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Dominguez v. Microfit Auto Parts, Inc.

United States District Court, D. Maryland, Southern Division

February 4, 2019

TONY DOMINGUEZ, et al., Plaintiffs,
v.
MICROFIT AUTO PARTS, INC., et al., Defendants.

          MEMORANDUM OPINION

          CHARLES B. DAY UNITED STATES MAGISTRATE JUDGE.

         Plaintiffs Tony Dominguez, Kevin Cabrera, Milton Fuentes, Areberth Gonzales, Asdruval Hernandez (“A. Hernandez”), Maximo Hernandez (“M. Hernandez”), Jose Munoz, Edwin Ochoa, Kunauth “Anthony” Persaud, and Gerardo Ventura (collectively “Plaintiffs”) along with Defendants Microfit Auto Parts, Inc., Inder S. Bian (“I. Bian”), and Kamaljit K. Bian (“K. Bian”) (collectively “Defendants”) have submitted a joint motion for approval of their proposed settlement agreement (“Settlement Agreement”). Joint Motion for Approval of Settlement Agreement (“Joint Motion”), ECF No. 36. Currently, both parties have agreed that Defendants will pay a total sum of $128, 122.49 to be divided as follows: Plaintiff Dominguez would receive $8, 016.75 in compensation for his claims; Plaintiff Cabrera would receive $13, 750.00 in compensation for his claims; Plaintiff Fuentes would receive $4, 288.99 in compensation for his claims; Plaintiff Gonzales would receive $1, 548.76 in compensation for his claims; Plaintiff A. Hernandez would receive $1, 171.70 in compensation for his claims; Plaintiff M. Hernandez would receive $36, 493.53 in compensation for his claims; Plaintiff Munoz would receive $25, 000.00 in compensation for his claims; Plaintiff Ochoa would receive $6, 500.00 in compensation for his claims; Plaintiff Persaud would receive $20, 642.97 in compensation for his claims; Plaintiff Ventura would receive $10, 709.79 in compensation for his claims. Parties also agreed that Defendants would pay Plaintiffs' counsel $55, 000.00 in total as reimbursement for attorneys' fees and costs incurred throughout these proceedings.

         The Court has reviewed the Joint Motion, the accompanying memorandum, and the applicable law. No. hearing is deemed necessary. See Local Rule 105.6 (D. Md.). For the reasons that follow, the Court hereby GRANTS the parties' Joint Motion without modification as: (1) there exists a bona fide dispute; (2) the settlement agreement is both fair and reasonable under the Saman test; and, (3) the attorneys' fees agreed to appear to be not only reasonable under Saman but also represent a significant reduction from what Plaintiffs' counsel incurred while prosecuting this case. A separate Order shall issue.

         I. Analysis

         A. A Bona Fide Dispute Exists

         Congress enacted the FLSA to protect workers from poor wages and long hours, which are often the result of power imbalances between workers and employers. Saman v. LBDP, Inc., No. Civ. A. DKC-12-1083, 2013 WL 2949047, at *2 (D. Md. June 13, 2013). Even when parties submit a joint motion seeking approval for a settlement agreement, the Court must undertake a multi-step review of the agreement and any attorney's fees requested to ensure its reasonableness. Id. “[A]s a first step, the bona fides of the parties' dispute must be examined to determine if there are FLSA issues that are ‘actually in dispute.'” Id. at *3 (citing Lane v. Ko- Me, LLC, Civ. A. No. DKC-10-2261, 2011 WL 3880427, at *2 (D. Md. Aug. 31, 2011) (citation omitted)).

         A bona fide dispute exists in this case. Plaintiffs commenced this proceeding on February 22, 2018. Pls.' Compl. ECF No. 1. Plaintiffs were employees of Microfit Auto Parts, a company that Defendants owned and operated. Pls.' Compl. ¶¶ 6-9. Microfit Auto Parts “sells and delivers automobile parts throughout the District of Columbia, Maryland, and Virginia region.” J. Mot. 3. Plaintiffs worked for various lengths of time as “auto part delivery drivers, ” a role that required them to not only deliver but to also collect payment at times. J. Mot. 3, 13. During their employment, Plaintiffs allege that Defendants did not pay them minimum wage or overtime. J. Mot. 3-4. Specifically, Plaintiffs allege they were paid a flat weekly rate along with the promise of “a commission of 1% of the value of goods delivered by [Plaintiffs] over the course of a month.” Pls.' Compl. ¶¶ 17, 21. However, Plaintiffs alleged they frequently worked more than 40 hours a week and were unable take breaks. Pls.' Compl. ¶ 19. Plaintiffs further alleged that Defendants failed to pay them the promised commission. Pls.' Compl. ¶ 22. Defendants denied all liability in their response to the complaint. Defs.' Answer, ECF No. 7. Defendants asserted that their own time records were accurate and, in any event, that their GPS records supported their understanding of how many hours Plaintiffs actually worked. J. Mot. 5-6, 13-14. Defendants made no admissions of liability with this Settlement Agreement. J. Mot. 5. The Joint Motion also highlights specific areas of the case about which the parties disagree. See J. Mot. 13 (enumerating three “significant disputes in this case” as the accuracy of time records, GPS records, and delivery records). Accordingly, the parties were and remain at odds with one another in regard to Plaintiffs' compensation-or lack thereof-as employees of Defendants.

         B. The Settlement Agreement Passes the Saman Test

         If a bona fide dispute exists, the next step in the analysis is to assess the fairness and reasonableness of a settlement agreement using the following factors:

(1) the extent of discovery that has taken place; (2) the stage of the proceedings, including the complexity, expense and likely duration of the litigation; (3) the absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented the plaintiffs; (5) the opinions of [ ] counsel ...; and (6) the probability of plaintiffs' success on the merits and the amount of the settlement in relation to the potential recovery.

Saman, 2013 WL 2949047, at *3 (quoting Lomascolo v. Parsons Brinckerhoff, Inc., No. 08-cv-1310, 2009 WL 3094955, at *10 (E.D. Va. Sept. 28, 2009)). Here, the settlement agreement appears to be fair and reasonable under the Saman factors.

         1. Extent of discovery

         According to the Joint Motion, a significant amount of discovery has been exchanged. J. Mot. 4. Specifically, Plaintiffs state they served Defendants with written discovery requests after Defendants filed their Answer. J. Mot. 4. Defendants responded by producing “thousands of pages of relevant documents.” J. Mot. 4. These documents included “available work and hours records, GPS records and delivery records.” J. Mot. 4. In fact, the bulk of what remains in dispute between the parties resulted from diverging interpretations of the information exchanged during this discovery process, including the reliability of the records. J. Mot. 5-6. While Plaintiffs “believe[] that certain documents . . . had not yet been produced by Defendants, ” discovery is significantly underway. J. Mot. 14.

         2. Stage of the Proceedings

         This settlement comes months after the case was filed with the Court. In the course of that time, the parties engaged in the exchange of a significant amount of discovery, formal mediation with Magistrate Judge Schulze, the exchange of offers of judgment, and what appears to have been continuous and vigorous negotiations. J. Mot. 4-7. While the matter settled before trial or even summary judgment motions were filed, it seems apparent that written discovery was nearly completed, although Plaintiffs still believe there are relevant documents in Defendants possession. J. Mot. 14. While it is unclear the extent to which parties may have sought to conduct depositions, it is doubtful that they would have made much difference in bringing the matter to a resolution.

         3. Absence of Fraud or Collusion

         There is no evidence that the Settlement Agreement is the product of fraud or collusion. “There is a presumption that no fraud or collusion occurred between counsel, in the absence of any evidence to the contrary.” Saman, 2013 WL 2949047, at *5. Here, even with this settlement the parties remain staunchly divided on the facts of the situation. See J. Mot. 7-12 (listing the amount awarded to each Plaintiff, their position on their personal claim and Defendants' response contradicting their position). Further, “[b]oth parties submit that attorneys' fees and costs were negotiated separately and only after a resolution was reached with respect to the Plaintiffs' settlement outcomes.” J. Mot. 16. Accordingly, no fraud or collusion appears present in this matter.

         4. Experience of Counsel

         Plaintiffs are represented by the law firm Hoffman Employment Law, LLC (“Hoffman Law”). In support of this motion, Plaintiffs' counsel provided declarations detailing their qualifications and experience. Specifically, Plaintiffs were represented by Howard B. Hoffman, the founding member of Hoffman Law and the primary counsel on this matter. Declaration of Howard B. Hoffman (“Hoffman Declaration”) ¶¶ 1-2, ECF No. 36-3. Mr. Hoffman has approximately nineteen (19) years of experience as an attorney. Hoffman Decl. ¶¶ 2, 11. In his declaration, Mr. Hoffman details his “extensive experience prosecuting and defending wage and hour cases and other employment law cases.” Hoffman Decl. ¶ 2. He included a list of nine “widely cited decisions” in wage and hour cases that he was involved in. Hoffman Decl. ¶ 10. He also included citations to various First Amendment cases he prosecuted and news articles relating to his practice. Hoffman Decl. ¶¶ 11-12. Mr. Hoffman bills at $400.00 per hour and completed 64.0 hours of work on this matter. J. Mot. 16; Hoffman Decl. ¶ 4. The two other members of Plaintiffs' counsel were associates at Hoffman Law each with between three and four years of experience practicing law.[1] Given Mr. Hoffman's active participation in this matter and the extent of his experience-as supported by the citations to several cases brought in this District-Plaintiffs' counsel has sufficient experience in this area of law to competently represent Plaintiffs.

         5. ...


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