Fisher v. SD Protection Inc.

Background

Michael Fisher brought claims under the Fair Labor Standards Act of 1938 and the New York Labor Law. The parties entered a settlement agreement requiring the defendants to pay $25,000, inclusive of costs and attorney fees, in full satisfaction of Fisher’s claims. The agreement initially proposed $2,000 for Fisher and $23,000 for his counsel.

On July 27, 2018, the court found the total settlement amount fair and reasonable but modified the allocation. It approved $15,055 for Fisher and $9,945 for Lee Litigation Group, PLLC, including $1,695 in documented costs and $8,250 in attorney fees. Lee Litigation Group appealed the reduction of its requested fees and costs.

The Court of Appeals later vacated the July 27 order and directed the district court to reconsider the costs and evaluate the requested fees without treating proportionality as outcome-determinative. The district court then stated that it would continue to approve the $25,000 total settlement, recommended $4,733.60 in costs and $9,096.40 in attorney fees, and allocated $11,170 to Fisher. Fisher’s counsel accepted that proposed allocation. The opinion also states that the defendants had already paid $4,000 and that Fisher’s counsel reported that Sandra Dominguez Mercado had attempted to withdraw from the settlement because of financial inability to comply.

Ruling

The court held that the $25,000 settlement remained fair and reasonable under the standards governing court approval of Fair Labor Standards Act settlements. It approved the following allocation:

- $11,170 to Michael Fisher for his Fair Labor Standards Act and New York Labor Law claims; - $4,733.60 to Lee Litigation Group for costs; and - $9,096.40 to Lee Litigation Group as attorney fees.

The court directed that the $4,000 already paid by the defendants be subtracted from those amounts. It also ruled that the defendants could not avoid the settlement obligations because a court-approved settlement is binding, particularly where the defendants had already made a payment under the agreement.

The court explained that proportionality can matter when the plaintiff’s recovery and counsel’s fees come from one lump-sum settlement because excessive fees can reduce the plaintiff’s recovery. But it approved the fees here based on its evaluation of their reasonableness rather than using proportionality as the deciding factor.

Finally, Judge Richard M. Berman denied defense counsel’s April 14, 2020 motion to withdraw as counsel without prejudice, stating that the denial would facilitate payment of the remaining settlement balance.