Diaz-Caballero v. Midtown Catch Corp.

Background

Ime Diaz-Caballero, also identified in the caption as Jorge, sued Midtown Catch Corp. doing business as Midtown Catch, Michael Cioffi, and Joseph Polizzi. The complaint asserted, among other claims, that Defendants failed to pay minimum and overtime wages required by the Fair Labor Standards Act, a federal wage law. Diaz-Caballero brought the action individually and on behalf of others similarly situated.

The parties reached a settlement and filed a motion asking the Court to approve it.

Settlement standard and analysis

Because the Fair Labor Standards Act contains mandatory wage protections, the Court explained that a private settlement of wage claims requires approval by the Department of Labor or a federal district court. The Court therefore considered whether the agreement was fair and reasonable under the circumstances, including the possible recovery, the costs and burdens of continued litigation, the risks faced by the parties, whether the negotiations were conducted at arm’s length, and any possibility of fraud or collusion.

The settlement required Defendants to pay Diaz-Caballero $31,440 and his counsel $16,560 in attorney’s fees and costs. The parties identified $14,706 in unpaid wages, which could have been increased by liquidated damages and other penalties, but acknowledged that Diaz-Caballero’s recovery could have been as low as $2,000. They represented that the negotiations were conducted at arm’s length, and the Court found no evidence of fraud or collusion.

The Court also reviewed the release. It released claims relating specifically to the claims in the lawsuit as of the settlement’s effective date. The agreement contained no confidentiality provision. The Court concluded that the settlement was fair and reasonable.

Attorney’s fees and costs

The Court separately assessed the requested $16,560 in attorney’s fees and costs. Counsel represented that the amount consisted of one-third of the $48,000 settlement amount plus $560 in costs. The Court compared that request with the lodestar method, which estimates fees by multiplying reasonable hourly rates by reasonable hours worked.

The Court reduced Michael Faillace’s hourly rate from $450 to $400 and Joshua Androphy’s rate from $400 to $350 because courts in the district had repeatedly rejected those proposed rates, and the case and work performed were not particularly complex or sophisticated. The Court accepted the hours billed by the person identified as “PL” and treated that person as a paralegal based on the work performed and billing rate. The Court excluded the hours billed by “CK” because the submission provided no information about that person’s identity, job, or qualifications.

Using the adjusted figures, the Court calculated a lodestar of $10,400 in fees, plus $862 in costs, for a total of $11,262. The requested fee award, excluding costs, was approximately 1.5 times the lodestar. The Court concluded that the overall award was within a reasonable range given the risks of a contingent-fee case and counsel’s substantial success, and it did not change the fee-and-cost amount agreed to in the settlement.

Ruling

Judge Analisa Torres granted the parties’ motion for settlement approval. The Clerk of Court was directed to close the case.