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Price v. On Trac Inc. of Tennessee

United States District Court, W.D. Louisiana, Lafayette Division

December 19, 2018

DANIEL TIMOTHY PRICE, ET AL.
v.
ON TRAC INC. OF TENNESSEE

          DOUGHTY MAGISTRATE JUDGE

          REPORT AND RECOMMENDATION

          PATRICK J. HANNA UNITED STATES MAGISTRATE JUDGE

         The parties reached a settlement in this case, which was conditionally certified as a collective action under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. As a result, the parties filed a joint motion for court approval of their settlement agreement. (Rec. Doc. 29). The parties also provided this Court with a copy of their settlement agreement for in camera review. Based on a review of the motion, the settlement agreement, the applicable law and jurisprudence, and for the following reasons, it is recommended that the joint motion for court approval of the parties' settlement agreement (Rec. Doc. 29) be granted.

         LAW AND ANALYSIS

         “This Court must approve any settlement reached by the parties which resolves the claims in this action brought under Section 16(b) of the FLSA.”[1] Generally, settlement is the preferred means of resolving litigation.[2] Further, there is a “strong presumption” in favor of finding a settlement to be fair.[3] Before the Court may approve a settlement in a collective action brought under the FLSA, it must first determine whether the settlement involves the resolution of a bona fide dispute over an FLSA provision and then decide whether the settlement is fair and reasonable.[4]

         The instant action presents a bona fide dispute over FLSA provisions, including whether the plaintiffs can prove how many hours they actually worked, whether the plaintiffs were properly paid for overtime hours worked, whether the defendant's alleged violations were made in good faith and on reasonable grounds, and whether the defendant's alleged FLSA violations were willful. The case was litigated for a year and a half with discovery, motion practice, meetings between counsel to review documents and discuss the merits of the claims, and a successful settlement conference with this Court, which was held on October 22, 2018. The issues raised by the parties are sufficient for this Court to find that genuine uncertainty as to the outcome of the litigation existed for each side, and a bona fide dispute existed in this case.

         In determining whether a settlement is fair, adequate, and reasonable, a court should consider the following six factors: (1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and absent class members.[5] As part of the fairness determination, a court must also assess the reasonableness of any proposed award of attorneys' fees and expenses sought by the plaintiffs' counsel.[6]

         The parties have agreed to individual settlement amounts for each of the plaintiffs and an amount to compensate the plaintiffs' counsel for his efforts on behalf of the plaintiffs. Having reviewed the settlement agreement carefully, this Court finds no evidence of fraud or collusion behind the settlement. There is “a presumption that no fraud or collusion occurred between counsel, in the absence of any evidence to the contrary.”[7] Since this case was filed in 2017, counsel for the parties have vigorously represented and advanced the positions of their clients by engaging in discovery and competently addressing the issues presented in this litigation. Furthermore, given the parties' participation in status conferences and a settlement conference with this Court, it is clear that the settlement was arrived at by arms-length and good faith negotiations. Thus, the first factor favors approval of the settlement as fair, adequate, and reasonable.

         With regard to the inquiries set forth in the second factor, the complexity, expense, and likely duration of the litigation, this FLSA action presented multiple complex legal issues which have been zealously litigated by experienced counsel, at significant expense. Had a settlement not been consummated, the Court is of the opinion that this case would likely have remained in litigation for a significant amount of time, in excess of at least one or two more years, including any appeal of any adverse judgment, causing the parties to incur significant additional expense. Accordingly, the second factor weighs in favor of finding that the settlement is fair, adequate, and reasonable.

         The third factor, the stage of the proceedings and the amount of discovery completed, likewise supports a finding that the settlement is fair, adequate, and reasonable, and accordingly should be approved. This case has been pending for over one and a half years. During its pendency, the parties conducted discovery and motion practice as well as factual and legal investigations. An investigation into detailed employment and payroll records was necessary, and several substantive issues remained outstanding at the time of the parties' settlement conference with this Court. Therefore, this Court finds that the case is ripe for settlement.

         The fourth factor, the probability of the plaintiffs' success on the merits, also supports a finding that the settlement is fair, adequate, and reasonable. This case has been litigated by competent and experienced lawyers who enjoy great respect in their field from both sides of the aisle. Counsel for the plaintiffs has appeared multiple times in this Court with success on many occasions. Counsel for the defendant is also well known to this Court and the legal community as a skilled litigator, particularly in employment-based matters. In light thereof, and given the nature of the disputed issues underlying this lawsuit, there is uncertainty surrounding the eventual outcome of the litigation, as well as the potential for appeal to the Fifth Circuit, such that the fourth factor weighs in favor of finding that the settlement of this action is fair, adequate, and reasonable.

         The fifth factor, the range of possible recovery, weighs in favor of a finding that the settlement is fair, adequate, and reasonable. The parties carefully negotiated and outlined in their settlement agreement the sums to be received in settlement by each eligible class member, including payments representing back pay and payments representing liquidated damages and interest. This Court therefore finds that the settlement agreement represents a settlement that curtails risk while resolving this dispute for an amount that, both in total and on individual assessment, is adequate, fair, reasonable, and within the range anticipated by this Court.

         The final factor, the opinions of the class counsel, class representatives, and absent class members, also supports a finding that the settlement is fair, adequate, and reasonable. Class counsel and the class representative, as well as the defendant and its counsel, have already approved the terms of the settlement agreement and have joined in asking this Court for approval. In the joint motion for approval of the settlement, the parties represented that the “settlement is in all respects a fair and reasonable resolution of all” of the plaintiffs' legal claims in this lawsuit.[8] There have been no objections to the settlement, and all of the parties agree that the proposed settlement is in the best interests of the parties involved. As recognized herein, the settlement was arrived at after extensive negotiation by experienced counsel. A court is entitled to rely on the judgment of experienced counsel in its evaluation of the merits of a class action settlement.[9] This Court finds no evidence that counsel have not worked in good faith to secure a good and fair settlement.

         As part of the fairness determination, a court must also evaluate the reasonableness of any proposed award of attorneys' fees and expenses sought by the plaintiffs' counsel.[10] In this case, the plaintiffs' counsel seeks approval of an award of in attorneys' fees, expenses, and costs that is represented by the parties to be less than the actual amount incurred by the plaintiffs' counsel in litigating this matter to date.[11] For the reasons ...


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