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Espinal v. Pogoriler

United States District Court, D. New Jersey

October 22, 2018

JAVIER ESPINAL, XAVIER ROSARIO, LUIGI DORTONO, SABUHAN AIROV, AND MANUEL DELGADO, and all others similarly situated, Plaintiffs,
v.
LEONID POGORILER, PETER CREUS, ONE OF KIND TRANSPORTATION, INC., ALL AROUND MANAGEMENT, INC., ALL POINTS TRANSPORTATION GROUP, INC., YAN MOSHE, NAZAR NIKSON, MNBT CORP., EXCEL SURGERY CENTER, LLC, HEALTH PLUS SURGERY CENTER, LLC AND JOHN DOE DEFENDANTS 1-10, Defendants.

          OPINION

          Kevin McNulty United States District Judge

         This matter comes before the Court on plaintiffs' motion for an order approving a settlement agreement under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., between plaintiffs, and defendants Leonid Pogoriler; One of Kind Transportation, Inc. ("One of Kind"); All Around Management, Inc. ("All Around"); and All Points Transportation Group, Inc. ("All Points") (collectively, "Pogoriler defendants"). Defendants Yan Moshe; Excel Surgery Center, LLC ("Excel"); Health Plus Surgery Center, LLC ("Health Plus"); Nazar Nikson; and MNBT Corporation ("MNBT) oppose the motion.

         For the reasons explained below, plaintiffs' motion is denied.

         I. Background and Proposed Settlement

         Because I write primarily for the parties, who are familiar with the facts and procedural history, I recount only the essential facts. On April 6, 2018, plaintiffs filed their first amended complaint, a prospective collective action lawsuit. (DE no. 11). Plaintiffs, drivers and patient escorts for surgery centers, claim that they, and other similarly situated drivers, were not paid overtime and minimum wages in violation of the FLSA, the New Jersey Wage and Hour Law, and the New York Labor Law. (Id.). Plaintiff Espinal also has individual claims. He asserts that he was retaliated against in violation of the FLSA, New York Labor Law, and the New Jersey Conscientious Employee Protection Act.

         Plaintiffs claim that Moshe operated two surgical centers through Excel and Health Plus. They further allege that Moshe and the surgical centers employed plaintiffs through transportation companies, including All Points, All Around, One of Kind, and MNBT, which were operated by Pogoriler, Creus and Nikson. Plaintiffs claim that they were misclassified as independent contractors, and as a result, were underpaid.

         On July 13, 2018, plaintiffs and the Pogoriler defendants agreed to a settlement. (DE nos. 59-1, at 4; 59-5). On that same date, Leonid Pogoriler submitted a declaration in opposition to Moshe, Excel, and Health Plus's pending motion to dismiss the amended complaint. (DE no. 40). The declaration asserted that the Pogoriler defendants were joint employers, and that plaintiffs routinely worked more than forty-hour work weeks. (DE no. 40).

         The settlement was not executed by the Pogoriler defendants until July 23, 2018. (DE no. 59-5, at 5). The settlement agreement is a non-monetary settlement. (DE no. 59-5). Under the terms of the agreement, the Pogoriler defendants agreed to the "[f]ull, complete and truthful cooperation with Plaintiffs' prosecution of the action; to produce all documents related to this action; and to be available for trial preparation and trial, depositions, and post-trial proceedings. (DE no. 59-5). In exchange, plaintiffs agreed to dismiss the Pogoriler defendants without prejudice, and to execute releases at the conclusion of the action. After execution of the settlement agreement, this motion to approve the settlement was filed.

         II. Discussion

         "When employees bring a private right of action for back wages under the FLSA, and present to the district court a proposed settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for fairness." Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982); see also Rabbenou v. Dayan Foods, Ltd., 2017 WL 3315263, at *1 (D.N.J. Aug. 3, 2017); Morales v. PepsiCo, Inc., 2012 WL 870752, at *1 (D.N.J. Mar. 14, 2012). The court is obligated to scrutinize the settlement to ensure it represents a fair and reasonable resolution of a bona fide dispute rather than a "mere waiver of statutory rights brought about by an employer's overreaching." Lynn's Food Stores, 679 F.2d at 1354.

         In scrutinizing an agreement for reasonableness and fairness, courts engage in a two-step process. Singleton v. First Student Mgmt. LLC, 2014 U.S. Dist. LEXIS 108427, at *21 (D.N.J. Aug. 6, 2014) (citation omitted). In the first step, court analyze whether the agreement is fair and reasonable under the so-called Girsh factors. Id. Although a class has not yet been certified, it is clearly contemplated; the plaintiffs seemingly concede that the Girsh factors are relevant and proffer an analysis of the settlement in light of them.

         In Girsh v. Jepson, 521 F.2d 153, 156-157 (3d Cir. 1975), the Third Circuit identified nine factors that a court should consider in evaluating whether a proposed class action settlement is "fair, reasonable, and adequate." The nine Girsh factors are as follows:

(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) stage of the proceedings and the amount of discovery completed; (4) risks of establishing liability; (5) risks of establishing damages; (6) risks of maintaining the class action through the trial; (7) ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

(citation omitted). "Once the settlement is found to be fair and reasonable, the Court proceeds to the second step to determine whether the agreement furthers the purpose of the FLSA." Singleton, ...


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