Pacheco v. Chickpea at 14th Street Inc.

Background

The parties submitted a proposed settlement of the litigation involving named plaintiff Jorge Pacheco and the listed Chickpea-related defendants and individuals. The opinion states that the settlement terms were contained in an amended Settlement Agreement. Pacheco asked the court to conditionally certify a settlement class under Federal Rule of Civil Procedure 23, approve a coextensive collective action under Section 16(b) of the Fair Labor Standards Act, approve the proposed settlement and plan of allocation for notice purposes, and approve a proposed notice.

The court reviewed supplemental information, heard oral argument, and directed changes to the proposed Settlement Agreement and notice. The parties later submitted revised documents.

Collective Action

The court approved a collective action based on its finding that the affected employees were similarly situated. The collective action consists of:

- All hourly employees employed at Chickpea restaurants located in New York City at any time from January 11, 2012, through October 24, 2019.

The court authorized notice informing potential collective-action members about the pending federal wage-law claim and their ability to join the lawsuit.

Settlement Class

For settlement purposes only, the court certified a class under Federal Rule of Civil Procedure 23(a) and 23(b)(3). The class consists of Jorge Pacheco, the opt-in plaintiffs, and all hourly employees employed at Chickpea restaurants located in New York City at any time from January 11, 2012, through October 24, 2019.

The court found, only for evaluating the settlement, that the Rule 23 requirements were met. It found the class sufficiently numerous, that common issues existed, that the plaintiffs’ claims were typical of the class, and that the plaintiffs and their attorneys could adequately represent the class. It also found that common issues predominated over individual issues and that a class action was superior to other ways of litigating the dispute. Because the certification was for settlement purposes, the court did not address manageability.

The certification applied only to settlement, notice, and distribution of any award. The court appointed Jorge Pacheco, Salvador Loreto, Sorobabel Sierra, Stephanie Bere, and Shanawaj Ahmed as class representatives. It appointed C.K. Lee of Lee Litigation Group, PLLC as class counsel and Advanced Litigation Strategies, LLC as claims administrator.

Notice and Settlement Process

The court found that the proposed settlement had enough potential to justify sending notice to the class and considering the settlement at a fairness hearing. It approved revised notice materials in English and Spanish. The notice would explain the litigation, the settlement class, class counsel, the essential settlement terms, possible attorney-fee and other-payment requests, how to participate, how to opt out or object, how to report an address change, and how to obtain more information.

The court approved the proposed method for distributing the notice. The claims administrator was directed to mail the notice and address-change form by first-class mail using the last known addresses in the defendants’ payroll records. It was also directed to take reasonable steps to locate corrected addresses, including using text messages or telephone calls when available, and to make a second mailing when the first mailing was returned as undeliverable. The defendants were ordered to provide class-member information to the claims administrator and class counsel within 14 calendar days after entry of the order.

Class members who wished to exclude themselves had to submit a signed written request to the claims administrator, postmarked within the period specified in the notice—60 calendar days after the initial mailing. Class members who wished to object to the proposed settlement had to submit written objections by the deadline specified in the notice, also set at 60 calendar days after the initial mailing.

Fairness Hearing and Disposition

The court scheduled a fairness hearing for August 20, 2020, at 4:00 p.m. in Courtroom 6B at 500 Pearl Street, New York, New York. At that hearing, the court would consider final certification of the settlement class, approval of the Fair Labor Standards Act collective action, approval of the Settlement Agreement and plan of allocation, and any requests for attorney fees, expense reimbursement, or service payments.

The order did not finally approve the settlement. It stated that, if the court later approved the Settlement Agreement after the fairness hearing, the named plaintiff, opt-in plaintiffs, and class members who did not timely opt out would release the claims described in that agreement, and non-excluded class members would qualify for settlement payments.

Judge Gabriel W. Gorenstein therefore conditionally certified the settlement class, approved the collective action, approved the notice and distribution procedures, and set dates for the remaining settlement process; the order did not decide the underlying claims on their merits.