Garcia v. 120 MP, LLC
- James Oetken
- 1:18-cv-06408
- U.S. District Court · Southern District of New York
- 5
In Garcia v. 120 MP, Judge Oetken denied approval of an $80,000 wage settlement because its proposed attorney-fee allocation was unreasonable.
The ruling affected the FLSA plaintiffs, defendants, and plaintiffs’ counsel: the court did not approve their proposed settlement because of the proposed attorney-fee allocation and directed the parties to state how they would proceed.
What happened
Garcia v. 120 MP, LLC was a wage case under the Fair Labor Standards Act. The parties told the court they had reached an $80,000 settlement, with $49,523 proposed for attorney’s fees and $1,477 for costs.
The court found the total settlement amount fair and reasonable, but found the proposed attorney-fee allocation unreasonable. The fee request included vague time entries, excessive hours from using twelve timekeepers, work by senior attorneys that could have been delegated, and hourly rates higher than ordinarily charged in the district.
Judge J. Paul Oetken denied the proposed settlement. He said the court would approve an agreement with attorney’s fees no higher than $25,338.75 and directed the parties to report whether they would seek a new agreement or proceed to trial.
The detailed version
- Garcia v. 120 MP, LLC · No. 1:18-cv-06408
- James Oetken
- May 8, 2020
Background
The parties notified the court that they had reached a settlement in this Fair Labor Standards Act (FLSA) case and submitted the proposed agreement for approval. The agreement called for defendants to pay plaintiffs $80,000. It allocated $49,523 to attorney’s fees and $1,477 to costs.
Court’s analysis
Under the required review of FLSA settlements, the court examined whether the agreement was fair and reasonable. It found that the $80,000 total settlement amount was fair and reasonable, but separately concluded that the proposed attorney-fee allocation was unreasonable.
The court evaluated the fee request using the lodestar method, which generally calculates a reasonable fee by multiplying a reasonable hourly rate by a reasonable number of hours. It found several problems with counsel’s application:
- Some time entries were too vague to show that the claimed hours were reasonable. Examples included entries describing a “call,” an “internal discussion,” preparation for a settlement meeting, or analysis of liability without enough detail. - The case was relatively straightforward, yet twelve timekeepers worked on it, including six attorneys. The court found this overstaffing unwarranted. - The most experienced attorneys with the highest rates performed much of the work, including tasks that could have been handled by more junior attorneys. - The hourly rates were higher than those ordinarily charged in the district for similar matters. The court determined reasonable rates of $450 per hour for C.K. Lee, $350 for Anne Seelig, $300 for the associates, and $200 for the paralegals.
To account for the deficiencies, the court reduced the requested attorney hours by 25 percent. Applying the reduced hours and rates produced a lodestar amount of $25,338.75. The court found no basis to adjust that amount.
Ruling
Judge J. Paul Oetken denied approval of the proposed settlement because the $49,523 attorney-fee allocation was unreasonable. The order did not approve a revised settlement or impose a final fee award. Instead, the court advised that it would approve a settlement with an attorney-fee award not exceeding $25,338.75 and directed the parties to file a letter by May 22, 2020, stating whether they intended to negotiate a new agreement or proceed to trial.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.