Marcusse v. Citizens Arts Club, Inc.

Background

Dillon Marcusse, Edward Miskie, Philip Portolano, Adam Sperandio, and Christina Mavronas sued Citizens Arts Club, Inc., doing business as Norwood, Alan Linn, and Camille Parson. They alleged, among other things, that the defendants failed to pay required minimum and overtime wages under the Fair Labor Standards Act and the New York Labor Law, and failed to provide proper wage notices and statements.

The parties reached a settlement and asked the court to approve it. The opinion states that the settlement was on behalf of the plaintiffs individually, not on a collective or class-wide basis.

Settlement approval

Under the Fair Labor Standards Act, wage claims cannot be settled without approval by the Department of Labor or a federal district court. The court therefore evaluated whether the agreement was fair and reasonable. It considered the plaintiffs’ possible recovery, the burdens and expenses of continuing the litigation, litigation risks, whether the agreement resulted from arm’s-length negotiations by experienced counsel, and whether there was evidence of fraud or collusion.

The settlement provided a total recovery of $62,506.56, allocated as follows:

- $8,922.99 to Marcusse; - $4,874.89 to Miskie; - $4,519.25 to Portolano; - $6,869.94 to Sperandio; - $10,237.10 to Mavronas; and - $25,002.39 to plaintiffs’ counsel as attorney’s fees, plus $2,080 in expenses.

Plaintiffs’ counsel estimated the plaintiffs’ possible damages at higher amounts based on payroll records and discussions with the plaintiffs. The defendants denied violating the federal or state wage laws and disputed the amount the plaintiffs could recover. The parties stated that continued litigation would require reviewing hundreds or thousands of additional documents, complex motion practice, and numerous depositions. They also stated that they negotiated at arm’s length, and the court found no evidence of fraud or collusion.

The court found that the release covered only wage-and-hour-related claims. The agreement did not contain a confidentiality provision. Although it included a provision barring defamation, it allowed the plaintiffs to make truthful statements about their litigation experience and the facts underlying the case. The court concluded that the settlement was fair and reasonable.

Attorney’s fees and expenses

The requested attorney’s fee was 40 percent of the settlement proceeds, or $25,002.39. Counsel’s billing records showed 262.12 hours of work and a lodestar amount—the total of hours multiplied by the court-approved hourly rates—of $66,184.25. The court accepted the stated hourly rates because they matched rates typically approved in the district. Because the requested fee was substantially lower than the lodestar amount, the court did not disturb the agreed fee award. It also found the $2,080 in filing, service, copying, and other expenses reasonable.

Disposition

The parties’ motion for settlement approval was GRANTED. The Clerk of Court was directed to close the case. The court approved the settlement but did not decide whether the defendants had violated the Fair Labor Standards Act or the New York Labor Law.