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Mitcham v. Intrepid U.S.A., Inc.

United States District Court, W.D. Kentucky, Louisville Division

May 28, 2019

TINA MITCHAM, On Behalf of Herself and All Others Similarly Situated, Plaintiff,
v.
INTREPID U.S.A., INC., et al., Defendants.

          OPINION AND ORDER CONDITIONALLY APPROVING 216(b) SETTLEMENT

          CLARIA HORN BOOM, UNITED STATES DISTRICT COURT JUDGE

         Plaintiff Tina Mitcham (“Plaintiff”), individually and on behalf of similarly situated individuals, and Defendants Intrepid U.S.A., Inc. and F.C. of Kentucky, Inc., d/b/a Intrepid USA Healthcare Services (“Intrepid”or “Defendants, ” collectively with Plaintiff, the “Parties”) have reached a comprehensive settlement in this case. Before the Court are two related motions to approve two settlements that resolve two separate claims. The Court will address each by separate Opinion and Order. The instant Opinion and Order addresses the Parties' Joint Motion for Approval of Section 216(b) Settlement of this collective action arising under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b). [R. 50; R. 51, Parties' Mem. in Supp] For the following reasons, the Court conditionally grants the Parties' Section 216(b) Settlement, pending the Parties' briefing of attorneys' fees, addressed more fully in the Court's concurrent Opinion and Order.

         I. Background

         On November 22, 2017, Plaintiff filed this action, seeking unpaid overtime pay owed under the FLSA and under Kentucky state law, Ky. Rev. Stat. §§ 337.275, et seq. [R. 1, Compl., at ¶ 1] Plaintiff also brought this action under Fed.R.Civ.P. 23. Id. at ¶¶ 26-36. This portion of the settlement only addresses individuals who opted into the FLSA collective action or are otherwise named Plaintiffs.

         On April 18, 2018, the Parties moved for conditional certification and Court-approved notice to putative class members pursuant to Section 216(b). [R. 24] The Court granted conditional certification and Court supervised notice on May 30, 2018. [R. 32] The Court conditionally certified the following collective class:

All former and current non-exempt home health workers employed by Defendants in the position of Licensed Practical Nurse, Physical Therapist Assistant, Certified Occupational Therapy Assistant or Home Health Aid at any of defendants' Kentucky locations at any time within the period beginning three years prior to the filing date of this Stipulation to provide in home health care services to patients and who were paid on a fee per visit basis, but excluding any individual who entered into the settlement in the case, Paine et. al. v. Intrepid U.S.A., Inc., 3:14-CV-02005 (M.D. Tenn. 2017).

Id. at ¶ 3. Following the close of the opt-in period, the Parties participated in mediation and ultimately reached a settlement. [R. 47] The Parties then submitted a Joint Status Report and Joint Motion to Set Schedule for Seeking Court Approval of Settlement. Id. The Court granted the Parties' motion and held a telephonic status conference to outline the schedule of settlement briefing. [R. 48; R. 49]

         Pursuant to the Parties' settlement agreement (the “Settlement Agreement”), Defendants agree to pay the Section 216(b) Plaintiffs (the “Original Class Members”) an aggregate gross amount of $23, 000. [R. 51, Mem. in Supp., at p. 2; R. 51-1, Ex. 1, Settlement Agreement, at p. 9, ¶ 4.3] The Original Class Members consist of 8 individuals, including the Named Plaintiff, Tina Mitcham, “who are current or former non-exempt home health workers at Intrepid in Kentucky (1) who worked at any time since April 18, 2015; (2) whose pay was computed on a fee per visit basis; and (3) who filed consents to join the present lawsuit brought by Named Plaintiff Tina Mitcham.” Id. “Opt-In Plaintiffs” refers to the Opt-In Plaintiffs excluding the Named Plaintiff. Id. According to the Agreement, “[e]ach Opt-In Plaintiff's payment is based on a determination of overtime compensation calculated by including alleged unrecorded compensable travel time and other alleged unrecorded work time, including time spent charting for patients outside of their in-home visits.” Id. (citing [R. 51-2, Ex. 2, Dec. David Garrison, at ¶¶ 10, 12]). Plaintiff's counsel also seek a service award for Plaintiff Mitcham in the amount of $7, 000 for her efforts in serving as Named Plaintiff in this action. Id. at pp. 2-3.

         In exchange for Defendants payments, the Original Class Members agree to release Defendant Intrepid and its related entities and persons “from claims for unpaid wages, penalties, liquidated damages, costs, attorneys' fees, and any other relief under the [FLSA], the Kentucky Wages and Hours Act, KY. Rev. Stat. § 337.010 et seq., Ky. Rev. Stat. § 446.070 based on the facts and allegations set forth in the Complaint in this action.” Id. In addition to the service fee, Plaintiff's counsel also requests attorneys' fees and expenses in the total amount of $142, 500 in addition to the 216(b) Settlement Fund and the Rule 23 Settlement Fund. Id.

         II. Legal Standard

         FLSA

         Plaintiff brought this case under Section 216(b) of the FLSA. [R. 1, Compl., at ¶¶ 3, 20-25] “As a general rule, employees' claims under the FLSA are non-waivable and may not be settled without supervision of either the Secretary of Labor or a district court.” Gentrup v. Renovo Services, LLC, 2011 WL 2532922, at *2 (S.D. Ohio Jun. 24, 2011) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352-53 (11th Cir. 1982)). Accordingly, as with the Plaintiff's class action claims brought under Fed.R.Civ.P. 23, this action cannot be settled without the Court's approval. Thus, “[t]he Court's role in this situation is in many ways comparable to, but in others quite distinguishable from, that of a court in a settlement of a class action brought pursuant to Fed.R.Civ.P. 23, and derives from the special character of the substantive labor rights involved.” Crawford v. Lexington-Fayette Urban Cty. Gov't, No. CIV. A. 06-299-JBC, 2008 WL 4724499, at *2 (E.D. Ky. Oct. 23, 2008) (quoting Collins v. Sanderson Farms, Inc., 568 F.Supp.2d 714 (E.D. La. July 9, 2008)).

         To approve the Parties' Settlement Agreement, the Court must conclude that it is a “fair, reasonable, and adequate” resolution of a bona fide legal dispute. Int'l Union, United Auto, Aerospace, and Agr. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007) (discussing a class action settlement under Federal Rule of Civil Procedure 23); Brittmon v. Upreach LLC, No. 2:17-CV-219, 2018 WL 7889855, at *1 (S.D. Ohio Nov. 8, 2018) (same standard for reasonableness in Rule 23 settlements guides the Court's review of FLSA settlements). To aid the Court in its determination of whether the Settlement Agreement is fair, reasonable, and adequate, the Sixth Circuit has identified six factors to consider: “(1) the risk of fraud or collusion; (2) the complexity, expense, and likely duration of the litigation; (3) the amount of discovery engaged in by the parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel and class representatives; (6) the reaction of absent class members; and (7) the public interest. Id. (citing Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th Cir. 1992)); Williams v. Vukovich, 720 F.2d 909, 922-23 (6th Cir.1983). “The Court may choose to consider only those factors that are relevant to the settlement at hand and may weigh particular factors according to the demands of the case.” Redington v. Goodyear Tire & Rubber Co., 2008 WL 3981461, at *11 (N.D. Ohio August 22, 2008) (citing Granada, 962 F.2d at 1205-06). The Court will use some of these factors to guide its evaluation of whether the proposed settlement is fair and reasonable.

         In addition, the Court also must consider the reasonableness of the agreed upon attorney's fees. Under Section 216(b), an award of attorney fees to the prevailing party is mandatory, “but the amount of the award is within the discretion of the judge.” Fegley v. Higgins, 19 F.3d 1126, 1134-35 (6th Cir. 1994) (citing United Slate, Tile & Composition Roofers, Damp and Waterproof Workers Ass'n, Local 307 v. G & M Roofing and Sheet Metal Co.,732 F.2d 495, 501 (6th Cir. 1984)). Further, “[s]ince the FLSA does not discuss what constitutes a reasonable fee, ‘[t]he determination of a reasonable fee must be reached through an evaluation of a myriad of factors, all within the knowledge of the trial court, examined in light of the congressional policy underlying the substantive portions of the statute providing for the award of fees.'” Id. (quoting United Slate, 732 F.2d at 501). The Court must determine the reasonableness of the ...


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