Ponce v. Spring Natural Corp.
- Vernon Broderick
- 1:23-cv-10678
- U.S. District Court · Southern District of New York
- 3
Ponce v. Industrious National Management, Judge Broderick entered the Rule 68 judgment despite concerns that its $48,000 fee-inclusive terms would fail FLSA settlement review.
The order directly affected Shantelle Lebron, Daniel Ponce, the identified Fair Labor Standards Act collective plaintiffs and class, and Industrious National Management Company LLC and Industrious Staffing Company LLC by requiring entry of the parties’ Rule 68 judgment.
What happened
In Ponce v. Industrious National Management Company LLC and Industrious Staffing Company LLC, Shantelle Lebron and the defendants asked the court to enter a judgment based on their offer and acceptance under Rule 68. The case involves claims under the Fair Labor Standards Act.
The court explained that the usual private settlement-approval requirement for Fair Labor Standards Act cases did not apply to a Rule 68 offer of judgment under controlling Second Circuit precedent. The court nevertheless said the proposed $48,000 judgment, which included attorneys’ fees, expenses, and costs without stating the fee or cost amounts, would likely be unreasonable under the usual settlement review process.
Judge Vernon S. Broderick ordered that judgment be entered under the parties’ Rule 68 offer and acceptance. The judgment was to be filed at the same time as the order.
The detailed version
- Ponce v. Spring Natural Corp. · No. 1:23-cv-10678
- Vernon Broderick
- Aug. 28, 2024
Background
Shantelle Lebron, on behalf of herself, and Industrious National Management Company LLC and Industrious Staffing Company LLC moved for entry of judgment under Federal Rule of Civil Procedure 68. The caption also identifies Daniel Ponce as a plaintiff suing on behalf of himself, Fair Labor Standards Act collective plaintiffs, and the class.
The court discussed the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., which held that private Fair Labor Standards Act settlements generally require approval by the district court or the Department of Labor. The court then explained that the Second Circuit later held in Mei Xing Yu v. Hasaki Restaurant, Inc. that judicial approval is not required for Rule 68(a) offers of judgment settling Fair Labor Standards Act claims.
Court’s concerns
The parties’ offer of judgment set the judgment amount at $48,000, inclusive of attorneys’ fees, expenses, and costs. It did not state how much would be paid in attorneys’ fees or costs. Judge Broderick stated that this made it impossible to determine whether the attorneys’ fees were reasonable and that the term was incompatible with what the court would consider a reasonable Fair Labor Standards Act settlement reviewed under Cheeks.
The court noted that it had previously expressed concerns that Mei Xing Yu could require courts to enter judgments that would not survive Cheeks review. The court also cited similar concerns expressed by other judges and by a dissenting judge in Mei Xing Yu.
Ruling
Judge Vernon S. Broderick held that Mei Xing Yu compelled him to sign the proposed judgment despite his concerns about the settlement terms. The court ordered that judgment be entered in accordance with the parties’ Rule 68 offer and acceptance of judgment, and stated that the judgment would be filed simultaneously with the order.
Disposition
The court ordered entry of judgment under the parties’ Rule 68 offer and acceptance. The opinion does not state that the court approved the settlement under the usual Cheeks review process; instead, it states that the court entered judgment because the controlling Second Circuit precedent required that result.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.