De Los Santos v. Hat Trick Pizza, Inc.
- Alison Nathan
- 1:16-cv-06274
- U.S. District Court · Southern District of New York
- 5
Judge Nathan approved the De Los Santos v. Hat Trick Pizza settlement as a reasonable compromise of wage claims.
The plaintiffs and Hat Trick Pizza, Inc. and the other defendants were affected by approval of their settlement. Plaintiffs’ counsel was affected by the court’s review of the requested fees, reduced hourly rates, approval of costs, and admonition about damages calculations.
What happened
In De Los Santos v. Hat Trick Pizza, the plaintiffs alleged violations of federal and New York wage laws. After extensive litigation, the parties agreed to settle the remaining claims for $45,000, including attorney’s fees and costs.
The court found the settlement reasonable because the parties genuinely disputed the defendants’ liability and the amount of damages. The court also approved the requested fees and $636.40 in costs, while reducing the hourly rates used to evaluate the attorneys’ work.
Judge Alison J. Nathan approved the settlement agreement in full and directed the Clerk of Court to close the case. The court also admonished plaintiffs’ counsel to ensure that future damages calculations are accurate.
The detailed version
- De Los Santos v. Hat Trick Pizza, Inc. · No. 1:16-cv-06274
- Alison Nathan
- Sept. 13, 2021
Background
The plaintiffs filed and later amended a complaint alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law, among other claims. After extensive litigation in this case and related cases, the parties reached a settlement covering the remaining claims and asked the court to approve it.
The proposed agreement provided for a total payment of $45,000, including attorney’s fees and costs. Plaintiffs’ counsel requested $15,424.27 in fees and costs. The opinion separately describes the fee request as $14,787.87 in fees—one-third of the settlement amount after costs—and $636.40 in costs.
Settlement Approval
The court explained that FLSA settlements must be approved by a court or the Department of Labor. Approval requires a settlement that is a fair and reasonable compromise of disputed issues, rather than an employer’s improper waiver of employees’ statutory rights.
The court found the $45,000 settlement reasonable. The plaintiffs’ allegations and damages calculations stated that they were owed $174,344.26 under New York law for unpaid minimum wages and overtime, liquidated damages, notice violations, and prejudgment interest. The defendants denied the allegations and argued that they were not liable for liquidated damages because they acted in good faith and without knowledge or malice. The court concluded that the genuine dispute about liability supported approval of the settlement.
The court noted an inconsistency in the plaintiffs’ damages calculations. A lower total appeared to result from an error in calculating liquidated damages for Marcelo De Los Santos. The court also observed that two calculations included unreimbursed delivery-vehicle fees that appeared related to implied-contract claims rather than New York Labor Law claims. The court nevertheless approved the settlement and admonished plaintiffs’ counsel to ensure that damages calculations are accurate before submitting them.
Attorney’s Fees and Costs
The court used the lodestar method as a cross-check. A lodestar is the reasonable hourly rate multiplied by the reasonable number of hours worked. Plaintiffs’ counsel claimed a lodestar of $70,004.33, substantially more than the requested fee.
The court reduced the proposed hourly rates for John Troy, George Byun, William Lou, Aaron Schweitzer, and Tiffany Troy to $400, $160, $80, $150, and $50, respectively. It found that roughly 155 hours was a reasonable amount of time because the case had been extensively litigated for nearly three years. Even using the reduced rates, the court found that the resulting lodestar exceeded the fee included in the settlement and therefore did not disturb the fee calculation.
The court found the requested $636.40 in filing and service costs reasonable and granted that request. The opinion notes that the invoice did not identify the source of $0.40, but found that this minor omission did not change the court’s conclusion.
Disposition
The court approved the settlement agreement in full. The Clerk of Court was directed to close the case. This order approved the parties’ settlement; it did not decide the underlying wage claims after trial or summary judgment.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.