Zapata v. Locust Cove Management LLC

Background

The court stated that it had been advised that the parties had reached a settlement in this case, including claims under the Fair Labor Standards Act (FLSA). The order did not describe the settlement terms or decide whether to approve it. Instead, the court directed the parties to proceed under one of three alternatives.

Available procedures

1. Dismissal with prejudice after court approval. Under Rule 41(a)(2), the parties could ask the court to approve a dismissal of the FLSA claims with prejudice, meaning the claims would be finally dismissed. Relying on the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc., the court explained that the parties could not dismiss FLSA claims with prejudice through the ordinary procedure in Rule 41(a)(1)(A). The parties first had to discuss whether they would consent to have all further proceedings conducted by the assigned magistrate judge. If they did not both consent, they had to file a joint motion explaining why the settlement was fair and should be approved, addressing the factors identified in Wolinsky v. Scholastic Inc., and attaching the settlement agreement.

The court stated that it would not approve settlement agreements containing confidentiality provisions. It also stated that materials concerning the court’s settlement review could not be filed under seal without a particularized showing overcoming the presumption of public access to judicial documents. If the settlement included attorney’s fees, the parties had to address whether the fees were reasonable and plaintiffs’ attorneys had to provide detailed time records.

2. Dismissal without prejudice without an FLSA settlement. The parties could submit a voluntary dismissal under Rule 41(a)(1)(A) if the FLSA claims were dismissed without prejudice and the parties certified that there had been no settlement of those claims. If they could not make that certification, the court required them to seek approval under the first alternative. The stipulation and certification were due January 10, 2024.

3. Offer of judgment. The parties could resolve the case through an offer and acceptance of judgment under Rule 68(a). The court explained that, under the Second Circuit’s decision in Mei Xing Yu v. Hasaki Restaurant, Inc., court approval was not required for a Rule 68(a) offer of judgment in an action raising FLSA claims. The executed offer and acceptance, along with a proposed order entering judgment, were due January 10, 2024.

Court’s order

Judge Woods ordered the parties to proceed through one of these three routes. The order did not itself grant or deny dismissal, approve the settlement, or enter judgment.