Chowdhury v. Best Wireless 23rd Park Inc
- Stewart Aaron
- 1:22-cv-11005
- U.S. District Court · Southern District of New York
- 3
In Chowdhury v. Best Wireless 23rd Park Inc., Judge Broderick ordered settlement disclosures for federal wage-law review because the parties had not provided the agreement’s terms.
Farzana Chowdhury, Best Wireless 23rd Park Inc., Best Wireless Church Street Inc., Best Wireless Queens Blvd Inc., Best Wireless Greenwich Inc., and Nishant Nick Garg were required to provide the settlement information and any required supporting materials.
What happened
In Chowdhury v. Best Wireless 23rd Park Inc., a mediator reported that the parties had agreed on all issues, and the court closed the case while allowing it to be reopened within 30 days. The parties had not filed a formal dismissal or provided the settlement terms.
The court explained that parties generally cannot privately settle Fair Labor Standards Act wage claims and dismiss the case without approval from the court or the Department of Labor. The court must determine whether the settlement is fair and reasonable, and must separately review any attorney-fee award.
Judge Vernon S. Broderick ordered the parties to submit the settlement terms by April 28, 2023, or explain why this review did not apply. If review applied, they also had to submit a joint explanation addressing the relevant fairness factors and provide billing evidence supporting any attorney-fee award.
The detailed version
- Chowdhury v. Best Wireless 23rd Park Inc · No. 1:22-cv-11005
- Stewart Aaron
- Apr. 14, 2023
Background
On March 27, 2023, the mediator reported that the parties had reached an agreement covering all issues. The court then closed the case but allowed the parties to reopen it within 30 days. As of this order, however, the parties had not filed a stipulated dismissal under Federal Rule of Civil Procedure 41, submitted an offer of judgment under Rule 68, or otherwise explained the agreement’s terms or whether it was a private settlement.
Settlement-review standard
The court stated that parties may not privately settle claims under the Fair Labor Standards Act (FLSA) and dismiss the action under Rule 41 without approval from the district court or the Department of Labor. The court must determine whether the settlement is fair and reasonable. The relevant circumstances include the plaintiff’s possible recovery, the litigation expenses and burdens the settlement would avoid, the risks faced by the parties, whether experienced counsel negotiated the agreement at arm’s length, and the possibility of fraud or collusion.
If the agreement provided for attorney’s fees, the court also had to assess whether those fees were reasonable. Counsel had to provide factual support, including contemporaneous billing records showing each attorney’s dates, hours, and work performed.
Order
The court ordered the parties to provide the settlement terms by April 28, 2023, so it could determine whether they complied with the FLSA and reflected a reasonable compromise of disputed issues. Alternatively, the parties could explain why the required settlement review did not apply and why they believed that was so.
If review was required, the parties also had to submit a joint letter of no more than five pages explaining why the settlement was fair and reasonable and addressing the five identified factors. If the agreement included attorney’s fees, they had to submit evidence supporting the fee award. The order required these submissions; the opinion does not state that the court approved the settlement.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.