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Anthony v. Crestview Wine & Spirits, LLC

United States District Court, D. Maryland, Southern Division

September 24, 2019

CRESTVIEW WINE & SPIRITS, LLC, et al. Defendants.



         Plaintiff 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.

         The 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. 29-1.[1]

         The 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 issue.

         I. DISCUSSION

         A. FLSA Settlement Generally

         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, 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.

         Although 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 reasonableness. Id.

         B. Bona Fide Dispute

         Counsel 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.

         "In 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).

         Prior 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 admitted liability).

         Further, 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.

         C. Fairness and Reasonableness

         In 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.

         1. Extent of discovery

         According 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.

         2. Stage of ...

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