Mateos v. SNZ Group Inc.

Background

Liborio Iriarte Mateos sued SNZ Group, Inc., doing business as Café 86; M&S Market 2350 LLC, doing business as Café 86; Muhammad Islam; Enrique Ceron-Casarez; Sahib Singh; and Manjit Singh. He alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law. His claims sought unpaid minimum wages, overtime compensation, spread-of-hours pay, and liquidated damages.

The parties requested approval of a proposed settlement. The agreement would bind Mateos, M&S Market, Sahib Singh, and Manjit Singh. The opinion states that the remaining defendants did not answer the complaint and that Mateos voluntarily dismissed them from the case.

Court’s analysis

The court explained that FLSA claims generally cannot be privately settled with prejudice without approval from the court or the Department of Labor. The court therefore evaluated whether the agreement was fair and reasonable by considering the possible recovery, litigation burdens and risks, the bargaining process, and the possibility of fraud or collusion.

Mateos estimated that damages traceable to the settling defendants were roughly $38,000. He submitted a spreadsheet estimating damages by week based on his hours, applicable minimum-wage and overtime rates, statutory damages, and liquidated damages. The court found this documentation adequate.

The court also found the settlement reasonable in light of the litigation risks. The settling defendants disputed the amount of overtime Mateos worked. The parties stated that the settling defendants could not afford a larger settlement and might seek bankruptcy protection if they were liable for a higher amount. The agreement was reached after multiple sessions with a neutral mediator.

Attorneys’ fees and other terms

The proposed agreement provided for $6,376.36 in attorneys’ fees and $869 in costs, for a total of $7,245.36 in fees and costs. The court found that amount reasonable. It noted that the percentage was approximately one-third of the settlement before costs and approximately 36% after costs. As a cross-check, the court reviewed the lodestar—the reasonable hourly rate multiplied by the reasonable hours worked. Counsel billed at $400 per hour for a partner and $100 per hour for a paralegal, and counsel and the paralegal spent 37.4 hours on the case, producing a lodestar of $12,494. The court found the resulting multiplier of approximately 0.58 reasonable.

The court also found the other settlement provisions reasonable. It stated that the agreement contained no objectionable confidentiality provisions and released only claims related to this case.

Ruling

Judge Edgardo Ramos found the proposed settlement fair and reasonable and approved it. The court dismissed the case with prejudice, directed the clerk to terminate the settlement motion, and closed the case.