Montalvo Candia v. 658-660 Amsterdam Corp.
- Vernon Broderick
- 1:19-cv-08181
- U.S. District Court · Southern District of New York
- 4
In Montalvo Candia v. 658-660 Amsterdam Corp., Judge Broderick denied without prejudice approval of an inconsistent Fair Labor Standards Act settlement.
The parties to the Fair Labor Standards Act case, including the plaintiffs and defendants, must either correct and resubmit the proposed settlement or notify the court that they are abandoning it.
What happened
In Montalvo Candia v. 658-660 Amsterdam Corp., the parties told Judge Vernon S. Broderick that they had settled the Fair Labor Standards Act case and asked him to approve the settlement.
The court found conflicting terms in the parties’ supporting letter and settlement agreement. The letter described a $15,500 payment in one check, while the agreement provided for $12,000 paid in twelve installments. The agreement also referred future enforcement to the Eastern District of New York, even though the request was made in the Southern District of New York.
Judge Broderick denied the request to approve the proposed settlement without prejudice. He gave the parties 21 days to submit a corrected agreement and explanation or to state that they were abandoning the settlement.
The detailed version
- Montalvo Candia v. 658-660 Amsterdam Corp. · No. 1:19-cv-08181
- Vernon Broderick
- Mar. 9, 2022
Background
The parties advised the court that they had reached a settlement in this Fair Labor Standards Act case. Because the Department of Labor had not approved the settlement, the court had to decide whether the proposed agreement was fair and reasonable before approving it.
Legal standard
The court explained that it must consider the total circumstances, including the plaintiff’s possible recovery, the burdens and expenses the settlement would avoid, the litigation risks, whether experienced counsel negotiated at arm’s length, and the possibility of fraud or collusion. The court must also evaluate the reasonableness of any attorneys’ fees and costs. If a proposed settlement is unreasonable in whole or in part, the court cannot rewrite it; it must reject the agreement or give the parties an opportunity to revise it.
Reasons for rejecting the proposed settlement
The court said it could not determine whether the agreement was fair and reasonable because the parties’ supporting letter contradicted the agreement itself. The letter stated that the defendants would pay $15,500 to settle all claims, while the agreement stated that the defendants would pay $12,000 to the plaintiff’s counsel. The letter said the payment would be made by one check, while the agreement provided for twelve installments.
The agreement also stated that the parties consented to personal jurisdiction in the United States District Court for the Eastern District of New York and requested that court’s jurisdiction over later enforcement proceedings. The supporting letter, however, was addressed to the Southern District of New York. The court stated that it could not properly review the settlement for fairness while these terms remained inconsistent.
Disposition
The court denied the parties’ request to approve the proposed settlement without prejudice. Within 21 days of the order, the parties could file a revised settlement agreement and joint letter explaining why it was fair and reasonable, or file a joint letter stating that they intended to abandon the settlement. If they abandoned the settlement, the court would set a status conference.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.