Heimann v. Lingua Franca NYC Inc.

Background

Karen Heimann sued Lingua Franca NYC Inc. and Rachelle Hruska a/k/a Rachelle Hruska Macpherson, alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law based on alleged failure to pay overtime wages and retaliation. After the parties reached a settlement, they asked the court to approve it. The court denied the first proposed settlement and then denied the parties’ renewed motion concerning a first revised settlement, each time allowing them to submit a further revision.

The parties then submitted the Second Revised Settlement and a renewed request for approval. The court had previously found that the settlement satisfied the relevant fairness factors, including the range of possible recovery, the burdens and risks of continued litigation, the parties’ bargaining process, and the possibility of fraud or collusion. The court found that the Second Revised Settlement was materially unchanged on those factors and remained fair and reasonable.

Release of Claims

The court had previously found the liability-release provision too broad because it released certain wage-related claims by Heimann without a reciprocal release protecting her. The Second Revised Settlement added a release of all claims, known and unknown, that the defendants might have against Heimann. The court found that this revised release was fair and reasonable.

Attorney’s Fees and Costs

Heimann’s counsel requested one-third of the settlement proceeds, or $6,132.61, consisting of $5,433.69 in attorney’s fees and $698.92 in costs. Counsel submitted time records showing that Jonathan Bernstein worked 29 hours at $400 per hour and that an unidentified paralegal worked 4.3 hours at a requested rate of $175 per hour.

The court had previously found Bernstein’s $400 hourly rate reasonable. Because counsel provided no information supporting the paralegal’s requested rate, the court reduced that rate to $125 per hour for its lodestar calculation. A lodestar is the reasonable hourly rate multiplied by the reasonable number of hours worked. The court calculated a lodestar of $12,137.50, plus $698.92 in costs, for a total of $12,836.42. The requested $6,132.61 award represented a multiplier of 0.48 of the lodestar. The court accepted that amount and granted the request for attorney’s fees and costs.

Disposition

The court approved the Second Revised Settlement as fair and reasonable and granted the parties’ motion for settlement approval. The Clerk of Court was directed to terminate pending motions, vacate all conferences, and close the case.