Mercado v. 121 Seaman Avenue, LLC
- Sarah Cave
- 1:19-cv-09000
- U.S. District Court · Southern District of New York
- 2
In Mercado v. 121 Seamen Avenue, LLC, Judge Nathan required settlement materials for fairness review and ordered the parties to discuss magistrate-judge consent.
Daniel Mercado and 121 Seamen Avenue, LLC, along with the other parties to the settlement, were required to provide the settlement materials and address magistrate-judge consent.
What happened
In Daniel Mercado v. 121 Seamen Avenue, LLC, the parties told the court that they had reached a settlement in this wage-and-hours case.
The court required them to submit the settlement agreement and a joint explanation by June 21, 2020, including information about the amounts owed, calculations, work hours, wages, and any requested attorney fees. The court also warned that it likely would not approve confidentiality terms or a broad release of all liability without adequate justification.
Judge Alison J. Nathan ordered the parties to discuss whether they would consent to having the assigned magistrate judge handle the rest of the case. The court did not approve the settlement in this order, and it adjourned upcoming conferences and deadlines indefinitely.
The detailed version
- Mercado v. 121 Seaman Avenue, LLC · No. 1:19-cv-09000
- Sarah Cave
- May 19, 2020
Background
The court was advised that the parties had reached a settlement in this Fair Labor Standards Act (FLSA) action. The order does not describe the underlying wage claims or state the proposed settlement amount.
Settlement review
The court explained that, before the settlement could take effect, it had to review and scrutinize the agreement for fairness under Federal Rule of Civil Procedure 41(a)(1)(A)(ii) and the Second Circuit's decision in Cheeks v. Freeport Pancake House, Inc. The court ordered the parties to submit the settlement agreement and a joint letter by June 21, 2020, explaining why the agreement should be approved.
The submission had to address the fairness factors discussed in Wolinsky v. Scholastic Inc.; explain how the settlement amounts were calculated; provide the plaintiff's hours worked and wages in enough detail for the court to follow the calculations; include both sides' estimates if they disagreed about hours or wages; and provide detailed billing records supporting any request for attorney fees. If the agreement included a non-disparagement provision, the parties also had to provide legal authority and arguments showing that provision was fair and reasonable.
The court further advised that it would likely not approve an agreement containing a confidentiality provision or a general release from all liability.
Magistrate-judge consent and case schedule
To speed the case, the court ordered the parties to meet and discuss whether they would consent under 28 U.S.C. § 636(c) to having all further proceedings conducted by the assigned magistrate judge. If both parties consented and the court approved the required form, the magistrate judge would conduct the remaining proceedings, and any appeal would go directly to the U.S. Court of Appeals for the Second Circuit. Either party could withhold consent without negative consequences. If either party declined, the parties had to file a joint letter within one week after submitting the settlement agreement, without identifying who declined. The court adjourned all upcoming conferences and deadlines indefinitely.
Disposition
Judge Alison J. Nathan ordered the settlement materials and the magistrate-judge-consent discussion described above. This order did not approve or reject the settlement and did not decide the underlying FLSA claims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.