Istre v. Louisiana Tank Specialties, LLC, No. 2:2014cv00339 - Document 46 (E.D. La. 2016)
Court Description: ORDER AND REASONS granting 45 Motion to Approve Settlement and Dismiss the Case. Signed by Judge Susie Morgan. (bwn)
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Istre v. Louisiana Tank Specialties, LLC Doc. 46 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A RU STY ISTRE, Plain tiff CIVIL ACTION VERSU S N O. 14 -3 3 9 LOU ISIAN A TAN K SPECIALTIES, LLC., D e fe n d an t SECTION : “E” ( 1) ORD ER AN D REAS ON S Before the Court is the J oint Motion to Approve Settlem ent and Dism iss the Case filed by Plaintiff Rusty Istre and Defendant Louisiana S.W. Transportation, Inc. 1 For the reasons below, the m otion is GRAN TED . BACKGROU N D This is a proposed collective action filed by Plaintiff Rusty Istre (“Istre”) for failure to pay overtim e in violation of the Fair Labor Standards Act of 1938 (“FLSA”). 2 On February 12, 20 14, Istre filed suit on behalf of him self and other sim ilarly situated individuals em ployed by Defendant Louisiana S.W. Transportation, Inc. (“LST”) 3 as frac tank cleaners since 20 12 pursuant to 29 U.S.C. § 216(b). 4 Istre also asserts individual claim s for unpaid overtim e wages while he was em ployed as a frac tank cleaner and servicer an d a deer ranch laborer for LST. 5 At the tim e Istre and LST reached a settlem ent agreem ent, Istre’s m otion to conditionally certify the collective class was pending, 6 and no other individuals had opted into the proposed collective class. Istre and LST 1 R. Doc. 45. 29 U.S.C. § 20 1 et. seq. 3 LST notes that it was incorrectly nam ed in this action as “Louisiana Tan k Specialties, LLC.” See R. Doc. 16 at 1; R. Doc. 25 at 1. 4 R. Doc. 15 at ¶¶ 2, 27. 5 See R. Doc. 15 at ¶¶ 37– 57. 6 R. Doc. 21. 2 1 Dockets.Justia.com participated in a settlem ent conference on February 12, 20 16, and agreed to a settlem ent. 7 On February 23, 20 16, Istre and LST subm itted the proposed settlem ent agreem ent to the Court for in cam era review in a joint m otion to approve settlem ent and dism iss the case with prejudice. 8 STAN D ARD OF LAW The Court “m ust approve any settlem ent reached by the parties which resolves the claim s in this action brought under [29 U.S.C. § 216(b)].”9 “In order to approve a settlem ent proposed by an em ployer and em ployees of a suit brought under the FLSA and enter a stipulated judgm ent, a court m ust determ ine that the settlem ent is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”10 The Court m ust scrutinize the proposed settlem ent agreem en t to verify that parties are not circum venting the “clear FLSA requirem ents” by entering into a settlem ent agreem ent. 11 When deciding whether to approve a proposed settlem ent, the Court m ust assess whether the proposed settlem ent is both (1) the product of a bona fide dispute over the FLSA’s provisions and (2) fair and reasonable. 12 AN ALYSIS I. BONA F IDE DISPUTE When deciding whether a bona fide dispute exists, the Court considers whether there is a “genuine dispute as to the defendant’s liability under the FLSA,”13 as “[w]ithout 7 R. Doc. 43. See R. Doc. 45. 9 Collins v. Sanderson Farm s, Inc., 568 F. Supp. 2d 714, 717 (E.D. La. 20 0 8 ). 10 Id. at 719. 11 See id. 12 Dom ingue v. Sun Electric & Instrum entation, Inc., No. 0 9-682, 20 10 WL 168 8793, at *1 (E.D. La Apr. 26, 20 10 ). 13 Allen v. Entergy Operations, Inc., No. 11-1571, 20 16 WL 614687, at *1 (E.D. La. Feb. 11, 20 16). 8 2 a bona fide dispute, n o settlem ent could be fair and reasonable.”14 This is particularly true in an “FLSA [action because its provisions] are m andatory, and not subject to negotiation and bargaining between em ployers and em ployees.”15 The Court finds that a bona fide dispute exists between Istre and LST regarding whether LST has violated the FLSA. In Akins v. W orley Catastrophe Response, another section of this Court explained that a bona fide dispute exists where the parties disagree on “hours worked or com pensation due” and engage in “aggressive prosecution and strenuous defense.”16 Istre has alleged that LST violated the FLSA with regard to his hours and com pensation, 17 and LST has raised several affirm ative defenses. 18 From the outset, LST has argued that Istre’s am ended com plaint 19 and Istre’s deposition testim ony20 conflict and support their argum ents that Istre has no valid FLSA claim . 21 LST argues that Istre was not em ployed as a “frac tank cleaner,”22 though Istre contends that his em ploym ent duties included acting as a frac tank cleaner. 23 Both parties disagree about Istre’s em ploym ent position and other issues relevant to LST’s liability, in cluding duration of em ploym ent, hours worked, whether he was denied overtim e wages, an d whether there exist sim ilarly situated in dividuals for the purpose of pursuing a collective action. 24 Additionally, a settlem ent conference was scheduled following the parties’ 14 Collins, 568 F. Supp. 2d at 719. Allen, 20 16 WL 614687, at *1. 16 Akins v. W orley Catastrophe Response, LLC, No. 12-240 1, 20 14 WL 1456382, at *2 (E.D. La. Apr. 14, 20 14). 17 R. Doc. 15. 18 R. Doc. 16. See also Dom in gue, 20 10 WL 1688793, at *1. 19 R. Doc. 15. 20 R. Doc. 25-1; R. Doc. 16. 21 See R. Doc. 25. 22 R.Doc. 25-2 at ¶ 25; R. Doc. 25 at 15– 17. 23 R. Doc. 21-2 at ¶ 5. 24 See, e.g., R. Doc. 15; R. Doc. 16 at ¶¶ 1, 5, 19, 32. 15 3 responses to Istre’s m otion to conditionally certify the FLSA collective action and to facilitate notice under 29 U.S.C. §216 (b). 25 Indeed, before the Court reset the trial date for Novem ber 7, 20 16, 26 the case was set for a five-day bench trial to begin on April 11, 20 16, and the parties were required to com plete discovery on February 3, 20 16. 27 The Court finds the m atter involved “both aggressive prosecution and strenuous defense” and thus a bona fide dispute exists. 28 II. F AIR AND R EASONABLE In determ in ing whether a negotiation is fair and reasonable under the FLSA, courts are guided by Reed v. General Motors Corporation, in which the Fifth Circuit enum erated factors to determ ine whether a settlem ent is fair in a class action under Rule 23 of the Federal Rules of Civil Procedure. 29 Courts, however, “adopt or vary these factors in their application in light of the special role of the Court in settlem ent of FLSA claim s.”30 There are six factors: (1) the existence of fraud or collusion behind the settlem ent; (2) the com plexity, expen se, and likely duration of the litigation; (3) the stage of the proceedings and the am ount of discovery com pleted; (4) the probability of the plaintiffs’ success on the m erits; (5) the range of possible recovery; and (6) the opinions of class counsel, class representatives, and absent class m em bers. 31 25 R. Docs. 21, 25, 28 . See also Allen, 20 16 WL 614687, at *1 (findin g that there was a bona fide dispute where parties engaged in in tense disagreem ent over the issue of classification). 26 R. Doc. 42. 27 R. Doc. 17. 28 See Atkins, 20 14 WL 1456382, at *2. 29 Allen, 20 16 WL 614687, at *2; Reed v. Gen. Motors Corp., 70 3 F.2d 170 , 172 (5th Cir. 1983). See also Collins, 568 F. Supp. 2d at 722 (noting “Rule 23 does not control FLSA collective actions, [but] m any courts have adopted m any of Rule 23’s procedures” given the court’s discretion under §216(b)). 30 Collins, 568 F. Supp. 2d at 722. 31 Id. (citing Cam p v . Progressive Corp., No. 0 1-2680 , 20 0 4 WL 21490 79 (E.D. La. Sept. 23, 20 0 4)). 4 A. Application of the Factors 1. The existence of fraud or collusion behind the settlem ent With respect to the “fraud or collusion” factor, there are several presum ptions that guide a court’s determ ination of whether a settlem ent is fair and reasonable. “[T]here is a strong presum ption in favor of finding a settlem ent fair,”32 and, absent evidence to the contrary, there is a presum ption that no fraud or collusion occurred between counsel. 33 In light of these presum ptions, however, “it is clear that the court should not give rubberstam p approval.”34 The Court has found no indication of fraud or collusion. Since this action was filed in 20 14, the parties have en gaged in discovery and m otions practice. 35 The Court finds the parties engaged in good-faith negotiations to resolve this m atter am icably. 36 Factor One indicates the settlem ent is fair an d reasonable. 2. The com plexity , expense, and likely duration of the litigation The instant case has been pen ding for m ore than two years, and a five-day bench trial set for April 20 16 was continued and reset for Novem ber 7, 20 16. Following the rescheduling of the trial, the parties entered settlem ent discussions. As the trial has already been pen ding for m ore than two years and the contested m otions indicate that there were num erous unresolved issues, the Court finds the second factor indicates the settlem ent is fair and reasonable. 3. The stage of the proceedings and the am ount of discovery com pleted A court will consider how m uch form al discovery has been com pleted for two reasons: (1) “extensive discovery [by the parties indicates] a good understanding of the 32 Dom ingue, 20 10 WL 168 8 793, at *1 (internal quotations om itted). Akins, 20 14 WL 1456382, at *2. 34 Id. (quotin g 4 N EWBERG ON CLASS ACTIONS §11.41 (4th ed.)). 35 See R. Docs. 21, 25, 28. 36 R. Doc. 43. 33 5 strengths and weaknesses of their respective cases and hence that the settlem ent’s value is based upon such adequate inform ation,” and (2) “full discovery dem onstrates that the parties have litigated the case in an adversarial m anner an d . . . therefore . . . settlem ent is not collusive but arm s-length.”37 The lack of m uch form al discovery is not necessarily fatal, however, and a court m ay look to inform al avenues of gathering inform ation or m ay approve a settlem ent with no form al discovery conducted. 38 At this stage of the proceedings, the parties have engaged in form al discovery lim ited to the issue of FLSA collective action certification 39 and represented to the Court that they are com pleting discovery gen erally. 40 Although discovery at this juncture is not yet com plete, the Court finds the parties are sufficiently fam iliar with the facts to reach a fair settlem ent. 41 Factor Three in dicates the settlem ent is fair and reasonable. 4. The probability of the plaintiff’s success on the m erits It is uncertain at this point whether Istre would be successful at trial. Defendant has provided a series of affirm ative defenses, including failure to state a claim and prescription. 42 Additionally, LST asserts it is not liable to Istre and, in the alternative, that any alleged violations of the FLSA were not willful because LST acted reasonably and without reckless disregard for FLSA requirem ents. 43 Moreover, the nature of Istre’s em ploym ent rem ains a key dispute. LST m aintains 37 N EWBERG ON CLASS ACTIONS § 13:50 (5th ed.) See id; In re Chicken Antitrust Litig. Am . Poultry , 669 F.2d 228, 241 (5th Cir. 1982) (explaining that form al discovery is not “a necessary ticket to the bargain ing table” where the parties and the court are adequately inform ed to determ in e the fairness of the settlem ent) (citing In re Corrugated Container Antitrust Litigation, 643 F.2d 195, 211 (5th Cir. 1981)). 39 See R. Doc. 18; R. Docs. 21, 25, 28 . 40 See R. Doc. 33 at ¶ 4. Together parties filed to continue trial stating they were “attem pting to com plete discovery and address disputes.” Id. 41 In the response to Interrogatory No. 5, LST conceded it m ade an “adm in istrative error” when it paid Istre an hourly rate instead of a salaried rate from March 1, 20 13, to March 12, 20 13. R. Doc. 38 at 4– 5. 42 See R. Doc. 16 at 12– 15. 43 R. Doc. 16 at 14. 38 6 that Istre cannot claim unpaid wages as a “frac tank cleaner” because he was not em ployed as a “frac tank cleaner.”44 In the am ended com plaint, Istre alleges that he was em ployed as a frac tank cleaner from 20 10 until 20 12. 45 A letter addressed to Istre, attached to the reply in support of his m otion to conditionally certify, indicates that on March 10 , 20 13, Istre’s paym ent structure changed. 46 Instead of an hourly pay rate, Istre was paid a flat salary on a bi-weekly basis. 47 Istre points to several docum ents from LST supporting his claim s, in cluding redacted tim e sheets of frac tank cleaners, the letter dated March 12, 20 15, 48 and Istre’s tim e sheets an d payroll. 49 The Court finds that given the num erous unresolved disputes between the parties and the stage at which this litigation rem ains, it is unclear whether Istre would be m eritorious. This factor indicates the settlem ent is fair and reasonable. 5. The range of possible recovery The confidential settlem ent agreem ent details the agreed-upon settlem ent am ount. The settlem ent am ount was based on a n egotiated num ber of overtim e hours that Istre allegedly worked but for which he was not paid overtim e. The Court finds that the agreed-upon am ount is within a range of possible recovery and thus indicates the settlem ent is fair and reasonable. 50 44 R. Doc. 38 at 1; R. Doc. 34-1 at 10 (noting LST “has con sistently m aintained . . . [that Istre] was not a tank cleaner, did not supervise tank cleaners, and has not established that certification of a class of tank cleaners is appropriate”). 45 R. Doc. 15 at 1. 46 R. Doc. 28-4. 47 Id.; R. Doc. 15 at 3– 4. 48 R. Doc. 28-4. 49 R. Doc. 28-3 at 5 (reflectin g an increase in pay from $ 980 .32 and $ 264.15 for the pay period of March 11, 20 13, to about $ 2,ooo for every following pay period through Novem ber 18 , 20 13). 50 See Collins, 568 F. Supp. 2d at 726– 27. 7 6. The opinions of class counsel, class representatives, and absent class m em bers In this case, the only parties to the settlem ent are LST and Istre. 51 Both parties jointly seek judicial approval and state that the settlem ent agreem ent addresses a bona fide dispute and is negotiated in good faith. Each party is represented by counsel. The parties negotiated a settlem ent agreem ent before the m agistrate judge and subm itted their proposed agreem ent for in cam era review by the Court. 52 The Court finds the final factor indicates the settlem ent is fair and reasonable. B. Conclusion All six of the factors indicate the proposed settlem ent is fair and reason able. Accordingly, the Court finds the proposed settlem ent agreem ent is fair and reasonable. CON CLU SION For the foregoing reasons, the Court finds the settlem ent agreem ent is both prem ised on a bona fide dispute and fair and reasonable. Accordingly; IT IS ORD ERED that the J oint Motion to Approve Settlem ent is GRAN TED and the parties’ confidential settlem ent agreem ent is APPROVED . IT IS FU RTH ER ORD ERED that this action 53 is D ISMISSED W ITH PREJU D ICE in accordance with the term s of the confidential settlem ent agreem ent. 51 Istre’s m otion to certify the FLSA collective action was still pending at the tim e the proposed settlem ent was subm itted to the Court. See R. Doc. 21. 52 R. Doc. 45. 53 Because the m otion for con ditional certification of the proposed FLSA collective class was pending at the tim e Istre and LST reached a settlem ent agreem ent an d no other individuals had opted into the proposed collective class, the settlem ent agreem ent applies only to Istre’s claim s. Brow n v. United Furniture Industries, Inc., 20 15 WL 1457265, at *5 (N.D. Miss. Mar. 30 , 20 15) (“[I]n an FLSA collective action , there are no absent class m em bers; only those who have opted in are considered parties to the suit and bound by the results of the action.”); LaChapelle v. Ow ens-Illinois, Inc., 513 F.2d 286, 288 (“Under [29 U.S.C. § 216(b)], . . . no person can becom e a party plaintiff and no person will be bound by or m ay ben efit from judgm ent unless he has affirm atively ‘opted into’ the class; that is, given his written, filed consent.”). 8 N e w Orle a n s , Lo u is ian a, th is 7th d ay o f March , 2 0 16 . ________________________________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 9
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