Saavedra v. Pick & Pack Produce Inc

Background

The parties jointly asked the court to approve their fully executed settlement agreement under the settlement-review requirement described in Cheeks v. Freeport Pancake House, Inc. The agreement required Pick & Pack Produce Inc., doing business as Lydig Pick & Pack, and Yoon Jai Lee to pay $20,000 to settle Alberto Saavedra’s claims under the Fair Labor Standards Act and New York Labor Law.

The parties stated that the settlement resulted from arms-length bargaining before a neutral mediator and represented approximately 57% of Saavedra’s estimated actual damages, excluding liquidated damages, attorneys’ fees, and costs. The agreement allocated $12,793.34 to Saavedra and $7,206.66 to his attorneys for fees and expenses.

Settlement Terms and Fee Request

The agreement contained a unilateral, limited release covering wage-and-hour claims. It also included a non-disparagement clause with an exception allowing the parties to discuss or disclose the facts alleged in the litigation, the parties’ factual or legal positions, truthful statements about Saavedra’s litigation experience, the lawsuit, and the settlement. The court found that exception sufficient to make the clause acceptable.

Counsel’s proposed fee award was described as one-third of the gross settlement payment and was lower than counsel’s lodestar, meaning the fees calculated from the attorney’s documented time and billing rates. Counsel also requested $550 in costs: $400 for the filing fee and $150 in service fees.

Court’s Ruling

The court took judicial notice of the $400 filing fee but declined to approve the additional $150 because counsel had not submitted authenticated expense records, despite the court’s earlier instruction to provide documentation for proposed fees and costs. The court also stated that allowing the parties to supplement the missing expense records would be inappropriate because its earlier instruction had been clear.

Judge Barbara Moses therefore denied the application for approval of the settlement agreement without prejudice to a renewed motion. The renewed motion had to limit the total award of fees and expenses to $7,056.66, described by the court as one-third of the total settlement consideration plus the $400 filing fee. The renewed motion was due by January 5, 2021, and could be submitted as a letter-motion or stipulation stating that the parties agreed to cap counsel’s aggregate fees and expenses at that amount. The opinion also noted that, under Fisher v. SD Protection Inc., the court could not rewrite an agreement containing an unsupported fee or expense award; its options were to accept the settlement, reject it while allowing time for a different settlement, or proceed with litigation.