Opinion
18-CV-5077 (MMH)
2022-03-31
Chao Ping LI and Jian Li, Plaintiffs, v. HLY CHINESE CUISINE INC. d/b/a New HLY Chinese Cuisine, Hua Yao, and Tao Liu, Defendants.
Ge Qu, Jian Hang, Shan Zhu, Hang & Associates, PLLC, Flushing, NY, for Plaintiffs. Joey Tsai, Tsai PLLC, New York, NY, for Defendants.
Ge Qu, Jian Hang, Shan Zhu, Hang & Associates, PLLC, Flushing, NY, for Plaintiffs.
Joey Tsai, Tsai PLLC, New York, NY, for Defendants.
MEMORANDUM & ORDER
MARCIA M. HENRY, United States Magistrate Judge:
Plaintiffs Chao Ping Li ("C. Li") and Jian Li ("J. Li") bring this wage and hour action against Defendants HLY Chinese Cuisine Inc., Hua Yao, and Tao Liu (collectively, "Defendants") pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. and New York Labor Law ("NYLL"). (See generally Compl., ECF No. 1.) Before the Court is the parties’ joint motion for settlement approval pursuant to Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). (See generally Motion for Settlement, ECF No. 31 ("Mot.").) For the reasons set forth herein, the Motion is GRANTED.
I. BACKGROUND
A. Factual Background
As alleged in the Complaint, Yao and Liu owned and operated HLY Chinese Cuisine Inc. d/b/a New HLY Chinese Cuisine, a restaurant located in Flushing, New York. (Compl., ECF No. 1 ¶¶ 14, 16.) Defendants employed both Plaintiffs as cooks in their restaurant. (Id. ¶¶ 7–8; Mot., ECF No. 31 at 1–2.)
Specifically, C. Li alleges that he worked as a kitchen cook from August 8, 2016 to August 30, 2018. (Compl. ¶¶ 7, 24.) While he worked 12 hours per day six days per week, he was paid a fixed monthly sum regardless of the hours he actually worked. (Id. ¶¶ 25-26.) His monthly wage started at $2,500 in August 2016 and rose periodically to his final rate of $4,000 per month. (Id. ¶ 27.) C. Li was paid in cash for most of his employment with Defendants. (Id. ¶¶ 27-28.)
J. Li worked as a kitchen cook from October 12, 2017 to August 20, 2018. (Id. ¶ 30.) J. Li was also paid fixed monthly rates ranging from $3,400 to $3,600, regardless of hours worked. (Id. ¶ 33.) Defendants paid J. Li in cash and checks. (Id. ¶ 34.) J. Li also alleges that Defendants owe him an additional $3,157. (Mot. at 2.)
B. Procedural History
Plaintiffs commenced this action on September 10, 2018, asserting individual and collective actions claims. (See generally Compl., ECF No. 1.) The Honorable Sanket J. Bulsara, the previously assigned magistrate judge, referred the parties to mediation in February 2019 and March 2020, but both sessions were unsuccessful. (See Feb. 8, 2019 Order; Mar. 2, 2020 Order.) The parties engaged in discovery, including depositions of the Defendants, and filed a joint pretrial order. (Proposed Pretrial Order, ECF No. 26.) The parties were also scheduled for a final pretrial conference before the Honorable Pamela K. Chen. (See June 23, 2021 Order.)
The case was reassigned to me on June 7, 2021.
On July 14, 2021, the parties appeared before the undersigned for a settlement conference and reached a settlement in principle. (See Jul. 14, 2021 Minute Entry & Order.) Subsequently, the parties advised the Court that Liu had stopped responding to counsel and was unable to make the payments according to the parties’ agreed-upon schedule. (Sept. 17, 2021 Ltr., ECF No. 30.) At a subsequent status conference with me, the parties reported a revised settlement. (Sept. 28, 2021 Minute Entry and Order.)
The settlement included only the named Plaintiffs and Defendants, as Plaintiffs did not seek collective action certification and no other Plaintiffs joined the action.
The parties filed their motion for settlement approval on October 11, 2021. (Mot., ECF No. 31.) Judge Chen referred the motion to me for a Report and Recommendation on November 1, 2021. On November 19, 2021, I requested supplemental information, which Plaintiffs submitted on December 1, 2021. (Suppl. Ltr., ECF No. 32.) The parties appeared for a telephonic Cheeks hearing on January 12, 2022. (See Jan. 12, 2022 Minute Entry & Order; see also Transcript ("Tr."), ECF No. 34.) Subsequently, the parties consented to my jurisdiction, which Judge Chen approved. (See Jan. 19, 2022 Order.)
II. DISCUSSION
A. Legal Standard
"In the Second Circuit, ‘parties cannot privately settle FLSA claims with a stipulated dismissal with prejudice under Federal Rule of Civil Procedure 41 absent the approval of the district court or the [United States] Department of Labor.’ " Cano v. Cherry Lawn Farms, Inc. , No. 19-CV-9469 (AEK), 2021 WL 2481489, at *1 (S.D.N.Y. June 17, 2021) (quoting Fisher v. SD Prot. Inc. , 948 F.3d 593, 599 (2d Cir. 2020) ). A reviewing court must ensure that the proposed agreement between the plaintiff and the defendant " ‘reflects a reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought about by an employer's overreaching.’ " Rotthoff v. New York State Cath. Health Plan, Inc. , No. 19-CV-4027 (AMD)(CLP), 2021 WL 1310220, at *2 (E.D.N.Y. Apr. 8, 2021) (quoting Le v. SITA Information Networking Computing USA, Inc. , No. 07-CV-86 (JS)(MLO), 2008 WL 9398950, at *1 (E.D.N.Y. June 12, 2008) ); Santana v. Los Limones Grocery Corp. , No. 17-CV-5264 (CLP), 2018 WL 6061340, at *2 (E.D.N.Y. Nov. 6, 2018) (same). The Court's review must be based on the totality of the circumstances. Cano , 2021 WL 2481489, at *1.
Courts generally consider a non-exclusive list of factors to determine whether a settlement is fair and reasonable:
(1) the plaintiff's range of possible recovery; (2) the extent to which the settlement will enable the parties to avoid anticipated burdens and expenses in establishing their respective claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; and (5) the possibility of fraud or collusion.
Fisher , 948 F.3d at 600 (2d Cir. 2020) (quoting Wolinsky , 900 F. Supp. 2d at 335–36 ); see also Jun Cui v. O2 Korean BBQ , No. 19-CV-2794 (DLI)(SJB), 2020 WL 7034369, at *4 (E.D.N.Y. Feb. 11, 2020). Conversely, the following factors can weigh against approving a settlement:
(1) the presence of other employees situated similarly to the claimant; (2) a likelihood that the claimant's circumstance will recur; (3) a history of FLSA non-compliance by the same employer or others in the same industry or geographic region; and (4) the desirability of a mature record and a pointed determination of the governing factual or legal issue to further the development of the law either in general or in an industry or in a workplace.
Abreu v. Congregation Yetev Lev D'Satmar Meats & Poultry, Inc. , 17-CV-272 (KAM)(LB), 2019 WL 2526087, at *3 (E.D.N.Y. June 19, 2019) (quoting Wolinsky , 900 F. Supp. 2d at 336 ).
"The Court must also separately assess the reasonableness of plaintiffs’ attorney's fees, even when the fee is negotiated as part of a settlement rather than judicially determined." Lliguichuzhca v. Cinema 60, LLC , 948 F. Supp. 2d 362, 366 (S.D.N.Y. 2013). "[C]ourts must ... carefully scrutinize the settlement, including to ensure that counsel's pecuniary interest ‘did not adversely affect the extent of relief counsel procured for the client[ ].’ " Abreu , 2019 WL 2526087 at *4 (quoting Wolinsky , 900 F. Supp. 2d at 336 ). To enable the Court to evaluate the reasonableness of the proposed fees, counsel must submit evidence supporting their requested fees including, for example, billing records. Wolinsky , 900 F. Supp. 2d at 336.
B. Terms of the Settlement
The motion for settlement approval includes a fully executed "Settlement Agreement" that sets forth the parties’ agreed-upon terms. (See Mot., Ex. A ("Settlement Agt."), ECF No. 31-1.) The proposed settlement agreement provides for a total settlement payment of $90,000, of which $58,789.33 will be paid to Plaintiffs and $31,210.67 will be paid to their attorneys in fees and costs. (Mot., ECF No. 31 at 2; Settlement Agt., ECF No. 31-1 § 3.) The settlement funds will be paid in monthly installments to Plaintiffs and their counsel. (Settlement Agt., ECF No. 31-1 § 3.1, Ex. B.) In consideration for the payment, Plaintiff will withdraw all claims underlying this action and any other wage and hour claims. (Id. § 1.1.) Defendants, in turn, agree to release Plaintiff from "any and all causes of action, suits, damages, claims, judgments, interest, attorneys’ fees, liquidated damages, punitive damages, costs and expenses whatsoever relating to, or in connection with, any claims under the [FLSA, NYLL]" and any other wage and hour claims. (Id. § 1.2.) As set forth below, based on the totality of the circumstances, the Court finds that the proposed settlement is fair and reasonable. Wolinsky , 900 F. Supp. 2d at 335.
1. Factors Supporting Reasonableness
a. Plaintiffs’ Range of Possible Recovery
A plaintiff can show the range of recovery based on, inter alia , facts alleged in the Complaint or revealed through discovery. Lopez v. Nights of Cabiria, LLC , 96 F. Supp. 3d 170, 176–77 (S.D.N.Y. 2015) (rejecting FLSA settlement where the parties did not provide estimated number of hours worked or applicable ranges); Douglas v. Allied Universal Sec. Servs. , 371 F. Supp. 3d 78, 83–84 (E.D.N.Y. 2019), reconsideration denied , 381 F. Supp. 3d 239 (E.D.N.Y. 2019) (collecting cases). C. Li alleges that he was paid the following fixed rates regardless of hours worked: (a) $2,500 from August 2016 to October 2016; (b) $3,200 from October 2016 to December 2016; (c) $3,600 from January 2017 to December 2017; (d) $3,800 from January 2018 to April 2018; and (e) $4,000 from May 2018 to August 2018. (Mot., ECF No. 31 at 1.) Likewise, J. Li claims he was paid: (a) $3,400 from October 2017 to April 10, 2018; and (b) $4,600 from April 11, 2018 to August 20, 2018. (Id. at 2.) Plaintiffs allege that they worked an average of 72 hours per week, from 11:00 a.m. to 11:00 p.m. six days per week. (Compl., ECF No. 1 ¶¶ 25, 31.)
C. Li calculates that he is owed $125,240.84 from Defendants. (Mot., Ex. B ("Damages"), ECF No. 31-2.) These figures are based on a purported minimum wage rate of $10.50 per hour from August 8, 2016 to December 31, 2016 and $13.50 from January 1, 2018 through August 30, 2018 and are broken down over the relevant time period as described below:
These calculations are based on Plaintiffs working a total of 72 hours per week, with an average of 32 hours of overtime per week. (Id. )
| Minimum Wage | Overtime | Spread of Hours | |
|---|---|---|---|
| Aug. 8, 2016 – Oct. 31, 2016 | $2,148.92 | $8,307.69 | $756.00 |
| Nov. 1, 2016 – Dec. 31, 2016 | $157.85 | $7,975.38 | $567.00 |
| Jan. 1, 2017 – Dec. 31, 2017 | $7,344.00 | $51,840.00 | $4,212.00 |
| Jan. 1, 2018 – Apr. 30, 2018 | $1,616.31 | $17,899.23 | $1,377.00 |
| May 1, 2018 – Aug. 30, 2018 | $831.69 | $18,830.77 | $1,377.00 |
| Total | $12,098.77 | $104,853.07 | $8,289.00 |
J. Li calculates that he is owed $51,579.92 from Defendants. (Id. ) These figures are based on a purported statutory minimum wage rate of $12.00 per hour from October 12, 2017 to April 10, 2018 and $13.50 from April 11, 2018 through August 20, 2018 and are broken down over the relevant time period as described below:
These calculations are based on Plaintiffs working a total of 72 hours per week, with an average of 32 hours of overtime per week. (Id. )
| Minimum Wage | Overtime | Spread of Hours | |
|---|---|---|---|
| Oct. 12, 2017 – Apr. 10, 2018 | $2,064.00 | $24,480.00 | $1,872.00 |
| Apr. 11, 2018 – Aug. 20, 2018 | $2,683.38 | $18,941.54 | $1,539.00 |
| Total | $4,747.38 | $43,421.54 | $3,411.00 |
Based on these figures, the total range of damages back wages (consisting of unpaid minimum wages, overtime and spread of hours), liquidated damages, and interest for both Plaintiffs is estimated as $425,074.62. (Id. ) However, the Court notes that these figures are actually inflated and based on incorrect statutory minimum wage rates. Plaintiffs allege that they were owed minimum wage payments of $10.50, $12.00, to $13.50 from August 8, 2016 to August 8, 2018 (id. ), but these minimum wage rates do not correspond to the correct time period. For example, C. Li's minimum wage from August 8, 2016 to October 31, 2016 is listed as $10.50 per hour (id. ), yet the applicable minimum wage rate under New York law from December 31, 2015 to December 30, 2016 was only $9.00 per hour. See N.Y. Lab. Law § 652(1). Similarly, J. Li stated that he was owed a minimum wage rate of $13.50 from April 11, 2018 to August 20, 2018, yet the statutory minimum wage from December 31, 2017 to December 30, 2018 for employers of ten or fewer employees was only $12.00 per hour. See N.Y. Lab. Law § 652(1)(a)(ii).
Plaintiffs allege that Defendants’ restaurant employed more than ten employees (Compl., ECF No. 1 ¶ 10); however, their minimum wage figures appear to be based on the statutory minimum rates for employers with ten or fewer employees.
Under the Settlement Agreement, Plaintiffs will receive $58,789.33—approximately 13.8% of the total alleged damages of $425,074.62. This recovery is reasonable and consistent with settlements approved in this Circuit where the parties reach a settlement to avoid the risks and uncertainty associated with litigation. See Sanchez v. DPC New York Inc. , 381 F. Supp. 3d 245, 250 (S.D.N.Y. 2019) (approving a settlement where the plaintiff obtained only 19% of the maximum possible recovery); Santos v. YMY Mgmt. Corp. , No. 20-CIV-1992 (JPC), 2021 WL 431451, at *1 (S.D.N.Y. Feb. 8, 2021) (finding that a settlement representing 18% of Plaintiff's total alleged damages and approximately 39% of his total alleged minimum wage and overtime was reasonable); Zorn-Hill v. A2B Taxi LLC , No. 19-CIV-1058 (KMK), 2020 WL 5578357, at *4-5 (S.D.N.Y. Sept. 17, 2020) (approving a settlement amount representing 12.5% of the plaintiff's total recovery). Therefore, this factor weighs in favor of reasonableness.
Because Plaintiffs have miscalculated the minimum wage rate they were owed, they have overestimated the amount of minimum wages, overtime pay and spread of hours pay that they were owed. Therefore, their total stated range of recovery is higher than it should be and the proportion of Plaintiffs’ recovery is likely higher than 13.8%.
b. Avoidance of Burdens and Expenses
Where, as here, "[t]parties have reached a settlement following the close of discovery, but before expending additional resources on dispositive motions and trial preparation," avoiding an unpredictable and costly trial weighs in favor of approving the settlement agreement. Sanchez v. Alan's R E 99 Cents & Up Inc. , No. 16-CV-1881 (CBA)(LB), 2018 WL 2452784, at *3 (E.D.N.Y. Apr. 24, 2018), report and recommendation adopted as modified , No. 16-CV-1881 (CBA)(LB), 2018 WL 2451190 (E.D.N.Y. May 31, 2018) ; see also Reyes v. Buddha-Bar NYC , No. 08-CV-2494 (DF), 2009 WL 5841177, at *3 (S.D.N.Y. May 28, 2009) ("[T]he value of an immediate recovery outweighs the mere possibility of further relief after protracted and expensive litigation[.]"). Accordingly, this factor weighs in favor of approving the settlement.
c. Seriousness of the Litigation Risks
The Proposed Settlement Agreement also "avoids the serious risks of litigation" that Plaintiffs face. See Sanchez , 381 F. Supp. 3d at 250 ; Lopez v. Poko-St. Ann L.P. , 176 F. Supp. 3d 340, 342 (S.D.N.Y. 2016) (settlement amount is fair "in light of the legal and evidentiary challenges that would face the plaintiffs in the absence of a settlement"). The primary risks include disagreement between the parties as to the hours worked and wages paid. (Mot., ECF No. 31 at 2.) Defendants deny that Plaintiffs were paid a fixed sum regardless of time worked and dispute the actual amount of time worked by Plaintiffs. (Id. ) According to Defendants, their time records show that Plaintiffs worked far fewer hours than alleged. (Id. ) As such, if this case were to proceed to trial, the record would show that Plaintiffs are not entitled to any damages because Defendants could prove that Plaintiffs were paid in accordance with applicable law. (Id. ) In light of these disputes, Plaintiffs’ recovery is substantial and provides them with certainty regarding the resolution of the case. See Santos , 2021 WL 431451, at *1 (noting the litigation risk where "Defendants categorically deny Plaintiff's claims"). Accordingly, this factor supports a finding of reasonableness.
d. Arm's Length Bargaining
The proposed settlement agreement appears to be the product of arm's length bargaining between experienced counsel. First, "[c]ounsel for each party has participated in numerous FLSA and NYLL matters before this Court," which supports a finding that they negotiated the settlement terms seriously. Strauss v. Little Fish Corp. , No. 19-CV-10158 (LJL), 2020 WL 4041511, at *4 (S.D.N.Y. July 17, 2020). In this case, counsel for Plaintiffs and Defendants have appeared in numerous FLSA actions. See, e.g. , Gao v. Jian Song Shi , No. 18-CV-2708 (ARR)(LB), 2021 WL 1949275 (E.D.N.Y. Apr. 30, 2021) (plaintiffs’ counsel); Qi Jun Kang v. Jia Xing 39th Inc. , 18-CV-001, 2018 WL 4538906 (S.D.N.Y. Sept. 21, 2018) (defendants’ counsel). Second, "because I presided over the settlement conference that immediately preceded [plaintiffs’] acceptance of the settlement, I know that the settlement is the product of arm's-length bargaining between experienced counsel. Both counsel represented their clients zealously at the settlement conference." Kang , 2018 WL 4538906, at *2. Third, counsel continued negotiations after the settlement conference and were able to resolve any remaining disputes about the payment schedule while adhering to the agreed-upon total settlement. (Sept. 28, 2021 Minute Entry and Order.) The equal strength and experience of counsel support a finding that the negotiations were fair and fulsome, and support a finding of reasonableness.
e. No Fraud or Collusion
The final factor also weighs in favor of approving the proposed settlement agreement because there is no evidence of fraud or collusion. "[B]ecause Plaintiff[s] are no longer employed by Defendants, the risk of coercion—a concern in other cases—is minimal to non-existent." Strauss , 2020 WL 4041511, at *4 ; see also Kaveh v. 1/0 Cap., LLC. , No. 16-CV-3494 (JMF), 2017 WL 10436077, at *1 (S.D.N.Y. Feb. 24, 2017) (coercion "concerns are not as relevant when the plaintiff no longer works for the defendant"). Specifically, Plaintiffs ended their employment relationship with Defendants in August 2018, before the lawsuit was filed in September 2018. (See Compl., ECF. No. 1 ¶¶ 7–8.) As a result, it is unlikely that Defendants held any undue influence over Plaintiffs when negotiating the Settlement Agreement.
2. Factors Weighing Against Reasonableness
A significant factor potentially weighing against a finding of reasonableness is Defendant Yao's alleged failure to comply with the FLSA in the recent past. Cabrera v. CBS Corp. , No. 17-CV-6011(CM)(BCM), 2019 WL 502131, at *7 (S.D.N.Y. Feb. 8, 2019) (rejecting a zero-pay settlement when the employer had previously settled a $1 million FLSA lawsuit). In December 2018, a former employee sued Yao, a co-defendant, and the restaurant they owned for failure to pay minimum wages and overtime wages. Yin et al. v. Alley 41 Inc. et al. , 18-CV-7078 (PK) (E.D.N.Y.) ("Yin "). A second plaintiff joined the case in February 2019. (Yin Am. Compl., ECF No. 10.) The parties in Yin settled the claims for $75,000 in January 2021. (Yin Settlement Agreement, ECF No. 33.)
In Yin and the instant case, Yao controlled two entities whose employees alleged FLSA and NYLL violations. Yao employed the plaintiffs in both cases during the same time period: approximately January 2018 to October 2018 for Yin and approximately February 2017 to August 2018 for co-plaintiff Huang. (Compare Yin Am. Compl., ECF No. 10 ¶¶ 11-12, with Compl., ECF No. 1, ¶¶ 7-8.) Like Plaintiffs, the Yin plaintiffs (a waiter and a cashier, respectively) also alleged that Yao and his co-defendants paid them fixed rates regardless of the number of hours they worked. (Compare Yin Am. Compl., ECF No. 10 ¶¶ 43, 49-52, with Compl., ECF No. 1 ¶¶ 26, 33.)
3. Totality of the Circumstances
However, under the "totality of the circumstances," the proposed settlement agreement in this case is still fair and reasonable. Quispe v. Stone & Tile Inc. , No. 20-CV-4682 (KAM)(MMH), 583 F.Supp.3d 372, 379-80 (E.D.N.Y. Feb. 1, 2022). First, the Yin plaintiffs filed suit approximately three months after Plaintiffs here, even though the conduct at issue in both cases occurred during similar time periods. The two cases proceeded simultaneously, with the Yin plaintiffs reaching a settlement sooner than Plaintiffs. As Yao's counsel explained at the January 12, 2022 fairness hearing, Yao is now "much more aware of the FLSA regulations" than he was before 2018, when both lawsuits were filed. (Tr., ECF No. 34 at 14:12.) Therefore, there does not appear to be any increased risk that Yao will further violate the FLSA in light of the settlements in this case and in Yin.
Second, as set forth in detail above, several Wolinsky factors support a finding of reasonableness, and none of the Wolinksy factors weighing against reasonableness are present. For example, "[a]s Plaintiff[s] no longer work[ ] for Defendants, [their] circumstances will obviously not recur. Although an argument could be made that maturation of this record could lead to further legal development in FLSA cases, this factor alone does not require the Court to reject the proposed settlement agreement." Canales v. Norwich Serv. Station Inc. , No. 20-CV-4759 (JMW), 2021 WL 5759727, at *4 (E.D.N.Y. Dec. 3, 2021).
Third, the settlement agreement does not include the typical provisions that preclude approval, including (1) overbroad releases; (2) highly restrictive confidentiality provisions; (3) non-disparagement provisions that bar truthful statements; and (4) prohibitions on future employment. See, e.g. , Brittle v. Metamorphosis, LLC , No. 20-CIV-3880 (ER), 2021 WL 606244, at *7–9 (S.D.N.Y. Jan. 22, 2021) (denying approval of FLSA settlement agreement containing a bar on reemployment, an overly broad confidentiality provision, and an overly broad release); Torres v. Mc Gowan Builders , No. 18-CV-6099 (RML), 2020 WL 5369056, at *2–4 (E.D.N.Y. Sep. 8, 2020) (rejecting a FLSA settlement agreement with an overly broad confidentiality provision, a high liquidated damages provision, a non-disparagement provision, and a general release of claims); Sapon v. Uncle Paul's Pizza & Cafe Inc. , No. 18-CV-4026 (VSB), 2020 WL 9048725, at *2–3 (S.D.N.Y. May 6, 2020) (finding a FLSA settlement agreement with an overbroad release unfair and unreasonable). Instead, the release is tailored to FLSA, NYLL, and other wage and hour claims. (Settlement Agt., ECF No. 31-1 § 1.) Finally, as described below, counsel's proposed attorney's fees are also fair and reasonable.
C. Attorney's Fees
Agreements for attorney's fees must be reviewed for reasonableness, no less than any other part of an FLSA settlement. Caceres v. Brentwood Farmers Martket, Inc. , No. 20-CV-3476 (AKT), 2021 WL 3276637, at *2 (E.D.N.Y. May 4, 2021) ("FLSA settlements entered into pursuant to a stipulated dismissal with prejudice represent a special type of contract because district courts are required to review these settlements for reasonableness ... The obligation extends to the reasonableness of attorneys’ fees and costs.") (quoting Fisher , 948 F.3d at 606 ) (internal citations omitted). "[T]here is no explicit limit on attorneys’ fees in FLSA actions[,]" and "a fee may not be reduced merely because the fee would be disproportionate to the financial interest at stake in the litigation." Fisher , 948 F.3d at 603–04 (quoting Kassim v. City of Schenectady , 415 F.3d 246, 252 (2d Cir. 2005) ) (internal quotations omitted).
"The Second Circuit favors the percentage-of-the-fund method of calculating attorney's fees because it ‘directly aligns the interests of [Plaintiff] and [his] counsel.’ " Gonzalez v. Citusa Park Ave., LLC , No. 20-CIV-2326 (AT), 2020 WL 8920703, at *2 (S.D.N.Y. Nov. 30, 2020) (quoting Wal-Mart Stores, Inc. v. Visa U.S.A., Inc. , 396 F.3d 96, 121 (2d Cir. 2005) ). Based on the retainer agreement with Plaintiffs, Plaintiffs’ counsel requests one-third of the value of the proposed settlement—specifically, $29,394.62 in attorney's fees and $1,816 in costs (consisting of $300 for mediation, $517 for deposition costs, $210 for state court filing fees, $400 for federal court filing costs, $15 for mailing costs, and $374 for service costs). (Mot., ECF No. 31 at 4; Suppl. Ltr., Exs. 1-2 ("Retainer Agts."), ECF Nos. 32-1, 32-2. ) "Contingency fees of one-third in FLSA cases are routinely approved in this Circuit" and are acceptable here. Gonzalez , 2020 WL 8920703, at *2 ; Shamsundar v. FCS Grp. LLC , No. 18-CV-2514 (KAM)(LB), 2019 WL 3716198, at *4 (E.D.N.Y. May 22, 2019) ("Courts in this district generally find 33% of the overall settlement, mirroring the one-third contingency fee arrangement to be reasonable ...."); see also Gonzales v. 27 W.H. Bake, LLC , No. 15-CIV-4161 (PAC)(HBP), 2018 WL 1918623, at *4 (S.D.N.Y. Apr. 20, 2018) (collecting cases).
The Retainer Agreements, which are written in English and Chinese, provide that Plaintiff's counsel fees for legal services will be: "one third of the recovery obtained (whether by settlement, arbitration award, or court judgment), or the amount agreed upon during settlement with Defendant's counsel, or the amount awarded by the Court, whichever of these is greatest." (Retainer Agt. at 1, Supp. Ltr. Exs. 1-2, ECF No. 32-1 & 32-2.) Counsel also "advance all ‘costs’ and "will be reimbursed out of the recovery before any distribution of fees to [counsel] or any distribution to [Plaintiffs]," including "court filing fees, deposition costs, translation services costs, expert fees and expenses, investigation costs, travel expenses, messenger service fees, and process server fees." (Id. at 2.) Counsel represents this arrangement using the formula ($90,000 - $1,816)/3 + $1,816 = $31,210.67. (Mot., ECF No. 31 at 4 n.1.)
"As a check on the reasonableness of attorney's fees, however, courts still calculate the total cost of attorney's hours billed, previously known as the lodestar method[,]" even where a retainer agreement exists. Gonzalez , 2020 WL 8920703, at *2. Courts must determine if the hourly rate is "what a reasonable, paying client would be willing to pay." Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany & Albany Cnty. Bd. of Elections , 522 F.3d 182, 184 (2d Cir. 2008). "This rate should be based on rates ‘prevailing in the community for similar services of lawyers of reasonably comparable skill, experience, and reputation.’ " Dacas v. Duhaney , No. 17-CV-3568 (EK)(SMG), 2020 WL 4587343, at *3 (E.D.N.Y. June 18, 2020) (quoting Gierlinger v. Gleason , 160 F.3d 858, 882 (2d Cir. 1998) ), report and recommendation adopted , No. 17-CV-3568 (EK)(SMG), 2020 WL 4586371 (E.D.N.Y. Aug. 10, 2020).
In this district, courts look to the experience level of a plaintiff's counsel to determine whether the requested attorney's fees are reasonable. Gonzalez v. Scalinatella, Inc. , 112 F. Supp. 3d 5, 21 (S.D.N.Y. 2015) ("Generally, to determine an appropriate hourly rate, the court looks to rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.") (internal quotations omitted); Marshall v. Deutsche Post DHL , No. 13-CV-1471 (RJD)(JO), 2015 WL 5560541, at *9 (E.D.N.Y. Sept. 21, 2015). "Recent decisions in the Eastern District of New York have determined that reasonable hourly rates in FLSA cases are approximately $300–$450 for partners, $200–$325 for senior associates, $100–$200 for junior associates, and $60–80 for legal support staff." Mendez v. Casa Blanca Flowers, Ltd. , No. 12-CV-5786 (ENV) (JMA), 2014 WL 4258943, at *6 (E.D.N.Y. July 8, 2014), report and recommendation adopted , No. 12-CV-5786 (ENV)(JMA), 2014 WL 4258988 (E.D.N.Y. Aug. 27, 2014).
Counsel requests attorneys’ fees based on the work of four attorneys (Ge Qu, Rui Ma, Diana Seo, and Shan Zu) and two "law clerks" who appear to have law degrees but perform both legal and administrative tasks (Zhujing Wu and Ge Yan). (Mot. at 5–6.) Plaintiffs’ counsel list their hourly rates as $150 and $250 for law clerks and $300 for associates. (Mot. at 5–6; Mot., Exs. C & D, ECF Nos. 31-3 & 31-4.) The Court notes that the billing rates for some of the listed attorneys are relatively high given their levels of experience at the time they billed hours on the case. (See, e.g. , Aug. 20, 2021 Invoice, Mot. Ex. C, ECF No. 31-3 at 2 (reflecting a rate of $300 for Shan Zu in December 2019, within his first two years of practice).) However, the attorneys also have extensive experience litigating wage and hour claims and fluency in several languages that facilitate communications with their target clients. (Mot. at 5–6). Accordingly, these hourly rates are reasonable.
The invoices indicate that three other individuals (Suelen Chimanski, Leticia Ochoa, and Yuezhu Liu) also performed work on this case. (Mot. Exs. C & D, ECF Nos. 31-3, 31-4). No information is provided about their job titles and experience, yet their hourly rate is $150. The Court approves the overall attorneys’ fees because the addition of these individuals to the invoice has little impact relative to the total legal fees, but encourages counsel to be as fulsome as possible when attempting to justify billed rates.
Plaintiffs’ counsel spent a total of 113.60 hours litigating this matter, resulting in legal fees of $36,310. (Mot. Exs. C and D, ECF Nos. 31-3 and 31-4.) With their requested attorneys’ fees of $29,394.62, Plaintiffs’ counsel will be recovering slightly less than their overall attorney's fees, or approximately .81 times the lodestar amount. Thus, based on the Court's review, the proposed attorney's fees are fair and reasonable. Garcia v. Grandpa Tony's Enterprises LLC , No. 20-CV-4691 (JMW), 2021 WL 4949030, at *4 (E.D.N.Y. Oct. 25, 2021) ("[T]he lesser one-third fee that Plaintiffs’ counsel is requesting is fair and reasonable compared to the lodestar cross-check.")
Finally, counsel also seeks $1,816 in costs, including $300 for mediation, $517 for deposition costs, $210 for state court filing fees, $400 for federal court filing costs, $15 for mailing costs, and $374 for service costs. Most of these costs are fair and reasonable and reflect common expenses in wage-and-hour cases in this district—for example, the mediation fees, federal court filing costs, and deposition costs (for two defendants). Caceres , 2021 WL 3276637, at *3. However, counsel provides no documentation or explanation to support the request for state court filing fees in this federal cause of action, or service costs, particularly where Defendants waived service of the Complaint. (See ECF No. 6.) Therefore, the request for fees is granted except as to the state court filing fees and the service costs, pending counsel's submission of supporting documentation.
III. CONCLUSION
For the reasons set forth herein, the Motion for Settlement Approval is granted pending counsel's submission to support the request for fees as set forth above. Counsel shall file a letter (not to exceed two pages) and shall attach documents to support the fee request by April 7, 2022 . The parties shall file a stipulation of dismissal consistent with Fed. R. Civ. P. 41(b) by April 14, 2022 .