Medina Ortiz v. 157 Matanza Deli Grocery Inc.

Background

Counsel for the parties submitted a proposed settlement agreement for the court’s approval under the standard described in Cheeks v. Freeport Pancake House, Inc. The proposed agreement provided for a total recovery of $44,000. It allocated $15,079.34—slightly more than one-third of the total—to the plaintiff’s counsel for fees and costs. The court reviewed counsel’s billing rates, time entries, and costs and found the requested fee, which was approximately three times counsel’s lodestar amount, reasonable.

Problems with the Agreement

The court identified drafting errors in the proposed agreement. One paragraph appeared to be missing language concerning confessions of judgment and counsel’s release. The same paragraph appeared to refer to the plaintiff’s counsel’s escrow account when it should have referred to the defendant’s bank account.

The agreement also included non-disparagement and non-publicity provisions. These provisions barred the parties from contacting the press, limited how they could respond to press inquiries, and prohibited them from using social media to discuss the action or settlement. The court found unfair the attempt to limit and compel the content of the parties’ speech, including a requirement that they respond to press inquiries only by referring to the confidentiality provision and stating that the parties had resolved the matter to their mutual satisfaction.

Ruling

Judge Valerie Caproni ordered that the proposed settlement agreement was not approved at that time because of its drafting errors and non-disparagement and non-publicity provisions. The court ordered the parties to submit a revised settlement agreement consistent with the order by December 6, 2019. The court stated that it was unlikely to approve an agreement restraining plaintiffs from making truthful statements on social media or to the press, including when a third party initiated the inquiry.