Juca v. Crystal Room, L.P.
- Vernon Broderick
- 1:21-cv-02855
- U.S. District Court · Southern District of New York
- 3
In Juca v. Crystal Room, Judge Broderick required settlement information before evaluating the proposed dismissal of FLSA claims.
Bolivar Juca and Crystal Room, L.P., along with the other defendants identified in the caption; the order required the parties to submit settlement information and any attorney-fee support.
What happened
In Juca v. Crystal Room, L.P., Bolivar Juca filed a notice of voluntary dismissal without prejudice on May 20, 2021. The court explained that the parties had not yet provided the settlement terms for review.
The court said it requires review of settlements resolving Fair Labor Standards Act claims, including dismissals without prejudice, to determine whether the agreement is fair and reasonable. The court also requires separate support for any attorney-fee award.
Judge Vernon S. Broderick ordered the parties to submit the settlement terms and a joint letter by June 21, 2021. The order did not itself approve or reject the settlement or state that the case was dismissed.
The detailed version
- Juca v. Crystal Room, L.P. · No. 1:21-cv-02855
- Vernon Broderick
- May 21, 2021
Background
Bolivar Juca filed a notice of voluntary dismissal without prejudice on May 20, 2021. The opinion states that the case involved claims under the Fair Labor Standards Act (FLSA). The court addressed whether it could accept a dismissal connected to a private settlement without first reviewing the settlement.
Court’s analysis
The court explained that parties may not privately settle FLSA claims with prejudice without approval from the district court or supervision by the Department of Labor. Under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., the court must determine whether an FLSA settlement is fair and reasonable. The opinion stated that the Second Circuit had reserved the separate question whether the same review is required for a voluntary dismissal without prejudice and had not definitively resolved that question.
Judge Broderick stated that, absent further guidance from the Second Circuit, he also requires this review for FLSA dismissals without prejudice. The court identified five factors from prior decisions: the plaintiff’s possible recovery; whether the settlement avoids expected burdens and expenses; the seriousness of the litigation risks; whether experienced counsel negotiated at arm’s length; and the possibility of fraud or collusion. If the settlement includes attorney’s fees, the court must separately assess whether those fees are reasonable and requires factual support, including contemporaneous billing records showing each attorney’s date, hours, and work performed.
Order
The court ordered the parties, by June 21, 2021, to provide the terms of any settlement reached so the court could determine whether they were fair and reflected a reasonable compromise of disputed issues. The parties also had to submit a joint letter of no more than five pages explaining why they believed the settlement was fair and reasonable, including information about the five identified factors. If the agreement included attorney’s fees, the parties had to provide evidence supporting the fee award.
The opinion does not state that the court approved the settlement, formally dismissed the case, or rejected the voluntary-dismissal notice.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.