Flores v. Lechonera Pollo Sabroso Restaurant Corp.
- Valerie Caproni
- 1:22-cv-06883
- U.S. District Court · Southern District of New York
- 2
In Flores v. Lechonera Pollo Sabroso, Judge Caproni deferred settlement approval, requiring revised fee, payment, and tax terms.
The order affected Iris Flores, the defendants, and Flores’s lawyers by requiring a revised settlement agreement with different fee, payment, and tax provisions before the court would approve the settlement.
What happened
Flores v. Lechonera Pollo Sabroso Restaurant Corp. involved the parties’ proposed settlement of Iris Flores’s wage-and-hour claims. The proposed settlement provided for a total recovery of $30,000, including $10,410 for her lawyers’ fees and costs.
The court found the requested lawyers’ fee award unreasonable because it represented 3.3 times the lawyers’ stated lodestar, or standard fee calculation. The agreement also did not say how much Flores would receive or how her payment would be reported for tax purposes.
Judge Caproni ordered the parties to submit a revised settlement agreement by April 26, 2023, with more reasonable fee terms and clearer payment and tax provisions. She also canceled the scheduled April 21 conference.
The detailed version
- Flores v. Lechonera Pollo Sabroso Restaurant Corp. · No. 1:22-cv-06883
- Valerie Caproni
- Apr. 19, 2023
Background
Iris Flores brought wage-and-hour claims individually and on behalf of others similarly situated against Lechonera Pollo Sabroso Restaurant Corp., doing business as Lechonera Pollo Sabroso, Basilio Bello, and Rafael Velasco. The parties submitted a proposed settlement for court approval under the requirement that courts review certain Fair Labor Standards Act settlements.
The proposed agreement provided for a total recovery of $30,000. It allocated $10,410 to Flores’s lawyers for fees and costs. Flores estimated that her wage-and-hour claims could be worth approximately $96,713.47 if fully recovered. Her lawyers submitted an invoice showing $3,177.50 in fees and costs as the lodestar, meaning the standard fee calculation based on time and rates, but sought 3.3 times that amount.
Court’s Analysis
The court stated that a fee multiplier greater than 2.0 was unreasonable in this case. It cited the requested hourly rates, the minimal complexity of the case, and the fact that the case settled after one mediation session. The court also noted that the requested rates were at the high end of what was reasonable given the lawyers’ experience and the risks involved.
The court further found that the settlement agreement said the defendant would issue three $10,000 checks to Flores’s lawyers but did not specify how much the lawyers would pay Flores or how the amount paid to her would be reported to the Internal Revenue Service.
Ruling
The court stated that it would approve a settlement with a more reasonable lawyers’ fee provision that specified the timing and amounts of payments to Flores, rather than only to the law firm, and specified the tax treatment of those payments. It ordered a revised settlement agreement by April 26, 2023. The order does not state that the proposed settlement was finally approved or denied as submitted. The court also canceled the April 21 conference and admonished Flores’s lawyers to review future submissions more carefully, noting that the agreement used both male and female pronouns for the plaintiff.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.