United States District Court, D. New Jersey
IN RE MORGAN STANLEY SMITH BARNEY LLC WAGE AND HOUR LITIGATION MDL 2280
WILLIAM J. MARTINI, U.S.D.J.
Jimmy Kuhn, Nick Pontilena, Howard Rosenblatt and Denise
Otten (collectively “Plaintiffs”) bring this
putative collective action under the Fair Labors Standards
Act (“FLSA”), 29 U.S.C. § 201 et
seq., and three putative wage and hour class actions
against Defendants Morgan Stanley Smith Barney LLC and Morgan
Stanley & Co., Inc. (together “MSSB”). This
matter comes before the Court on the parties' joint
motion for judicial approval of their settlement agreement.
There was no oral argument. Fed.R.Civ.P. 78(b). For the
reasons set forth below, the parties' motion is
Court assumes the parties' familiarity with the facts and
procedural history of the instant case and writes solely for
their benefit. On February 28, 2017, the Court granted
summary judgment in favor of MSSB and dismissed all of
Plaintiffs' outstanding claims with prejudice.
See Order, ECF No. 168. Plaintiffs subsequently
filed an appeal. See Notice of Appeal, ECF No. 169.
The parties now jointly move for judicial approval of their
settlement agreement. See Joint Mot. in Supp. of
Judicial Approval of Settlement (“Joint Mot.”),
ECF No. 175-1.
employees bring a private action under the FLSA, and present
to the district court a proposed settlement . . ., the
district court may enter a stipulated judgment if it
determines that the compromise reached ‘is a fair and
reasonable resolution of a bona fide dispute over the FLSA
provisions.'” See Brumley v. Camin Cargo
Control, Inc., No. 08-cv-1798, 2012 WL 1019337, at *2
(D.N.J. Mar. 26, 2012) (quoting Lynn's Food Stores,
Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir.
1982)). “While the Third Circuit has not directly
addressed the factors to be considered in deciding motions
for approval of FLSA settlements, district courts have
typically looked to the considerations set forth in
Lynn's Food, cited infra.”
Id. (citing multiple cases). “While factors
for evaluating ‘fairness' of a settlement in an
FLSA collective action have not been definitively set out by
the Third Circuit, district courts in this Circuit have
utilized the Girsh factors established for approving
Rule 23 class action settlements . . . .” See
id. at *4-5 (citing Girsh v. Jepson, 521 F.2d
153, 156-57 (3d Cir. 1975)).
parties' motion essentially requires that the Court
reverse itself. As a threshold matter, the Court finds that
the Lynn's Foods holding is inapplicable here.
In that case, the Eleventh Circuit was concerned with a
settlement agreement between an employer and employees
reached outside of the adversarial context of a lawsuit.
See 679 F.2d at 1354. In that same opinion, however,
it noted that when parties reach an agreement within the
adversarial context, the “employees are likely to be
represented by an attorney who can protect their rights under
the [FLSA]” and the agreement is, therefore,
“more likely to reflect a reasonable compromise.”
See id. Here, competent attorneys have duly
represented the parties at all times and the concern voiced
in Lynn's Foods is not present.
as noted above, the Court previously granted summary judgment
in favor of MSSB and dismissed all claims with
prejudice. In so doing, the Court undertook an extensive
review of the facts in the record and determined that
under no circumstance would Plaintiffs' claims
prevail. “[A] bona fide dispute must be determined to
be one over factual issues . . . .'” See
Brumley, 2012 WL 1019337, at *2 (citing Lynn's
Foods, 679 F.2d at 1354) (quotation omitted). In
granting summary judgment for MSSB, the Court specifically
determined that there are no genuine disputes as to
any material fact that a reasonable jury could find
in favor of Plaintiffs. Consequently, there is no “bona
fide dispute over the FLSA provisions” currently before
the above, the Court is mindful of the parties' desire to
end this litigation after more than six years. In the Third
Circuit, “[a] strong public policy exists in favor of
settlements.” See Edwards v. Born, Inc., 792
F.2d 387, 390 (3d Cir. 1986). The settlement agreement
consists of wage payments to the four named plaintiffs and
attorneys' fees that amount to the expenses incurred by
counsel throughout the course of litigation. See
Joint Mot. at 4, 8. The parties entered into this agreement
because Plaintiffs would rather receive the payment than risk
receiving nothing after appeal and because MSSB prefers to
avoid incurring the substantial costs of defending the
appeal. See id. at 4. Assuming this Court's
approval was required, it would find the agreement fair and
reasonable under the circumstances.
this Court cannot approve a settlement of a case when it has
already determined the outcome. When an appeal has been
docketed, as here, the parties are free to make whatever
agreement they deem reasonable and voluntarily dismiss that
appeal on their own undertaking. See Fed. R. App. P.
42(b); Clarendon Ltd. v. Nu-West Indus., Inc., 936
F.2d 127, 128 (3d Cir. 1991) (“The parties may make
whatever arrangement they agree on and need not notify or
involve the court of appeals panel.”). Moreover, when
confronted with a joint motion for settlement approval after
the district court's grant of summary judgment, the Third
“‘When a clash between genuine adversaries
produces a precedent, . . . the judicial system ought not
allow the social value of that precedent, created at a cost
to the public and other litigants, to be a bargaining chip in
the process of settlement. The precedent, a public act of a
public official, is not the parties'
Clarendon, 936 F.2d at 129 (quoting In re
Mem'l Hosp. of Iowa Cnty., Inc., 862 F.2d 1299, 1302
(7th Cir. 1988)).
Court's “duty lies not in the direction of an
automatic acquiescence to the parties' request, but
rather with a deliberate consideration of the policy that
will best serve the public good.” See id. The
Court's summary judgment opinion produced a precedent
concerning the FLSA's application at considerable cost to
the public in the form of the Court's time and resources,
which it will not diminish by approving the parties'
agreement. Simply put, there is nothing to settle. The
parties are free to dismiss their appeal of the rulings in
this case at a price acceptable to them, ...