Guzman Oropeza v. Campania Felix LLC

Background

Antonio Guzman Oropeza sued Campania Felix LLC, doing business as San Matteo Pizzeria e Cucina, Fabio Casella, and Rafael Doe, individually and on behalf of others similarly situated. The opinion states that the case involved claims under the Fair Labor Standards Act, a federal wage-and-hour law. On January 21, 2020, the court was notified that the parties had reached an agreement on all issues.

Court’s Instructions About the Agreement

The court ordered that the parties could not dismiss the action with prejudice unless either the court or the Department of Labor approved the settlement agreement. If the parties sought that type of dismissal, they had to file a joint letter motion asking for court approval, together with the settlement agreement, or provide documentation showing Department of Labor approval.

The court required the approval request to be filed publicly by February 21, 2020. The request had to explain why the proposed agreement was fair and reasonable and discuss, at minimum:

- the plaintiff’s possible range of recovery; - how the agreement would help the parties avoid anticipated burdens and expenses in proving their 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 request also had to address whether there was a genuine dispute about the number of hours worked or the amount of compensation owed, and how much the plaintiff’s attorney would seek in fees. The court stated that, absent special circumstances, it would not approve an agreement filed under seal or in redacted form.

Alternative Dismissal Without Approval

The court noted that the Court of Appeals for the Second Circuit had not decided whether the parties could settle a Fair Labor Standards Act 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 under that rule within 30 days.

The stipulation had to include an affirmation from the plaintiff’s counsel stating that the plaintiff or plaintiffs had been clearly advised that the settlement would not prevent another lawsuit against the same defendants, and affirming that the 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

The court did not approve the agreement or dismiss the case in this order. Instead, Judge Valerie Caproni established the filing requirements and deadlines for the parties’ possible next steps. If no approval request or stipulation was filed by February 21, 2020, the court ordered a conference for February 28, 2020, at 10:00 a.m. in Courtroom 443 of the Thurgood Marshall U.S. Courthouse.