Tovar v. The Empire Shoe Repairing Corp.
- Vernon Broderick
- 1:19-cv-03474
- U.S. District Court · Southern District of New York
- 5
In Tovar v. The Empire Shoe Repairing Corp., Judge Broderick approved the parties’ fair and reasonable Fair Labor Standards Act settlement and closed the case.
Ciro Fabio Tovar, The Empire Shoe Repairing Corp. doing business as Empire Shoe Repair, the other defendants identified in the caption, and Plaintiff’s counsel were affected by the approved settlement and fee allocation.
What happened
In Tovar v. The Empire Shoe Repairing Corp., the parties reached a settlement in a Fair Labor Standards Act case. Because the Department of Labor had not approved the settlement, the court reviewed whether it was fair and reasonable.
The settlement totaled $42,500, including $14,508.67 for attorney’s fees and costs and $27,991.33 for Ciro Fabio Tovar. The court considered the disputed hours, the defendants’ defenses, the risks and costs of continuing the case, the parties’ mediation and negotiations, and the absence of evidence of fraud or collusion.
Judge Vernon S. Broderick found the settlement and attorney’s fees fair and reasonable, approved the agreement, and directed the Clerk of Court to close the case.
The detailed version
- Tovar v. The Empire Shoe Repairing Corp. · No. 1:19-cv-03474
- Vernon Broderick
- May 6, 2020
Background
The court was advised that the parties had settled this Fair Labor Standards Act (FLSA) case. The defendants are identified in the caption as The Empire Shoe Repairing Corp., doing business as Empire Shoe Repair, and other defendants. The court explained that parties generally may not privately settle FLSA claims with prejudice without approval from the court or the Department of Labor. Because there was no Department of Labor approval, the court independently reviewed whether the proposed settlement was fair and reasonable.
Settlement Review
The agreement provided for a total settlement of $42,500. Of that amount, $14,508.67 was allocated to attorney’s fees and costs, leaving $27,991.33 for Plaintiff Ciro Fabio Tovar. Plaintiff’s counsel represented that Plaintiff’s maximum possible recovery was $178,459.06, including actual damages, penalties, and interest.
The court considered the parties’ stated litigation risks. The defendants disputed the number of hours Plaintiff claimed to have worked, asserted that he had taken multiple vacations during his employment, and disputed liquidated damages. The defendants also represented that reduced business limited their ability to pay a full judgment. The court noted that the settlement resulted from arm’s-length negotiations and a mediation session, occurred before discovery had ended, avoided the expense of further proceedings and trial, and showed no basis for finding fraud or collusion. Based on the total circumstances, the court found the settlement a fair and reasonable resolution.
Attorney’s Fees and Costs
The requested $14,508.67 in attorney’s fees and costs included $513 in costs and represented approximately one-third of the total settlement. Plaintiff’s counsel submitted billing records showing $6,838 in fees and costs and stated that Plaintiff’s retainer agreement provided for a 40 percent contingency fee.
The court explained that courts regularly approve attorney’s fees equal to one-third of an FLSA settlement. It found that counsel had investigated and researched the claims, appeared at an initial pretrial conference and mediation, and negotiated and completed the settlement. The court also noted that the requested amount was 2.5 times the lodestar, meaning the amount calculated from counsel’s documented time and rates. It concluded that the requested fees and costs were fair and reasonable.
Disposition
Judge Vernon S. Broderick found the proposed settlement fair and reasonable, approved the parties’ settlement agreement, and directed the Clerk of Court to close the case.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.