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Acevedo v. Southwest Airlines Co.

United States District Court, D. New Mexico

December 10, 2019

ANGELA ACEVEDO, on Behalf of Herself and on Behalf of all Others Similarly Situated, Plaintiff,
v.
SOUTHWEST AIRLINES CO., Defendant.

          PROPOSED FINDINGS AND RECOMMENDED DISPOSITION REGARDING FINAL APPROVAL OF CLASS ACTION SETTLEMENT

          HONORABLE LAURA FASHING U.S. MAGISTRATE JUDGE

         THIS MATTER comes before the Court on the parties' Joint Motion for Preliminary Approval of Class Action Settlement. Doc. 78. Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the Honorable District Judge Martha Vázquez referred this matter to me for a recommended disposition. Doc. 80. The Court held a final fairness hearing on November 22, 2019. Doc. 91. Having reviewed the parties' submissions and heard the arguments of counsel, I recommend that Judge Vázquez approve the proposed class action settlement as follows.

         I. INTRODUCTION

         The parties filed their Joint Motion for Preliminary Approval of Class Action Settlement on August 2, 2019. Doc. 78. On August 7, 2019, the Court granted preliminary approval of the Parties' proposed class action settlement. Doc. 82. After the Court granted preliminary approval and notice was disseminated, no objections were raised by any class member. On November 22, 2019, the Court held the final fairness hearing regarding the parties' proposed class action settlement. Doc. 91. The primary issues are: (i) whether the proposed settlement is fair and reasonable; (ii) whether the incentive award to the named plaintiff Angela Acevedo (hereinafter, the “Named Plaintiff”) is reasonable; (iii) whether the requested attorneys' fee award of 33.33% of the gross recovery, in addition to litigation and third-party administrator costs, is reasonable; and (iv) whether this Court should maintain the confidentiality of the parties' proposed settlement agreement, as jointly requested and briefed by the parties.

         Having reviewed the terms of the settlement, I recommend that: (1) the parties' Rule 23 class settlement be approved; (2) the incentive award to the Named Plaintiff be approved; (3) the attorneys' fees and other costs be approved; and (4) the parties be permitted to maintain the confidentiality of the settlement agreement under seal.

         II. BACKGROUND

         On January 12, 2016, Plaintiff filed this action alleging that Defendant Southwest Airlines Co.: (1) misclassified her and the putative class members as exempt from overtime under the Fair Labor Standards Act (“FLSA”) and New Mexico Minimum Wage Act (“NMMWA”); (2) failed to pay them minimum wage; and (3) failed to pay them for all hours they worked-including alleged “off-the-clock” time spent finding a work station and logging into their computers. See Doc. 1. Plaintiff sought to bring this lawsuit as a collective action under the FLSA, 29 U.S.C. § 201, et seq. and as a Rule 23 class action under the NMMWA. Id. Plaintiff sought damages on her behalf and on behalf of the putative class. Id. Both Plaintiff and Defendant are represented by experienced attorneys who have litigated numerous wage and hour cases, including class and collective actions.

         Since the inception of this case, the litigation was hard fought. For example, Plaintiff filed multiple amended complaints and defendant filed multiple motions to dismiss. See, e.g., Docs. 15, 21, 30, 31. Among other arguments, Defendant argued that Plaintiff's federal overtime claims failed pursuant to the FLSA's Railway Labor Act (“RLA”) exemption and her state law claims were preempted by the RLA. See Docs. 15, 31. With the exception of Plaintiff's NMMWA overtime claim, all of Plaintiff's legal claims have either been dismissed by the Court or voluntarily dismissed with prejudice by Plaintiff-including Plaintiff's: (1) alleged overtime and minimum wage claims under the FLSA; (2) minimum wage claims under the NMMWA; (3) quantum meruit claims; and (4) unjust enrichment claims. See, e.g., Docs. 49, 71. After briefing on the various motions to dismiss were concluded, the parties engaged in merits-based and class discovery. This case has been vigorously litigated by both sides.

         On May 21, 2019, the parties participated in an all-day mediation with mediator Courtenay Bass in Dallas, Texas. The parties agree that Ms. Bass is an experienced mediator in the employment law arena. The mediation culminated in Ms. Bass making a mediator's proposal concerning a class-wide settlement of Plaintiff's NMMWA overtime claim, which both sides accepted.

         On July 31, 2019, the parties filed their Joint Motion for Preliminary Approval of the Settlement. (Doc. 78), which the Court granted. (Doc. 82). Afterwards, a court-approved notice was sent to each of the hundreds of putative class members by an agreed-upon third-party administrator. The Court scheduled the final fairness hearing to review the settlement after notice was issued to the class members, and to consider any objection(s) (if applicable). After the class notice was issued, no objections were received. Additionally, 13 individuals timely submitted requests to be excluded, and one individual submitted a late request.

         III. STANDARD FOR APPROVAL

         “Compromises of disputed claims are favored by the courts.” Williams v. First Nat'l Bank, 216 U.S. 582, 595 (1910). “In the class action context in particular, ‘there is an overriding public interest in favor of settlement'” because settlement of complex disputes “minimizes the litigation expenses of both parties and also reduces the strain such litigation imposes upon already scarce judicial resources.” Armstrong v. Board of School Directors, 616 F.2d 305, 313 (7th Cir. 1980) (citation omitted). Rule 23(e) of the Federal Rules of Civil Procedure requires judicial approval of the settlement of the claims of a certified class. “The authority to approve a settlement of a class . . . action is committed to the sound discretion of the trial court.” Jones v. Nuclear Pharm., Inc., 741 F.2d 322, 324 (10th Cir. 1984). “In exercising its discretion, the trial court must approve a settlement if it is fair, reasonable and adequate.” Id.

         In the Tenth Circuit, the Court must analyze the following factors to determine whether this standard is met: (1) whether the proposed settlement was fairly and honestly negotiated; (2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation; and (4) the judgment of the parties that the settlement is fair and reasonable. Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002). As discussed below, the parties' proposed settlement satisfies each of the requirements for final approval.

         1. The Proposed Settlement Was Fairly and Honestly Negotiated.

         In this case, the parties jointly seek to settle this matter and “[t]here are numerous indicia that the settlement negotiations in this case have been fair, honest and at arm's length.” Lucas v. Kmart Corp., 234 F.R.D. 688, 693 (D. Colo. 2006). “First, the parties to this litigation have ‘vigorously advocated their respective positions throughout the pendency of the case.'” Id. at 693. Since 2016, the parties have extensively briefed numerous contested issues regarding overtime and minimum wage liability-including, for example, the issues set forth in multiple motions to dismiss filed by Defendant. See, e.g., Docs. 15, 31. The settlement agreement itself took weeks to finalize and came only after a lengthy private mediation during which detailed and extensive data and methodologies were exchanged. See Lucas, 234 F.R.D. at 693. In addition, the parties were represented by “counsel with expertise on the [wage and hour laws] and complex class action litigation.” Id. These factors support the integrity of ...


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