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Miller v. Lewis Manor Homes, Ltd.

United States District Court, E.D. Michigan, Southern Division

December 30, 2019

Nancy Miller, Plaintiff,
v.
Lewis Manor Homes, LTD, Regina's Home, Inc., and Ellen Lewis, Defendants.

          R. Steven Whalen Mag. Judge.

          OPINION AND ORDER APPROVING SETTLEMENT AGREEMENT [16]

          JUDITH E. LEVY UNITED STATES DISTRICT JUDGE.

         Plaintiff filed this suit on October 29, 2018, alleging that Defendants violated the Fair Labor Standards Act (FLSA), 29 U.S.C. §201, et seq, by improperly deducting eight-hour sleeping periods from Plaintiff's twenty-four-hour shifts. (ECF No. 1.) Plaintiff seeks recovery of unpaid minimum wage and overtime compensation. Id. On December 11, 2019, the parties filed a joint Motion for Approval of Settlement. (ECF No. 16.) According to the Settlement Agreement, the parties agree to a settlement amount of $45, 000.00. (Id. at PageID.55.) Plaintiff's counsel will receive $18, 000 in attorney fees and $498.35 in costs, leaving Plaintiff with a net settlement of $26, 501.65. Id.

         I. Legal Standard

         Judicial approval of settlement agreements in FLSA cases is necessary for an agreement to be enforceable. Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015); Smolinski v. Ruben & Michelle Enters. Inc., Case No. 16-cv-13612, 2017 WL 835592, at *1 (E.D. Mich. Mar. 3, 2017). This requires the court to determine whether the settlement is a “fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982).

         Although there is not a prescribed process for making this determination, courts generally consider the following factors in non-collective FLSA cases:

(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.

See Williams v. Alimar Sec., Inc., No. 13-12732, 2017 WL 427727, at *1 (E.D. Mich. Feb. 1, 2017) (citing Wolinsky v. Scholastic, Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012)) (internal quotation marks and citation omitted). When the settlement agreement includes the payment of attorney fees, the court must also assess the reasonableness of that amount before approving the settlement. Wolinsky, 900 F.Supp.2d at 336.

         II. Analysis

         After reviewing Plaintiff's complaint, the settlement agreement, and Plaintiff's counsel's billing, the Court approves the settlement.

         A. Settlement Amount

         In this case, Plaintiff could have recovered a maximum of $68, 217.71 in actual damages, assuming each unpaid hour was compensable. (ECF No. 16, PageID.59.) When added to Plaintiff's maximum liquidated damages of $68, 217, 71, Plaintiff's recovery ceiling is $136, 435.42. Id. The proposed settlement amount of $45, 000 is thirty-three percent of Plaintiff's recovery ceiling.

         The proposed settlement will allow the parties to avoid the burden and expenses of trial.

         Both parties face serious litigation risks. Defendants' documentation supports actual damages of only $4, 862.49. Id. Given the uncertainty of trial and Defendants' trial plan of contesting all liability (ECF No. 16, PageID.54), Plaintiff could ultimately recover far less than the settlement amount. On ...


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