Opinion
Index No. 531125/2022
10-06-2023
Brysen Brown, individually and on behalf of all others similarly situated, Plaintiff, v. Sisense, Inc., Defendant
Outten & Golden LLP, New York City (Melissa L. Stewart of counsel), for Plaintiff. Sheppard, Mullin, Richter & Hampton LLP, New York City (Katerina Mantell of counsel), for Defendant.
Unpublished Opinion
Outten & Golden LLP, New York City (Melissa L. Stewart of counsel), for Plaintiff.
Sheppard, Mullin, Richter & Hampton LLP, New York City (Katerina Mantell of counsel), for Defendant.
AARON D. MASLOW, JUSTICE
The following numbered papers were read on this motion:
NYSCEF Doc No. 1: Summons and Complaint
NYSCEF Doc No. 2: Exhibit A - Consent to be Plaintiff
NYSCEF Doc No. 3: Notice of Appearance
NYSCEF Doc No. 4: Notice of Motion for Approval of Collective Action Settlement
NYSCEF Doc No. 5: Memorandum of Law in Support of Motion
NYSCEF Doc No. 6: Affirmation of Melissa Stewart, Esq. in Support of Plaintiff's Motion
NYSCEF Doc No. 7: Settlement Agreement and Release
NYSCEF Doc No. 8: Plaintiff's Cost Summary
NYSCEF Doc No. 9: Proposed Order Granting Plaintiff's Unopposed Motion
NYSCEF Doc No. 10: Order in Braham v Manufacturers and Traders Trust Company
NYSCEF Doc No. 11: Order in Kennedy v Manufacturers and Traders Trust Company
NYSCEF Doc No. 12: Request for Judicial Intervention Regarding Notice of Motion
NYSCEF Doc No. 13: Stipulation re Time to Answer
NYSCEF Doc No. 14: Stipulation
NYSCEF Doc No. 15: Stipulation of Agreement to Proposed Order
NYSCEF Doc No. 16: Stipulated Proposed Order Granting Plaintiff's Motion
NYSCEF Doc No. 17: Supplemental Affirmation of Melissa Stewart, Esq. in Support of Motion
NYSCEF Doc No. 18: Fee Entries
NYSCEF Doc No. 19: Cost Entries
NYSCEF Doc No. 20: Order in Ardaix v BetterCloud, Inc.
NYSCEF Doc No. 21: Order in Eisenman v The Ayco Company, L.P.
NYSCEF Doc No. 22: Order in Islam v Morgans Hotel Group Management LLC
NYSCEF Doc No. 23: Order in Cedeno v Hibernia Construction LLC, et al.
NYSCEF Doc No. 24: Order in Mauro v Gurney's Inn Resort & Spa LLC
NYSCEF Doc No. 25: Order in Gonzalez v Sterling Caterers, Inc., et al.
NYSCEF Doc No. 26: Order in Padder v Levy Premium Foodservice Limited Partnership
NYSCEF Doc No. 27: Order in Braham v Manufacturers and Traders Trust Company
NYSCEF Doc No. 28: Order in Flaherty v Bath & Body Works, LLC
NYSCEF Doc No. 29: Order in Smith v Alteryx, Inc.
NYSCEF Doc No. 30: Order in Lombardi v Shopkeep, Inc.
NYSCEF Doc No. 31: Affirmation in Support in Ardaix v BetterCloud, Inc.
NYSCEF Doc No. 32: Order in Casebeer Darktrace, Inc.
NYSCEF Doc No. 33: Order in Villasin v American Yacht Club
NYSCEF Doc No. 34: Memorandum of Law in Villasin v American Yacht Club
NYSCEF Doc No. 35: Order in Salzmann v Metropolis Country Club, Inc.
NYSCEF Doc No. 36: Memorandum of Law in Salzmann v Metropolis Country Club, Inc.
NYSCEF Doc No. 37: Notice of Entry in Won Kim v TD Ameritrade, Inc.
NYSCEF Doc No. 38: Affidavit of Brian S. Schaffer, Esq. in Won Kim v TD Ameritrade, Inc.
NYSCEF Doc No. 39: Order in Destra v OS Restaurant Services, Inc.
NYSCEF Doc No. 40: Affidavit of Brian Schaffer, Esq. in Destra v OS Restaurant Services, Inc.
NYSCEF Doc No. 41: Order in Jones v Guidepoint Global LLC
NYSCEF Doc No. 42: Supplemental Affirmation in Jones v Guidepoint Global LLC
NYSCEF Doc No. 43: Order in Pierre v Kaufman Enterprises, LLC
NYSCEF Doc No. 44: Affirmation of Troy L. Kessler in Pierre v Kaufman Enterprises, LLC
NYSCEF Doc No. 45: Order in Waloven v Forty Eight Lounge LLC
NYSCEF Doc No. 46: Affirmation in Support in Waloven v Forty Eight Lounge LLC
NYSCEF Doc No. 47: Order in Kulauzovic v Citibank, N.A.
NYSCEF Doc No. 48: Affirmation in Support in Kulauzovic v Citibank, N.A.
NYSCEF Doc No. 49: Order in Diaz v Albert Kemperle, Inc.
NYSCEF Doc No. 50: Memorandum of Law in Diaz v Albert Kemperle, Inc.
NYSCEF Doc No. 51: Order in Grant v Jay-Jay Cabaret, Inc.
NYSCEF Doc No. 52: Memorandum of Law in Grant v Jay-Jay Cabaret, Inc.
NYSCEF Doc No. 53: Order in Jacobs v Washington Place, LLC
NYSCEF Doc No. 54: Memorandum of Law in Jacobs v Washington Place, LLC
NYSCEF Doc No. 55: Letter from Plaintiff to Justice Aaron D. Maslow
NYSCEF Doc No. 56: Stipulated Order Granting Plaintiff's Unopposed Motion
Upon the foregoing papers and having heard oral argument on the record from appearing counsel, the within motion is determined as follows.
I. Introduction
Plaintiff Brysen Brown ("Plaintiff") filed an unopposed motion for approval of a collective action settlement on October 27, 2022 (see NYSCEF Doc No. 4). On April 3, 2023, the parties submitted a Joint Stipulation (see NYSCEF Doc No. 15), stating that the motion is unopposed and agreeing to the text of the Stipulated Proposed Order (see NYSCEF Doc No. 16).On April 14, 2023, our Part requested via email that Plaintiff submit a supplemental affirmation regarding Plaintiff's counsel's fees (see NYSCEF Doc No. 55 at 1). Plaintiff submitted the affirmation in question on May 2, 2023 (see NYSCEF Doc No. 17).
II. Plaintiff's Claim Under the FLSA
Plaintiff worked as an overtime-exempt Development Representative for Defendant Sisense, Inc. ("Defendant") from October 2019 to October 2020 (see NYSCEF Doc No. 6, Stewart Aff ¶ 12). Plaintiff alleges that Defendant violated the FLSA, 29 U.S.C. §§ 201, et seq. and California law by improperly classifying him, and other similarly situated employees, namely, Account Development Representatives, Sales Development Representatives and Business Development Representatives (collectively "Development Representatives"), as exempt from federal overtime requirements and by failing to pay them overtime wages (see id.).
III. Plaintiff's Counsel's Investigation of this Matter
Before filing suit, Plaintiff's counsel asserts that it conducted a thorough investigation as well as legal research, which focused on the merits of the putative collective members' claims, the damages to which they were entitled, the legal exemptions that apply to the sales industry, and the likelihood of collective action certification (see id. ¶ 13).
To explore potential pre-litigation resolution of this matter, Plaintiff's counsel informed Defendant, by letter dated February 9, 2022, of the allegation that Development Representatives were misclassified as exempt (see id. ¶ 14).
IV. The Mediation
In approximately March 2022, the parties agreed to participate in a mediation (see id. ¶¶ 15-16). At that juncture, the parties engaged in an informal exchange of discovery (see id. ¶ 16). Defendant produced Plaintiff's personnel documents, job descriptions, as well as summary compensation information and dates of employment for potential class members, which enabled Plaintiff's counsel to develop a damages model and calculate damages allegedly sustained by Plaintiff and the putative collective members (see id.).
On July 14, 2022, the parties attended a remote mediation session with Dina Jansenson, Esq., an experienced collective action mediator (see id. ¶ 17). The parties agreed on a settlement in principle, memorialized in a memorandum of understanding dated July 14, 2022 (see id.). During the next several months, the parties finalized the terms of the proposed settlement, which are memorialized in the parties' Settlement Agreement, executed on October 12, 2022 (see id.).
V. Plaintiff's Counsel Views the Proposed Settlement as Fair and Reasonable
Based on the informal discovery conducted in this case, Plaintiff's counsel opines that the proposed settlement is fair, reasonable and in the best interest of the putative collective members in light of the risk of significant delay, as well as defenses asserted by Defendant as to collective action certification and the merits of the claims (see id. ¶ 18).
VI. The Proposed Settlement
Pursuant to the Settlement Agreement, a Gross Fund of $699,999.99 shall be established to settle claims against Defendant (the "Gross Fund"), which Gross Fund is to be funded by Defendant (see NYSCEF Doc No. 7, Settlement Agreement and Release ¶ 1.10).
The Gross Fund covers putative collective members' settlement awards; Plaintiff's counsel's attorney's fees and costs; any service award approved for the named Plaintiff; liquidated damages; interest; and the fees and costs of the Settlement Administrator (see id.).
Plaintiff contends that the average net settlement per person, after accounting for payment of fees, costs, service awards and administration, amounts to approximately $4,847.99 (see NYSCEF Doc No. 55 at 1).
A viable argument can be made that the aforesaid sum of $4,847.99, albeit far from life-altering, provides putative collective members with meaningful economic benefit, particularly when contrasted with other like collective action settlements, from which recipients alas often derive de minimis sums or all but valueless coupons.
Plaintiff's counsel is seeking $233,333.33 in attorneys' fees, as well as out-of-pocket costs amounting to $268.33, as reflected in counsel's most recent Supplemental Affirmation on the subject, dated May 2, 2023 (see NYSCEF Doc No. 6, Stewart Supplemental Aff ¶¶ 10, 33).
VII. Does the Parties' Proposed Settlement Satisfy the Factors Relevant to Approval of a Collective Action Settlement?
The Court's role in this process is to ascertain whether the parties' proposed settlement satisfies the factors relevant to approval of a collective action settlement.
VIII. Case Law Germane to the Approval of FLSA Settlements
Settlements seeking dismissal of claims under the FLSA require court approval, or, alternatively, supervision by the United States Department of Labor (see Cheeks v Freeport Pancake H., Inc., 796 F.3d 199, 200 [2d Cir. 2015]). "In the context of FLSA settlements of collective actions, it is well established that the same due process issues that arise in the context of a Rule 23 [or a CPLR 908] class action settlement are not implicated" (Weston v TechSol, LLC, No. 17 Civ. 0141, 2018 U.S. Dist LEXIS 166574, *10 [EDNY Sept. 26, 2018]). The rationale underlying this distinction is that "plaintiffs in an FLSA action may decide not to opt-in to the settlement, thereby retaining the right to sue the defendant for the same claims at a later date" (id.).
. "Although the [CPLR] does not define the criteria for [settlement approval under CPLR 908], New York courts have recognized that its class action statute is similar to the federal statute" (Fiala v Metro. Life Ins. Co., 27 Misc.3d 599 [Sup Ct, NY County 2010]).
As such, the "standard for approval of an FLSA settlement is lower than for a class action." (Viafara v MCIZ Corp., 2014 U.S. Dist LEXIS 60695, *22 [SDNY Apr. 30, 2014]). Courts review a proposed settlement under the FLSA to determine whether it is a "fair and reasonable" compromise of disputed issues and authorize notice of the settlement to a collective of similarly situated employees to whom notice of the settlement will be distributed (Weston, 2018 U.S. Dist LEXIS 166574, *7-9). As held by the Southern District of New York in Viafara, "[c]ourts approve FLSA settlements when they are reached as a result of contested litigation to resolve bona fide disputes" (Viafara, 2014 U.S. Dist LEXIS 60695, *22).
A one-step settlement approval process is recognized as the appropriate procedure for settling a collective action under the FLSA (e.g. Rue-Scott Braham v Manufacturers & Traders Trust Co., Sup Ct, Kings County, King, J., Index No. 516209/2020 [NYSCEF Doc No. 10]; Kennedy v Manufacturers & Traders Trust Co., Sup Ct, NY County, Rivera, J., Index No. 505693/2018 [NYSCEF Doc No. 11]; see also Weston, 2018 U.S. Dist LEXIS 166574, *28 [EDNY Sept. 26, 2018] [granting motion for settlement approval and attorneys' fees, as well as simultaneously "approv(ing) the proposed Notice and Claim Form, and authoriz(ing) distribution to the settlement collective"]).
IX. The Proposed Settlement Is Approved as Fair and Reasonable
Courts approve FLSA settlements when they are reached as a result of contested litigation to resolve bona fide disputes (see Lynn's Food Stores, Inc. v U.S., 679 F.2d 1350, 1353 [11th Cir 1982]). Courts regard the adversarial nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement (see Beckman v KeyBank, N.A., 293 FRD 467, 476 [SDNY 2013]).
A review of the NYSCEF case file for this case reveals that, other than a Summons and Complaint, effectively no customary litigation-related activity has taken place in this case, such as (1) responsive pleadings, including an answer, (2) examinations before trial, (3) bills of particulars, (4) notices to admit, (5) examinations before trial, (6) expert witness disclosures pursuant to CPLR 3101 (d), (7) preliminary conference, (8) compliance conference, (9) motions to dismiss, (10) motions for summary judgment, and (11) motion practice other than for settlement purposes. A review of the NYSCEF case file for this action reveals that of the 56 documents uploaded onto NYSCEF, with the exception of the Summons and Complaint, no substantive litigation-related document has been uploaded onto NYSCEF. This action was not the subject of a vigorous adversarial process. Plaintiff deftly eschews this factor in Plaintiff's Memorandum of Law (see NYSCEF Doc No. 5).
The foregoing notwithstanding, one may nonetheless advance a potent argument that the parties' proposed FLSA settlement meets the standard for approval. A convincing argument can be made that the proposed settlement was reached after vigorous arm's length negotiations facilitated by an experienced mediator, along with the exchange of extensive mediation discovery (see NYSCEF Doc No. 6, Stewart Aff ¶¶ 16-17); Campos v Goode, No. 10 Civ. 0224, 2011 U.S. Dist LEXIS 22959, *16 [SDNY Mar. 4, 2011] [FLSA settlement approved after "the parties engaged in mediation with an experienced mediator in an effort to reach a resolution"]).
Further weighing in favor of approving the proposed settlement, Plaintiff alleges that the settlement represents a significant percentage of the recovery that putative collective members would have achieved had they prevailed on all of their claims and survived an appeal, and a substantial portion of what Defendant would be required to pay if faced with a judgment (see NYSCEF Doc No. 5, Memorandum of Law at 8). As Plaintiff contents, the net settlement fund represents an estimated 45% of putative collective members' lost wages, assuming that putative collective members worked an average of eight overtime hours per overtime (see NYSCEF Doc No. 6, Stewart Aff ¶¶ 34). Plaintiff alleges that the average putative collective member's net award amount is $4,847.99 (see id.).
Plaintiff further argues that the parties' proposed settlement is reasonable in light of the substantial risk that Plaintiff faces (see NYSCEF Doc No. 5, Memorandum of Law at 9). Assessing the adequacy of a settlement "requires balancing the value of that settlement against the present value of the anticipated recovery following a trial on the merits, discounted for the inherent risks of litigation" (Reeves v La Pecora Bianca, Inc., 2020 NY Slip Op 31817[U], *4 [Sup Ct NY County 2020]). Indeed, "[i]f settlement has any purpose at all, it is to avoid a trial on the merits because of the uncertainty of the outcome" (In re Ira Haupt & Co., 304 F.Supp. 917, 934 [SDNY 1969]).
Plaintiff argues that his case is subject to substantial risk, which risk element further militates in favor of approving the proposed settlement (see NYSCEF Doc No. 5, Memorandum of Law at 9). For instance, there was a risk that Plaintiff would not succeed in certifying or maintaining a collective action through trial since Defendant could be expected to argue that the differences among various locations and other individualized questions preclude collective certification (see id.). In fact, other defendants have prevailed on like arguments in similar cases (e.g. End-Hatcher v Sprint Nextel Corp., 2009 U.S. Dist LEXIS 127262, *16 [SDNY Nov. 13, 2019] [denying certification of collective sales consultants at locations nationwide for lack of proof of common policy]).
Plaintiff asserts that a trial on the merits entails a significant risk for Plaintiff as to damages since Plaintiff would bear the burden to establish that putative collective members consistently worked over 40 hours a week, a potentially daunting task in light of the dearth of contemporaneous time records (see NYSCEF Doc No. 5, Memorandum of Law at 10). The risk faced by Plaintiff should this case proceed to trial further weighs in favor of approval of the parties' proposed settlement. As the Southern District has held, that a "proposed FLSA settlement reflects a reasonable compromise over contested issues" weighs in favor of approval of the parties' proposed settlement (Beckman v KeyBank, N.A.. 293 FRD 467, 476 [SDNY 2013]).
X. The Award of Attorneys' Fees and Costs Sought Is Appropriate
Plaintiff's counsel is seeking $233,333.33 in attorneys' fees, as well as out-of-pocket costs amounting to $268.33 (see NYSCEF Doc No. 6, Stewart Supplemental Aff ¶¶ 10, 33).
The attorneys' fee sought by Plaintiff's counsel - one-third of the settlement fund - is routinely granted by courts in the context of wage and hour settlements (e.g. Milton v Bells Nurses Registry & Emp. Agency, Inc., 2015 NY Misc. LEXIS 4604, *13 [Sup Ct, Kings County 2015] [awarding one-third of settlement fund]; Hastings v Regeis Care Center, LLC, 2018 NY Misc. LEXIS 11289, *10-11 [Sup Ct, Bronx County 2018] [awarding one-third of settlement fund]; Mancia v HSBC Secs. (USA), Inc., 2016 NY Misc. LEXIS 496, *1 [Sup Ct, Kings County 2016] [awarding one-third of settlement fund]; Ryan v Volume Servs. Am., 2013 NY Misc. LEXIS 932, *11 [Sup Ct, New York County 2013] [awarding one-third of settlement fund]).
The attorneys' fee sought by Plaintiff's counsel is also consistent with the retainer agreement entered into by Plaintiff, which provides that counsel will receive one-third of any recovery (see NYSCEF Doc No. 6, Stewart Aff ¶¶ 41). Retainer "agreements are strong evidence of what members of the [collective] have found to be a reasonable fee" (Friedman v Northville Indus. Corp., 1991 NY Misc. LEXIS 837, *12 [Sup Ct, Suffolk County 1991]).
The risk of litigation is" 'perhaps the foremost factor to be considered' in determining the award of appropriate attorneys' fees" (Taft v Ackermans, No. 02 Civ. 7951, 2017 U.S. Dist LEXIS 9144, *30 [SDNY Jan 31, 2017]; see Matter of Lawrence, 24 N.Y.3d 320, 326 [2014] [reasonableness of fees depends "on a number of factors, primarily the risk to the attorneys and the value of their services in proportion to the overall fee"]; Milton v Bells Nurses Registry & Emp. Agency, Inc., 2015 NY Misc. LEXIS 4604, *15 [Sup Ct, Kings County 2015] ["[C]ontingency fees... transfer a significant portion of the risk of loss to the attorneys taking a case. Access to the courts would be difficult to achieve without compensating attorneys for that risk"]).
In the present case, Plaintiff's counsel undertook this action without any assurance of payment for counsel's services, pursuing the case on a wholly contingent basis in the face of the risk that Plaintiff's claims would not come to fruition (see NYSCEF Doc No. 6, Stewart Aff ¶¶ 42), which risks were addressed in the preceding section (see Hart v RCI Hosp. Holdings, No. 09 Civ. 3043, 2015 U.S. Dist LEXIS 126934, *42 [SDNY Sept. 22, 2015] [granting counsel's "substantial fee award" to "recognize the outsize risks that (class counsel) took in investing in (that) uncertain lawsuit"]).
Further weighing in favor of the grant of the attorneys' fees sought, Plaintiff's counsel provided the Court with exhaustively detailed submissions buttressing its legal fees request, including: (1) a recently-filed supplemental affirmation on the subject, dated May 2, 2023, in which counsel analyzes a second route to assess the propriety of its legal fees via the lodestar approach, which approach concededly yields a lower preliminary figure ($147,441.00 before application of a multiplier) than the one-third fee computation method) (see NYSCEF Doc No. 6, Stewart Supplemental Aff ¶ 3); and (2) a detailed spreadsheet, dated May 2, 2023, featuring attorney and support staff time entries (see NYSCEF Doc No. 18, Time Entries).
XI. Conclusion
This Court finds the herein described settlement to be fair and reasonable and will sign the proposed Order approving the collective action settlement.