Leonardo v. ASC, Inc.
- Debra Freeman
- 1:18-cv-03657
- U.S. District Court · Southern District of New York
- 5
In Leonardo v. ASC, Judge Freeman approved a modified Fair Labor Standards Act settlement and discontinued the action with prejudice, without costs or fees.
Seferino Leonardo, the defendants, Leonardo’s counsel C.K. Lee, and the parties to the settlement were affected. The action was discontinued with prejudice, the settlement was approved with modifications, and counsel was ordered to provide a sworn explanation of how Leonardo’s authorization was obtained.
What happened
In Leonardo v. ASC, Inc., Seferino Leonardo brought claims under the Fair Labor Standards Act and New York Labor Law. The parties reached a settlement, and the court reviewed it for fairness. The court considered that Leonardo had been deported to Mexico and would likely be unable to participate meaningfully in a trial, while the defendants appeared to have strong defenses on liability.
The court approved a $5,000 settlement, allocating $3,333.33 to Leonardo’s claimed damages and $1,666.67 to his attorneys’ fees and costs. It also approved changes limiting Leonardo’s release to claims asserted or that could have been asserted in the action, requiring payment even without a tax form, and striking the non-publication and non-disparagement provisions.
Judge Debra Freeman approved the settlement and discontinued Leonardo’s action with prejudice, without costs or fees to any party. The court did not retain jurisdiction to enforce the settlement and separately ordered Leonardo’s counsel, C.K. Lee, to explain under oath how he obtained Leonardo’s informed authorization before signing the agreement for him.
The detailed version
- Leonardo v. ASC, Inc. · No. 1:18-cv-03657
- Debra Freeman
- Dec. 20, 2019
Background
Seferino Leonardo brought this action under the Fair Labor Standards Act (FLSA) and New York Labor Law against ASC, Inc. doing business as La Nonna, and other defendants. The parties consented to proceed before Magistrate Judge Debra Freeman. After reaching an agreement in principle, they submitted a proposed settlement for the court’s required fairness review of an FLSA settlement.
The court previously requested additional information and held a fairness hearing on December 19, 2019. Leonardo, who was residing in Mexico after being deported there, participated by telephone. The court stated that he would likely be unable to participate or assist meaningfully in a trial and that the defendants appeared to have strong defenses on liability. An earlier order had dismissed the claims of opt-in plaintiff Victorino Cruz Jimenez without prejudice.
Settlement approval and dismissal
The court found the total proposed settlement of $5,000 fair, reasonable, and adequate. The payment was allocated as $3,333.33 for Leonardo’s claimed damages and $1,666.67 for his attorneys’ fees and costs. The court understood that Leonardo’s portion would be delivered to him by his nephew, Rafael Peral.
The court approved the remaining settlement terms with three modifications: defendants were required to make the payment even if Leonardo did not provide an Internal Revenue Service W-9 form and tax identification number; Leonardo’s release was limited to claims asserted or that could have been asserted in this action; and the non-publication and non-disparagement provisions were stricken in their entirety. The court stated that these changes provided greater protection for Leonardo’s rights and interests.
The court did not incorporate the settlement agreement into its order and did not retain jurisdiction to enforce it. As a result of approving the executed settlement agreement, the court ordered that Leonardo’s action against the defendants be discontinued with prejudice and without costs or fees to any party.
Counsel’s authorization to sign
Separately, the court questioned whether Leonardo’s counsel, C.K. Lee, had sufficiently obtained Leonardo’s express agreement to all settlement terms before signing the agreement on Leonardo’s behalf. A paralegal stated that he had read the entire agreement to Leonardo after the court requested confirmation, but testified at the hearing that he had not similarly read the entire agreement to Leonardo before it was executed. The court also found that Leonardo’s answers through a Spanish interpreter did not always appear to show that he understood the court’s questions.
The court directed Lee to submit, within one week, an affidavit or declaration under penalty of perjury explaining the steps he took to ensure that Leonardo understood the specific settlement terms and authorized Lee to sign the agreement before it was submitted to the court.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.