Nnebe v. Daus

Background

The plaintiffs are Jonathan Nnebe, Eduardo Avenaut, Khairul Amin, Anthony Stallworth, Parichay Barman, Noor Tani, and the New York Taxi Workers Alliance. The defendants are Matthew Daus, Charles Fraser, Joseph Eckstein, Elizabeth Bonina, the New York City Taxi and Limousine Commission, and the City of New York.

The plaintiffs challenged a former policy under which the Taxi and Limousine Commission summarily suspended drivers after arrests for certain crimes. The Second Circuit determined in 2019 that the policy violated drivers’ due-process rights because it did not provide adequate notice and reinstatement-hearing procedures. In March 2022, the court certified a liability class but did not certify a damages class because individual damages issues predominated.

In November 2023, the court held a bellwether trial involving ten randomly selected class members. All ten prevailed, with individual jury awards ranging from $4,500 to $42,500 and averaging $18,950. The court entered judgment on December 22, 2023, including nominal damages of $1 for each of ten absent class members who declined to appear at the damages trial. After the court denied the defendants’ post-trial motions, the parties negotiated a settlement.

Proposed Settlement

The proposed Settlement Agreement requires settlement-class members and the plaintiffs to release the defendants from liability, claims, or rights of action arising from the acts or omissions alleged in the case. In exchange, the defendants will pay a total of $140,000,000, inclusive of class-member awards, attorneys’ fees, expenses, costs, and claims-administration costs.

The agreement estimates approximately 19,500 settlement-class members. Individual initial distribution caps are based principally on the number of days a driver’s license was suspended and whether the driver requested a reinstatement hearing. The listed caps range from $700 or $750 for shorter suspensions to $36,000 for suspensions of 391 days or more. A separate category provides a $17,000 cap for drivers with no suspension end date, and drivers who did not request a hearing would receive 37.5% of the amounts distributed under the other categories. The agreement also permits disputes about class-member categories and may provide for a second distribution of unclaimed funds.

The agreement provides $15,000 incentive payments to the Named Plaintiffs and the ten Trial Plaintiffs, in addition to their individual settlement awards. Plaintiffs’ counsel represented that they would seek attorneys’ fees of no more than 25% of the amounts claimed by settlement-class members. The court deferred consideration of the final fee request and requested additional information before final approval about the Named Plaintiffs’ participation in the litigation.

Preliminary Approval

Federal Rule of Civil Procedure 23(e) requires a two-step process for proposed class settlements. At the preliminary stage, the court must determine whether it will likely be able to approve the settlement and certify the class for purposes of entering judgment on the proposal.

The court considered the four factors specified in Rule 23(e)(2): whether the class representatives and counsel adequately represented the class, whether negotiations occurred at arm’s length, whether the relief was adequate, and whether the proposal treated class members equitably. The court found that the factors supported preliminary approval. It relied in part on the extensive litigation history, the 2023 bellwether trial, the risks and delay of conducting damages trials for thousands of class members, and the use of Magistrate Judge Ona B. Wang and private mediator Stephen Sonnenberg during settlement negotiations.

The court noted an unresolved question about why the first eight suspension-length categories were selected, including the large difference between the $750 cap for a 26-to-31-day suspension and the $21,000 cap for a 32-to-60-day suspension. The court held that this issue did not prevent preliminary approval but expected clarification at the fairness hearing. The court also stated that it would need more information before final approval about the Named Plaintiffs’ work and risks in the litigation.

Conditional Settlement-Class Certification

The proposed settlement class consists of all Taxi and Limousine Commission-licensed drivers whose licenses were suspended based on an arrest on a criminal charge between June 28, 2003, and February 18, 2020. The class excludes people who timely opt out and the twelve individuals who had already opted out of the liability class.

The court found that the proposed class continued to satisfy the four requirements for class certification under Rule 23(a): sufficient size, common legal or factual questions, representative claims, and adequate representation. Although the court had previously found that individual damages issues prevented damages-class certification, it concluded that those trial-management concerns did not prevent certification for settlement purposes because the proposed settlement would avoid a trial.

The court therefore conditionally certified the class for settlement purposes only, pending final certification after approval of the Settlement Agreement. It appointed plaintiffs’ counsel as class counsel and the Named Plaintiffs as class representatives.

Notice and Fairness Hearing

The court found that the proposed method of notice—first-class mail with prepaid return envelopes, email and text messages when available, reminders, and a website—was the best practicable method under the circumstances. The court determined, however, that parts of the proposed notice and claim form could falsely suggest that the settlement was final or obscure class members’ rights to object or opt out.

The court revised the notice and claim form and attached approved versions for distribution. It ordered that the notice and claim form be issued to the conditionally certified settlement class within fourteen days. The court scheduled the fairness hearing for August 13, 2025, at 10:00 a.m. in Courtroom 21C at the Daniel Patrick Moynihan United States Courthouse in New York. The parties were ordered to submit a motion for final approval, including written objections and the requested attorneys’ fees, by July 23, 2025.

Disposition

Judge Richard J. Sullivan granted the plaintiffs’ unopposed motion for preliminary approval of the proposed class settlement, issuance of notice, and scheduling of a fairness hearing. The order did not grant final approval of the settlement or final certification of the settlement class.