Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 1 of 6
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW MEXICO
`
`
`MARTIN F. CORONADO, JR., on his own behalf and
`on behalf of all others similarly situated,
`
`
`Plaintiff,
`
`
`vs.
`
`FLOWERS FOODS, INC., and
`FLOWERS BAKING CO. OF
`EL PASO, LLC,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Civ. No. 16-350 JCH/KK
`
`
`Defendants.
`
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`This case is before the Court on the Joint Motion for Approval of Proposed Collective
`
`Action Settlement [Doc. 215], in which the parties ask the Court to approve the settlement of
`
`Plaintiffs’ Fair Labor Standards Act (“FLSA”) claims against Defendants Flowers Foods, Inc. and
`
`Flowers Baking Co. of El Paso, LLC (“Flowers”). After reviewing the motion, the affidavits, and
`
`the settlement agreement, and after considering the law and the facts, the Court concludes that the
`
`motion should be granted and the settlement agreement should be approved.
`
`LEGAL STANDARD
`
`In a lawsuit by employees against their employer to recover back wages under the FLSA,
`
`the parties must present any proposed settlement to the district court for review and a determination
`
`of whether the settlement agreement is fair and reasonable. See Lynn’s Food Stores, Inc. v. United
`
`States, 679 F.2d 1350, 1353 (11th Cir. 1982). Requiring court approval of FLSA settlements
`
`effectuates the purpose of the statute, which is to “protect certain groups of the population from
`
`

`

`Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 2 of 6
`
`substandard wages and excessive hours... due to the unequal bargaining power as between
`
`employer and employee.” Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945).
`
`However, the requirement of court approval of FLSA settlements has recently been called
`
`into question by some courts, including the District of New Mexico. See, e.g., Riley v. D. Loves
`
`Rests., LLC, No. 20-1085 WJ/KK, 2021 WL 1310973, at *1-4 (D.N.M. Apr. 8, 2021) (concluding
`
`that court need not approve private settlement of bona fide dispute regarding FLSA liability);
`
`Lawson v. Procare CRS, Inc., No. 19-00248-TCK-JFJ, 2019 WL 112781, at *2-3 (N.D. Okla. Jan.
`
`4, 2019) (same); Fails v. Pathway Leasing LLC, No. 18-00308-CMA-MJW, 2018 WL 6046428,
`
`at *2-4 (D. Colo. Nov. 19, 2018) (same). While this issue has not been settled by the Tenth Circuit,
`
`“there does not appear to be disagreement at this time over whether FLSA settlements may be
`
`approved by the Court.” Slaughter v. Sykes Enters., Inc., No. 17-02038-KLM, 2019 WL 529512,
`
`at *6 (D. Colo. Feb. 11, 2019) (citing Thompson v. Qwest Corp., No. 17-1745-WJM-KMT, 2018
`
`WL 2183988, at *2 (D. Colo. May 11, 2018)). The parties here request court approval and neither
`
`suggests that it is not required. Accordingly, the Court applies the standard used by district courts
`
`in the Tenth Circuit to scrutinize FLSA settlements.
`
`In order to approve a settlement under the FLSA, “the district court must find that (1) the
`
`litigation involves a bona fide dispute, (2) the proposed settlement is fair and equitable to all parties
`
`concerned, and (3) the proposed settlement contains an award of reasonable attorney fees.” See,
`
`e.g., Mpia v. Healthmate Int’l, LLC, No. 19-CV-02276-JAR, 2021 WL 2805374 at *1 n.4 (D. Kan.
`
`Jul. 6, 2021) (unpublished) (citing Geist v. Handke, No. 2:17-CV-02317-HLT, 2018 WL 6204592
`
`(D. Kan. Nov. 28, 2018) (unpublished) and Lynn’s Food Stores, 679 F.2d at 1354)). Each of these
`
`requirements is satisfied here.
`
`
`
` 
` 
`
`2 
`
`

`

`Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 3 of 6
`
`I.
`
`Bona Fide Dispute
`
`DISCUSSION
`
`Parties requesting approval of an FLSA settlement must provide the Court with sufficient
`
`information to determine whether a bona fide dispute exists. Dees v. Hydradry, Inc., 706 F.Supp.2d
`
`1227, 1234 (M.D. Fla. 2010). In their extensive briefing on both the Defendants’ motion for
`
`summary judgment and their motion for decertification, the parties have presented to this Court:
`
`(1) a detailed description of the nature of the dispute; (2) a detailed description of Flowers’ business
`
`and the type of work performed by the plaintiffs; (3) Flowers’ reasons for disputing the plaintiffs’
`
`right to overtime; (4) the plaintiffs’ justification for the disputed wages; and (5) Flowers’ reasons
`
`for disputing the plaintiffs’ right to additional compensation. The parties likewise disagree about
`
`the merits of plaintiffs’ claims and the validity of Flowers’ defenses. Plaintiffs acknowledge that
`
`resolution of these issues would therefore require significant litigation, with the possibility of
`
`limited to no recovery on either side.
`
`The Court finds that a bona fide dispute exists.
`
`II.
`
`Fair and Reasonable
`
`To be fair and reasonable, an FLSA settlement must provide adequate compensation to the
`
`employees and must not frustrate the FLSA policy rationales. Baker v. Vail Resorts Mgmt. Co.,
`
`Case No. 13-CV-01649-PAB-CBS, 2014 WL 700096, at *2 (D. Colo. Feb. 24, 2014). When
`
`determining whether a settlement is fair and reasonable, courts weigh a number of factors,
`
`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
`
` 
` 
`
`3 
`
`

`

`Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 4 of 6
`
`to the potential recovery. Hargrove v. Ryla Teleservices, Inc., Case No. 2:11CV344, 2013 WL
`
`1897027, at *2 (E.D. Va. Apr. 12, 2013) (citation omitted). There is a strong presumption in favor
`
`of finding a settlement fair. Id.
`
`The parties in this case have engaged in extensive discovery and motion practice, enabling
`
`them to fully explore the merits of their respective positions. The parties also have representation
`
`from experienced counsel, and this Court attributes significant weight to their professional
`
`judgment that this agreement represents a fair and reasonable settlement of this dispute. Further,
`
`the Court finds that this settlement is a product of extensive arms-length negotiations that took
`
`place over the course of months, including a settlement conference with a United States Magistrate
`
`Judge and the exchange of multiple offers and counteroffers. The settlement also delivers fair value
`
`to plaintiffs, who will receive compensation for overtime without the risk, expense, and heartache
`
`that comes with protracted litigation and trial, the outcome of which is uncertain. The settlement
`
`specifically obligates Flowers to pay a gross amount of $137,500, of which $21,000 ($3,500
`
`apiece) will be paid to those six plaintiffs currently working as distributors for Flowers Foods in
`
`exchange for their agreement to enter into a mutual arbitration agreement with Flowers that
`
`contains a class and collective action waiver applicable to any future disputes between them. Under
`
`that agreement, Flowers will pay all fees and costs associated with arbitration, and ample discovery
`
`will be permitted. After deductions are made for attorney fees and costs, another $81,000 will be
`
`divided equally among the nine plaintiffs for recovery under the FLSA. The parties represent that
`
`they believe the settlement amount to be fair and reasonable.
`
`Accordingly, the Court finds that the Settlement is fair and reasonable.
`
`
`
` 
` 
`
`
`
`4 
`
`

`

`Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 5 of 6
`
`III. Attorney’s Fees
`
`The FLSA entitles a prevailing plaintiff to recover “a reasonable attorney’s fee ... and costs
`
`of the action.” 29 U.S.C. § 216(b); see, e.g., Gray v. Phillips Petrol. Co., 971 F.2d 591, 593 (10th
`
`Cir. 1992). Though the fee is mandatory, the Court has discretion to determine the amount and
`
`reasonableness of the fee. Wright v. U–Let–Us Skycap Serv., Inc., 648 F. Supp. 1216, 1218 (D.
`
`Colo. 1986). In common fund cases, it is standard to use a percentage method when calculating
`
`attorneys’ fees. See Gottlieb v. Barry, 43 F.3d 474, 482-83 (10th Cir. 1994), abrogated on other
`
`grounds by Devlin v. Scardelletti, 536 U.S. 1 (2002); Barr v. Qwest Communications Co., LLC,
`
`Case No. 01-cv-00748-WYD-KLM, 2013 WL 141565, *3-4 (D. Colo. Jan. 11, 2013). Regardless
`
`of the method used to calculate fees, the fees awarded must be reasonable. Gottlieb, 43 F.3d at 482
`
`(citing Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 853 (10th Cir. 1993)
`
`(implying a preference for the percentage of the fund method)).
`
`Here, the plaintiffs’ counsel will be paid $35,500 for fees, costs, and expenses, which is
`
`about 25.8% of the total settlement amount. This is significantly below the traditional 33%
`
`awarded to plaintiffs’ counsel in contingency fee cases. Furthermore, that amount—$35,500—is
`
`a significant reduction from the amount of fees attributable to plaintiffs’ counsel using the lodestar
`
`method, which is a little over $46,000. Based on the affidavits of Jenny Kaufman and Philip Davis
`
`[Docs. 215-2], the Court finds both the hourly rates of the plaintiffs’ counsel, along with the hours
`
`spent on this complex and protracted litigation, to be reasonable. Therefore, the awarded fee of
`
`$35,500 is a reduction in favor of the plaintiffs, and the Court finds it to be both fair and reasonable.
`
`
`
`
`
`
`
`
`
` 
` 
`
`
`
`5 
`
`

`

`Case 1:16-cv-00350-JCH-KK Document 216 Filed 06/07/22 Page 6 of 6
`
`IT IS THEREFORE ORDERED that the Joint Motion for Approval of Proposed
`
`Collective Action Settlement [Doc. 215]is GRANTED, and the Settlement Agreement is hereby
`
`APPROVED.
`
`
`
`
`
` 
` 
`
`
`
`
`
`
`
`
`
`
`
`
`
`_______________________________________
`SENIOR UNITED STATES DISTRICT JUDGE
`
`6 
`
`