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Diaz v. Lost Dog Pizza, LLC

United States District Court, D. Colorado

May 21, 2019

VICTOR DIAZ, on his own behalf and on behalf of all others similarly situated, Plaintiff,



         Before the Court is the parties' Joint Motion for Final Approval of Class and Collective Action Settlement (“Joint Motion”) and Plaintiff's Motion for Attorney Fee (“Fee Motion”). (ECF No. 43 & 44.) The Court held a settlement fairness hearing (“Settlement Hearing”) on May 15, 2019. Considering the arguments raised at the Settlement Hearing and in the Joint Motion and Fee Motion, and for the reasons set forth below, the Court grants the Joint Motion and Fee Motion, and approves the Settlement Agreement (ECF No. 43-1), including an incentive payment for Plaintiff Victor Diaz and reasonable attorneys' fees and costs.

         I. BACKGROUND

         On September 14, 2017, Plaintiff Victor Diaz filed this lawsuit as a putative collective and class action against Defendant Lost Dog Pizza, LLC (d/b/a Brown Dog Pizza), and its owners and managers, Daniel Warren Lynch and Jeff Smokevitch (collectively, “Defendants”). (ECF No. 1.) Plaintiff, on behalf of himself and others (“pizza workers”)-all hourly employees at Defendants' pizzeria from 2014 onward-alleges that Defendants failed to properly compensate pizza workers for overtime hours under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., and the Colorado Minimum Wage Act (“CMWA”), Colo. Rev. Stat. §§ 8-6-101 et seq. For example, Plaintiff alleges that he worked 107.67 hours from July 16-31, 2015, and 99.61 hours from September 5-18, 2016, and that Defendants failed to pay him overtime as required during those periods. (ECF No. 1 ¶ 17.) He also alleges that Defendants subjected all pizza workers to a “common policy of refusing to pay overtime wages for hours worked beyond forty each workweek and beyond twelve each workday.” (Id. ¶¶ 18, 29.)

         On June 19, 2018, the Court certified a Rule 23 class for the CMWA claims, and conditionally certified a collective action under the FLSA. (ECF No. 30.) The difference between the class definition and the collective action definition is simply the respective timeframe.[1] The Rule 23 class includes employees from September 14, 2015, onward, whereas the FLSA action covers pizza workers as of September 14, 2014. (Id. at 12.) At that time, the Court approved a revised version of the proposed FLSA Notice and Consent to Join and directed notice to potential collective action members. (Id. at 10-11.) However, the Court denied, without prejudice to refiling, the parties' proposal to notify class members of a settlement because the full details of the proposed settlement were not before the Court. (Id. at 11.)

         Plaintiff filed a Notice of Completion of Mailing of the FLSA opt-in notices on July 2, 2018. (ECF No. 33.) According to the parties, three potential FLSA plaintiffs returned consent to join forms. (ECF No. 43 at 2.)

         After the opt-in period closed in August 2018, the parties concluded settlement negotiations and moved for preliminary approval of a class and collective action settlement. (ECF No. 37.) This time, the Court granted preliminary approval, ordered notice to class members, set deadlines for opt-out forms and objections, and scheduled the Settlement Hearing for May 15, 2019. (ECF No. 40.) On January 2, 2019, Defendants filed a Notice of Completion of Mailing of the class settlement notice. (ECF No. 42.)

         On April 10, 2019, the parties filed the Joint Motion and Plaintiff filed the Fee Motion. (ECF No. 43 & 44.) The Court held the Settlement Hearing on May 15, 2019. (ECF No. 45.)


         In deciding whether to approve a settlement in class action, a court must determine whether the settlement is “fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2). Courts consider four factors in evaluating the settlement:

(1) whether the proposed settlement was fairly and honestly negotiated;
(2) whether serious questions of law and fact exist, placing 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 and expensive litigation; and
(4) the judgment of the parties that the settlement is fair and reasonable.

Gottlieb v. Wiles, 11 F.3d 1004, 1014 (10th Cir. 1993), abrogated on other grounds by Devlin v. Scardelletti, 536 U.S. 1 (2002). The Court may also consider the fact that no objections were filed by any class members. In re Dun & Bradstreet Credit Servs. Customer Litig., 130 F.R.D. 366, 372 (S.D. Ohio 1990) (“No timely objection was raised by any Class Member to the proposed settlement, and less than 5% of all Class Members have chosen to opt out. One untimely objection, improper in other regards, was filed and subsequently withdrawn prior to the fairness hearing. No. objection was raised at the fairness hearing. The Court gives these factors substantial weight in approving the proposed settlement.”).

         Having thoroughly reviewed the Joint Motion and the Settlement Agreement, the Court finds that the settlement negotiated by counsel is fair, reasonable, and adequate. With regard to the four factors, the parties have demonstrated that the Settlement Agreement was negotiated at arms' length by counsel experienced in these types of cases. The parties engaged in informal discovery, undertook a detailed review of Defendants' billing records, and negotiated settlements amounts for each class or collective action member as well as a cy pres award for unclaimed funds.

         The parties have also shown that serious questions of fact and law exist, particularly with regard to the accuracy of the billing records and entitlement to certain overtime wages, as well as the appropriateness of any liquidated damages under the FLSA . These factual and legal issues weigh in favor of approving the Settlement Agreement.

         Further, the Court finds that the value of the Settlement Agreement outweighs the possibility of recovery after protracted litigation. Courts have held that the ...

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