Coronel v. Royal Katsuei Inc.

Background

Olga Maria Coronel sued Royal Katsuei Inc., Sushi Katsuei Inc., and Aung Ko Win on behalf of herself and others similarly situated. The opinion states that the parties advised the court that they had reached a settlement, including claims under the Fair Labor Standards Act (FLSA), a federal wage-and-hour statute.

Court’s instructions

The court described two possible procedures for resolving the FLSA claims.

First, if the parties wanted to dismiss the FLSA claims with prejudice—that is, permanently—they had to seek judicial approval under Federal Rule of Civil Procedure 41(a)(2). The court relied on the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., which held that FLSA claims cannot be dismissed with prejudice through the ordinary voluntary-dismissal procedure without court involvement.

Before seeking approval, the parties were ordered to discuss whether they would consent under 28 U.S.C. § 636(c) to having all further proceedings conducted by the assigned magistrate judge. If both sides consented, they had to file the required consent form by November 27, 2019. If either side withheld consent, the parties had to file a joint letter by that date stating that they did not consent, without identifying the party that withheld consent. The order stated that withholding consent would not have negative consequences.

If the parties did not consent to proceed before the magistrate judge, the court directed them to file a joint motion by December 4, 2019 explaining why the settlement was fair and should be approved. The motion had to address the factors identified in Wolinsky v. Scholastic Inc. and include the settlement agreement. The court also stated that it would not approve a settlement containing a confidentiality provision and would not allow settlement-related materials to be filed under seal without a specific showing overcoming the presumption that judicial documents are publicly accessible. If the settlement included attorney’s fees, the parties had to address whether the fees were reasonable and provide detailed attorney time records.

Second, the parties could dismiss the FLSA claims without prejudice under Rule 41(a)(1)(A). For that option, the court directed them to submit a stipulation of dismissal by November 27, 2019.

Disposition

Judge Gregory H. Woods did not approve the settlement, dismiss the case, or rule on the merits of the FLSA claims in this order. Instead, he directed the parties to follow one of the two procedures for resolving their settlement-related claims.