Abundiz Carranza v. VBFS, Inc.
- Paul Engelmayer
- 1:20-cv-02635-PAE
- U.S. District Court · Southern District of New York
- 3
In Abundiz Carranza v. VBFS, Judge Engelmayer approved the parties’ revised wage-claim settlement and ordered the case closed.
Fili Abundiz Carranza, the other people he sought to represent, VBFS, Inc. and the other defendants, and Carranza’s counsel were affected by the approved settlement. The agreement required the defendants to make the payments described in the opinion and allocated specified amounts to Carranza and his counsel.
What happened
In Abundiz Carranza v. VBFS, Inc., the parties asked the court to approve a settlement resolving claims under the Fair Labor Standards Act, New York Labor Law, and the Wage Theft Protection Act. The court had previously rejected their proposed agreement because its release was too broad.
The revised agreement required the defendants to pay $200,000 in 48 monthly installments. Fili Abundiz Carranza was to receive $133,044.02, while his lawyer was to receive $66,955.98, including fees and costs. The court found the fee allocation reasonable and noted that the revised agreement did not include confidentiality or non-disparagement provisions and limited the release to claims asserted in the action.
Judge Paul A. Engelmayer ruled that the revised agreement was reached through fair procedures and was fair and reasonable. He approved the agreement and directed the Clerk of Court to close the case.
The detailed version
- Abundiz Carranza v. VBFS, Inc. · No. 1:20-cv-02635-PAE
- Paul Engelmayer
- Sept. 9, 2022
Background
Fili Abundiz Carranza brought this action on his own behalf and on behalf of others similarly situated under the Fair Labor Standards Act, New York Labor Law, and the Wage Theft Protection Act. On May 14, 2022, the parties submitted a proposed settlement for court approval. The court declined to approve that proposal on June 15, 2022, because its release provision covered claims “including but not limited to all claims” asserted in the action and claims based on “any conduct.”
On July 12, 2022, the parties submitted an amendment that substantially narrowed the release. The amended agreement and the original agreement together formed the revised agreement the court reviewed.
Court’s Analysis
The court explained that parties cannot privately settle Fair Labor Standards Act claims with prejudice without approval from either the district court or the Department of Labor. The court therefore had to determine whether the revised agreement was fair and reasonable. It also separately reviewed the reasonableness of the proposed attorneys’ fees.
Under the revised agreement, the defendants were required to pay $200,000 in 48 monthly installments of different amounts. Carranza was to receive $133,044.02. His counsel was to receive $66,955.98, consisting of $66,552.03 in fees and $433.91 in costs. The court found the allocation reasonable, including the one-third share allocated to counsel after costs.
The court also noted that the agreement contained no confidentiality provision that would undermine the Fair Labor Standards Act’s remedial purposes and no non-disparagement provision that could interfere with approval. Unlike the original agreement, the revised release was limited to claims Carranza asserted in this action, including his claims under the Fair Labor Standards Act and New York Labor Law.
Disposition
The court found that the agreement was reached through procedurally fair means and was fair and reasonable. Judge Paul A. Engelmayer approved the revised agreement and directed the Clerk of Court to close the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.