UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

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In re:  Prime Succession, Inc.,                       ) CIV. ACTION NO.:  99-2278 D/BRE

FLSA Class Action Litigation                       )

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JOINT MOTION TO APPROVE SETTLEMENT OF CLASS CLAIMS

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            COME NOW the parties, by and through the undersigned counsel, and move this Court for an Order approving the Stipulation of Settlement filed with this Court on Friday, December 10, 1999.  In support of this Motion[1], the parties would show the Court as follows:

 

I.      Facts

            The Representative Plaintiffs filed this action on March 26, 1999, in the United States District Court for the Western District of Tennessee, pursuant to the Fair Labor Standards Act.  The Representative Plaintiffs alleged a number of specific acts by the Defendants which were purported to create violations of the Fair Labor Standards Act’s prohibitions against the payment of wages below the statutory minimum wage and the failure to pay overtime wages.  The Representative Plaintiffs also alleged that they were instructed not to record their hours of work in excess of forty (40) during any workweek.  The Defendants vigorously denied these allegations and the parties commenced discovery.  On August 27, 1999, this Court entered an Order permitting this action to proceed as a “class” action.

            Substantial discovery was undertaken by the parties which included depositions of each of the Representative Plaintiffs, current in-house counsel for the Defendant Prime Succession, Inc., a Delaware corporation, the former Vice-President in charge of sales for Defendant Prime Succession, Inc., a Delaware corporation, and a current sales manager for the Defendant Prime Succession of Tennessee, Inc.  In addition to this, counsel for the Representative Plaintiffs undertook discovery of all of the time and pay records maintained by the Defendants at their headquarters in Erlanger, Kentucky.  The time and pay records comprised thousands of documents, each of which had to be separately examined.

            In addition to the discovery undertaken in this matter, counsel for the Representative Plaintiffs has devoted significant amounts of time and effort into research and investigation into the enterprise nature of the Defendants, as well as establishing proof with an intent of negating the Defendants’ proffered FLSA exemptions.

            Beginning on or about October 20, 1999, counsel for the parties began settlement discussions aimed at resolving the outstanding claims between the parties.  On November 19, 1999, counsel for the Representative Plaintiffs traveled to Erlanger, Kentucky to meet with counsel for the Defendants and the individuals within the corporate Defendants with authority to resolve the disputes contained in this litigation.  After several rounds of negotiations, the parties reached a tentative agreement subject to the approval of the Representative Plaintiffs and the final agreement as to the exact language of the settlement.  The agreement was presented to the Representative Plaintiffs and, on or about November 29, 1999, they accepted the terms of the agreement.  The parties then began working out the details of the agreement which were successfully concluded on December 10, 1999, and are contained in the Stipulation of Agreement previously filed with this Court.

            The terms of the agreement are as follows:

1.     The parties have identified each individual who may fit within the Court-approved class definition, and who is therefore believed to be entitled to notice of the pendency of this litigation and the settlement;

2.     Each individual identified (hereinafter “Settlement Class Member”) will be entitled to opt-into this settlement class.  By opting into the settlement class, each Settlement Class Member will receive 100% of the Approved Amount of his or her claim, if any;

3.     The Defendants will retain the independent accounting firm of Watkins, Watkins and Keenan (hereinafter “WWK”) to administer the settlement.  This will include WWK making the initial determination as to the amount of the Settlement Class Members’ claims and the payment of said claims, subject to approval by the Court;

4.     Any Settlement Class Member who disagrees with the amount determined by the independent examiner, WWK, will be entitled to take this matter to arbitration.  The parties have mutually selected local arbitrator Allen S. Blair, of the law firm of Hanover, Walsh, Jalenak & Blair.  Mr. Blair’s decision will be final and binding upon the parties, including the Settlement Class Member;

5.     The Defendants have agreed to abide by the terms of the Fair Labor Standards Act, for all Family Service Counselors, as well as any other laws prohibiting false, deceptive or illegal employment practices;

6.     The Defendants will pay all of the costs and expenses of the noticing and administration of this settlement; and

7.     The Defendants will pay the Court approved Class Counsel $238,300.00, to cover all costs, expenses and fees incurred up to the date of the Court’s entry of an Order approving this settlement, as well as the reasonable fees and expenses incurred by Class Counsel after the date of entry of an Order approving the settlement, up to a maximum of $25,000.00.

 

II.   Legal Analysis

            In determining whether to approve a settlement as being fair, just and reasonable, the Court must look to the fairness of the decree to those affected, the adequacy of the settlement to the class and the public interest.  Williams v. Vukovich, 720 F.2d 909 (6^th Cir. 1983).  In this case, it bears reiterating that “class” actions brought under the Fair Labor Standards Act (“FLSA”) are not true class actions as that term is contemplated by the Federal Rules of Civil Procedure.  29 U.S.C. § 216(b).  The Sixth Circuit Court of Appeals has noted that this type of representative suit is not a true class action in the sense that in order to bind anyone to the result obtained, that individual must affirmatively consent to be bound.  Clougherty v. James Vernor Co., 187 F.2d 288 (6^th Cir. 1951).  The significance of this is that the due process concerns which mandate a high level of judicial scrutiny of class action litigation are not present in FLSA actions.  Maguire v. Trans World Airlines, Inc., 55 F.R.D. 48 (S.D.N.Y. 1972); Wagner v. Loew’s Theatres, Inc., 76 F.R.D. 23 (M.D.N.C. 1977).

            In the present case, it is clear that the settlement being proposed is fair and adequate.  In salient part, the Defendants have agreed to pay 100% of the approved FLSA claims as determined by an independent examiner and, if the individual Settlement Class Member is dissatisfied with the result, that individual can take his or her claim to arbitration.  In addition to this, the Defendants have agreed to pay the costs and expenses of both the examiner and the arbitration, together with the reasonable fees and expenses of Class Counsel in administering this settlement.  The only item of damage which any Settlement Class Member is foregoing on his or her FLSA claim is the potential for recovering double damages.  However, litigation of each potential claim would have required significant additional resources and would not have been guaranteed a favorable result.  Indeed, the result would have been hotly contested, absent this settlement, and therefore the Settlement Class Member obtains certainty of resolution.  In addition to this, the entire settlement proceeding and pay out is subject to the scrutiny and approval of the Court.  Finally, no individual who does not opt-into the class, with prior notice that the parties had reached a settlement will be bound to its terms.

            As to the vindication of the public interest, this settlement also promotes both judicial economy and the public good.  In the interests of judicial economy, the Court will not be compelled to devote the substantial blocks of time required to litigate a FLSA representative case.  The Court will not be compelled to make rulings on anticipated cross motions for summary judgment, nor sit in judgment on the potentially hundreds of individual damage claims.  Rather, this settlement passes all of the damage assessment to a neutral examiner with an appeal process to arbitration, while making all of the results subject to this Court’s approval.

            Simultaneously, this settlement agreement promotes the public good.  As a part of this settlement, the Defendants, while specifically denying illegal conduct occurred, have agreed to abide by the terms of the Fair Labor Standards Act, for all Family Service Counselors, as well as any other laws prohibiting false, deceptive or illegal employment practices.  By obtaining the agreement to this relief, the Representative Plaintiffs will have successfully promoted the purpose of the FLSA, which is clearly in the public interest.  In addition to this, no one who does not opt-into the class will be bound to the settlement.  Notification that the parties have reached a settlement is specifically included in the notice that will accompany the opt-in form.  Thus, there is no public harm to result from the approval of this settlement.

 

III. Conclusion

            Based on the fact that no one who declines to opt-into the class will be bound by this settlement; that the settlement pays 100% of the Approved Amount of the individual claims; that the Defendants will pay the fees and expenses in this matter to date, as well as the fees and expenses of administering the settlement; and that this settlement promotes judicial economy and the public good, the parties respectfully request that this Court enter an Order approving the settlement.

 

Respectfully submitted,

 

 

 

______________________________                        ______________________________

Alan G. Crone                                                              William G. Trumpeter

James R. Becker, Jr.                                                     Kelly L. Weston

James J. Webb, Jr.                                                       Miller & Martin LLP

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