Nestor Victor v. Sams Deli Grocery Corp.

Background

Pastor Nestor Victor brought claims individually and on behalf of others similarly situated against Sams Deli Grocery Corp., doing business as Sam’s Deli, Sameer Ali, Walid Mohamed Seidi, and Lou Doe. The opinion states that the claims were brought under the Fair Labor Standards Act. On September 30, 2020, the court was notified that the parties had reached an agreement on all issues through the magistrate judge.

Court’s Order

The court did not decide the underlying claims and did not approve or reject the settlement. It ordered that the parties could not dismiss the action with prejudice based on their settlement unless the settlement was approved by either the court or the Department of Labor. If the parties sought court approval, they had to file a joint letter motion and the settlement agreement on the public docket by October 30, 2020. The letter had to explain why the proposed settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. It also had to address whether there was a genuine dispute about the hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees.

The court stated that, absent special circumstances, it would not approve a settlement filed under seal or in redacted form. The order also explained that the Second Circuit had not decided whether the parties could settle an Fair Labor Standards Act case without court or Department of Labor approval and dismiss it without prejudice under Federal Rule of Civil Procedure 41(a)(1)(A). If the parties chose that route, they had to file a stipulation on the public docket within 30 days, accompanied by an affirmation from the plaintiff’s counsel stating that the plaintiff or plaintiffs had been clearly advised that the settlement would not prevent another lawsuit against the same defendants and affirming that the settlement contained no release of the defendants. The court warned that this option could allow the case to be reopened in the future.

The parties could alternatively consent to have the assigned magistrate judge conduct all further proceedings and enter a final disposition by submitting the consent form by October 15, 2020. The court stated that withholding consent would not have adverse substantive consequences. If no consent form, letter, or stipulation was filed by October 30, 2020, the court scheduled a conference for November 6, 2020. Judge Valerie Caproni therefore issued procedural instructions concerning the proposed settlement and next steps; the opinion does not state that the case was dismissed or that the settlement was approved.