Berry v. Mediacom Communications Corporation
- Vyskocil
- 1:22-cv-05183
- U.S. District Court · Southern District of New York
- 3
In Berry v. Mediacom, Judge Vyskocil declined to approve the Fair Labor Standards Act settlement because counsel sought more than the retainer agreement allowed.
Elizabeth Berry, her counsel, and Mediacom Communications Corp.; the parties were permitted to submit a revised settlement agreement for approval.
What happened
In Berry v. Mediacom Communications Corporation, the parties asked the court to approve a settlement of Elizabeth Berry’s Fair Labor Standards Act case. The court had previously found that the parties had not provided enough information to evaluate the settlement’s fairness.
The parties submitted additional information, including details about their negotiations, Berry’s possible recovery, the difficulties of proving her claim at trial, billing records, and the retainer agreement. The court found that the settlement itself was fair and reasonable. The proposed payment totaled $7,500, including $2,000 for Berry.
Judge Vyskocil declined to approve the settlement as proposed because the agreement would pay Berry’s counsel $5,500, while the retainer agreement provided for a 40% fee in this situation. The court allowed the parties to submit a revised settlement agreement for approval by February 27, 2023.
The detailed version
- Berry v. Mediacom Communications Corporation · No. 1:22-cv-05183
- Vyskocil
- Jan. 26, 2023
Background
Elizabeth Berry and Mediacom Communications Corp. previously told the court that they had agreed to settle the case. They submitted the proposed settlement and information intended to show that it was fair. The court previously declined to approve the proposal because it lacked enough information to evaluate the settlement, including the requested attorneys’ fee.
The parties then submitted additional information, billing records, and, for the first time, the retainer agreement between Berry and her counsel. The parties explained that experienced counsel negotiated at arm’s length, described Berry’s best-case potential recovery as $458.63, and identified the difficulty of proving that Mediacom’s alleged failure to pay for time worked was willful.
Court’s Analysis
The court reviewed the settlement for fairness under the Fair Labor Standards Act and Second Circuit law. It found that the parties had remedied nearly all of the previously identified deficiencies and that the settlement agreement was fair and reasonable in those respects. The proposed settlement totaled $7,500, with $2,000 going directly to Berry. The court said this appeared to be a strong result given that the case involved minutes of uncompensated time.
The proposed allocation gave Berry’s counsel $5,500, more than 70% of the total payment. The court explained that a percentage fee of that size is not automatically disqualifying. But the court found the fee unreasonable because it was nearly twice the fee stated in the retainer agreement.
The retainer agreement provided that the attorney’s fee would be the greater of 40% of a settlement or verdict, or an amount awarded by the court in connection with a class settlement or verdict. The court concluded that the class-settlement or class-verdict provision did not apply because this case involved no class settlement or verdict. The court therefore found that the agreement entitled counsel to a 40% fee. It also noted that the agreement did not provide for compensation based on the hourly rate counsel later proposed.
Disposition
The court held that it could not approve the settlement as currently proposed. It did not rewrite the agreement. Instead, it allowed the parties to try again and required any revised settlement agreement to be submitted for approval by February 27, 2023.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.