Carrasco v. Sompo America Insurance Services LLC

Background

Mario Carrasco brought claims under the Fair Labor Standards Act and the New York Labor Law on behalf of himself and other workers. He alleged that the Defendants failed to pay proper wages because of time shaving, resulting in unpaid overtime, and failed to satisfy New York requirements concerning wage statements and wage notices. He sought unpaid overtime wages, liquidated damages, penalties, injunctive relief, and attorneys’ fees and costs. The Defendants disputed the allegations and denied liability.

After a private mediation, the parties negotiated a proposed settlement. Carrasco moved for an order conditionally certifying a settlement class and a co-extensive Fair Labor Standards Act collective action, preliminarily approving the settlement and its plan for allocating payments, approving notice to class members, and scheduling a hearing on final approval.

Settlement Class and Collective Action

For settlement purposes only, the proposed class included current and former workers who, during the specified period beginning September 26, 2011, were either employees of Elite Placement Group LLC assigned to Endurance Services Limited for temporary consulting work at Endurance’s U.S. offices, or temporary reinsurance accountant consultants assigned to Endurance Services Limited at those offices through third-party staffing agencies. The class excluded individuals who opted out under the settlement agreement.

The court found that the proposed members were similarly situated under Section 16(b) of the Fair Labor Standards Act and conditionally certified the class as an FLSA collective action. The court authorized mailing notice to potential collective-action members, including information about the FLSA claim and their ability to join the lawsuit.

The court also found, exclusively for settlement purposes, that the proposed class satisfied Federal Rule of Civil Procedure 23(a) and Rule 23(b)(3). It found that the class was sufficiently numerous, that common issues existed, that Carrasco’s claims were typical, and that Carrasco and his attorneys could adequately represent the class. It also found that common issues predominated and that a class action was superior to other methods of resolving the dispute. The court certified the class for settlement, notice, and payment-distribution purposes only.

If the settlement failed to receive final approval, was overturned on appeal, or otherwise was not completed, the settlement-related class and collective-action certification would be dissolved. Carrasco would retain the right to seek certification during continued litigation, and the Defendants would retain the right to oppose certification.

Preliminary Settlement Approval

The court granted preliminary approval to the settlement agreement and the plan of allocation. It found that the settlement was within the possible range for approval, making notice appropriate. It also found that the settlement was negotiated at arm’s length and was not collusive, and that class counsel understood the strengths and weaknesses of the class’s claims when they agreed to settle. The court found that the proposed allocation plan was rationally related to the relative strengths and weaknesses of the claims and was within the possible range for approval.

This was preliminary approval, not final approval. Under the order, class members who did not timely opt out would release the described claims only if the court later granted final approval and entered judgment. Class members who did not opt out would qualify for payment after final approval.

Notice and Case Administration

The court approved the proposed class notice and its distribution method. The notice was intended to explain the litigation, the settlement class, class counsel, the settlement’s essential terms, the proposed attorneys’ fees and other payments, participation procedures, the final-approval process, and procedures for opting out or objecting.

The court directed the claims administrator to prepare the final notice, receive class-member information from the Defendants, mail notice using last-known addresses, and send notice by email or text message when possible. Class members were given procedures for opting out and objecting, with deadlines tied to the mailing of notice and subject to the order’s outside deadlines.

The court appointed Mario Carrasco as class representative, C.K. Lee of Lee Litigation Group, PLLC as class counsel, and Arden Claims Service as claims administrator.

Fairness Hearing and Disposition

The court scheduled a fairness hearing for June 9, 2020, to consider final certification of the settlement class and FLSA collective action, final approval of the settlement and allocation plan, and any requests for attorneys’ fees, costs, and service payments. The order directed Carrasco to file a motion for judgment and final approval no later than 15 days before that hearing.

The order therefore conditionally certified the settlement class and collective action, granted preliminary approval to the settlement agreement and plan of allocation, approved the form and distribution of class notice, and set deadlines and procedures for the fairness hearing. It did not finally approve the settlement or decide whether the Defendants violated the wage laws.

Judge

The order was signed by the Honorable Cathy Seibel, United States District Judge.