United States District Court, D. Maryland, Southern Division
CHARLES B. DAY, UNITED STATES MAGISTRATE JUDGE
Alphonsus Anthony, along with Defendants Crestview Wine
Sprits, LLC, Halishor, LLC d/b/aNew Carrolton Liquors, Jaspal
Singh, and Surjit Sing, (collectively "Defendants")
have submitted a Renewed Consent Motion for Approval of
Settlement ("Renewed Consent Motion") that resolves
Plaintiffs claims under the Fair Labor Standards Act
("FLSA"). See Renewed Consent Mot., ECF
No. 31. Previously, this Court denied without prejudice, the
parties' Consent Motion to Approve Settlement
("Consent Motion"), ECF No. 29, for failure to
provide sufficient information which the Court could assess
under the factors identified in Soman v. LBDP, Inc.,
Civ. No. DKC-12-1083, 2013 WL 2949047 (D. Md. June 13, 2013).
ECF No. 30.
parties agree that Defendants will pay Plaintiff a total sum
of $30, 000 calculated as follows: $9, 340.58 for wages, $9,
340.58 in liquidated damages, and $11, 318.84 in
attorneys' fees. Confidential Settlement Agreement and
Release 2, ("Settlement Agreement"), ECF No.
Court has reviewed the various memoranda, the Settlement
Agreement, 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' Renewed Consent 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 agreed upon attorneys'
fees appear to be not only reasonable under Saman,
but also represent a reduction from what Plaintiffs counsel
incurred while litigating this case. A separate Order shall
FLSA Settlement Generally
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, 2013 WL 2949047, at
*2. The FLSA provisions are mandatory and generally are not
subject to bargaining, waiver, or modification by contract or
settlement. See Brooklyn Sav. Bank v. O 'Neil,
324 U.S. 697, 706 (1945). However, a court-approved
settlement is an exception to the rule, so long as the
settlement reflects a reasonable compromise of disputed
issues, rather than "a mere waiver of statutory rights
brought about by an employers' overreaching."
Saman, 2013 WL 2949047, at *2.
the United States Court of Appeals for the Fourth Circuit has
not addressed the factors to be considered in deciding
motions for approval of FLSA settlements, district courts in
this circuit typically employ the considerations set forth by
the United States Court of Appeals for the Eleventh Circuit
in Lynn's Food Stores, Inc. v. United States,
679 F.2d 1350, 1354 (11th Cir. 1982). Id. at *3;
Amaya v. Young & Chang, Inc., No. PWG-14-749,
2014 WL 3671569, at *2 (D. Md. July 22, 2014); Butler v.
DirectSAT USA, LLC, No. DKC-10-2747, 2015 WL 5177757, at
*2 (D. Md. Sept. 3, 2015). The settlement must reflect a fair
and reasonable resolution of a bona fide dispute
over FLSA provisions. Soman, 2013 WL 2949047, at *3
(citing Lynn's Food, 679 F.2d at 1355).
"[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. (citing Lane v. Ko-Me, LLC, Civ. A. No.
DKC-10-2261, 2011 WL 3880427, at *2 (D. Md. Aug. 31, 2011))
(citation omitted). Then as a second step, the terms of the
proposed settlement must be assessed for fairness and
Bona Fide Dispute
contend that a bona fide dispute no longer exists
because "the parties agree on how much Mr. Anthony is
owed." Renewed Consent Mot. 3. Further, counsel contends
that because there is no longer a bona fide dispute,
an assessment for fairness and reasonableness of the
Settlement Agreement is not required. Id. at 2-3.
The Court disagrees.
deciding whether a bona fide dispute exists as to
defendant's liability under the FLSA, courts consider the
pleadings in the case, along with the representations and
recitals in the proposed settlement agreement."
Duprey v. Scotts Co., LLC, 30 F.Supp. 3d 404, 408
(D. Md. 2014) (citing Lomascolo v. Parsons Brinckerhoffi
Inc., No. I:08cvl310, 2009 WL 3094955, at * 16-17 (E.D.
Va. Sept. 28, 2009)). "A bona fide dispute is
one in which there is some doubt whether the plaintiff would
succeed on the merits at trial." Kirkpatrick v.
Cardinal Innovations Healthcare Solutions, 352 F.Supp.
3d 499, 502 (M.D. N.C. 2018) (citing Hall v. Higher
One Machs., Inc., No. 5-15-CV-670-F, 2016 WL
5416582, at *6 (E.D. N.C. Sept. 26, 2016)). "A bona
fide dispute exists when an employee makes a claim that
he or she is entitled to overtime payment."
Lomascolo, 2009 WL 3094955, at *16 (holding that a
bona fide dispute existed because the complaint
alleges a dispute over the amount due and the defendants deny
those factual averments).
to settling this matter, Plaintiff alleged that Defendants:
(1) failed to pay Plaintiff overtime pay for hours worked
over forty; and (2) failed to pay Plaintiff the applicable
minimum wage during Plaintiffs first month of employment.
Compl. ]fl| 50, 57-58, 66, ECF No. 1. Defendants each filed
an Answer, denying the allegations. See Answers by
Defendants, ECF No. 10-13. Even in the Settlement Agreement,
Defendants steadfastly deny liability. Confidential
Settlement Agreement and Release, 2, ECF No. 29-1. It is
clear when reviewing the pleadings and the Settlement
Agreement, there is doubt whether Plaintiff would have
succeeded on the merits at trial. Therefore, although the
parties have reached an agreement to end the litigation, they
remain at odds with one another regarding Defendants'
liability. See Butler, 2015 WL 5177757, at *3
(holding that there was a bona fide dispute because
at the time of settlement, the plaintiff continued to assert
the defendants' liability, and the defendants had not
the parties engaged in extensive discovery lasting over four
months, which included 168 interrogatories and 122 requests
for production of documents. Renewed Consent Mot. 9; See
Kirkpatrick, 352 F.Supp. 3d at 502 (holding that there
was a bona fide dispute between the parties because
the parties engaged in extensive discovery and because there
were serious questions of fact and law at issue).
Accordingly, the Court finds that a bona fide
dispute exists in this case.
Fairness and Reasonableness
order to assess the fairness and reasonableness, the court is
required to weigh 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.
Soman, 2013 WL 2949047, at *3 (quotingLomascolo
v. ParsonsBrinckerhoff, Inc., No. 08-cv- 1310, 2009 WL
3094955, at *10 (E.D. Va. Sept. 28, 2009)). "There is a
'strong presumption in favor of finding a settlement
fair' that must be kept in mind in considering the
various factors to be reviewed in making the determination of
whether a settlement is fair, adequate and reasonable."
Lomascolo, 2009 WL 3094955, at *10.
Extent of discovery
to the Renewed Consent Motion, the parties settled only after
an extensive discovery process. Renewed Consent Mot. 9.
Discovery lasted over four months, and the "parties
jointly propounded 168 interrogatories and 122 requests for
production." Id. With extensive discovery, the
Court agrees that the parties "had sufficient
opportunity to obtain and review evidence, to evaluate their
claims and defenses, and to engage in informed arms-length
settlement negotiations." Id.
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