Lopez v. Pelham Pharmacy, Inc.

Background

Lissy Lopez brought this action under the Fair Labor Standards Act and the New York State Labor Law. The parties notified the court that they had agreed to settle on January 5, 2024. The court required a joint explanation supporting approval of the proposed settlement under the factors identified in Wolinsky v. Scholastic, Inc.

Lopez submitted the executed settlement agreement and a supporting letter. The agreement provided for a total payment of $22,400 and a release by Lopez of claims against the defendants related to this action. The agreement allocated $7,734.65 to Lopez’s counsel for attorneys’ fees and costs.

Settlement Approval

The court applied the standards required for approval of private Fair Labor Standards Act settlements. It considered the possible recovery, the expenses and burdens the parties would avoid, the litigation risks, whether the agreement resulted from arm’s-length negotiations, and the possibility of fraud or collusion.

Lopez claimed estimated damages of $42,964. After attorneys’ fees, she would receive $14,665.35, approximately 34% of her estimated maximum recovery. The court found that amount fair and reasonable. The case was still in its early stages: fact discovery was incomplete, and Lopez had not sought conditional certification of a group of similarly situated plaintiffs. The settlement therefore avoided additional litigation expenses and risks. Both sides were represented by counsel, and the court found no indication of fraud or collusion.

Attorneys’ Fees and Costs

The court also reviewed the requested $7,734.65 in attorneys’ fees and costs. The award represented 34.5% of the settlement and was within percentages previously approved by courts in the district. As a cross-check, the court reviewed counsel’s billing records under the lodestar method, which compares reasonable hours and hourly rates to the requested award.

Counsel’s billing records showed $3,074.95 in incurred fees, and counsel waived reimbursement of expenses. The court found no excessive work or staffing. Although counsel’s $445 hourly rate was high, the court found it consistent with prevailing market rates in the district and noted counsel’s effort to assign work to lower-billing paralegals and assistants. The court also found that the lodestar multiplier of 2.38 was within a reasonable range.

Disposition

Judge Arun Subramanian approved the settlement and the attorneys’ fees and costs. The court dismissed the case with prejudice, ruled that all pending motions were moot, and directed the Clerk of Court to close the case.