Marcusse v. Citizens Arts Club, Inc.
- Analisa Torres
- 1:19-cv-08379
- U.S. District Court · Southern District of New York
- 2
In Marcusse v. Citizens Arts Club, Judge Torres required court or Department of Labor approval before dismissing the settled Fair Labor Standards Act case with prejudice.
The plaintiffs, defendants, their attorneys, and any proposed settlement are affected because a court or Department of Labor approval is required before a with-prejudice dismissal based on the settlement.
What happened
In Marcusse v. Citizens Arts Club, the parties told the court they had reached a settlement in a case brought under the Fair Labor Standards Act, a federal wage-and-hours law.
The court said the case could not be dismissed with prejudice based on the settlement unless the court or the Department of Labor approved the agreement. The parties had to file a public request and the settlement agreement by March 31, 2020, explaining why the settlement was fair, addressing any dispute about hours or compensation, and identifying requested attorney fees and supporting billing records.
Judge Analisa Torres also said the court generally would not approve sealed or heavily redacted agreements, broad nondisclosure terms, or releases unrelated to wage-and-hours issues. She ruled that any pending motions were moot and vacated all conferences, but did not approve the settlement or dismiss the case.
The detailed version
- Marcusse v. Citizens Arts Club, Inc. · No. 1:19-cv-08379
- Analisa Torres
- Jan. 30, 2020
Background
The plaintiffs—Dillon Marcusse, Edward Miskie, Philip Portolano, and Adam Sperandio, individually and on behalf of similarly situated people—sued Citizens Arts Club, Inc., doing business as Norwood; Alan Linn; and Camille Parson. The opinion states that the parties reached a settlement in this Fair Labor Standards Act case. The order does not describe the underlying wage-and-hours claims or the settlement's terms.
Settlement-approval requirement
The court ordered that the action could not be dismissed with prejudice unless the settlement agreement was approved either by the court or by the Department of Labor. A dismissal with prejudice would end the action in a manner that generally bars refiling the same claims. If the parties sought that type of dismissal, they had to file either a joint letter asking the court to approve the settlement or documentation showing Department of Labor approval. The filing, together with the settlement agreement, had to be placed on the public docket by March 31, 2020.
The court required any request for approval to explain why the proposed settlement was fair and reasonable. It identified these minimum subjects: the plaintiffs' possible recovery; the burdens and expenses the settlement would avoid; the seriousness of the litigation risks; whether experienced counsel negotiated at arm's length; and the possibility of fraud or collusion. The request also had to address whether a genuine dispute existed about the hours worked or compensation owed, and how much of the settlement the plaintiffs' attorney would seek as fees.
Attorney fees and settlement terms
Any attorney-fee request had to include contemporaneous billing records showing, for each attorney, the date, hours worked, and nature of the work. The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. It also stated that, absent compelling circumstances, it would not approve agreements containing sweeping nondisclosure provisions or broad releases of claims unrelated to Fair Labor Standards Act issues.
Disposition
Judge Analisa Torres ruled that any pending motions were moot and vacated all conferences. The order did not approve the settlement, dismiss the action, or decide the merits of the plaintiffs' claims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.