De los Santos Comonfort v. Services Mangia, Inc.
- Edgardo Ramos
- 1:19-cv-09262
- U.S. District Court · Southern District of New York
- 5
In De los Santos Comonfort v. Services Mangia, Judge Ramos denied without prejudice approval of an FLSA settlement because the proposed attorney fees were too high.
Ricardo De los Santos Comonfort, the named defendants, and plaintiff’s counsel were affected: the settlement was not approved as submitted, and the parties were given a choice between revising the agreement to reduce attorney fees and continuing toward trial.
What happened
In De los Santos Comonfort v. Services Mangia, Inc., Ricardo De los Santos Comonfort sued the defendants under the Federal Labor Standards Act and New York Labor Law. The parties asked the court to approve their settlement.
The proposed settlement was $90,000, more than 40% of the plaintiff’s estimated damages of $209,654.33. The court found the settlement itself fair and reasonable because it resulted from mediation and reflected the risks and costs of continuing the case.
The court found the proposed $29,999 attorney-fee payment too high compared with counsel’s $6,865 lodestar calculation. Judge Ramos therefore denied the request for settlement approval without prejudice and gave the parties until October 13, 2020, to submit a revised agreement with lower fees or state that they would continue toward trial.
The detailed version
- De los Santos Comonfort v. Services Mangia, Inc. · No. 1:19-cv-09262
- Edgardo Ramos
- Sept. 29, 2020
Background
Ricardo De los Santos Comonfort brought claims individually and on behalf of others similarly situated against Services Mangia, Inc.; Mangia 57, Inc.; Joanna Sasha & Friends Food Svc Inc.; Sasha Muniak; Pawell Koszalka; Margaret Doe; and Silvia Doe. He alleged violations of the Federal Labor Standards Act (FLSA) and New York Labor Law.
The parties asked the court to approve a settlement agreement. In the Southern District of New York, an FLSA settlement generally requires approval by the court or the Department of Labor. The court evaluates whether the agreement is fair and reasonable by considering the possible recovery, the burdens and expenses of continued litigation, litigation risks, whether the agreement resulted from arm’s-length negotiations between experienced counsel, and possible fraud or collusion.
Court’s Analysis
The agreement provided for a $90,000 settlement reached through mediation. That amount represented more than 40% of the plaintiff’s estimated damages of $209,654.33. The defendants argued that they had paid the plaintiff more than the law required and produced employment records contradicting his claims. The court also noted that the plaintiff no longer worked for the defendants, making undue settlement pressure unlikely. Based on the total circumstances, the court found the settlement amount fair and reasonable.
The court separately reviewed the proposed attorney fees. Plaintiff’s counsel sought $29,999, or one-third of the settlement. Although the court stated that one-third awards are routinely approved in the district, it also said that the amount must be compared with the lodestar—the fees calculated from the attorneys’ reasonable hourly rates multiplied by the hours worked. Counsel’s submissions showed a lodestar of $6,865, making the proposed fee 4.36 times that amount. The court acknowledged the contested legal and factual issues and the settlement negotiations from February through September 2020, but found the proposed fees still too high.
Disposition
The court denied without prejudice the parties’ request for approval of the settlement agreement. The parties could either file, by October 13, 2020, a revised letter addressing the court’s concerns and a revised agreement reducing attorney fees, or file a joint letter stating that they intended to abandon settlement and continue to trial. If they chose to continue to trial, the court would reopen the case and schedule a pretrial conference.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.