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Blackmon v. Cohen

United States District Court, M.D. North Carolina

January 8, 2020



          N. Carlton Tilley, Jr. Senior United States District Judge.

         Plaintiff Sharon Renea Blackmon filed the instant action alleging that she was owed unpaid overtime wages. This matter is before the Court on the parties' Joint Motion for Approval of Fair Labor Standards Act Settlement. [Docs. #41, 43.] For the reasons that follow, it is determined that the terms of the Settlement Agreement, including attorney's fees and costs, are fair and reasonable; therefore, the Joint Motion is granted.

         Before approving an FLSA settlement, the court must determine if the settlement is a “fair and reasonable compromise of disputed claims and issues arising from a bona fide dispute raised pursuant to the FLSA.” Kirkpatrick v. Cardinal Innovations Healthcare Sols., 352 F.Supp.3d 499, 502 (M.D. N.C. 2018) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982)). Thus, to approve a FLSA settlement, the court must make “finding[s] with regard to (1) whether there are FLSA issues actually in dispute, (2) the fairness and reasonableness of the settlement in light of the relevant factors from Rule 23, and (3) the reasonableness of the attorneys' fees, if included in the agreement.” Duprey v. Scotts Co., LLC, 30 F.Supp.3d 404, 408 (D. Md. 2014); see also Hood v. Uber Techns., Inc., No. 1:16-CV-998, 2019 WL 93546, at *4 (M.D. N.C. Jan. 3, 2019).

         The Court must first determine whether a bona fide dispute exists. “A bona fide dispute is one in which there is some doubt whether the plaintiff would succeed on the merits at trial.” Kirkpatrick, 352 F.Supp.3d at 502 (quoting Hall v. Higher One Machs., Inc., No. 5-15-CV-670-F, 2016 WL 5416582, at *6 (E.D. N.C. Sept. 26, 2016)). To determine this, the court looks to the pleadings and proposed settlement agreement. Id. (citing Duprey, 30 F.Supp.3d at 404.) Here, while Blackmon plausibly alleged a scheme by which her employer knowingly failed to pay her overtime, (Mem. Op. & Order [Doc. #23]), she acknowledges the issues of proof she faces at trial, including determining and proving the number of hours of overtime she worked, (Mem. in Supp. of Jt. Mot. for Approval at 5 [Doc. #42]). Defendant State of North Carolina[1] denies these allegations and disputes the applicable statute of limitations and the propriety of liquidated damages. (Decl. of Philip J. Gibbons, Jr. ¶ 10 (Sept. 6, 2019) [Doc. #42-3].) “This disagreement is a genuine dispute that supports the concept of a negotiated settlement of this FLSA claim.” Hood, 2019 WL 93546, at *4 (internal quotations and brackets omitted) (quoting Rivera v. Dixson, No. TDC-14-cv-2901, 2015 WL 427031, at *3 (D. Md. Jan. 30, 2015)).

         The Court must next determine whether the settlement is fair and reasonable. “Although the Fourth Circuit has not addressed directly the relevant factors the court should consider when determining whether a FLSA settlement is fair and reasonable, district courts within the circuit have generally considered the fairness factors a court would consider under Federal Rule of Civil Procedure 23(e).” Kirkpatrick, 352 F.Supp.3d at 502 (citing Hoffman v. First Student, Inc., No. WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md. Mar. 23, 2010)). These factors include “(1) the extent of discovery that has taken place; (2) the stage of the proceedings, including the complexity, expense, and likely duration of the litigation; (3) the absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented the plaintiff; (5) the probability of plaintiff's success on the merits and (6) the amount of the settlement in relation to the potential recovery.” Id. at 502-03 (quoting Hargrove v. Ryla Teleservices, Inc., No. 2:11CV344, 2013 WL 1897027, at *2 (E.D. Va. Apr. 12, 2013); see also Hood, 2019 WL 93546, at * 4 & Duprey, 30 F.Supp.3d at 409. In considering these factors, “there is a strong presumption in favor of finding a settlement fair . . . .” Id. (internal quotation marks omitted) (quoting Lomascolo v. Parsons Brinckerhoff, Inc., No. 18CV1310, 2009 WL 3094955, at *16-*17 (E.D. Va. Sept. 28, 2009)).

         In the present case, all six factors support a finding that the settlement is fair and reasonable. First, the parties have engaged in formal discovery, which included the production of approximately 700 pages of payroll and time-keeping information that, along with information from Blackmon, her counsel used to analyze and calculate potential damages. (Decl. of Gibbons ¶ 11.) This analysis allowed her counsel to determine they had sufficient information about Blackmon's claims and her employer's defenses to settle the matter fairly. (Id.)

         Next, the parties are seeking approval of their settlement at the conclusion of the discovery period.[2] (See Text Order (June 5, 2019) (extending the deadline for completion of discovery to August 18, 2019).) It is likely they would then have engaged in further motions practice and possibly trial preparation, an estimated three-day trial, and appeals. As Blackmon describes, “[r]esolution of the issues . . . would require substantial time and resources.” (Mem. in Support of Jt. Mot. for Approval at 7.) Nevertheless, during settlement negotiations, counsel for the parties “had sufficient information to assess the respective strengths and weaknesses of their case”. (Id.)

         Third, there is a presumption that “no fraud or collusion occurred between counsel, in the absence of any evidence to the contrary”. Lomascolo, 2009 WL 3094955, at *12. Here, there is no evidence of fraud or collusion, and Blackmon's counsel avers that the settlement “is the product of good faith negotiations” and “was reached only after the Parties exchanged discovery and conducted several rounds of demands and counteroffers.” (Decl. of Gibbons ¶ 12.) “Blackmon [herself] participated in each step of the settlement process, approved the settlement terms, and authorized acceptance of the settlement.” (Id.)

         Next, Blackmon's counsel are experienced FLSA litigators. Philip Gibbons, Jr. has focused almost exclusively on litigating labor and employment cases for the last two decades and, more specifically, wage and hour claims under federal and state law for the last ten years. (Id. ¶ 2.) He has served as lead counsel in numerous class and collective action wage and hour lawsuits in federal district courts, including the Southern District of Indiana and the Western District of North Carolina. (Id. ¶¶ 4-5.) He has been rated an “AV” attorney in Martindale-Hubble and recognized in Indiana Super Lawyers and Best Lawyers in America from 2015-2018 in the categories of “Employment Litigation - Plaintiff” and “Labor and Employment Law”, respectively. (Id. ¶ 6.) Craig L. Leis has practiced labor and employment law almost exclusively for the past seventeen years, including counseling employers and representing employees. (Id. ¶ 8.)

         Fifth, Blackmon describes her probability of success on the merits and related matters as “hotly disputed”. (Mem. in Supp. of Jt. Mot. for Approval at 8.) Even if she were successful on her claim for overtime wages, there appears to be meaningful disagreement about the application of the two- or three-year statute of limitations, which turns on the willfulness of her employer's conduct and significantly impacts the amount of Blackmon's recovery, as well as the propriety of liquidated damages.

         Finally, the amount of the settlement is significant compared to the potential recovery. According to Blackmon, the settlement amount of $11, 625.00 for unpaid overtime wages and $11, 625.00 for liquidated damages represents approximately 93% of her estimated unpaid overtime and liquidated damages over the three-year period preceding the lawsuit. (Id. at 13.) All of these factors support a finding that the proposed settlement amount is fair and reasonable.

         Next, it is necessary to assess the attorney's fees request made pursuant to 29 U.S.C. § 216(b), which requires the court to “allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.” The Fourth Circuit Court of Appeals has provided a three-step process by which to calculate attorney's fees: (1) “'determine the lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate'” applying “the factors set forth in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717-19 (5th Cir. 1974)”, (2) “'subtract fees for hours spent on unsuccessful claims unrelated to successful ones'”, and (3) “award ‘some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff.'” McAfee v. Boczar, 738 F.3d 81, 88 (2013) (quoting Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009)).

         Here, Blackmon's counsel have spent 78 hours representing her on this case, totaling $33, 400 in fees, (Decl. of Gibbons ¶ 13), reflecting a blended hourly rate of $428. While Gibbons's current hourly rate is $500, “[t]he majority of the time” he billed was at an hourly rate of $485. (Id. ¶ 21.) Leis's current hourly rate is $450, but “[t]he majority of the time” he billed was at an hourly rate of $425. (Id. ΒΆ 22.) Although that lodestar totals $33, 400, ...

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