Christeson v. Amazon.com Servs., Inc.
| Decision Date | 28 August 2019 |
| Docket Number | CIVIL ACTION No. 18-2043-KHV |
| Parties | WYATT CHRISTESON AND PATRICK J. HILLS Plaintiffs, v. AMAZON.COM SERVICES, INC., Defendant. |
| Court | U.S. District Court — District of Kansas |
Wyatt Christeson brings suit against Amazon.com Services, Inc. to recover unpaid wages, liquidated damages, punitive damages, costs and attorney fees under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. On August 6, 2019, Patrick J. Hills filed a notice of consent to join the lawsuit.1 Plaintiff Consent Form (Doc. #63). This matter is before the Court on Plaintiffs' Unopposed Motion For Approval Of Settlement Agreement And Release And Motion For Dismissal Of Lawsuit With Prejudice (Doc. #67) filed August 9, 2019. For reasons stated below, the Court sustains the motion in part.
The named plaintiff initially filed this lawsuit as a collective action and the Court conditionally certified a class consisting of "Christeson and seven other IT Support Engineers who worked for Amazon at any time between January 25, 2015 and March 31, 2018." MemorandumAnd Order (Doc. #43) filed May 16, 2019 at 7; see Complaint (Doc. #1) filed January 25, 2018. After three unsuccessful motions for approval of a collective action settlement agreement, attorney fees and costs and a service award,2 named plaintiff (now joined by Hills) has decided to change courses. Plaintiffs request that the Court (1) decertify the conditionally certified class;3 (2) approve the settlement agreement between plaintiffs and Amazon; (3) approve an attorney fee and costs award; and (4) dismiss this action with prejudice.
Under the settlement agreement, Amazon will pay a total of $32,853.16. Of that amount, Amazon will pay $6,553.36 to Christeson and $7,341.28 to Hills. The parties calculated these figures by awarding plaintiffs each $250.00 for any de minimis time worked, plus approximately $394.00 for each instance that plaintiffs recorded approximately 40, 49 or 55 hours in a work week. In exchange, plaintiffs will release the FLSA claims which are specifically set forth in the complaint.
The rest of the settlement fund ($18,958.52) will go to plaintiffs' attorney and to cover costs and expenses. Plaintiffs request $15,000.00 for attorney fees and $3,958.52 for costs andexpenses.4 Plaintiffs' counsel asserts that he or she has spent more than 300 hours on this matter and seeks $15,000.00 in fees, which equates to an hourly rate of $50.00. If the Court reduces the cost and fee award, the parties will redistribute any remaining funds to plaintiffs. Any Court-ordered reduction of the cost and fee award will not affect the validity of the settlement. Amazon reserves the right to object to the proposed cost and fee award and subject it to testing through the adversarial process, but it does not actually object to plaintiffs' request for a cost and fee award of $18,958.52. Defendant's Response To Plaintiffs' Request For Attorneys' Fees (Doc. #68) filed August 9, 2019 at 2.
When employees file suit against their employer under the FLSA, the parties must present any proposed settlement to the Court for review and a determination whether the settlement is fair and reasonable. McCaffrey v. Mortgage Sources, Corp., No. 08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011); see Lynn's Food Stores v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982). The provisions of the FLSA are not subject to private negotiation between employers and employees. See Lynn's Food Stores, 679 F.2d at 1352 (citing Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706-07); Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1234 (M.D. Fla. 2010); Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 718 (E.D. La. 2008). To allow such waivers would nullify the effectiveness of the Act. Collins, 568 F. Supp. 2d at 712. Requiringthe Court to approve such settlements thus effectuates the purpose of the FLSA—to "protect certain groups of the population from substandard wages and excessive hours . . . due to the unequal bargaining power as between employer and employee," which may "endanger[ ] national health and well-being and the free flow of goods in interstate commerce." Brooklyn Sav. Bank, 324 U.S. at 706. To approve an FLSA settlement, the 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 McCaffrey, 2011 WL 32436, at *2; Lynn's Food Stores, 679 F.2d at 1354.
In its previous orders, the Court found a bona fide dispute, so now it must only determine whether the settlement is fair and reasonable and whether the requested attorney fees and costs are reasonable. Memorandum And Order (Doc. #35) filed January 29, 2019 at 11; Memorandum And Order (Doc. #43) at 8.
To be fair and reasonable, an FLSA settlement must be reasonable to the employees and must not frustrate FLSA policies. When determining the reasonableness of a settlement, the framework for evaluating the fairness of a class action settlement is instructive. McCaffrey, 2011 WL 32436, at *2. The Tenth Circuit considers the following factors when deciding whether to approve a class action settlement under Rule 23(e), Fed. R. Civ. P.: (1) whether the parties fairly and honestly negotiated the settlement; (2) whether serious questions of law and fact exist which place the ultimate outcome of the litigation in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted litigation; and (4) the judgment of the parties that the settlement is fair and reasonable. In its previous order, the Courtdetermined that these four factors weigh in favor of approving the settlement. See Memorandum And Order (Doc. #35) filed January 29, 2019 at 11-12. That conclusion still stands.
In addition to these factors, the Court must also ensure that the settlement does not undermine the purpose of the FLSA to protect employees' rights from employers who generally wield superior bargaining power. To do so, the Court considers the following factors: (1) presence of employees situated similarly to plaintiff, (2) a likelihood that plaintiffs' circumstances will recur and (3) a history of FLSA non-compliance by defendant or others in defendant's industry. Dees, 706 F. Supp. 2d at 1244.
The record reflects that the settlement is consistent with the purpose of the FLSA. Although the record indicates that other employees are situated similarly to plaintiffs, those individuals are free to pursue their own claims in separate actions. In addition, the record suggests no reason why similar conduct is likely to recur. Finally, the record does not reflect a history of FLSA non-compliance by defendant or others in its industry.
The Court therefore finds that the settlement is fair and reasonable.
Plaintiffs request $18,958.52 in attorney fees and costs, which is substantially more than the combined $13,894.64 plaintiffs will recover - approximately 136 per cent, in fact, of plaintiffs' recovery. The FLSA requires that settlement agreements include an award of reasonable attorney fees and costs. 29 U.S.C. § 216(b); Gambrell v. Weber Carpet Inc., No. 10-2131-KHV, 2012 WL 162403, at *3 (D. Kan. Jan. 19, 2012); Peterson v. Mortgage Sources, Corp., No. 08-2660-KHV, 2011 WL 3793963, at *4 (D. Kan. Aug. 25, 2011). Though the Court has discretion to determine the amount and reasonableness of the fee, the FLSA fee award is mandatory. Gambrell, 2012 WL 162403, at *3 (citing Wright v. U-Let-Us Skycap Servs., Inc., 648 F. Supp. 1216, 1218(D. Colo. 1986)). When a settlement creates a common fund, courts apply one of two methods to determine reasonable attorney fee awards: a percentage of the fund or the lodestar method. See Rosenbaum v. MacAllister, 64 F.3d 1439, 1445 (10th Cir. 1995). The Tenth Circuit applies a hybrid approach, which combines the percentage fee method with the specific factors traditionally used to calculate the lodestar. See Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994). In all cases, the Court must consider the factors listed in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). See Rosenbaum, 64 F.3d at 1445; Ramos v. Lamm, 713 F.2d 546, 552 (10th Cir. 1983), overruled on other grounds by Pennsylvania v. Del Valley Citizens' Council for Clean Air, 483 U.S. 711, 725 (1987).
Where the parties propose a percentage of the fund approach, as they do in this case, the Court has discretion to reduce an award of attorney fees which it determines would be unreasonable under the lodestar approach. See Wininger v. SI Mgmt. L.P., 301 F.3d 1115, 1125 (9th Cir. 2002); see also Powers v. Eichen, 229 F.3d 1249, 1258 (9th Cir. 2000) (); In re Petrol. Prods. Antitrust Litig., 109 F.3d 602, 607 (9th Cir. 1997) (). The percentage reflected in a common fund award must be reasonable and, as in statutory fee cases, the Court must articulate specific reasons for fee awards demonstrating the reasonableness of the percentage and thus the reasonableness of the fee award. See Brown v. Phillips Petrol. Co., 838 F.2d 451, 454 (10th Cir. 1988). To determine reasonableness, the Court relies heavily on the 12 factors articulated in Johnson, 488 F.2d 714. See, e.g., Ramos, 713 F.2d at 552.
The 12 Johnson factors are as follows: (1) time and labor required, (2) novelty and difficulty of the questions presented in the case, (3) skill requisite to perform the legal service properly, (4) preclusion of other employment by the...
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