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Wilson v. DFL Pizza, LLC

United States District Court, D. Colorado

July 10, 2019

KAYLEE WILSON, individually and on behalf of similarly situated persons, Plaintiff,



         This action was brought on behalf of delivery drivers at Defendants' Domino's Pizza stores who were allegedly under-reimbursed for the automotive expenses they incurred such that their wages were reduced below the federal minimum wage. This matter is now before the Court on (1) the Joint Renewed Motion to Approve Collective Action Settlement with Memorandum in Support (the “Renewed Motion”) (ECF No. 64), with incorporates by reference the parties' previous Motion for Settlement (ECF No. 58) which was denied without prejudice; and (2) Plaintiffs' Application for Fees, Costs and Expenses (the “Application”) (ECF No. 61).[1] These filings seek approval of the parties' settlement agreement of this action brought under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and an award of attorney's fees and costs to Plaintiffs' attorneys. Upon consideration of the Renewed Motion and Application, the court record, and the applicable rules and case law, and being otherwise fully advised, the Renewed Motion and Application are GRANTED.

         I. BACKGROUND

         Named Plaintiff Kaylee Wilson was a delivery driver at one of Defendants' Domino's Pizza stores. As relevant here, Plaintiff Wilson, individually and on behalf of similarly situated persons, filed this FLSA collective action alleging Defendants under-reimbursed their delivery drivers for the automotive expenses they incurred to such an extent that their unreimbursed business expenses reduced their wages below the federal minimum wage. Pursuant to the parties' stipulation, the Court conditionally certified this case as a collective action to facilitate its potential settlement. After notice of this action, 215 of Defendants' delivery drivers, including Plaintiff Wilson, filed opt-in forms.

         The parties engaged in settlement discussions and reached a settlement after a full day of mediation with an experienced employment mediator and subsequent direct negotiations. Plaintiffs' attorneys disseminated a notice of the settlement terms to all Plaintiffs, Plaintiffs were afforded a month to object to the settlement, and no Plaintiff has objected. Plaintiffs now seek court approval of their proposed settlement via the Renewed Motion and Application, providing publicly available, unredacted copies of the “Settlement and Release Agreement” and “Supplemental Settlement Agreement and Release.”


         A. Collective Action Settlement

         Courts have held that settlements of FLSA actions such as this one must or may require court approval.[2] Cooper v. OFS 2 Deal 2, LLC, No. 15-cv-01291-RM-NYW, 2016 WL 1071002, at *2 (D. Colo. Mar. 17, 2016); Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982); Baker v. Vail Resorts Mgmt. Co., No. 13-cv-01649-PAB-CBS, 2014 WL 700096, at *1 (D. Colo. Feb. 24, 2014). Approval may be granted when: (1) the FLSA settlement is reached as a result of bona fide dispute; (2) the proposed settlement is fair and equitable to all parties concerned; and (3) the proposed settlement contains a reasonable award of attorneys' fees. Cooper, 2016 WL 1071002, at *2; Lynn's Food Stores, 679 F.2d at 1354; Baker, 2014 WL 700096, at *1. In addition, the “Court must determine whether the settlement agreement undermines the purpose of the FLSA, which is to protect employees' rights from employers who generally wield superior bargaining power.” Baker, 2014 WL 700096 at *2. To determine whether the settlement agreement complies with the FLSA, the court evaluates the following factors: “(1) the presence of other similarly situated employees; (2) a likelihood that plaintiffs' circumstances will recur; and (3) whether defendants had a history of non-compliance with the FLSA.” Baker, 2014 WL 700096 at *2 (citing Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1244 (M.D. Fla. 2010)). Finally, before approval of any settlement may be had, final collective action certification may be required, as well as notice to opt-in plaintiffs of any settlement and an opportunity to object. Ostrander v. Customer Engineering Servs., LLC, No. 15-cv-01476-PAB-MEH, 2018 WL 1152265, at *2 (D. Colo. Mar. 5, 2018).

         B. Attorney's Fees under the FLSA

         The FLSA requires any judgment to include an award of reasonable attorney's fees and the costs of the action. 29 U.S.C. § 216(b) (“The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.”). The Court has discretion to determine the amount and reasonableness of the fee to be awarded. Davis v. Crilly, 292 F.Supp.3d 1167, 1173 (D. Colo. 2018).

         The two primary methods for determining attorney-fee awards in common-fund cases are the percentage-of-the-fund method and the lodestar method. See Chieftain Royalty Co. v. Enervest Energy Institutional Fund XIII-A, L.P., 888 F.3d 455, 458 (10th Cir. 2017) (discussing fee awards in class actions). The Tenth Circuit has expressed a preference for the percentage-of-the-fund approach in common fund cases. Id. To determine the appropriate percentage, the Tenth Circuit considers the twelve factors first announced in Johnson v. Georgia Highway Express, 488 F.2d 714, 717-19 (5th Cir. 1974) (commonly called the Johnson factors). Those factors are:

the time and labor required, the novelty and difficulty of the question presented by the case, the skill requisite to perform the legal service properly, the preclusion of other employment by the attorneys due to acceptance of the case, the customary fee, whether the fee is fixed or contingent, any time limitations imposed by the client or the circumstances, the amount involved and the results obtained, the experience, reputation and ability of the attorneys, the “undesirability” of the case, the nature and length of the professional relationship with the client, and awards in similar cases.

Chieftain Royalty, 888 F.3d at 458 (quoting Gottlieb v. Barry, 43 F.3d 474, 482 n.4 (10th Cir. 1994)). In addition, courts frequently conduct a lodestar crosscheck to ensure the reasonableness of the percentage that attorneys seek. 5 W. Rubenstein, Newberg on Class Actions § 15:85 (5th ed. 2019); Aragon v. Clear Water Prods. LLC, No. 15-cv-02821-PAB-STV, 2018 WL 6620724, at *7 (D. Colo. Dec. 18, 2018).

         III. ANALYSIS

         A. The Renewed Motion

         In the Renewed Motion, Plaintiffs rely heavily on Nelson v. Mountainside Pizza, Inc., No. 16-cv-02825-RM-NRN. Such reliance was not misplaced due to the substantial similarities between Nelson and this action. Thus, for much of the same reasons given in Nelson, the Court finds approval may be had in this case.

         1. Final Certification

         The FLSA provides “a private right of action for one or more employees to bring an action against their employer to recover unpaid wages or overtime compensation on behalf of himself or themselves and other employees similarly situated.” In re Chipotle Mexican Grill, Inc., No. 17-1028, 2017 WL 4054144, at *1 (10th Cir. Mar. 27, 2017) (quotation marks and citation omitted). Under the two-step “ad hoc” approach, “a court typically makes an initial notice stage determination of whether plaintiffs are similarly situated, ” applying a fairly lenient standard. Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001) (quotation marks and citation omitted). Then, after discovery, the court makes a second similarly-situated determination, applying a stricter standard. Thiessen, 267 F.3d at 1102-03. Under that standard, a court considers “(1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; [and] (3) fairness and procedural considerations.” Thiessen, 267 F.3d at 1103 (quotation marks and citation omitted).[3]

         Plaintiffs request, and Defendants conditionally consent to, a final collective certification of the collective action members. In support of their request, Plaintiffs rely on several other pizza delivery driver cases which have been certified under Fed.R.Civ.P. 23 or under the FLSA for settlement purposes. See, e.g., Gassel v. American Pizza Partners, L.P., No. 14-cv-00291-PAB-NYW (D. Colo. filed Aug. 24, 2016) (final certification under FLSA for purposes of collective action settlement); Bass v. PJCOMN Acq. Corp., No. 09-cv-01616-REB-MEH, 2011 WL 2149602 (D. Colo. June 1, 2011) (certification under Rule 23). In addition, Plaintiffs contend the facts which support certification in those cases support certification in this case as well, e.g., that the delivery drivers were subject to the same delivery driver reimbursement policy and were reimbursed similar set amounts of automobile expenses per delivery. Upon review of Plaintiffs' contentions, the record, and prior cases which have found final certification appropriate, the Court agrees. Accordingly, the Court finds final collective action certification may be had.

         2. ...

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