Saldana v. DeJuan Stroud, Inc.

Background

The parties notified the court that mediation had resulted in an agreement resolving all issues. Because the case included claims under the Fair Labor Standards Act (FLSA), the court addressed how the settlement could be finalized and how the case could be dismissed.

Court’s order

The court ordered that the parties could not dismiss the action with prejudice unless the settlement agreement was approved by either the court or the Department of Labor. A dismissal with prejudice would end the action and bar the claims from being brought again. If the parties wanted court approval, they had to file a joint letter motion and the settlement agreement on the public docket by October 30, 2020. The motion had to explain why the settlement was fair and reasonable, including the plaintiff’s possible recovery, the burdens and expenses avoided, litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. It also had to address whether a genuine dispute existed about hours worked or compensation owed and how much the plaintiff’s attorney would seek in fees.

The court stated that it generally would not approve a settlement filed under seal or in redacted form without special circumstances. It also warned that it was unlikely to approve a general release, or a release of claims unrelated to the wage-and-hour claims in the complaint and related state-law claims. If the parties believed unusual circumstances justified a broader release, their motion had to explain why. The court warned that failing to follow these instructions could lead to denial of the motion and sanctions against the attorneys.

The court also described a different option: filing a stipulation under Federal Rule of Civil Procedure 41(a)(1)(A) to dismiss the case without prejudice without court or Department of Labor approval. That filing had to be made on the public docket within 30 days and include an affirmation from the plaintiff’s counsel stating that the plaintiff had been clearly told the settlement would not prevent another lawsuit against the same defendants and affirming that the settlement agreement contained no release. The court warned that this option could allow the case to be reopened in the future.

Disposition

Judge Valerie Caproni did not approve or reject the settlement in this order. Instead, she set the procedures and deadlines for seeking approval or filing a dismissal without prejudice. She ordered that a conference would be held on November 6, 2020, if no letter motion or stipulation was filed by October 30, 2020.