Flores de Jesus v. Subway IP Inc.
- Vernon Broderick
- 1:16-cv-06773
- U.S. District Court · Southern District of New York
- 5
In Flores de Jesus v. Subway IP, Judge Broderick approved a $35,000 Fair Labor Standards Act settlement and closed the case.
The settlement resolved the plaintiff’s FLSA claims against Subway IP Inc., allocated $23,333 to the plaintiffs and $11,667 to attorneys’ fees and costs, and left claims against the franchisee available to pursue.
What happened
Flores de Jesus v. Subway IP Inc. was a Fair Labor Standards Act case in which the parties reached a settlement. The settlement was with the franchisor, while the plaintiff could still pursue claims against the franchisee.
The court had previously rejected an earlier settlement because it contained an overly broad release. After reviewing the revised agreement, the court considered the settlement amount, litigation risks, continued litigation costs, negotiations, and possible fraud or collusion. The agreement provided $35,000 total, including $11,667 for attorneys’ fees and costs and $23,333 for the plaintiffs.
Judge Vernon S. Broderick found the revised settlement and the requested attorneys’ fees fair and reasonable. He approved the agreement and directed the Clerk of Court to close the case.
The detailed version
- Flores de Jesus v. Subway IP Inc. · No. 1:16-cv-06773
- Vernon Broderick
- Sept. 8, 2020
Background
The parties told the court that they had settled this Fair Labor Standards Act (FLSA) case. They first submitted a settlement agreement in January 2019, but the court did not approve it because the release was overly broad. The parties later submitted a revised agreement and stated that they had changed it as the court directed.
Because the settlement was a private resolution of FLSA claims and had not been approved by the Department of Labor, the court had to determine whether it was fair and reasonable. The court considered the total circumstances, including the possible recovery, the burdens and costs of continued litigation, the risks faced by the parties, whether experienced counsel negotiated at arm’s length, and whether fraud or collusion appeared possible.
Settlement Amount
The revised agreement provided for a total settlement of $35,000. It allocated $11,667 to attorneys’ fees and costs, leaving $23,333 for distribution to the plaintiffs. Counsel represented that the maximum potential recovery, including additional damages, could be $250,000. The court noted that the plaintiff faced a possible summary judgment motion and the risk that the claims could be dismissed. The settlement involved only the franchisor, and the plaintiff could still pursue claims against the franchisee. Payments were to begin within 21 days after approval.
The court found that the agreement resulted from negotiations between experienced counsel, that continued litigation would create additional costs and proceedings, and that there was no basis to suspect fraud or collusion. The parties had settled before discovery ended.
Attorneys’ Fees and Costs
The agreement requested $11,667 in attorneys’ fees and costs, including $1,071.60 in costs. Counsel submitted time records and cost documentation showing more than $31,560 in time and $1,071.60 in costs. The court found that the requested amount—approximately one-third of the settlement—was regularly approved in FLSA cases, was less than the calculated lodestar, and used an hourly rate of $400 that fell within a reasonable range.
Ruling
The court found the proposed settlement fair and reasonable and approved the parties’ settlement agreement. The Clerk of Court was directed to close the case.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.