| Amid Dubious Fair Labor
Standards Act Settlements SDNY Judge Berman
Rules on Fees and Costs
By Matthew
Russell Lee, Patreon
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SDNY COURTHOUSE,
April 8 – Litigation under the
Fair Labor Standards Act makes
up a surprisingly high
percentage of Federal judges'
workloads.
While without
question many restaurant and
other workers are abused and
need vindication, in too many
cases savvy specialize
lawfirms sell out their
ostensible clients' interests
in order for fees. It is
similar, in its way, to some
of the photograph copyright
cases being filed.
On
April 7 U.S. District Court
for the Southern District of
New York Judge Richard Berman
ruled after an appeal, in
great detail, citing "the very
real potential for migration
('diversion') of a plaintiff’s
potential recovery into
counsel’s fees warned against
by other courts, including
JudgeLewis A. Kaplan who
remarked in Lopez v.
Nights of Cabiria, LLC,
96 F. Supp. 3d 170, 176
(S.D.N.Y. 2015) that:
“[C]ourts must remain alert to
the risk that the filing and
settling of FLSA cases has
become a volume-based business
and that the interest of
plaintiffs’ counsel in
counsel’s own compensation
will adversely affect the
extent of the relief counsel
will procure for the clients.”
Similarly, Judge
William H. Pauley III has
cautioned in Velasquez v.
SAFI-G, Inc., 137 F.
Supp. 3d 582, 585 (S.D.N.Y.
2015) that in a wage case
settlement “the Court’s
primary function is to make
sure that some of the
plaintiff’s recovery has not
been unreasonably diverted to
pay his attorney a greater fee
than that to which he is
entitled."
Judge
Berman continued, "Plaintiff’s
counsel failed to certify a
class or procure any class
relief, notwithstanding their
pursuit of a collective and
class action from “beginning
to end.” And, Plaintiff’s
proposed award of $2,000
ignores the prospect of
Plaintiff’s recovery under the
NYLL, even though the NYLL
claims are clearly set forth
in the Complaint...
In the
Barfield case, Judge Jed
Rakoff reduced the plaintiff’s
counsel’s attorneys’ fees by
half (50%) because of
counsel’s failure to certify a
collective action. Barfield,
537 F.3d at 152. The Court of
Appeals affirmed, reasoning
that “plaintiff’s primary aim
in this litigation, as
reflected in her complaint and
in the first four months of
litigation . . . was to
certify a collective action.”
Id. “It is against this
background of anticipated
relief for thousands that
plaintiff’s recovery of
$1,744.50 in compensatory and
liquidated damages for herself
appears to reflect only a
small degree of success.”
Id...
Plaintiff’s
counsel advised the Court at
the conference that the
parties had engaged in
settlement discussions but
were still negotiating class
relief: Court: “How much
progress has been made in this
case toward either resolution
or preparation for trial?” Mr.
Lee: “Your Honor, there have
been some discussions about
settlement, but the impasse is
whether it should be for an
individual basis or class
basis.” Oct. 25, 2017 Tr. at
2:2-6. At the settlement
conference, Plaintiff’s
counsel resolved the impasse
with defense counsel, without
explanation as far as the
Court is aware, and settled
for a non-class award to
Plaintiff Fisher of $2,000 in
satisfaction of all his
individual claims."
The case is
Fisher v. SD Protection Inc.,
et al., 19-cv-2229 (Berman).
***
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