Cuaya v. Aunt Jake's

Background

The court was advised that the parties had reached a settlement in a case brought by Martin Cuaya, individually and on behalf of others similarly situated, against Aunt Jake’s and other defendants. The settlement included claims under the Fair Labor Standards Act (FLSA), a federal law governing certain wage and working-condition requirements.

The order did not approve the settlement, dismiss the claims, or enter judgment. Instead, it directed the parties to choose among three procedures for resolving the FLSA claims.

Option One: Court Approval for Dismissal With Prejudice

The parties could seek dismissal of the FLSA claims with prejudice, meaning the claims would be permanently dismissed. Relying on Second Circuit precedent, the court stated that the parties could not dismiss FLSA claims with prejudice through a notice under Federal Rule of Civil Procedure 41(a)(1)(A). They instead had to seek court approval under Rule 41(a)(2).

Before doing so, the parties were ordered to discuss whether they would consent under 28 U.S.C. § 636(c) to having all further proceedings handled by the assigned magistrate judge. If both parties consented, they had to file the completed consent form by January 2, 2023. If either party did not consent, the parties had to file a joint letter by that date stating that they did not consent, without identifying the party or parties withholding consent. The order stated that withholding consent would not have negative consequences.

If the parties did not consent to proceed before the magistrate judge, they had to submit a joint motion by January 9, 2023 explaining why the settlement was fair and should be approved. The motion had to address the factors identified in the court’s cited precedent and include the settlement agreement. The court stated that it would not approve settlement agreements containing a confidentiality provision. It also stated that documents related to the settlement review could not be filed under seal unless the parties made a specific showing overcoming the presumption of public access to court documents.

If the settlement included attorney’s fees, the parties also had to address whether the fees were reasonable. Plaintiffs’ attorneys had to attach detailed time records for the court’s review.

Option Two: Dismissal Without Prejudice

The parties could submit a voluntary dismissal of the FLSA claims without prejudice under Rule 41(a)(1)(A). The court would accept that procedure only if the dismissal was without prejudice and the parties certified that there had been no settlement of the FLSA claims. If they could not make that certification, they had to seek court review of the settlement under the first procedure.

Any proposed stipulation and certification under this option had to be submitted by January 2, 2023. The order specified which counsel could submit the certification depending on the particular Rule 41 provision being used.

Option Three: Offer of Judgment

The parties could resolve the case through an offer and acceptance of judgment under Federal Rule of Civil Procedure 68(a). The order explained that, under that rule, a defending party may make an offer of judgment on specified terms, and the opposing party may accept it within 14 days. The court stated that Second Circuit precedent does not require judicial approval of a Rule 68(a) offer of judgment in an action raising FLSA claims.

If the parties chose this option, they had to submit the executed offer and acceptance, along with a proposed order entering judgment consistent with those documents, by January 2, 2023.

Disposition

Judge Gregory H. Woods ordered the parties to proceed under one of the three described procedures. The opinion does not state that the court approved the settlement, dismissed the case, or entered judgment.