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Epps v. Scaffolding Solutions, LLC

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

December 11, 2019

TONY EPPS and MATTHEW SULLIVAN, For themselves and on behalf of all others similarly situated Plaintiff,
v.
SCOFFOLDING SOLUTIONS, LLC, Defendant.

          REPORT AND RECOMMENDATION

          Lawrence R. Leonard United States Magistrate Judge

         Before the Court is the parties' Joint Motion for Settlement Approval, ECF No. 117, which was filed in accordance with the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. This matter was referred to the undersigned United States Magistrate Judge for a report and recommendation pursuant to a Referral Order from the United States District Judge. ECF No. 118; see also 28 U.S.C. §§ 636(b)(1)(B); Fed.R.Civ.P. 72(b); E.D. Va. Local Civ. R. 72. For the following reasons, the undersigned RECOMMENDS that the Joint Motion for Settlement Approval, ECF No. 117, be GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Defendant Scaffolding Solutions, LLC, ("Scaffolding Solutions" or "Defendant"), is engaged in the business of erecting and dismantling scaffolding, with six locations in North Carolina, South Carolina, and Virginia, including in the City of Chesapeake. ECF No. 104 at 1. The named Plaintiffs and opt-in Plaintiffs were employees of Defendant-either as Erectors, Foremen or Helpers-who worked out of the Chesapeake location between October 2014 and April 2018. Id. at 1 -2. Plaintiffs erected and dismantled scaffolding at various job sites throughout Hampton Roads, as well as out of the area in Richmond, Fredericksburg, Charlottesville, Lynchburg, Northern Virginia, the District of Columbia, North Carolina, South Carolina and Pennsylvania. Id. at 2. As hourly employees of a business engaged in interstate commerce with annual gross receipts in excess of $500, 000.00, Plaintiffs and Defendant are subject to the FLSA. Id.

         The Court previously ruled that Plaintiffs as a class were subject to a compensation policy for out-of-town travel which violated the FLSA and for which some Plaintiffs were entitled to recover. Id. at 5; ECF No. 96. Plaintiffs alleged further that they were entitled to compensation which they were not paid for the time from when they were required to report to the Chesapeake Yard in the morning at 6:00 a.m. until they arrived at the first job site of the day, and that they were not compensated for the return journey from the last job site of the day or for subsequent work at the Chesapeake Yard at the end of the work day. ECF No. 104 at 15. Defendant disputed that Plaintiffs were entitled to such compensation, contending that they were not performing work-related duties until they arrived at the various jobsites. Id. at 25-29.

         Plaintiffs filed their cause of action on October 26, 2017, ECF No. 1, which Defendant answered on January 16, 2018, ECF No. 11. Plaintiffs moved to conditionally certify their class on February 16, 2018, ECF No. 18, and the Court granted the motion on February 21, 2018, ECF No. 19. Over Defendant's objection, the Court granted Plaintiffs' Motion for Leave to Amend their complaint, ECF No. 55, and the Amended Complaint was filed on January 3, 3019. ECF No. 54. The parties subsequently litigated motions for decertification, for partial summary judgment, and to dismiss Count II and claim for willfulness (Defendant), for bifurcation (joint), and to strike Defendant's expert, and for partial summary judgment (Plaintiffs). ECF Nos. 49, 51, 56, 58, 66, 79. After trial was bifurcated and the liability portion of trial rescheduled for November 19, 2019, the parties engaged in a settlement conference with United States Magistrate Judge Miller, at which the proposed Settlement Agreement was reached.

         According to the proposed Settlement Agreement, ECF No. 117, attach. 1, Defendant agreed to pay a total amount of $200, 00.00 ("Gross Settlement Amount") to settle this action. In exchange, the named Plaintiffs and all participating members agree to release their claims against Scaffolding Solutions. Id. Under the Settlement Agreement, "no more than $100, 000.00 shall be allocated to Plaintiffs' damages" and the balance of the settlement amount shall be allocated to attorneys' fees and costs. Id. at 3. Pursuant to the Joint Motion for Settlement Approval, the twenty opt-in Plaintiffs actually will share $85, 000.00 in damages, with $5, 000.00 allocated to costs and $110, 000.00 allocated to attorneys' fees. ECF No. 117 at 5. The $85, 000.00 in damages is alleged to represent the "about 90% of the[] claimed unpaid overtime pay within two years of the[] respective opt-in dates as calculated by Plaintiffs' counsel."[1] Id. at 2. Neither Tony Epps nor Matthew Sullivan, the named Plaintiffs, are earmarked to receive any additional recovery for their efforts in bringing and prosecuting the matter. ECF No. 117 and attach. 1, passim.

         The Court held a hearing on the Joint Motion for Settlement Approval on December 10, 2019. ECF No. 119. At the hearing, Mr. Christopher North and Mr. Joshua David appeared on behalf of the Plaintiffs and Ms. Jaime Wisegarver appeared on behalf of the Defendant. As such, the Motion, ECF No. 117, is now ripe for recommended disposition.

         II. ANALYSIS

         All FLSA settlements must be approved either by the United States Department of Labor or the court. Taylor v. Progress Energy, Inc., 415 F.3d 364, 374 (4th Cir. 2005), reinstated on reh'g, 493 F.3d 454 (4th Cir. 2007), cert, denied, 554 U.S. 909 (2008); Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982); Lomascolo v. Parson Brinckerhoff, Inc., 2009 WL 3094955 at *8 (E.D. Va. 2009). Such approval is required for both class actions and individual cases. See Poulin v. Gen. Dynamics Shared Res., Inc., 2010 WL 1813497 at *1 (W.D. Va. 2010). "A proposed settlement should be approved if it reflects a reasonable compromise over issues actually in dispute." Galvez v. Americlean Servs. Corp., 2012 WL 1715689 at *2 (E.D. Va. 2012). At the settlement hearing, "a court's role is ... a balancing of likelihoods rather than an actual determination of the facts and law in passing upon whether the proposed settlement is fair, reasonable, and adequate." Lomascolo, 2009 WL 3094955 at *10 (citation omitted). "In addition to being fair and reasonable, in order to merit Court approval, the settlement must resolve a bona fide dispute over FLSA provisions." Id. at *16.

         Factors the court weighs when considering approval of an FLSA settlement agreement for a class action include: (1) the extent of discovery conducted; (2) the stage of the proceedings; (3) the absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented the plaintiffs; (5) the opinions of class counsel and class members; and (6) the amount of settlement in relation to the potential recovery. In re Jiffy Lube Sec. Litig., 927 F.2d 155, 158-59 (4th Cir. 1991); Flinn v. FMC Corp., 528 F.2d 1169, 1173-74 (4th Cir. 1975); Lomascolo, 2009 WL 3094955 at *11-16 (listing the factors in headings); see also Patel v. Barot, 15 F.Supp.3d 648, 656 (E.D. Va. 2014) (listing similar factors for non-class action FLSA settlement approvals). Analysis of these factors demonstrates that the proposed settlement is fair and reasonable.

         Regarding the first and second factors, this case has been actively litigated for almost two years. Both parties conducted extensive discovery, including multiple sets of interrogatories and requests for production of documents, and the depositions of eighteen of the twenty Plaintiffs and several corporate officers of Defendant. Defendant produced, and Plaintiffs reviewed tens of thousands of documents. The parties litigated the Plaintiffs' Motion for Leave to File a First Amended Complaint, Defendant's Motion for Partial Summary Judgment and for Decertification, Plaintiffs' Motion to Exclude Testimony from Defendant's Expert, Defendant's Motion to Dismiss Count II of the Amended Complaint, Defendant's Renewed Motion for Decertification, and Plaintiffs Motion for Partial Summary Judgment. The parties' prepared an extensive Final Pretrial Order and participated in the attendant final pretrial conference, and then submitted proposed voir dire and jury instructions as they readied this case for trial. Indeed, after the Court granted the Joint Motion to Bifurcate the trial, trial was ultimately rescheduled for November 19, 2019 on the issue of liability. See In re Jiffy Lube Sec. Litig., 927 F.2d at 159 ("[A] reasonable judgment on the possible merits of the case is best achieved when all discovery has been completed and the case is ready for trial."). Only after this extensive litigation was the case subsequently resolved following mediation before United States Magistrate Judge Miller shortly before the beginning of trial.

         Third, there is neither evidence, nor even a suggestion, of any collusion on the part of the parties. The Settlement Agreement was reached through mediation conducted by Judge Miller on October 28, 2019. Id. at 2; see Lomascolo, 2009 WL 3094955 at * 12 (noting there is a presumption that no fraud or collusion occurred in the absence of any evidence to the contrary) (citing Camp v. Progressive Corp., 2004 WL 2149079 at *7 (E.D. La. 2004)). As advised by Mr. North at the hearing, Defendant only made their first settlement offer two weeks before the scheduled trial date, and therefore each side was required to prepare the case for trial.

         Fourth, Plaintiffs' counsel are experienced in FLSA cases, labor and employment law, and collective and class actions. Both lead counsel have successfully handled FLSA actions in this Court before, and the undersigned has previously recognized Mr. North's expertise in these cases in approving an FLSA settlement and counsel's requested attorney's ...


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