Davis v. J.P. Morgan Chase & Co.
2011 U.S. Dist. LEXIS 117082
W.D.N.Y.2011Background
- Five Chase employees filed a wage-hour class action under FLSA and NY law seeking unpaid overtime; the court preliminarily approved a settlement for settlement purposes, certified a settlement class, and set a fairness hearing for July 21, 2011.
- At the fairness hearing, plaintiffs, defendants, and objectors presented arguments; the court found the settlement fair and adequate and granted final approval.
- The settlement fund is $42 million; $14 million for attorneys’ fees to class counsel and $28 million to class members; California class members receive more favorable treatment than non-California members.
- The releases cover both Federal and State wage-hour claims arising from the same factual predicate as the wage-hour claims in this case, with California-specific provisions addressed.
- Objectors argued the releases were overbroad and that the named plaintiffs cannot release claims they do not possess for no consideration; the court rejected these challenges.
- The court addressed the California-payments issue, noting California class members receive approximately four times the non-California share, which the court found reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement is fair, reasonable, and adequate | McReynolds favors approval given arm's-length negotiations | Chase contends substantial risks and complexities justify settlement | Settlement approved as fair and adequate |
| Whether the releases are overly broad | Releases arise from the same factual predicate as the suit | Releases limited to the core wage-hour claims | Releases upheld as within the identical factual predicate rule |
| Whether California-class payments are appropriate | California members deserve enhanced remedies under state law | Different remedies for California vs. non-California warranted by law | California payments deemed fair and not unfair to non-California members |
| Whether attorney’s fees and costs are reasonable | Fees justified by time, risk, and results | Fees should align with customary practices | Fees of 33 1/3% of maximum settlement plus costs approved with lodestar cross-check and multiplier consideration |
| Whether Pickle plaintiffs’ concerns affect settlement | Pickle plaintiffs challenge global class structure | Court should rely on adequacy of named representatives | Pickle arguments rejected; settlement approved |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) (presumption of fairness in arm's-length class settlements)
- McReynolds v. Richards-Cantave, 588 F.3d 790 (2d Cir. 2009) (presumption of fairness for settled class actions after meaningful discovery)
- City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (nine-factor test for settlement fairness)
- D'Amato v. Deutsche Bank, 236 F.3d 78 (2d Cir. 2001) (procedural and substantive fairness considerations in class settlements)
- In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004) (litigation risk and reasonableness of settlement)