Franco Bautista v. 20th Street Pizza Corp.
- Valerie Caproni
- 1:19-cv-07008
- U.S. District Court · Southern District of New York
- 3
In Franco Bautista v. 20th Street Pizza, Judge Caproni required approval or a specified filing before an FLSA settlement could end the case.
The plaintiff, the defendants, and their lawyers were affected because the order set the procedures they had to follow to end the FLSA case after reaching a settlement through mediation.
What happened
In Franco Bautista v. 20th Street Pizza Corp., the parties told the court that mediation had produced an agreement resolving all issues. The case involved claims under the Fair Labor Standards Act, a federal law governing minimum wages and overtime.
The court said the parties could not dismiss the case with prejudice based on the settlement unless the court or the Labor Department approved the agreement. They could instead file a dismissal without prejudice under a federal procedural rule, but that filing had to include a statement from the plaintiff’s lawyer confirming that the plaintiff understood another lawsuit could be filed and that the settlement did not release the defendants.
Judge Valerie Caproni ordered that any approval request or dismissal filing be placed on the public docket by the stated deadline and warned that failing to file would result in a conference. The court did not approve or reject the settlement in this order.
The detailed version
- Franco Bautista v. 20th Street Pizza Corp. · No. 1:19-cv-07008
- Valerie Caproni
- Dec. 30, 2019
Background
The court was notified that, through mediation, the parties had reached an agreement on all issues. The action involved claims under the Fair Labor Standards Act (FLSA). The order does not state the settlement amount or the agreement’s other terms.
Order concerning dismissal with prejudice
The court ordered that the parties could not dismiss the action with prejudice based on the settlement unless the settlement agreement was approved by either the court or the Department of Labor. If the parties wanted court approval, they had to file a joint letter motion with the settlement agreement on the public docket by January 30, 2020. The letter motion had to explain why the proposed settlement was fair and reasonable and address:
- The plaintiff’s possible recovery range;
- The burdens and expenses the settlement would avoid in proving the claims and defenses;
- The seriousness of the litigation risks;
- Whether experienced counsel negotiated the agreement at arm’s length; and
- The possibility of fraud or collusion.
The letter also had to address whether a genuine dispute existed about the hours worked or compensation owed, and how much the plaintiff’s attorney would seek in fees. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. Alternatively, the parties could provide documentation showing approval by the Department of Labor.
Possible dismissal without prejudice
The court noted that the Second Circuit had not decided whether the parties could settle an FLSA case without court or Department of Labor approval and dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days. The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff had been clearly advised that the settlement did not prevent another lawsuit against the same defendants and affirming that the settlement agreement did not release the defendants. The court warned that this option carried a risk that the case could be reopened in the future.
Disposition
This order did not approve or reject the settlement and did not decide the underlying FLSA claims. It set requirements for either seeking approval before a dismissal with prejudice or filing a dismissal without prejudice. If no required letter or stipulation was filed by January 30, 2020, Judge Valerie Caproni ordered a conference for January 31, 2020, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall United States Courthouse.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.