Flores v. Chowbus Inc.
- Vernon Broderick
- 1:21-cv-00970
- U.S. District Court · Southern District of New York
- 4
In Flores v. Chowbus, Judge Broderick entered a $120,000 Rule 68 judgment despite concerns about reviewing the Fair Labor Standards Act settlement.
The judgment affected the plaintiffs and defendants in the Fair Labor Standards Act case by entering the parties’ $120,000 Rule 68 offer of judgment and closing the case.
What happened
In Flores v. Chowbus Inc., the parties submitted an accepted offer of judgment for $120,000, including the plaintiffs’ attorneys’ fees and costs. They asked the court to enter judgment based on that offer after reporting that they were close to settling.
The court said it lacked enough information to determine whether the agreement was fair and reasonable under the usual review process for Fair Labor Standards Act settlements. The filings did not explain the attorneys’ fees or identify any releases or waivers. The court also expressed concern that Rule 68 could be used to avoid protections for workers’ wages.
Nevertheless, Judge Vernon S. Broderick concluded that controlling Second Circuit precedent required entry of the Rule 68 judgment. He entered the judgment and directed the Clerk of Court to close the case.
The detailed version
- Flores v. Chowbus Inc. · No. 1:21-cv-00970
- Vernon Broderick
- Nov. 7, 2022
Background
The court considered the parties’ filings under Federal Rule of Civil Procedure 68. The filings followed the parties’ October 21, 2022 notice that they were close to settlement. The proposed judgment stated that the defendants had offered the plaintiffs $120,000 under Rule 68 and that the amount included attorneys’ fees and costs.
The underlying claims were brought under the Fair Labor Standards Act, a federal law governing matters such as wage and hour protections. The court discussed Cheeks v. Freeport Pancake House, Inc., in which the Second Circuit recognized that these settlements generally require judicial or Department of Labor approval because of concerns about worker protection and unequal bargaining power. The court also discussed Mei Xing Yu v. Hasaki Restaurant, Inc., in which the Second Circuit held that judicial approval is not required for Rule 68(a) offers of judgment settling Fair Labor Standards Act claims.
Court’s analysis
Judge Broderick stated that the filings contained very little information beyond the $120,000 amount and the fact that it included attorneys’ fees. The filings did not state the amount of the attorneys’ fees, their percentage of the total amount, or whether the agreement contained releases or waivers. As a result, the court said it could not determine whether the agreement would have been fair and reasonable under the review process described in Cheeks, or whether any release provisions were impermissibly broad.
The court expressed concern that Mei Xing Yu appeared inconsistent with Cheeks and could allow parties to use Rule 68 to avoid judicial scrutiny of Fair Labor Standards Act settlements. However, the court concluded that the Second Circuit’s unqualified language in Mei Xing Yu required it to enter the submitted offer of judgment.
Disposition
The court entered judgment in accordance with the parties’ Rule 68 offer and acceptance of judgment for $120,000, inclusive of attorneys’ fees and costs. The Clerk of Court was directed to close the case. The opinion does not describe any separate allocation of the award or decide whether the settlement terms would have been fair under the usual Cheeks review.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.