Arriaga v. Nipa Thai Restaurant Corp.
- Vernon Broderick
- 1:15-cv-00213
- U.S. District Court · Southern District of New York
- 4
In Arriaga v. Nipa Thai Restaurant Corp., Judge Broderick approved the parties’ $42,500 Fair Labor Standards Act settlement and closed the case.
The approval affected the plaintiffs, the defendant corporations, and plaintiffs’ counsel by authorizing the $42,500 settlement, including the stated fees and costs, and ending the case in the district court.
What happened
In Arriaga v. Nipa Thai Restaurant Corp., the parties told the court they had settled claims under the Fair Labor Standards Act, a federal wage law. They asked the court to review and approve their agreement.
The agreement provided $42,500 total, including $14,450.19 for attorneys’ fees and costs and $28,049.81 for the plaintiffs. The court considered the plaintiffs’ possible recovery, the risks and costs of continuing the case, the defendants’ financial circumstances, the negotiations, and whether fraud or collusion was involved.
Judge Vernon S. Broderick found the settlement and attorneys’ fees fair and reasonable, approved the agreement, and directed the Clerk of Court to close the case.
The detailed version
- Arriaga v. Nipa Thai Restaurant Corp. · No. 1:15-cv-00213
- Vernon Broderick
- Sept. 8, 2020
Background
The parties reached a settlement in this Fair Labor Standards Act (FLSA) case and submitted their agreement for court approval. The opinion states that private settlements of FLSA claims requiring a bar on further claims need approval from either the district court or the Department of Labor. Because there was no Department of Labor approval, the court reviewed whether the agreement was fair and reasonable.
Settlement Amount
The agreement provided for a total settlement of $42,500. It allocated $14,450.19 to attorneys’ fees and costs, leaving $28,049.81 for distribution to the plaintiffs. Counsel represented that the maximum potential recovery, including additional damages, was $103,169.58 for Alejandro Arriaga and $89,586.53 for Eleuterio Jeronimo.
The court recognized that the settlement was only a portion of the claimed potential recovery. It nevertheless found the amount reasonable because the defendants were corporations whose ability to pay a judgment was uncertain: one restaurant was no longer operating, and the other had been dissolved in 2017. The case had settled before discovery closed, so rejecting the agreement could have led to additional proceedings, motions, and trial costs. The court also found that experienced counsel had negotiated at arm’s length and found no basis to believe that fraud or collusion occurred.
Attorneys’ Fees and Costs
The requested fees and costs totaled $14,450.19, approximately one-third of the settlement. Plaintiffs’ counsel submitted contemporaneous time records and expense information totaling more than $18,000 and reflecting more than 60 hours of work. Although counsel did not expressly state an hourly rate, the records indicated an hourly rate of $300 based on $18,000 in fees, which the court found within the range of reasonable rates in the district. The court also noted that one-third fees are regularly approved in FLSA cases and that the requested amount was less than the calculated lodestar, an estimate based on reasonable hours multiplied by a reasonable hourly rate.
Ruling
Judge Vernon S. Broderick found the proposed settlement agreement fair and reasonable and approved it. The court also found the attorneys’ fees fair and reasonable. The Clerk of Court was directed to close the case.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.