Polanco v. Victory Auto Group LLC
- Paul Engelmayer
- 1:23-cv-10900
- U.S. District Court · Southern District of New York
- 2
In Polanco v. Victory Auto Group LLC, Judge Engelmayer ordered clarification whether a Rule 68 settlement covered six named plaintiffs or absent class members.
The six named plaintiffs, the defendants, and any absent class members whose claims might be covered by the proposed settlement.
What happened
Polanco v. Victory Auto Group LLC is a Fair Labor Standards Act and New York Labor Law case involving Juan Polanco and five other named plaintiffs. The parties submitted a settlement under a rule allowing a party to accept a formal offer of judgment from the opposing side.
The court understood the agreement to cover only the six named plaintiffs, not people who were absent from the proposed class. But the agreement did not clearly say that. This mattered because settlements involving a certified class under the federal class-action rule require court approval.
Judge Engelmayer ordered the parties to submit a joint letter by March 21, 2024, explaining whether the settlement resolved only the six named plaintiffs’ claims or also purported to resolve claims belonging to other people. The order did not itself approve or reject the settlement.
The detailed version
- Polanco v. Victory Auto Group LLC · No. 1:23-cv-10900
- Paul Engelmayer
- Mar. 15, 2024
Background
Juan Polanco brought this action under the Fair Labor Standards Act and New York Labor Law as a collective action and class action. On March 8, 2024, the parties submitted a settlement agreement. Juan Polanco and five additional named plaintiffs—Astariel Francis, Caprice Loga, Germinal Lantigua, Glennys Pena, and Jinelca Mercado—accepted defendants’ offer of judgment under Federal Rule of Civil Procedure 68.
The court discussed the general requirement that private settlements of Fair Labor Standards Act claims ordinarily receive approval from the court or the Department of Labor. It also noted that the Second Circuit has held that court approval is not required for Rule 68 offers of judgment settling Fair Labor Standards Act claims.
Issue
The court found that this case differed because it included a proposed class action under New York Labor Law. The court understood the agreement to be limited to the six named plaintiffs and not to bind absent class members, but the parties’ submission did not expressly say so. Under Federal Rule of Civil Procedure 23(e), claims of a certified class may be settled, voluntarily dismissed, or compromised only with court approval.
Order
The court directed the parties to submit a joint letter by March 21, 2024. The letter had to state whether the Rule 68 offer resolved the claims only of the six plaintiffs specifically named in the proposed judgment or purported to resolve the claims of any other people. The order did not approve or reject the settlement. Judge Engelmayer entered the order on March 15, 2024.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.