Morris v. Affinity Health Plan, Inc.
859 F. Supp. 2d 611
S.D.N.Y.2012Background
- Putative wage-and-hour class/collective action against Affinity alleging off-the-clock work and failure to pay overtime under NYLL and FLSA.
- Court conditionally certified a settlement class in 2010 for Marketing Representatives in Affinity’s South Region; notice issued; opt-ins totaling 64.
- Parties mediated; settlement memorialized in Settlement Agreement; plaintiffs Guadron and Adlin signed; Morris objected.
- Court conducted fairness hearing in April 2012 and granted final approval, attorneys’ fees, costs, and service award.
- Notice distributed to class members; Berdon Claims Administration LLC designated as claims administrator; funds to be distributed to class members, attorneys, expenses, and service award recipients.
- Court retained jurisdiction to enforce Settlement Agreement and oversee fund distribution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement class should be certified under Rule 23 for settlement. | Guadron argues common questions predominate; large class meets numerosity and typicality. | Affinity contends common policy and injury justify class treatment. | Yes; settlement class certified under Rule 23(a) and (b)(3). |
| Whether the settlement is procedurally and substantively fair. | Settlement reached after arm’s-length negotiations and extensive discovery; mediator involved. | Settlement process scrutinized but supported by discovery and mediation. | Procedurally and substantively fair; approved under Grinnell factors. |
| Whether fees, costs, and service awards are reasonable. | Fees aligned with common-fund approach; one-third of fund deemed reasonable. | Fees scrutinized but supportable given risks and recovery to class. | Fees of $833,333.33, costs $7,707.10, and $7,500 service award approved. |
| Whether the settlement is superior to ongoing litigation. | Settlement reduces risk, complexity, and delay; class-wide resolution efficient. | Litigation could yield greater recovery but with greater risk and expense. | Grinnell factors favor final approval; settlements superior to continued litigation. |
| Whether notice and distribution comply with due process. | Notice provided to all class members and opportunity to object/exclude. | Distribution plan adequately protects class members’ rights. | Notice proper; Berdon Claims Administration designated; funds to be distributed per plan. |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011) (Dukes does not bar commonality in wage-hour class actions)
- City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (Grinnell factors govern substantive fairness in class settlements)
- Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172 (W.D.N.Y. 2011) (court context for class actions and opt-outs/approvals)
- In re Warfarin Sodium Antitrust Litig., 391 F.3d 516 (3d Cir. 2004) (informing on adequacy of discovery before settlement)