individual service payments to Plaintiff and
seven Opt-in Plaintiffs.” (Doc. 55 at 6.) This
settlement, which the Parties characterize as an
“outstanding recovery for the Collective Members,
” was reached after some discovery and a full day of
mediation. (Doc. 55 at 6.) From this gross total, the parties
indicate that there are $196, 819.00 in fees, incentives, and
administrative costs. (Doc. 55 at 9.) Once those costs are
subtracted out, each collective member is to receive a pro
rata share of the award based upon their fraction of the
total overtime workweeks by all collective members. (Doc. 55
at 9.) Third- party administrator Analytics LLC is to be
responsible for contacting settlement plaintiffs with
information regarding the settlement (see Settlement
Notice, Doc. 55-3) and joining the settlement collective
(see Claim Form, Doc. 55-4), and then distributing
the award amongst the members. (Doc. 55 at 9, 11.)
Settlement Agreement provided for $134, 250.00 in
attorneys' fees as well as reimbursement to
Plaintiff's attorneys for costs up to $18, 000.00,
requested separately in the concurrently pending Motion for
an Award of Attorneys' Fees and Costs (Doc. 56).
Bona Fide Dispute
Parties assert that this case presents a bona fide dispute
over entitlement to overtime wages. (Doc. 55 at 13.) In
support of this assertion, the Parties explain that there are
material disputes as to whether the collective action
plaintiffs would be able to obtain conditional certification,
survive a decertification motion, maintain a certified
collective through trial, and the amount of damages due.
(Doc. 55 at 13-14.)
this Court has not previously had an opportunity to address
Defendant's motion to dismiss (see Doc. 50), or
otherwise address the merits of Plaintiff's claims, the
Court finds there is a bona fide dispute. The original
complaint was opposed (see Docs. 1, 13), as was the
amended complaint (see Docs. 41, 44). The Parties
engaged in an unsuccessful attempt to arbitrate their claims
during the pendency of this action, (see Doc. 30)
and Defendant sought to compel Plaintiff to arbitrate these
claims pursuant to the Federal Arbitration Act. (See
Docs. 11, 43.) In addition, a review of the substance and
merits of these filings reveals that there is “some
doubt” as to whether Plaintiff would succeed on the
merits of her claim. See Selk, 159 F.Supp.3d at
1172. Because there is a bona fide dispute, the Court will
engage in the second step of the analysis.
Fair and Reasonable Resolution
found a bona fide dispute, the Court turns to an assessment
of whether the settlement is a fair and reasonable resolution
of the dispute. The Court will address the Parties'
arguments regarding the fairness and reasonableness of the
settlement in the context of the Selk factors,
listed supra. Based upon the below evaluation, the
Court finds that the settlement is fair and reasonable.
Plaintiff's Range of Possible Recovery
approximate payout of the settlement would be for about 5
minutes of unpaid work per day, or 25 minutes of unpaid time
per week. (See Doc. 55 at 16.) The Complaint,
however, alleges that each collective member worked about 10
to 15 minutes of over-time per day; the recovery amounts to
one-half or one-third of the total possible recovery. The
Parties cite a string of cases in which district courts in
this Circuit have approved settlement recoveries less than 30
to 50 percent of the Plaintiff's possible recovery. (Doc.
55 at 16-17); see e.g. Jones, 2014 WL 2090034, at *2
(approving an FLSA settlement at 30 to 60 percent of possible
recoverable damages). The Court finds these cases persuasive;
this factor weighs in favor of approval.
Stage of Proceedings and Amount of Discovery
Parties engaged only in a portion of the first phase of
discovery, but filed for approval of the instant settlement
before the Court-imposed deadline for conditional
certification. (See Doc. 52.) Nevertheless the
Parties indicate that they have exchanged “substantial
discovery, ” sufficient to enable Plaintiff's
counsel to “fully and fairly evaluate the claims and
defenses and the value of the settlement.” (Doc. 55 at
17-18.) The Court finds that the parties have engaged in
ample discovery to ...