Moody v. Inspire Summits LLC
- Sarah Cave
- 1:20-cv-05834
- U.S. District Court · Southern District of New York
- 4
In Moody v. Inspire Summits, Judge Woods declined to approve the proposed Fair Labor Standards Act settlement and ordered the parties to choose a permitted dismissal process.
B. Moody, K. O'Brien, Inspire Summits LLC, and Christopher P. Skroupa, whose proposed settlement was not approved and who were directed to follow one of the court's specified dismissal procedures.
What happened
In Moody v. Inspire Summits LLC, the parties told the court they had settled claims that included claims under the Fair Labor Standards Act. The court reviewed their letter and proposed agreement but said it lacked enough information to evaluate the settlement properly.
The court declined to approve the proposed settlement. It directed the parties either to seek approval to dismiss the Fair Labor Standards Act claims with prejudice under Rule 41(a)(2), or to submit a stipulation dismissing those claims without prejudice under Rule 41(a)(1)(A). It also gave deadlines for the parties to address consent to a magistrate judge and, if necessary, explain why the settlement was fair.
Judge Gregory H. Woods issued the February 13, 2021 order. The order did not decide the underlying claims or approve the proposed settlement.
The detailed version
- Moody v. Inspire Summits LLC · No. 1:20-cv-05834
- Sarah Cave
- Feb. 13, 2021
Background
B. Moody and K. O'Brien sued Inspire Summits LLC and Christopher P. Skroupa. The parties informed the court that they had reached a settlement, including claims under the Fair Labor Standards Act (FLSA), a federal law governing certain wage and hour rights. They submitted a joint letter and proposed settlement agreement.
Court's analysis
The court said it did not have enough information to properly assess the proposed settlement and therefore declined to approve it. Relying on the Second Circuit's decision in Cheeks v. Freeport Pancake House, the court explained that FLSA claims cannot be dismissed with prejudice—that is, permanently—under the parties' automatic dismissal procedure in Federal Rule of Civil Procedure 41(a)(1)(A). A dismissal with prejudice instead requires court approval under Rule 41(a)(2).
The court also stated that it would accept a stipulation dismissing the FLSA claims without prejudice, meaning the order would not permanently bar those claims, under Rule 41(a)(1)(A). If the parties sought approval of a settlement and dismissal with prejudice, they had to explain why the settlement was fair under the factors discussed in Wolinsky v. Scholastic Inc., attach the settlement agreement, and address any attorney-fee request. The court said it would not approve an agreement containing a confidentiality provision and would not allow settlement-related documents to be filed under seal without a specific showing overcoming the presumption of public access.
Orders and deadlines
The parties were ordered to discuss whether they would voluntarily consent to have all further proceedings conducted by the assigned magistrate judge. If both consented, they had to file the required consent form by March 1, 2021. If either party declined, the parties had to notify the court by that date without identifying the nonconsenting party. If they did not consent and wanted approval of a dismissal with prejudice, they had to file a joint motion by March 8, 2021 explaining why the settlement was fair. Alternatively, they could submit a stipulation dismissing the FLSA claims without prejudice by March 1, 2021.
Result
Judge Gregory H. Woods declined to approve the proposed settlement and directed the parties to proceed through one of the two described dismissal processes. The order did not resolve the merits of the underlying claims.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.