Ray v. 1650 Broadway Associates Inc.

Background

The case was brought by Kevin Ray, Brian Esposito, Samuel Ladd, and Jenna Miller on behalf of themselves and others similarly situated against 1650 Broadway Associates Inc., doing business as Ellen’s Stardust Diner, and Kenneth Sturm. The opinion concerns final approval of a class-action and Fair Labor Standards Act (FLSA) collective-action settlement.

The court held a fairness hearing on February 23, 2021. Before that hearing, the court had preliminarily approved the settlement agreement, conditionally certified the proposed classes, appointed the named plaintiffs as class representatives, appointed class counsel, approved the settlement notice, appointed Rust Consulting as claims administrator, and scheduled the fairness hearing. After reviewing the settlement under Federal Rule of Civil Procedure 23 and the applicable settlement factors, the court granted final approval of the settlement agreement and settlement class.

Attorneys’ Fees and Costs

Class counsel initially reported approximately 753.8 hours of attorney, paralegal, and staff work and an aggregate lodestar of approximately $290,880, but had not supplied contemporaneous time records. After the court requested those records at the fairness hearing, counsel provided them on February 26, 2021.

The court excluded counsel’s work relating to separate proceedings before the National Labor Relations Board and the New York State Department of Labor because counsel had not shown that the legal standard allowing fees for related administrative proceedings applied in this FLSA case. The court found that $268,052.50 for work litigating the FLSA claims was fair and reasonable. It also awarded $5,567.69 in costs.

In evaluating the fee request, the court considered counsel’s time and labor, the case’s complexity, the risks of continued litigation, the quality of representation, the relationship between the fee and settlement, and public-policy considerations. The court noted that the fee was less than one-third of the settlement fund and consistent with fee awards in similar cases in the district.

Order

The court certified the Federal Rule of Civil Procedure 23 class action and FLSA collective action for purposes of implementing the settlement. The class consists of 251 present and former servers employed by and identified by the defendants.

The court found the settlement agreement fair, reasonable, adequate, and binding on all class members and defendants. It dismissed with prejudice all claims by the class representatives, all claims by class members, and all counterclaims asserted by the defendants.

The defendants must pay the $1,450,000 settlement fund to the claims administrator in two equal installments of $725,000. The claims administrator must distribute settlement checks to class members under the settlement agreement, pay each class representative service awards of $5,000 in two parts, and pay the awarded attorneys’ fees and costs in two parts, subject to the settlement terms and the amount due for claims-administration services. Judge Vernon S. Broderick retained jurisdiction to oversee compliance with the settlement agreement.