Carmona Varillas v. Mini Mint, Inc.
- Vernon Broderick
- 1:18-cv-11104
- U.S. District Court · Southern District of New York
- 4
In Julio Carmona Varillas v. Mini Mint, Inc., Judge Broderick approved a fair and reasonable Fair Labor Standards Act settlement and closed the case.
The two plaintiffs, Mini Mint, Inc. and the other defendants, and plaintiffs’ counsel were affected by the approved settlement and its allocation of attorney’s fees and costs.
What happened
In Julio Carmona Varillas v. Mini Mint, Inc., the parties reached a settlement in a case under the Fair Labor Standards Act, a federal wage law. The court independently reviewed the agreement and supporting materials.
The agreement provided $52,500 total, including $17,766.68 for attorney’s fees and costs and $34,733.32 for the plaintiffs. The court considered the plaintiffs’ possible recovery, the risks and costs of continuing the case, the parties’ negotiations, and the absence of evidence of fraud or collusion.
Judge Vernon S. Broderick ruled that the settlement and the requested attorney’s fees were fair and reasonable. He approved the agreement and directed the Clerk of Court to close the case.
The detailed version
- Carmona Varillas v. Mini Mint, Inc. · No. 1:18-cv-11104
- Vernon Broderick
- May 6, 2020
Background
The parties informed the court that they had settled this case under the Fair Labor Standards Act (FLSA). The court explained that FLSA claims generally cannot be privately settled in a way that permanently ends them unless the court or the Department of Labor approves the settlement. Because there was no Department of Labor approval, the court reviewed whether the proposed settlement was fair and reasonable.
Settlement amount
The agreement called for a total settlement of $52,500. Of that amount, $17,766.68 was allocated to attorney’s fees and costs, leaving $34,733.32 for the plaintiffs. Counsel represented that the maximum possible recovery was $109,242.64 for Plaintiff Carmona and $72,244.72 for Plaintiff Colmenares.
The court recognized that the settlement was only a portion of the amount the plaintiffs claimed they could recover. It nevertheless found the settlement reasonable because the defendant had consistently argued that the plaintiffs were properly compensated through a tip credit. If that defense succeeded, the plaintiffs might receive no recovery. The court also considered that the agreement resulted from arm’s-length negotiations after two mediation sessions and that continued litigation could require costly motion practice or a trial. The court found no basis to believe that fraud or collusion was involved.
Attorney’s fees and costs
The settlement provided $17,766.68 in attorney’s fees and costs, including $400 in costs. That amount was about one-third of the total settlement. Plaintiffs’ counsel submitted billing records showing $7,305 in fees and costs and represented that the plaintiffs’ retainer agreement provided for a 40 percent contingency fee.
The court found that counsel had investigated and researched the claims, participated in two mediations, and negotiated and completed the settlement. It concluded that the one-third fee was reasonable compensation rather than a windfall and noted that the requested amount was 2.4 times the lodestar, meaning the documented time-based fee calculation.
Ruling
Judge Vernon S. Broderick found the proposed settlement fair and reasonable, approved the settlement agreement, and directed the Clerk of Court to close the case.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.