Guzman Oropeza v. Campania Felix LLC
- Valerie Caproni
- 1:19-cv-04430
- U.S. District Court · Southern District of New York
- 3
In Guzman Oropeza v. Campania Felix LLC, Judge Caproni declined to approve the wage settlement and invited a revised agreement addressing its release and speech restrictions.
The proposed settlement affected Antonio Guzman Oropeza, the other plaintiffs represented in the case, the defendants, and plaintiffs’ counsel. The order required changes to the settlement before the court would approve it.
What happened
In Guzman Oropeza v. Campania Felix LLC, the parties asked the court to approve a $22,500 settlement of the plaintiff’s wage-and-hour claims. The proposed agreement included $7,879.33 for the plaintiff’s lawyers’ fees and costs.
The court found the release too broad because it appeared to cover unrelated contract, fraud, and employee-benefit claims. It also found that restrictions on disparaging statements and soliciting employees lacked an exception allowing truthful statements about the case and the plaintiff’s experience. The court otherwise found the agreement fair and reasonable, including the adjusted request for lawyers’ fees.
Judge Valerie Caproni did not approve the proposed settlement as fair and reasonable at that time. She stated that the court would approve a revised agreement limited to the wage-and-hour claims and allowing truthful statements, and ordered any revised agreement filed by March 6, 2020.
The detailed version
- Guzman Oropeza v. Campania Felix LLC · No. 1:19-cv-04430
- Valerie Caproni
- Feb. 21, 2020
Background
Antonio Guzman Oropeza, individually and on behalf of others similarly situated, and the defendants submitted a proposed settlement for court approval. The proposed settlement provided for a total recovery of $22,500, with 35% of that recovery, stated as $7,879.33, allocated to the plaintiff’s counsel for fees and costs. The court reviewed the agreement under the requirement that wage-and-hour settlements be fair and reasonable.
Reasons for the ruling
The court identified several problems with the proposed agreement:
- The release of claims was ambiguous and overbroad. Although the agreement said the release covered claims specifically related to the litigation, it also listed contract, fraudulent-inducement, employee-benefit, and other claims unrelated to the wage-and-hour allegations in the complaint. - The non-disparagement provision restricted the plaintiff from speaking disparagingly, derogatorily, or in a defamatory manner about the defendants. The non-solicitation provision restricted the plaintiff from directly soliciting the defendants’ employees for lawsuits against the defendants. Neither provision included an exception allowing truthful statements about the case and the plaintiff’s experience litigating it. - The court found that counsel’s billing was somewhat inflated. After reducing the hourly rate used for Michael Faillace from $450 to $400 and reducing the time attributed to drafting the complaint, the requested fee was approximately 2.5 times the adjusted lodestar. A lodestar is a fee calculation based generally on reasonable hours multiplied by a reasonable hourly rate. The court nevertheless found the adjusted fee multiplier reasonable.
The court stated that the remainder of the settlement agreement was fair and reasonable.
Disposition
Judge Valerie Caproni ordered that the proposed settlement agreement was not approved as fair and reasonable at that time because of the overbroad release and the non-disparagement provisions. The court stated that it would approve a revised agreement if it allowed the plaintiff to make truthful statements and limited the release to the wage-and-hour claims raised in the complaint. The court ordered that any revised agreement be filed by March 6, 2020, and adjourned the scheduled February 28, 2020 status conference to March 13, 2020, at 10:00 a.m.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.