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Lafleur v. Dollar Tree Stores, Inc.

United States District Court, E.D. Virginia, Norfolk Division

June 1, 2016

MARINA LaFLEUR, and THERESA CROY, individually and on behalf of others similarly situated, Plaintiffs,
v.
DOLLAR TREE STORES, INC., d/b/a DOLLAR TREE, and d/ba/ DEALS, Defendant.

          AMENDED MEMORANDUM OPINION & ORDER

          RAYMOND A. JACKSON, District Judge.

         This matter comes before the Court on a third Joint Motion for Approval of Settlement brought by Plaintiffs Theresa Cray. Kimberly Cruz, and Dee Crouch, on behalfof themselves and the 4, 209 opt-in Plaintiffs in the collective group they represent ("Plaintiffs"), and Defendant Dollar Tree Stores, Inc., d/b/a Dollar Tree, and d/b/a Deals ("Dollar Tree"), collectively, the "Parties." ECF No. 564. Plaintiffs have also tiled a third Unopposed Petition for Approval of Attorneys' Fees and Expenses. ECF No. 566.

         On July 23, 2015, the Court held a settlement fairness hearing, and for the reasons stated in open court, which arc set forth more fully in a Memorandum Opinion dated July 31, 2015, the Joint Motion for Approval of Settlement and Plaintiffs' Unopposed Petition for Approval of Attorneys' Fees and Expenses were both denied. The Court found the record bereft of data or expert support to establish the settlement fund of $300, 000 was fair and inadequate documentation to justify counsel fees of $1, 900, 000, which the Court deemed excessive. Given that the Parties stated they wished to continue settlement discussions in light of the Court's concerns, the Court permitted the Parties to supplement their filing within ten days of the date of the hearing.

         Upon review of the Parties' supplemental filing, the Court again considered the Joint Motion for Approval of Settlement, which it again denied in a Memorandum Opinion and Order dated October 21, 2015. The Court still found the explanation for the calculations of the settlement fund amount inadequate to find it fair and reasonable. The Court also found that there was still inadequate documentation to support $1, 900, 000 in attorneys' fees.

          I. FACTUAL & PROCEDURAL HISTORY

         Plaintiffs are current and former Dollar Tree hourly sales associates. Dollar Tree is a publicly-traded corporation headquartered in Chesapeake, Virginia with retail stores in the continental United States. Pls.' Compl. ¶¶ 13-17, ECF No. 1. Dollar free stores are corporately-owned and operated with operating policies and procedures that apply to all stores. Id. at ¶¶ 16, 19.

         Plaintiffs Marina EaFleur and Theresa Cray brought their claims against Dollar Tree on behalf of themselves and all current and former "Hourly Associates" and "Assistant Store Managers." Id. at * 1. Plaintiffs claim that Defendant violated wage laws in 48 states and the District of Columbia by engaging in practices that required or permitted employees to work "off-the-clock" and overtime without compensation, Id. at ¶ 2. Plaintiffs allege that these "standard and uniform human resource and employment policies and practices, including policies and practices governing wages and compensation." applied to all Dollar Tree employees nationwide and facilitated a company-wide procedure of allowing employees to perform overtime work without pay. Id. at ¶ 20. These allegations specifically claim that putative class members are paid on an hourly basis and are required to work off-the-clock (1) when making bank deposits, (2) during interrupted meal periods, and (3) at miscellaneous other times performing activities such as unloading trucks, stocking inventory and aisles, retrieving carts and boxes, cleaning, and waiting for other employees to start the next shift. Id. at ¶¶ 21, 24-34. As a result of the practice of allowing unpaid off-the-clock work, Plaintiffs worked outside of their scheduled work period and Defendant failed to compensate them for associated overtime. Id. at ¶ 43. Accordingly, Plaintiffs claim Defendant violated federal and state laws prohibiting unpaid overtime and payment of wages below the minimum wage. Id. at ¶ 44.

         Plaintiffs LaFleur and Croy filed their Complaint in this case on November 28, 2011 before the United States District Court for the Northern District of Illinois. ECF No. 1. The Complaint articulates the aforementioned allegations and brought causes of action for alleged violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. ยงยง 201 et seq., the Illinois Minimum Wage Law, 820 ILCS 105/1 et seq., the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq., and similar state wage and hour laws applicable to putative class members. Id. On June 18, 2012, United States District Judge Marvin E. Aspen issued a memorandum opinion and order directing the case to be transferred to the Eastern District of Virginia. ECF No. 58.

         On October 2, 2012, this Court conditionally certified the case, allowing Plaintiffs to send notice to potential opt-in Plaintiffs. ECF No. 82. This Court also dismissed non-Illinois state law claims and pendant claims for Plaintiffs who worked solely as Assistant Store Managers, including named Plaintiff LaFleur. Id. On November 13, 2012, the Court approved the Parties' proposedjoint discovery plan for Phase I Discovery. ECF No. 109. Subsequently. Plaintiffs sent notices to approximately 275.000 former and current Dollar Tree employees. 6, 276 of which opted-in as Plaintiffs in the lawsuit. Out of 6, 276 opt-in Plaintiffs, 184 opt-in Plaintiffs were later dismissed, leaving 6, 092 Plaintiffs.

         On January 11, 2013, the Court denied Defendant's motion for certification for an interlocutory appeal of its order granting conditional certification, and granted Defendant's motion to dismiss the remaining Illinois state claims. ECF No. 195.

         On January 3, 2014, the Court granted Plaintiffs leave to amend their Complaint to add Dee Crouch and Kimbcrly Cruz as named Plaintiffs in this action. ECF No. 433. The Court also dismissed opt-in Plaintiffs whoseclaims were time-barred pursuant to the applicable statute of limitations, who filed bankruptcy claims without acknowledging claims against Dollar Tree, and who failed to respond to Defendant's written discovery requests. Id. On March 7, 2014, the Court denied Defendant's Motion to Decertify. ECF No. 446. At the hearing on decertification, Defense counsel represented to the Court that approximately 4, 000 individuals remained as opt-in Plaintiffs of the conditionally certified class. On April 4, 2014, Defendant filed two motions - a Motion for Reconsideration ofthis Court's March 7, 2014 Order and a Motion for Interlocutory Appeal and to Stay Order Denying Decertification. ECF Nos. 454, 456. On May 20, 2014, this Court denied both motions. ECF Nos. 465, 466.

         On March 3, 2015, a hearing was to be held on two motions[1] pertaining to Phase II Discovery. That morning, the Court cancelled the hearing upon written notification from each Party that a settlement had been reached. Because the Parties have reached a settlement agreement, the Court has reserved judgment on these and all pending motions.

         On May 19, 2015, the Court held a telephone conference with the Parties. After giving the Parties guidance on the appropriate notice to be sent to the opt-in Plaintiffs, the Court indicated its reservations regarding the decertification clause and stated that the Parties would have to explain the reasons for its inclusion in the proposed Settlement Agreement at the fairness hearing. In response, Defendant filed a motion for leave to file a memorandum explaining its position. ECF No. 519. The Court granted the motion. On July 1, 2015, Defendant filed its memorandum. ECF No. 522.

         After settlement conferences before a United States Magistrate Judge, the Court held a fairness hearing on July 23, 2015. As indicated above, the Court denied the first Joint Motion for Approval of Settlement and Petition for Approval of Attorneys' Fees and Expenses on July 31, 2015. ECF No. 525. The Court again denied the second Joint Motion for Approval of Settlement and Petition for Approval of Attorneys' Fees and Expenses on October 21, 2015. ECF No. 537.

          II. LEGAL STANDARDS

          A. Approval of Settlement Fund

         A Fair Labor Standards Act ("FLSA") settlement must be approved by the Department of Labor or a federal district court. Taylor v. Progress Energy, Inc., 415 F.3d 364, 374 (4th Cir. 2005). In determining whether a settlement is "fair, adequate, and reasonable" there is a "strong presumption in favor of finding a settlement fair' that must be kept in mind in considering the various factors to be reviewed." Lomascolo v. Parsons Brinckerhoff, Inc., No. 1:08cv1310, 2009 WL 3094955. at *10 (E.D. Va. Sep. 28, 2009) (quoting Camp v. Progressive Corp., No. Civ.A. 01-2680. Civ.A. 03-2507, 2004 WL 2149079, at *5 (E.D. La. Sept. 23, 2004)). Courts consider a number of factors in evaluating a FLSA settlement agreement, including:

(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 plaintiffs:
(5) the probability of plaintiffs' success on the merits[;] and
[(6)] the amount of the settlement in relation to the potential recovery.

Id. at *10 (citing Flinn v. FMC Corp., 528 F.2d 1169, 1173-74 (4th Cir. 1975)); Paiel v. Barot, 15 F.Supp.3d 648, 656 (E.D. Va. 2014) (citing In re Dollar General Stores FLSA Litigation, No. 5:09-MD-1500, 2011 WL 3841652, at *2 (E.D. N.C. Aug. 23, 2011)).

          B. Approval of Attorney Fees

         The touchstone of any award of attorneys' fees and expenses is reasonableness. SunTrust Mortg, Inc. v. AIG United Guar. Corp., 933 F.Supp.2d 762. 769 (E.D. Va. 2013) (quoting E.I. DuPont de Nemours and Co. v. Kolon Indus., Inc., Civil Action No. 3:09cv058, 2013 WL 458532, at *2 (E.D. Va. Feb. 6, 2013)). The fee applicant bears the burden of demonstrating the reasonableness of its fee request, Kenney v. A Touch of Patience Shared Hous., Inc., 779 F.Supp.2d 516, 525 (E.D. Va. 2011), and of "providing sufficient detail in [its] records to explain and support [its] requests for fees and costs." Andrade v. Aerotek, Inc., 852 F.Supp.2d 637, 645 (D. Md. 2012). Indeed, "the party who seeks payment must keep records in sufficient detail that a neutral judge can make a fair evaluation of the time expended, the nature and need for the service, and the reasonable fees to be allowed." Hensley v. Eckerhart, 461 U.S. 424, 441 (1983) (Burger, C.J., concurring).

         To calculate an award of attorney fees the Court must determine a "lodestar fee." Brodziak v. Runyon, 43 F.3d 194, 196 (4th Cir. 1998); Grissom v. The Miller Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). The lodestar fee is calculated by multiplying the number of reasonable hours expended limes a reasonable rate. Id. The United States Court of Appeals for the Fourth Circuit ("the Fourth Circuit") has held that the Johnson factors must be applied in determining the reasonable hours expended and hourly rate. See Daly v. Hill, 790 F.2d 1071, 1077 (4th Cir. 1986). These factors include:

(1) the time and labor required:
(2) the novelty and difficulty of the ...

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