2:18-cv-02169
D. Ariz.Jul 25, 2019Background
- Plaintiff Peggy Quintana sued HealthPlanOne LLC as an FLSA collective action alleging unpaid pre- and post-shift time (estimated 10–15 minutes/day) on behalf of 1,117 potential collective members; seven opt-ins joined.
- Parties mediated, exchanged discovery, and reached a settlement before resolution of arbitration and conditional-certification motions.
- Parties proposed a $447,500 common settlement fund covering claimant payments, attorneys’ fees, costs, and service/incentive awards.
- Proposed allocations: $134,250 attorneys’ fees (30%), up to $18,000 costs, and $30,000 in service awards to the named plaintiff and seven opt-ins (later reduced).
- Court reviewed the settlement under a “totality of the circumstances” test for FLSA collective settlements (bona fide dispute + fair and reasonable resolution) and approved the settlement with modifications: reduced service awards and approved fees/costs with adjustments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a proposed FLSA collective settlement should be approved | Settlement resolves bona fide disputes about liability, damages, certification risks; settlement is fair and adequate | No opposition to settlement approval in record (Defendant did not oppose) | Approved: court found a bona fide dispute and the settlement fair and reasonable under the totality-of-circumstances approach |
| Whether the release is overbroad | Release limited to wage-and-hour claims arising from facts in the suit | (Implicit) broader releases for named plaintiffs tied to service awards | The limited wage-and-hour release for collective members is fair; general releases for named/opt-in plaintiffs are supported by service awards (court approved reduced awards) |
| Whether the requested service/incentive awards are reasonable | $9,000 to named plaintiff and $3,000 to each of seven opt-ins as compensation for time and risk | (Implicit) concern about disproportionate payments relative to average recoveries | Court found proposed amounts excessive; reduced awards by one-third ($6,000 to named plaintiff; $2,000 to each opt-in) as reasonable |
| Whether attorneys’ fees and costs requested are reasonable | Seek 30% of fund ($134,250) and costs up to $18,000; percentage method with lodestar cross-check appropriate | No opposition on fees; court assesses reasonableness under Ninth Circuit guidance | Court awarded $134,250 (30%) in fees and $14,356.73 in costs (miscellaneous $60 excluded); percentage method with lodestar cross-check justified |
Key Cases Cited
- Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66 (Sup. Ct.) (FLSA claims and settlement approval context)
- Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.) (judicial approval required for private FLSA settlements)
- Selk v. Pioneers Mem. Healthcare Dist., 159 F. Supp. 3d 1164 (S.D. Cal. 2016) (totality-of-circumstances factors for FLSA settlement review)
- Campbell v. City of Los Angeles, 903 F.3d 1090 (9th Cir.) (distinguishing Rule 23 class actions from FLSA collective actions)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.) (percentage-of-fund fee method and lodestar cross-check)
- Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268 (9th Cir.) (benchmark percentage guidance and need for explanation for departures)
- Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir.) (25% benchmark for common-fund fee awards)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir.) (district court discretion to use percentage or lodestar in common-fund cases)
- Rodriguez v. West Pub. Corp., 563 F.3d 948 (9th Cir.) (deference to competent counsel’s negotiated settlements)