Canelha v. A Royal Flush of New York II, Inc.
- Kevin Fox
- 1:19-cv-01587
- U.S. District Court · Southern District of New York
- 2
In Canelha v. A Royal Flush of New York II, Inc., Judge Broderick ordered FLSA settlement materials and fee evidence before deciding whether the settlement was fair.
The plaintiffs and defendants in the FLSA case, including their attorneys if the settlement provides for attorney’s fees.
What happened
In Canelha v. A Royal Flush of New York II, Inc., the parties told the court they had reached a settlement in a Fair Labor Standards Act case. The court explained that such claims generally cannot be privately settled with prejudice without approval from the court or the Department of Labor.
The court required the parties to submit the settlement terms and a joint letter explaining why the agreement was a fair and reasonable compromise. The letter must address factors including the possible recovery, litigation costs and risks, the parties’ negotiations, and possible fraud or collusion.
Judge Vernon S. Broderick also required evidence supporting any attorney-fee award, including contemporaneous billing records. The order did not approve the settlement; it required the parties to provide information so the court could evaluate it.
The detailed version
- Canelha v. A Royal Flush of New York II, Inc. · No. 1:19-cv-01587
- Kevin Fox
- Nov. 26, 2019
Background
The parties advised the court that they had reached a settlement in this Fair Labor Standards Act (FLSA) case. The court stated that parties may not privately settle FLSA claims with prejudice unless the settlement is approved by the district court or the Department of Labor. The court therefore had to determine whether the proposed agreement was fair and reasonable.
Settlement review
The court said it would consider the total circumstances, including:
- the plaintiffs’ possible recovery; - the extent to which the settlement would avoid the burdens and expenses of proving the claims and defenses; - the seriousness of the litigation risks; - whether experienced counsel reached the agreement through arm’s-length bargaining; and - the possibility of fraud or collusion.
The court also stated that any attorney-fee provision must be assessed separately. Counsel must provide a factual basis for the requested fees, including contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work.
Order
Judge Vernon S. Broderick ordered the parties to provide the court with the settlement terms and a joint letter of no more than five pages explaining why the settlement represented a fair and reasonable compromise of disputed issues. The order also required fee-supporting evidence if the agreement included attorney’s fees. The court did not approve or reject the settlement in this order; it requested information for its review.
Disposition
The court ordered further submissions concerning the proposed settlement and any attorney fees. The opinion states a submission deadline of January 10, 2019, even though the order is dated November 26, 2019.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.