De La Cruz v. Manhattan Parking Group LLC d/b/a Manhattan Parking Group

Background

Carlos Martin De La Cruz brought this case against Manhattan Parking Group LLC and other defendants. The parties had submitted a motion for preliminary approval of a proposed settlement, along with a proposed settlement agreement, notice, opt-out form, and proposed order.

Court’s Questions

The court scheduled a conference for July 22, 2021, concerning the pending motion. It directed the parties to file a joint letter by July 19 addressing several issues:

- Notice and language access: The parties were asked to estimate how many proposed class members do not speak English fluently, identify the languages they speak, and explain whether the proposed notice and opt-out form would be translated. - Opting out: The court noted that the settlement agreement and notice said that a class member who wanted to leave the settlement had to state that he or she was “opting out,” while the proposed form instead said, “I DO NOT WANT TO JOIN THE LAWSUIT.” The court said these documents should use consistent language indicating that the class member was actively excluding himself or herself from the class. - Proposed class and collective action: The proposed order referred to conditional certification of a Rule 23(b)(3) opt-out class and a co-extensive collective action under the Fair Labor Standards Act. The court questioned that approach because the proposed Rule 23 class reached back to February 5, 2014, while the Fair Labor Standards Act limitations period was, at most, three years. The court also noted that it need not formally certify a Fair Labor Standards Act collective action merely to facilitate sending notice to potential members. - Settlement-fund increase: The proposed agreement set the maximum gross settlement fund at $1.2 million but also called for the settlement amount to increase proportionately if the class exceeded 1,650 people. The court asked when that determination would be made, whether it would be reported to the court, and how the increase would work. - Other deductions: The court asked what costs, apart from employer payroll taxes, could be deducted from the gross settlement amount and who would receive those funds. - Tax forms and payment: Under the proposed agreement, only “Authorized Claimants”—class members who returned a complete and valid tax form as determined by the settlement administrator—would receive settlement checks. The court asked why new tax forms were required, what the forms would look like, when and how they would be sent, how long recipients would have to return them, and whether the forms would explain expected payments. - Participation and reversion: The court requested an estimate of how many class members might not return valid tax forms, including because of immigration status or other factors. It questioned why money allocated to people who did not return valid forms would revert to the defendants, particularly because the gross settlement fund represented only 4% of the class members’ estimated total damages according to the plaintiff’s counsel. The court also questioned why attorney fees would be calculated as a percentage of the gross settlement amount if some funds could return to the defendants. - Reporting: At a minimum, the court asked the parties to report how many class members returned valid tax forms and how much was paid to authorized claimants.

Disposition and Classification

This order scheduled a conference and required a joint letter addressing the proposed settlement. It did not state that the court granted or denied the motion for preliminary settlement approval. The order therefore resolved a procedural matter concerning review of a proposed class settlement, without deciding the underlying claims.