Ballo v. R & J Automotive LLC
1:24-cv-01627
| S.D.N.Y. | Feb 12, 2025Background
- Plaintiff Mardie Ballo filed a Fair Labor Standards Act (FLSA) case against R & J Automotive LLC, Ramcham Jagnarine, Parts Authority, LLC, and Parts Authority, Inc.
- The parties jointly sought entry of judgment pursuant to Federal Rule of Civil Procedure 68 after reaching a settlement.
- Under Cheeks v. Freeport Pancake House, FLSA settlements typically require court or Department of Labor approval due to concerns about fairness and potential abuse.
- The Rule 68 offer here included a total settlement of $2,000 (inclusive of attorneys' fees and costs) without specifying the allocation of attorneys’ fees.
- Judge Broderick expressed concerns that this style of settlement would not pass muster under Cheeks, as it lacks necessary documentation to assess reasonableness, but acknowledged binding Second Circuit precedent from Mei Xing Yu compels acceptance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a Rule 68 settlement in an FLSA case requires judicial approval under Cheeks standards | Settlement permissible under Rule 68; seeks judgment. | Settlement valid under Rule 68; no approval needed. | Rule 68 FLSA settlements do not require Cheeks review; judgment entered as submitted. |
| Sufficiency of information regarding attorneys’ fees in the parties' settlement | Implicitly agrees to terms; details not specified. | Inclusion of all fees in lump sum is sufficient. | Court notes lack of transparency but allows as binding precedent requires. |
| Court’s ability to withhold judgment where settlement terms would not pass Cheeks scrutiny | No argument raised. | No argument raised. | Court bound by Second Circuit precedent to enter judgment despite reservations. |
| Alignment of Second Circuit precedent with FLSA purpose and Cheeks policy | No position stated. | Relies on Mei Xing Yu as binding authority. | Court criticizes precedent as contrary to FLSA intent, but follows it. |
Key Cases Cited
- Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015) (held that FLSA settlements require judicial or DOL approval to prevent abuse)
- Mei Xing Yu v. Hasaki Rest., Inc., 944 F.3d 395 (2d Cir. 2019) (held that Rule 68 settlements in FLSA cases do not require Cheeks review)
- Fisher v. SD Prot. Inc., 948 F.3d 593 (2d Cir. 2020) (requires adequate documentation to assess reasonableness of attorneys’ fees in FLSA settlements)