Espinobarros Basurto v. Diala Deli Gourmet Corp.

Background

Evaristo Espinobarros Basurto brought this wage-and-hour case individually and on behalf of others similarly situated against Diala Deli Gourmet Corp., doing business as Diala Deli, and other defendants. The parties consented to the jurisdiction of Magistrate Judge James L. Cott under 28 U.S.C. § 636(c).

The parties submitted a joint “fairness letter” and a fully signed settlement agreement for court approval. The requested review was required under Cheeks v. Freeport Pancake House, which concerns judicial review of settlements in cases under the Fair Labor Standards Act (FLSA), the federal wage-and-hour law.

Court’s analysis

The court explained that settlements in FLSA cases generally receive a strong presumption of fairness because courts are not as well positioned as the parties to assess the settlement’s reasonableness. The court also considered that the defendants’ financial situation during the COVID-19 pandemic could make it difficult to collect damages, which supported finding the settlement reasonable.

After reviewing the parties’ joint letter and settlement agreement, the court found that all settlement terms—including the allocation of attorneys’ fees and costs—appeared fair and reasonable under the circumstances.

Ruling

Judge Cott approved the proposed settlement. The parties were directed to file a fully signed stipulation and order of dismissal with prejudice no later than October 20, 2020, and to dismiss the non-appearing defendants, as the plaintiff had indicated he would. If they did not do so, the court stated that it would direct the clerk to close the case. The order itself approved the settlement and directed the later filing; it did not state that the case had already been dismissed.