Castillo v. La Tinfora Grocery Corp.

Background

This Fair Labor Standards Act (FLSA) case involved a proposed settlement that required court approval under Second Circuit precedent. On June 13, 2023, the parties submitted an agreement providing for a $50,000 settlement payment.

On August 8, 2023, the court found the settlement payment reasonable but declined to approve the agreement in its entirety. The court identified problems with the calculation of attorneys’ fees and the breadth of the settlement release. The parties then submitted a revised agreement. The court found that revision corrected the release problem but still declined, without prejudice, to approve the agreement because the attorneys’ fee award was not calculated under the court’s presumptive rule: a percentage-based fee should be calculated after deducting costs. The court stated that it would approve a fee of $16,987.33, representing 33 percent of the settlement amount after costs.

Latest Agreement and Ruling

On October 18, 2023, the parties submitted another revised agreement. It was identical to the prior agreement except that it calculated the plaintiff’s counsel’s fee as 33 percent of the $50,000 settlement, net of costs, totaling $16,987.33. The court concluded that this change corrected the remaining deficiency and found the settlement agreement reasonable.

Judge Paul A. Engelmayer approved the settlement agreement in its entirety. Under the approved, executed agreement, the court ordered the case dismissed with prejudice, meaning the case was closed and could not be brought again. The Clerk of Court was directed to terminate outstanding deadlines and close the case.

Continuing Jurisdiction

The court retained jurisdiction over the action for 90 days after the order was issued to enforce the settlement’s terms. The parties were ordered to file an update by January 17, 2024, concerning the settlement’s status and the payment schedule.