Castillo v. La Tinfora Grocery Corp.
- Paul Engelmayer
- 1:22-cv-09640
- U.S. District Court · Southern District of New York
- 4
In Castillo v. La Tinfora Grocery, Judge Engelmayer declined without prejudice to approve a Fair Labor Standards Act settlement because the proposed attorneys’ fee calculation lacked justification.
The proposed settlement parties and plaintiff’s counsel; the settlement was not approved, and counsel was directed to justify any fee above the court’s presumptive amount.
What happened
Castillo v. La Tinfora Grocery Corp. is a wage-and-hour case under the Fair Labor Standards Act. The parties proposed a $50,000 settlement, with two-thirds going to Victor Castillo, but the court previously found problems with the attorneys’ fees and the release of claims.
The revised agreement fixed the release problem by limiting it to related wage-and-hour claims. It did not fix the fee problem: plaintiff’s counsel sought $17,147.67, including one-third of the full settlement plus $481 in costs, without explaining why that amount was justified.
Judge Paul A. Engelmayer again declined, without prejudice, to approve the settlement. He directed the parties to submit a revised agreement and explanatory letter by October 10, 2023, and stated that, absent further justification, fees and costs should not exceed $16,987.33.
The detailed version
- Castillo v. La Tinfora Grocery Corp. · No. 1:22-cv-09640
- Paul Engelmayer
- Oct. 3, 2023
Background
Victor Castillo brought this Fair Labor Standards Act case against La Tinfora Grocery Corp. and other defendants. On June 13, 2023, the parties submitted a proposed settlement for court approval. The proposed settlement totaled $50,000, two-thirds of which would go to Castillo.
On August 8, 2023, the court found the payment reasonable but declined, without prejudice, to approve the agreement in its then-current form. The court identified problems with the attorneys’ fee calculation and the breadth of the release, and directed the parties to submit a revised agreement.
Revised Agreement
The parties submitted a revised agreement on August 29, 2023. The revised release limited the released future liability to wage-and-hour allegations that arose during the period involved in the litigation. The court found that change reasonable because the release no longer extended beyond the wage-and-hour claims at issue.
The revised agreement did not address the attorneys’ fee concern. Plaintiff’s counsel sought a total of $17,147.67, consisting of one-third of the $50,000 settlement, or $16,666.66, plus $481 in costs. The court had previously explained that, absent extraordinary circumstances or a case-specific justification, a percentage-based fee should be calculated from the settlement amount after costs are deducted. Counsel’s submission did not provide that justification.
Using the settlement, cost, and percentage figures supplied by counsel, the court calculated that the presumptive maximum would be a $16,506.33 fee plus $481 in costs, for a total of $16,987.33. The court noted that counsel’s letter did not acknowledge that it was requesting more than that presumptive amount or explain why a higher award was warranted.
Disposition
The court declined, without prejudice, to approve the proposed settlement agreement. It directed the parties to submit, by October 10, 2023, a revised agreement addressing the remaining attorneys’ fee issue and an accompanying explanatory letter. The court stated that, absent justification, the revised agreement should provide no more than one-third of the settlement amount after costs are deducted.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.