Ballo v. R & J Automotive LLC
- Vernon Broderick
- 1:24-cv-01627
- U.S. District Court · Southern District of New York
- 3
In Ballo v. R & J Automotive, Judge Broderick ordered entry of a $2,000 Fair Labor Standards Act judgment despite concerns about undisclosed fees and costs.
The order directly affected Mardie Ballo and the four defendants by requiring entry of the parties’ Rule 68 judgment for $2,000, inclusive of attorneys’ fees, expenses, and costs.
What happened
In Ballo v. R & J Automotive LLC, Mardie Ballo and the defendants asked the court to enter a judgment based on their offer and acceptance under Federal Rule of Civil Procedure 68. The case involved claims under the Fair Labor Standards Act, a federal law governing certain pay and work-hour requirements.
The court explained that settlements of Fair Labor Standards Act cases generally require court or Department of Labor approval. But the Second Circuit Court of Appeals has ruled that this approval is not required for judgments based on Rule 68 offers. The proposed judgment required payment of $2,000, including attorneys’ fees, expenses, and costs, without stating how much would go to fees or costs.
The court said those terms would likely be unreasonable under the usual settlement-review standard and that it could not compare the payment with Ballo’s possible recovery. Nevertheless, Judge Vernon S. Broderick ruled that the Second Circuit’s decision required him to order entry of the judgment, which was filed with the order.
The detailed version
- Ballo v. R & J Automotive LLC · No. 1:24-cv-01627
- Vernon Broderick
- Feb. 12, 2025
Background
Mardie Ballo brought this Fair Labor Standards Act (FLSA) case on behalf of herself and others similarly situated against R & J Automotive LLC, Ramcham Jagnarine, Parts Authority, LLC, and Parts Authority, Inc. Ballo and all defendants asked the court to enter judgment under Federal Rule of Civil Procedure 68, which provides a procedure for accepting an offer of judgment.
Legal framework
The court explained that the Second Circuit generally requires court approval or Department of Labor approval before parties privately settle an FLSA case. That requirement comes from the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., which recognized concerns about unequal bargaining power and possible abuse in FLSA settlements.
The court also explained that the Second Circuit later held, in Mei Xing Yu v. Hasaki Restaurant, Inc., that judicial approval is not required for a Rule 68 offer of judgment settling FLSA claims. Judge Broderick stated that he had previously expressed concern that this rule could require courts to enter judgments that would not pass the review required under Cheeks.
Court’s analysis
The proposed judgment provided for $2,000, inclusive of attorneys’ fees, expenses, and costs. It did not identify how much of that amount would be paid as attorneys’ fees or costs. The court said this prevented it from determining whether the fees were reasonable. The court also said it could not compare the judgment amount with Ballo’s “total maximum possible recovery.”
The court stated that these terms were incompatible with what it would likely consider a reasonable FLSA settlement under the Cheeks standard. However, it concluded that Mei Xing Yu compelled it to enter the proposed judgment despite those concerns.
Disposition
The court ordered that judgment be entered according to the parties’ Rule 68 offer and acceptance of judgment. The judgment was filed at the same time as the order. The court did not state how the $2,000 amount would be divided between Ballo, attorneys’ fees, expenses, and costs.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.