Cruz v. La Lomita Mexican Deli Corp.
- Ona Wang
- 1:21-cv-07780
- U.S. District Court · Southern District of New York
- 5
In Cruz v. La Lomita, Judge Wang approved a fair and reasonable wage settlement, awarding plaintiffs $46,666.67 and dismissing the action with prejudice.
Juana Cruz and Humberto Guerra, the defendants named in the action, and plaintiffs’ counsel are affected by the approved settlement. The plaintiffs will receive $46,666.67, counsel will receive $23,333.33 in fees, and the action is dismissed with prejudice.
What happened
Juana Cruz and Humberto Guerra sued La Lomita Mexican Deli Corp., doing business as La Lomita, and three individuals, alleging that they were not paid the required minimum and overtime wages under federal and New York law.
The parties reached a $70,000 settlement after negotiations. The plaintiffs will receive $46,666.67, and their lawyers will receive $23,333.33 in attorneys’ fees. The court found the settlement fair and reasonable, considering the risks and costs of continuing the case and the agreement’s terms.
Judge Ona T. Wang approved the settlement and ordered that the action be dismissed with prejudice, meaning the settled action cannot be brought again.
The detailed version
- Cruz v. La Lomita Mexican Deli Corp. · No. 1:21-cv-07780
- Ona Wang
- Dec. 1, 2022
Background
Juana Cruz and Humberto Guerra brought claims under the Fair Labor Standards Act (FLSA) and New York Labor Law against La Lomita Mexican Deli Corp. doing business as La Lomita, Mayra Perez, Maria Perez, and Albino Perez. Plaintiffs alleged that they worked as cashiers, food delivery workers, and kitchen workers at defendants’ grocery stores, approximately 66 hours per week, but were not paid the required minimum or overtime wages. They also alleged that defendants did not provide pay or timekeeping records concerning their work hours.
The parties reached a settlement after telephone and electronic negotiations and asked the court to approve it. The court reviewed the agreement under the Second Circuit’s requirement that courts approve FLSA settlements before stipulated dismissals settling FLSA claims with prejudice take effect.
Court’s Analysis
The court applied five factors: the plaintiffs’ possible recovery, the burdens and expenses of continuing litigation, the risks faced by the parties, whether the settlement resulted from arm’s-length negotiations between experienced counsel, and the possibility of fraud or collusion.
Plaintiffs estimated that they could recover $129,820.00 if they proved all their claims at trial. The proposed settlement totaled $70,000.00. Plaintiffs would receive $46,666.67, and plaintiffs’ counsel would receive $23,333.33 in attorneys’ fees. The court found the amount reasonable in light of the risks and expenses of litigation.
The court also found that the settlement resulted from extensive negotiations, with no evidence of fraud or collusion. It approved the release because it was limited to employment-related claims through the date the agreement was executed. The agreement contained no confidentiality or non-disparagement provision. The court further found the attorneys’ fee award reasonable.
Ruling
Judge Ona T. Wang approved the parties’ proposed settlement agreement as fair and reasonable. The court ordered that plaintiffs receive $46,666.67 and that plaintiffs’ counsel receive $23,333.33, all allocated to attorneys’ fees. The court also ordered that the action be dismissed with prejudice and directed the Clerk to close the case.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.