Fujiwara v. Sushi Yasuda Ltd.
58 F. Supp. 3d 424
S.D.N.Y.2014Background
- Employees (wait staff, bussers, sushi chefs) sued Sushi Yasuda under the FLSA and NYLL alleging unpaid gratuities, unpaid training wages, unpaid overtime/spread‑of‑hours premiums; suit filed Dec. 2012.
- Parties negotiated and reached a classwide settlement in April 2014: $2.4 million total fund; allocation plan: class distributions (pro rata by shifts), $100,000 admin/errors fund, proposed $800,000 attorneys’ fees (later reduced to $600,000), and $20,000 service awards for each of six class representatives.
- Court-authorized notice to an 87‑member class; 68 eligible claimants responded, one opt‑out, no objections.
- At final approval hearing the court questioned fee size and confidentiality and examined allocation, service awards, and lodestar multiplier.
- Court found settlement procedurally and substantively reasonable under the Grinnell factors but required modifications: remove confidentiality provisions for class members; deny separate service awards beyond an enhanced shift credit; reduce attorney fees and award costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Final approval — fairness of $2.4M settlement | Settlement is the product of arm’s‑length bargaining, adequate discovery, and benefits to class | Settlement resolves all claims and is reasonable given risks/costs | Approved: settlement fair, reasonable, adequate under Grinnell factors |
| Confidentiality clause | Plaintiffs/counsel would keep settlement terms confidential except limited disclosures | Defendants joined settlement with clause | Denied to the extent it binds class members; court ordered confidentiality provisions removed for class members (public policy disfavors nondisclosure in FLSA settlements) |
| Service awards for class reps ($20,000 each) | Class reps assisted in prosecution and faced reputational/risk burdens warranting payments | Defendants consented to settlement; may have supported awards | Denied: reps already receive 50% shift enhancement in allocation which adequately compensates them; separate $20,000 awards refused |
| Attorneys’ fees ($800k → $600k requested) | Counsel sought one‑third (then one‑quarter) of fund citing common practice; contingency risk justifies multiplier | Defendants did not oppose settlement; court must scrutinize fee reasonableness | Reduced: court awarded 20% ($480,000) + costs $20,020.18 = $500,020.18 (lodestar cross‑check and multiplier analysis supported reduction) |
Key Cases Cited
- Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (U.S. 1942) (FLSA purpose quoted)
- Wal‑Mart Stores, Inc. v. Visa U.S.A., 396 F.3d 96 (2d Cir. 2005) (presumption of fairness for arm’s‑length settlements by experienced counsel)
- City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (nine‑factor fairness test for class settlements)
- Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) (factors for percentage‑of‑fund fee awards and lodestar cross‑check)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (survey on typical lodestar multipliers)
- LeBlanc‑Sternberg v. Fletcher, 143 F.3d 748 (2d Cir. 1998) (attorneys may recover reasonable out‑of‑pocket litigation expenses)