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Cerrato v. Alliance Material Handling Inc.

United States District Court, District of Maryland, Northern Division

December 16, 2014

MARK CERRATO, on behalf of himself and others similarly situated Plaintiffs,


William D. Quarles, Jr., united States District Judge.

Mark Cerrato sued Alliance Material Handling, Inc. ("Alliance") and Thomas Albero (collectively "the Defendants"), for violations of the Fair Labor Standards Act ("FLSA"), [1] the Maryland Wage Payment and Collection Law ("MWPCL"), [2] and the Maryland Wage and Hour Law ("MWHL") .[3] Pending is a joint motion for final approval of a collective action settlement. A fairness hearing was held on Thursday, December 11, 2014, at 11:00 am. For the following reasons, the Court will grant the motion.

I. Background

A. Facts

On September 30, 2013, Cerrato, on behalf of himself and all others similarly situated, sued the Defendants to recover unpaid overtime. See ECF No. 1. Cerrato alleges that he worked for Alliance from November 2005 to August 2013 as a fork lift technician. ECF No. ¶ 1 9. Cerrato alleges that he, and other similarly situated employees, regularly worked for more than 40 hours per week, and Alliance did not properly pay them time and a half for all overtime hours they worked. See ECF No. 1 ¶¶ 11-16. On October 15, 2013, the Defendants answered the complaint and denied all material allegations. See ECF No. 7.

On December 6, 2013, Cerrato moved for conditional collective action certification and court-facilitated notice. ECF No. 15. On January 23, 2014, the parties held a settlement conference with Magistrate Judge Susan K. Gauvey. On April 25, 2014, the parties filed a joint motion for FLSA settlement approval. ECF No. 22. On April 30, 2 014, the Court denied the motion for settlement approval until other plaintiffs had opted into the class. ECF Nos. 25-26. After notice, eight persons opted into the action. ECF No. 50 at 5. On June 17, 2014, the parties entered into an amended settlement agreement. ECF No. 38-1.

On October 17, 2014, the parties filed a joint motion for a fairness hearing and final settlement approval. ECF No. 38. On October 21, 2014, the Court ordered the parties to revise the notice for the fairness hearing to inform opt-in Plaintiffs of the possibility that their claims could be dismissed with prejudice at the fairness hearing. ECF No. 41. The Court also requested supplemental briefing on the fairness of the settlement and the reasonableness of attorneys' fees. Id.

On November 5, 2014, the parties provided the Court with the revised notice of the hearing for the opt-in Plaintiffs, and the Court scheduled a fairness hearing. ECF Nos. 44-4 5. On November 24, 2014, the parties filed a joint supplemental memorandum in support of final settlement approval and attorneys' fees. ECF No. 50.

On December 11, 2014, the Court held a fairness hearing. None of the opt-in Plaintiffs attended the hearing, and the Plaintiffs' counsel indicated that there have been no objections to the settlement. The Court requested that the Plaintiffs' counsel clarify how notice of the hearing was provided to the opt-in Plaintiffs. On December 12, 2014, the Plaintiffs' counsel submitted a letter stating that the eight opt-in plaintiffs received notice of the hearing through regular mail, and seven received additional notice through email.[4] ECF No. 53.

B. The Settlement Agreement

Through settlement negotiations facilitated by Judge Gauvey, the parties reached the following agreement.

In exchange for dismissing the action with prejudice, the Defendants agreed to pay each of the Plaintiffs the "full and maximum relief" under the FLSA that the Plaintiffs would have received had they proven their claims. See ECF No. 50 at 1-2. The Defendants provided the payroll records for all the Plaintiffs so that their overtime could be calculated. See ECF No. 50 at 5-6; ECF No. 38-1 at 9-11. Based on the calculations, the Defendants agreed to pay Cerrato and four of the opt-in Plaintiffs.[5] It was determined that no overtime was owed to the other four opt-in Plaintiffs, and their claims would be dismissed with prejudice unless they objected at the fairness hearing. See ECF No. 3 8 at 5. The Defendants have not admitted liability, and continue to maintain that all the Plaintiffs were properly compensated for their work. ECF No. 38-1 at 3-4.

In addition to the overtime payments, Cerrato will receive $10, 000 in liquidated damages, [6] and a $1, 000 incentive award. See ECF No. 3 8 at 5. The Settlement Agreement contains a general release provision. See ECF No. 38-1 at 7-9. The provision releases the Defendants from "any and all past, present or future claims, demands, rights, causes of action, judgments, executions, damages, liabilities, costs and expenses" by Cerrato or "his agents, successors, assigns, heirs, devisees, legatees, executors, administrators, [and] . . . representatives." Id.

The Defendants also agreed to pay the Plaintiffs' counsel $42, 302.89 in attorneys' fees. ECF No. 38 at 7. This amount would not be deducted from any of the Plaintiffs' awards, and would not increase regardless of additional work ...

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