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

Background

Carlos Martin de la Cruz brought this wage-and-hour case under the Fair Labor Standards Act and the New York Labor Law on behalf of himself and other similarly situated workers. The complaint alleged that defendants’ timekeeping and payroll practices failed to pay parking attendants, car washers, cashiers, and other workers for all hours worked, including overtime. The alleged practices included not paying for certain late-arriving or late-working time, deducting meal-break time while requiring workers to remain on call, and not paying required extra compensation for workdays longer than 10 hours.

After written discovery and mediation, the parties agreed to a $1.2 million settlement for up to 1,650 class members. The court initially denied preliminary approval without prejudice because the proposed agreement required workers to submit tax forms before receiving settlement checks, and unused funds could revert to defendants. The parties later entered an addendum eliminating that requirement. The court then preliminarily approved the revised settlement, and a separate order granted final approval, approved a service award, and granted in part the request for attorneys’ fees and administration fees to the extent of approving payment to the settlement administrator.

The settlement notice was sent to 1,608 class members. After additional efforts to locate workers, 1,515 were notified. Eighteen opted out, and no class member objected. The remaining issue was Class Counsel’s request for $400,000 in attorneys’ fees and $6,360.74 in expenses.

Fee analysis

For class-action settlements that create a common fund, attorneys’ fees are paid from the fund and must be reasonable. The court ordinarily uses a percentage-of-the-fund method and may use a lodestar calculation as a cross-check. A lodestar is the reasonable number of hours worked multiplied by reasonable hourly rates.

The court determined that 25% of the $1.2 million settlement fund was a reasonable baseline fee for this early-settling Fair Labor Standards Act and New York Labor Law case. That percentage produced a $300,000 fee. The court declined to increase or decrease the baseline based on litigation risk, the quality of representation, public-policy considerations, or the results achieved. Although the settlement was fair under the circumstances, it represented approximately 4% of Class Counsel’s estimated total damages, and the average payment after deductions was estimated at $423.15 when using the requested $400,000 fee. The court also noted problems with the original settlement structure, which could have reduced class members’ participation and created a reversion of funds to defendants.

For the lodestar cross-check, Class Counsel reported approximately 241 hours at rates ranging from $800 per hour for partners to $275 per hour for paralegals, producing a self-calculated lodestar of $150,987.50. The court found the hours generally reasonable but found the rates clearly unreasonable. It reduced the lodestar by 40%, to $90,590.70. The $300,000 award represented a multiplier of approximately 3.31 of that reduced lodestar, which the court found did not require another reduction.

The court found the requested $6,360.74 in expenses reasonable. The expenses included filing, investigation, mediation, translation, and travel costs.

Disposition

Judge Barbara Moses granted in part the Motion for Attorneys’ Fees and Administration Fees. The order awarded Class Counsel $300,000 in attorneys’ fees and reimbursement of $6,360.74 in expenses, for a total of $306,360.74, to be paid by or on behalf of defendants from the settlement fund under the settlement agreement.