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Stephens v. Farmers Restaurant Group

United States District Court, District of Columbia

June 20, 2019

SHAYN STEPHENS et al., Plaintiffs,
v.
FARMERS RESTAURANT GROUP et al., Defendants.

          MEMORANDUM OPINION

          TIMOTHY J. KELLY, UNITED STATES DISTRICT JUDGE

         Plaintiffs, who worked at several restaurants operated by Defendants in Virginia, Maryland, and the District of Columbia, bring claims under the Fair Labor Standards Act (FLSA) and District of Columbia and Maryland law, alleging that Defendants violated federal and state minimum-wage, overtime-pay, and sick-leave requirements. The parties have reached a settlement agreement resolving all claims, which the Court preliminarily approved, and they now seek final approval of that agreement. Before the Court are the parties' Joint Motion for Final Approval of the Settlement Agreement, ECF No. 62, as well as Plaintiffs' Unopposed Motion for Attorney's Fees and Expenses, ECF No. 64. For the reasons explained below, the motions will be granted.

         I. Background

         The Court described in detail the factual and procedural background of this case in its two prior opinions. See Stephens v. Farmers Rest. Grp., 291 F.Supp.3d 95 (D.D.C. 2018) (“Stephens I”); Stephens v. Farmers Rest. Grp., 329 F.R.D. 476 (D.D.C. 2019) (“Stephens II”). Thus, the Court recites only the salient aspects of that background here in addition to recounting the developments since the Court preliminarily approved the settlement agreement.

         A. Factual and Procedural History

         Farmers Restaurant Group and co-owners Daniel Simon and Michael Vucurevich (collectively, “Defendants”) operate five restaurants in Virginia, Maryland, and the District of Columbia. ECF No. 5 (“Am. Compl.”) ¶¶ 8-9. On June 7, 2017, six then-current and former employees of Defendants commenced this action, alleging Defendants violated various federal and state labor laws. Plaintiffs' complaint, as amended, brings claims under the FLSA, the District of Columbia Minimum Wage Act (DCMWA), D.C. Code § 32-1001 et seq., the District of Columbia Sick Leave Act (DCSLA), Id. § 32-131, the Maryland Wage and Hour Law (MWHL), Md. Code Ann., Lab. & Empl. § 3-401 et seq., and the Maryland Wage Payment and Collection Law (MWPCL), Id. § 3-501 et seq. See Am. Compl. ¶¶ 45-101.

         In July 2017, Plaintiffs sought conditional certification of a collective action for their FLSA, DCMWA, and DCSLA claims. See ECF No. 13. The Court granted Plaintiffs' motion over Defendants' opposition, conditionally certifying a collective of current and former servers based on some-though not all-of the alleged policies Plaintiffs claimed violated the applicable federal and state wage and hour laws. See Stephens I, 291 F.Supp.3d at 107-21. After Plaintiffs' counsel sent putative members a notice of lawsuit, 119 individuals opted to join the collective action. See Stephens II, 329 F.R.D. at 481.

         In March 2018, Plaintiffs moved to certify two classes covering their District of Columbia and Maryland state-law claims under Federal Rule of Civil Procedure 23, see ECF No. 36, which Defendants opposed, see ECF No. 42. In May of that year, however, and after Plaintiffs' motion was fully briefed, the parties agreed to pursue mediation. Several months later, the parties submitted a proposed settlement agreement to the Court for preliminary approval. See Stephens II, 329 F.R.D. at 481. The Court requested supplemental briefing from the parties on certain aspects of the agreement and the negotiations. See Id. Upon consideration of the parties' filings, the Court granted their motion, provisionally certifying the proposed Rule 23 classes for settlement purposes and preliminarily approving the proposed settlement agreement. See Id. at 491. In that order, the Court also approved the proposed notices to be sent to members of the collective action and to putative Rule 23 class members, appointed a settlement administrator, approved the proposed class representatives for the Rule 23 Maryland and District of Columbia classes, and approved Molly Elkin as class counsel. See id.

         Following the Court's preliminary approval, the settlement administrator mailed notices to the 119 members of the collective action and to 861 members of the Rule 23 classes. See ECF No. 63-1 (“Schwartz Decl.”) ¶ 9. 154 notices were initially returned as undeliverable, but the settlement administrator was ultimately able to locate correct addresses for all but 38 of those individuals. Id. ¶ 10. By the deadline to postmark claims, 226 Rule 23 class members submitted a claim form. Id. ¶ 14.[1] Though advised in the notice of the right to opt out of the settlement and the consequences of taking no action, no member of the Rule 23 classes opted out. See ECF No. 59-5; Schwartz Decl. ¶ 17. And though apprised in the notice of the opportunity to object, no member of the collective action or the Rule 23 classes objected to the settlement agreement. See ECF No. 56-3; ECF No. 59-5; Schwartz Decl. ¶¶ 17-18.

         On May 17, 2019, the parties submitted a joint motion for final approval of the settlement agreement. ECF No. 62. Plaintiffs also submitted an unopposed motion for attorney's fees and expenses under the applicable fee-shifting provisions for the federal and state law claims, as agreed to in the settlement agreement. ECF No. 64; see also ECF No. 65-1 (“Elkin Decl.”). On May 30, 2019, the Court held a fairness hearing to assess the settlement. As there were no objectors, only counsel for the parties were present, and they discussed in more detail the negotiations, the agreement terms, and their opinions about the settlement.

         B. The Settlement Terms

         The terms of the settlement agreement have not changed since the Court preliminarily approved it. ECF No. 63 (“Final Approval Mot.”) at 3; see also ECF No. 56-2 (“Agreement”); Stephens II, 329 F.R.D. at 481-82.

         The agreement settles all federal and state wage and hour claims of the 119 servers who opted in to the collective action as well as all claims of members of the Rule 23 class action. The two Rule 23 settlement classes, under Maryland and District of Columbia law, respectively, consist of 861 current and former servers who worked in one of Defendants' restaurants in either Maryland or the District of Columbia between June 7, 2014, and July 20, 2018. Agreement ¶ 1.2.[2]

         Upon final approval of the settlement, Defendants will deposit $1, 490, 000 in a settlement fund to be distributed as described below. Id. ¶ 9.3. Class counsel will receive an award of $388, 484 in attorney's fees and $8, 516 for litigation expenses, and the settlement administrator will be paid in an amount not to exceed $35, 000 for its services. Id. ¶¶ 10.3-.4. Each of the seven named plaintiffs, as representatives of the collective action and Rule 23 classes, will receive a service award of $5, 000. Id. ¶ 10.5. The 119 individuals who opted in to the collective action will receive $498, 715, to be distributed to each individual based on the total number of weeks that he or she worked as a server during the applicable period. Id. ¶¶ 10.6-.7. Of the remaining $524, 285 set aside for members of the Rule 23 class, $179, 538.52 has been claimed by the 226 individuals who submitted proper claim forms. Schwartz Decl. ¶ 16. The unclaimed balance of $344, 746.48 will revert to Defendants.

         II. Legal Standard

         A. Rule 23 Class Certification

         Parties seeking class certification, even for settlement purposes only, must show that they meet the prerequisites of Rule 23(a) and fall within at least one of the categories described in Rule 23(b). See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613-14 (1997); see also Trombley v. Nat 'l City Bank, 826 F.Supp.2d 179, 191-92 (D.D.C. 2011) (“Trombley II”). Rule 23(a) requires: (1) that the proposed class be “so numerous that joinder of all members is impracticable”; (2) that there be “questions of law or fact common to the class”; (3) that “the claims or defenses of the representative parties are typical of the claims or defenses of the class”; and (4) that the representatives “will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a). And under Rule 23(b)(3), by which the parties seek certification, the parties must “demonstrate (1) predominance of common questions of law and fact to the entire class, and (2) superiority of the class action method to other methods of adjudication for the controversy.” Trombley II, 826 F.Supp.2d at 193.

         B. Final Approval of the Settlement Agreement

         Parties to a class action cannot enter into a binding settlement agreement without court approval. Fed. R Civ. P. 23(e); see also Thomas v. Albright, 139 F.3d 227, 231 (D.C. Cir. 1998). A reviewing court may approve a proposed agreement “only after a hearing and only on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2). In making that determination, a court must consider whether: (1) “the class representatives and class counsel have adequately represented the class”; (2) “the proposal was negotiated at arm's length”; (3) “the relief provided for the class is adequate, taking into account, ” as relevant here, the costs, risks, and delay of trial and appeal, the effectiveness of the proposed method of distributing relief to the class, and the proposed attorney's fee awards; and (4) “the proposal treats class members equitably relative to each other.” Id. When the parties are “seeking class certification and settlement at the same time, however, ” the court must apply “‘closer judicial scrutiny' than settlements that are reached after class certification.” Trombley v. Nat 'l City Bank, 759 F.Supp.2d 20, 23 (D.D.C. 2011) (“Trombley I”) (quoting Manual for Complex Litigation (Fourth) § 21.612 (2004)).

         Whether to approve a proposed settlement agreement is ultimately within the discretion of the reviewing court. In re Lorazepam & Clorazepate Antitrust Litig., 205 F.R.D. 369, 375 (D.D.C. 2002). But that discretion “is constrained by the ‘principle of preference' favoring and encouraging settlement in appropriate cases.” In re Vitamins Antitrust Litig, 305 F.Supp.2d 100, 103 (D.D.C. 2004) (quoting Pigford v. Glickman,185 F.R.D. 82, 103 (D.D.C. 1999)). Indeed, in this Circuit, “[settlement is highly favored, as ‘ [n]ot only the parties, but the general public as well, benefit from the saving of time and money that results from the voluntary settlement of litigation.'” ...


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