Fisher v. SD Protection Inc.

Background

Michael Fisher sued SD Protection Inc. and other defendants under the Fair Labor Standards Act of 1938 (FLSA) and the New York Labor Law (NYLL). His complaint was brought for himself and others similarly situated as a proposed class and collective action. The complaint sought unpaid overtime and statutory penalties for allegedly deficient wage notices and wage statements.

The parties agreed to a $25,000 settlement. The proposed allocation gave Fisher $2,000 and gave Lee Litigation Group, his counsel, $23,000 in fees and costs. The district court’s July 27, 2018 order had found the total settlement fair and reasonable, but awarded counsel only $1,695 in documented costs and less than the requested fees. The case remained open while settlement payments were being made.

The Court of Appeals later vacated that order and directed the district court to reconsider costs and evaluate the requested fees without treating proportionality as the deciding factor. On remand, defendants took no position on the next steps but would not agree to pay more than the previously agreed gross amount of $25,000.

Court’s assessment of the proposed settlement

The court stated that it would find the total $25,000 settlement fair and reasonable under the standards used to review FLSA settlements. It also stated that Fisher should receive $11,170, consisting of:

- $585 in unpaid FLSA wages; - $585 in FLSA liquidated damages; - $5,000 in NYLL statutory damages for wage-notice violations; and - $5,000 in NYLL statutory damages for wage-statement violations.

The court concluded that Lee Litigation Group’s proposed fees and costs were not reasonable. It considered the factors from Goldberger v. Integrated Resources, Inc., which courts use to evaluate fee requests, including the time and labor involved, the case’s complexity and risk, the quality of representation, the requested fee compared with the settlement, and public-policy concerns.

The court found that counsel had achieved only minimal success because no class or collective relief was obtained and the proposed settlement provided no recovery for Fisher’s NYLL claims, despite counsel’s own damages calculation. The court also found that the case was relatively uncomplicated, lasted less than seven months, involved no class-certification or dispositive motions, and included limited discovery.

The court criticized counsel’s hourly rates, which were $550 for C.K. Lee and $450 for Anne Seelig, as unreasonably high. It also found that counsel recorded excessive hours, used vague time entries, and had inaccurately described how other courts had treated the firm’s billing rates. The court concluded that $9,096.40 in attorney fees was reasonable.

Costs and proposed allocation

The court initially awarded $1,695 in costs because that was the amount supported by receipts in the district court’s file. On remand, it gave counsel the benefit of the doubt regarding additional receipts submitted to the Court of Appeals and recommended $4,733.60 in costs.

Thus, the court stated that counsel should receive a total of $13,830: $4,733.60 in costs and $9,096.40 in attorney fees. Fisher should receive $11,170. These amounts total the previously agreed $25,000 settlement.

Order and disposition

The court directed the plaintiff and defendants to submit written comments and propose a timetable for the next steps by April 15, 2020, at noon. It did not enter a new settlement approval order. It denied as moot counsel’s request to enforce the settlement and enter judgment for $21,000 in the alleged outstanding balance plus $1,650 for enforcement-related time, because there was no currently approved settlement. The court stated that it was prepared to conduct a trial on the merits if the parties could not reach a new settlement.