Ramirez v. Harishivji Inc.

Background

Cesar Ramirez sued Harishivji, Inc. (doing business as Ashoka), Gauri Shankar, and Anthony Doe, individually and on behalf of others similarly situated. He alleged that the defendants failed to pay minimum and overtime wages required by the Fair Labor Standards Act (FLSA). After reaching a settlement, the parties asked the court to approve their agreement.

Legal standard

The court explained that FLSA wage claims generally cannot be settled without approval from the Department of Labor or a federal district court. A court may approve a settlement only if it is fair and reasonable. Relevant considerations include the plaintiff’s possible recovery, the costs and burdens avoided through settlement, the risks of continued litigation, whether the agreement resulted from negotiations between experienced counsel, and the possibility of fraud or collusion. Courts also examine whether releases are overly broad or confidentiality provisions are highly restrictive. When a settlement includes attorney’s fees, the court separately evaluates whether those fees are reasonable.

Settlement analysis

The agreement required the defendants to pay Ramirez $10,800: $7,200 in damages and $3,600 in attorney’s fees and costs. The parties identified Ramirez’s alleged unpaid wages as $51,000 and estimated that his full recovery could have been as much as $125,658. The defendants disputed Ramirez’s account of the hours he worked and said they intended to present witnesses who would show that he worked significantly fewer hours, potentially reducing or defeating his recovery. The defendants also had several creditors, were on a payment plan with the New York State Department of Taxation, and represented that they would likely declare bankruptcy if the case continued.

The court also noted that the case settled early, avoiding significant litigation expenses; the parties reported extensive, arm’s-length settlement discussions; and the record contained no evidence of fraud or collusion. The release covered claims relating specifically to this lawsuit as of the settlement’s effective date, and the agreement contained no confidentiality provision. The court concluded that the settlement satisfied the relevant fairness factors and was fair and reasonable.

Attorney’s fees and costs

Ramirez’s counsel requested $3,600 in fees and costs, equal to one-third of the total recovery. As a cross-check, the court calculated the lodestar, meaning the reasonable number of hours multiplied by reasonable hourly rates. Counsel’s proposed lodestar was $5,400 in fees plus $566 in costs. Michael Faillace billed four hours at $450 per hour, and Jesse Barton billed 9.6 hours at $375 per hour.

The court found that the case was not particularly complicated and that the work did not require special expertise. It reduced Faillace’s rate to $400 per hour and Barton’s rate to $225 per hour. Those rates produced a lodestar of $3,760: $1,600 for Faillace and $2,160 for Barton. Adding the $566 in costs produced a total of $4,326. Because the requested $3,600 was slightly less than that amount, the court approved the requested fee-and-cost award.

Disposition

Judge Analisa Torres granted the parties’ motion for settlement approval and directed the Clerk of Court to close the case. The opinion approved the settlement; it does not state that the court decided whether the underlying wage allegations were true.