Galt v. Eagleville Hosp.
Galt v. Eagleville Hosp.
Opinion of the Court
The parties have reached a settlement in this case brought under the Fair Labor Standards Act
I. BACKGROUND
Named Plaintiffs Adrienne Galt and Nancy Murphy are former registered nurses at Defendant Eagleville Hospital. In December 2015, they filed this class and collective action on behalf of themselves and other similarly situated employees of Eagleville Hospital, alleging that Defendant violated the FLSA and the PMWA by requiring them to work during 30-minute unpaid meal breaks and then automatically deducting that time from their shift totals, depriving them of compensation, including overtime pay.
In October 2016, Plaintiffs sought conditional certification of an FLSA collective consisting of "[a]ll persons who have worked for Defendant as a Registered *488Nurse, Nursing Assistant, Licensed Practical Nurse, or Mental Health Technician" during any work week in the previous three years.
From June 2016 through June 2017, the parties engaged in document discovery. Defendant produced hiring, training and compliance materials, e-mails, meeting minutes, Human Resources materials, its Employee Handbook and Policy Manual, daily timekeeping and payroll reports for the Named Plaintiffs, as well as employment dates, rates of pay and work assignments for the entire Settlement Class.
Plaintiffs moved for preliminary approval of the Settlement Agreement as well as preliminary certification of a PMWA settlement class and FLSA settlement collective. On December 20, 2017, the Court held a preliminary approval hearing. At the hearing, the Court asked the parties to modify the release clause of the Settlement Agreement to limit any waiver of rights by class members to claims related to the allegations in the complaint and to extend the response period for class members from 30 days to 60 days. The parties made the requested modifications to the Settlement Agreement and Notice of Settlement,
The Notice of Settlement was first distributed on January 31, 2018 to 361 prospective class members, and ultimately successfully delivered to 354 class members.
II. THE PROPOSED SETTLEMENT AGREEMENT
Pursuant to the Settlement Agreement, Defendant will pay a total of $520,000.00 to resolve this litigation.
In exchange, the Settlement Class Members will release Defendant from any and all claims for unpaid wages, overtime or other compensation and all other relief under the FLSA and all other state and local wage/hour and wage payment laws and common law theories arising or accruing prior to the approval date of the parties' settlement that relate to allegations made in Plaintiffs' December 30, 2015 Complaint.
III. DISCUSSION
Plaintiffs ask the Court to certify 1) a settlement class under the PMWA consisting of the 361 employees who worked as a Registered Nurse, Nursing Assistant, Licensed Practical Nurse, or Mental Health Technician for Eagleville Hospital during any work week since March 2, 2014 ("the PMWA Class") and 2) a settlement collective under the FLSA consisting of the 73 members, including the Named Plaintiffs, who filed a consent form to join Plaintiffs' FLSA claim ("the FLSA Collective"). In addition, Plaintiffs ask the Court to approve the terms of the proposed settlement agreement, to award enhancement payments to Plaintiffs Galt, Murphy, and Johnson, and to award attorneys' fees and expenses. The Court addresses these issues in turn.
A. Class Certification under Rule 23
To certify a class, the requirements of Federal Rules of Civil Procedure 23(a) and 23(b) must be satisfied.
1. Rule 23(a) Factors
Under Rule 23(a), Plaintiffs must demonstrate: (1) numerosity: the class is so numerous that joinder of all members is impracticable; (2) commonality: there are *490questions of law or fact common to the class; (3) typicality: the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) adequacy of representation: the representative parties will fairly and adequately protect the interests of the class.
a. Numerosity
In evaluating numerosity, courts assess whether there are enough prospective class members that joinder of all the members would be impracticable.
b. Commonality
The commonality requirement is satisfied if there is at least one question of law or fact common to the class.
Here, all prospective class members worked in patient-facing positions at Eagleville Hospital that required them to work through meal breaks and were subject to the same timekeeping policies that prevented them from recording time worked during their meal breaks. Moreover, they seek similar legal remedies pursuant to the FLSA and the PMWA. These shared legal and factual issues are sufficient to satisfy the commonality requirement.
c. Typicality
The typicality requirement is satisfied if the claims of the representative parties are typical of the claims of the class.
Here, as discussed above, the Named Plaintiffs' claims are based on Defendant's alleged failure to compensate them for time spent working during meal breaks, and they seek compensation for *491this unpaid time. The prospective class members have claims that rely on the same policies and procedures and entitle them to the same types of relief. Thus, the interests of the Named Plaintiffs align with those of the prospective class members, and the typicality requirement is satisfied.
d. Adequacy of Representation
Class members are adequately represented if class counsel is qualified to represent the class and the interests of the class representatives are not in conflict with the interests of the class members.
2. Rule 23(b) Requirements
If the Court determines that a putative class satisfies the requirements of Rule 23(a), it must also determine whether the class falls into one of the categories enumerated in Rule 23(b). Plaintiff in this action seeks certification under Rule 23(b)(3), which provides:
A class action may be maintained if Rule 23(a) is satisfied and if the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.29
These two requirements are generally referred to as "predominance" and "superiority."
a. Predominance
"The predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation, and assesses whether a class action would achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated."
Here, as discussed, Plaintiffs have alleged that Defendant engaged in a common course of conduct that harmed all class members, specifically, that Defendant required certain categories of employees to work during meal breaks without providing a system for logging such hours, and thus failed to compensate the employees for that time. Accordingly, the Court finds that the issues common to the prospective class members predominate over their individual issues.
b. Superiority
To satisfy the superiority test, the Court must "balance, in terms of fairness and efficiency, the merits of a class action against those of alternative available methods of adjudication."
Because Plaintiffs have satisfied the relevant requirements of Rule 23 to obtain class certification, the Court will certify the class for purposes of settlement.
B. FLSA Collective Certification
Where, as here, a Court has already conditionally certified a FLSA collective, a Court must make "a conclusive determination as to whether each plaintiff who has opted into the collective action is in fact similarly situated to the named plaintiff" prior to granting final certification.
Here, as discussed, the 71 FLSA opt-in members each worked in patient-facing roles at Eagleville Hospital's single location in Eagleville, Pennsylvania. Each is asserting FLSA and PMWA claims based on time worked during unpaid meal breaks, and seek compensation for their unpaid work. While the members of the collective do have different salaries, titles, and work schedules, their pay and conditions of employment are sufficiently comparable for their interests to be aligned. Thus, the 71 opt-in members of the FLSA collective are similarly situated to the Named Plaintiffs, and the Court will grant *493final certification for purposes of this settlement.
C. Fairness of the Proposed Settlement
1. Initial Presumption of Fairness
In this Circuit, a settlement is entitled to an initial presumption of fairness where it resulted from arm's-length negotiations between experienced counsel, there was sufficient discovery, and there were no objectors and only a small percentage of opt-outs.
2. The Settlement Satisfies the Girsh Factors
After determining whether an initial presumption applies, the courts must also consider the nine factors articulated by the Third Circuit in Girsh v. Jepson
(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.41
The Court may make findings regarding the Girsh factors where appropriate,
a. Complexity, Expense and Duration of Litigation
This first Girsh factor requires the Court to consider "the probable costs, in both time and money, of continued litigation."
b. Reaction of Class to Settlement
The second Girsh factor also weighs in favor of settlement. As discussed, no potential class members have objected to, or sought exclusion from, the proposed settlement. These facts indicate consent on the part of the class to the terms of the settlement.
c. State of the Proceedings and Amount of Discovery Completed
In evaluating the third Girsh factor, the Court assesses "the degree of case development that [C]lass [C]ounsel have accomplished prior to the settlement," in order to "determine whether counsel had an adequate appreciation of the merits of the case before negotiating."
d. Risks of Establishing Liability and Damages
The fourth and fifth Girsh factors require the Court to "survey the possible risks of litigation in order to balance the likelihood of success and the potential damage award if the case were taken to trial against the benefits of an immediate settlement."
e. Risks of Maintaining the Class Action Through Trial
While the significance of this sixth Girsh factor in the settlement context has been questioned,
f. Ability of Defendant to Withstand a Greater Judgment
The seventh Girsh factor examines whether Defendant "could withstand a judgment for an amount significantly greater than the Settlement."
g. The Range of Reasonableness
The eighth and ninth Girsh factors "evaluate whether the settlement represents a good value for a weak case or a poor value for a strong case."
Based upon Plaintiffs' testimony that they performed about eight hours of meal break work per month, Plaintiffs calculated the maximum total compensatory damages of the class to be approximately $491,666. Under the terms of the settlement, class members will recover a total of $307,500 in damages and unpaid wages, exclusive of enhancement awards to the Named Plaintiffs and Plaintiff Nina Johnson. This represents approximately 62.5% of the maximum total compensatory damages. Taking into account the uncertainty of proving meal break hours worked by each class member and of class certification in response to a contested motion, the Settlement Amount represents a significant recovery of the unpaid wages that could have reasonably been proven at trial. In light of the risks associated with continued litigation, the Court finds the final two Girsh factors weigh in favor of settlement.
3. Purposes of the FLSA
The Court also finds that in light of the parties' modifications to the release and confidentiality provisions of the Settlement Agreement, the agreement as a whole is consistent with, and will not frustrate, the purposes of the FLSA. First, at the Court's direction following the preliminary approval hearing, the parties have limited the release provision to apply only to claims related to the allegations contained in the Complaint. Thus, the proposed settlement does not preclude class members from later asserting wage and hours claims that do not arise from the unpaid meal break allegations at issue in this lawsuit. Second, at the Court's direction, the parties have removed the confidentiality provision of the Settlement Agreement, which would likely have frustrated the FLSA informational purposes and undermined the express non-retaliation provision of the FLSA.
Accordingly, after applying the presumption of fairness to which the settlement is entitled, and considering the Girsh factors alongside the purposes of the FLSA, the Court concludes the class action settlement is fair, reasonable, and adequate. The Court will grant final approval of the settlement agreement.
D. Incentive Payments to Class Representatives
Incentive payments may be approved to compensate class representatives for services they provide and risks they incur during the course of litigation as well as to reward the members for the benefit they provide to the class and to the public.
Here, Plaintiffs seek an enhancement payment of $5,000 to each of the two Named Plaintiffs, Adrienne Galt and Nancy Murphy, and $2,500 to Nina Johnson, the pre-certification opt-in Plaintiff. Class Counsel asserts that these Plaintiffs were directly and regularly involved in this litigation and accepted both financial and reputational risks by commencing and supporting it. In particular, Plaintiffs produced documents to describe and confirm their claims, assisted with the review of case documents to inform litigation strategy, spoke with putative class members and encouraged their cooperation and assistance in the prosecution of the case, reviewed pleadings for accuracy, provided declarations in support of motions, responded to written discovery requests, assisted in preparations for settlement negotiations, and reviewed the fairness of Defendant's settlement proposals. These services will benefit all class members through the proposed settlement, and the enhancement payment sought in this case is consistent with awards granted in similar cases.
Accordingly, the Court finds the requested enhancement payments here are reasonable and will award the amounts requested.
*497E. Attorneys' Fees
Plaintiffs have requested a total of $182,000 in attorneys' fees. Two methods may be used for calculating attorneys' fees in class or collective action lawsuits: the lodestar method and the percentage-of-recovery method.
(1) the size of the fund created and the number of persons benefitted; (2) the presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel; (3) the skill and efficiency of the attorneys involved; (4) the complexity and duration of the litigation; (5) the risk of nonpayment; (6) the amount of time devoted to the case by plaintiffs' counsel; and (7) the awards in similar cases.62
After considering these factors, courts may also "cross-check the percentage award at which they arrive against the 'lodestar' award method."
1. Size of the Fund and the Number of Persons Benefitted
In the Third Circuit, courts have approved attorneys' fees awards ranging from approximately 19% to 45% of the common fund as reasonable.
2. Substantial Objections By Class Members
As discussed, there have been no objections to any aspect of the settlement agreement in this case, including to the attorneys' fees award. The absence of objections favors awarding the requested fees.
3. The Skill and Efficiency of the Attorneys Involved
The skill and efficiency of the attorneys involved is "measured by the quality of the result achieved, the difficulties faced, the speed and efficiency of the recovery, the standing, experience and expertise of the counsel, the skill and professionalism with which counsel prosecuted the case and the performance and quality of opposing counsel."
4. The Complexity and Duration of the Litigation
As discussed, the parties reached a tentative settlement agreement approximately twenty-one months into this case. Courts have generally found FLSA claims and wage-and-hour law enforcement litigation to be complex.
5. Risk of Non-Payment
Class Counsel took this case on a contingent fee basis and faced the risk of non-payment should they fail to obtain an adequate recovery for Plaintiffs and the Class. Having assumed this risk and devoted significant time to this matter, the Court finds that this factor weighs in favor of awarding the requested fees.
6. Hours Devoted by Counsel
Class Counsel assert that they have spent over 400 hours of attorney time on this case since its inception in addition to time spent by their staff. The Court finds that the time devoted to this case was significant, and this factor weighs in favor of finding the award reasonable.
7. Awards in Similar Cases
As discussed, most fee awards in common fund cases range from 19% to 45% of the settlement fund, with 25% being the median.
8. Lodestar Cross-Check
The lodestar is calculated by "multiplying the number of hours reasonably worked" by the normal hourly rates of counsel.
The lodestar in this case is $76,298.82, based on the actual billing rates of all attorneys who worked on this case. A fee award of $158,865 results in a lodestar multiplier of 0.6. The Third Circuit has recognized that multipliers "ranging from one to four are frequently awarded in common fund cases when the lodestar method is applied."
F. Costs
Class Counsel has requested an award of costs of approximately $10,000 to cover out-of-pocket expenses associated with this litigation. There have been no objections to the request for costs. In light of the length of the litigation and the number of filings by the parties, the Court finds the requested award to be reasonable.
G. Payment to Settlement Administrator
Finally, Plaintiffs have requested payment of $8,000 to the appointed Settlement Administrator, Dahl Administrator, as compensation for their efforts in preparing and disseminating the Class Notice mailing, engaging in necessary re-mailing efforts, responding to inquiries and requests from Class Members and the parties' counsel, reviewing Defendant's time and pay data to perform the Class Members' individual damage calculations, creating and mailing the settlement checks, providing necessary tax forms, and providing other ancillary services. In the absence of any objections from class members, the Court finds the requested payment to be fair and reasonable in light of the efforts expended.
IV. CONCLUSION
For these reasons, the Court will certify the PMWA Settlement Class and FLSA Settlement Collective and grant final approval of the parties' Settlement Agreement, as amended by the modifications dated December 21, 2017 and April 6, 2018, including the enhancement awards to the Named Plaintiffs and Plaintiff Nina Johnson, the requested attorneys' fees and costs, and payment to the Settlement Administrator. An appropriate order follows.
43 Pa. Cons. Stat. Ann. §§ 333.101, et seq.
Compl. at ¶¶ 10-15, 46-49.
Doc. No. 27.
Doc. Nos. 31, 32, 36, 37.
Pls.' Mem. in Support of Final Settlement Approval (Doc. No. 55-3) at 2.
Cohen Decl. (Doc. No. 55-8) at ¶ 2.
Modification to Agreement dated December 21, 2017 (Doc. No. 55-5).
Order Granting Preliminary Class and Collective Action Settlement Approval (Doc. No. 51).
Pls.' Mem. in Support of Final Settlement Approval (Doc. No. 55-3) at 5; Kratz Decl. (Doc. No. 55-7) at ¶¶ 6-8. The Settlement Agreement, as well as Plaintiffs' Memorandum in Support of Preliminary Approval, stated that the PMWA Class consisted of 364 prospective members. The parties have since confirmed that this number mistakenly included three individuals whose employment with Defendant ended before March 2, 2014, and who the parties agree would not have timely claims under the PMWA. See Correspondence from Plaintiffs' Counsel, dated April 19, 2018.
Kratz Decl. (Doc. No. 55-7) at ¶¶ 10-11.
See Order dated April 4, 2018 (Doc. No. 58).
Modification to Collective/Class Action Settlement Agreement dated April 6, 2018.
See Dec. 21, 2017 Modification to Collective/Class Action Settlement Agreement.
Altnor v. Preferred Freezer Servs., Inc. ,
Marcus v. BMW of N. Am., LLC ,
Rouse v. Comcast Corp. , No. 14-1115,
Fed. R. Civ. P. 23(a)(1).
See Stewart v. Abraham,
In re Warfarin Sodium Antitrust Litig.,
Wal-Mart Stores, Inc. v. Dukes ,
Fed. R. Civ. P. 23(a)(3).
In re Prudential Ins. Co. of Am. Sales Practice Litig. Agent Actions ,
Baby Neal ex rel. Kanter v. Casey,
Rouse ,
In re Warfarin,
Fed. R. Civ. P. 23(b)(3).
In re Hydrogen Peroxide Antitrust Litig.,
In re Prudential,
Sullivan v. DB Investments, Inc.,
See
See
In re Prudential,
See Amchem Prods., Inc. v. Windsor,
Camesi v. Univ. of Pittsburgh Med. Ctr. ,
Zavala v. Wal Mart Stores Inc. ,
Gen. Motors ,
In re Pet Food Prods. Liab. Litig. ,
In re Gen. Motors ,
See, e.g., Bredbenner v. Liberty Travel, Inc. , No. 09-905,
In re Gen. Motors ,
In re Prudential ,
In re Cendant Corp. Litig. ,
In re Warfarin ,
In re Prudential ,
See, e.g. , Mabry v. Hildebrandt , No. 14-5525,
Such discussions would, however, be limited by the terms of the separate non-derogation provision of the settlement agreement.
See Bredbenner ,
Bredbenner ,
Rouse ,
In re Gen. Motors ,
In re Prudential ,
Bredbenner ,
Nichols v. SmithKline Beecham Corp. , No. 00-6222,
Gunter v. Ridgewood Energy Corp. ,
See In re Gen. Motors ,
In re Rite Aid Sec. Litig. ,
Nichols ,
McGee v. Ann's Choice, Inc. , No. 12-2664,
See Lazy Oil Co. v. Wotco Corp. ,
In re Rite Aid ,
In re Ikon Office Sols. Inc. Sec. Litig. ,
In re Prudential ,
Reference
- Full Case Name
- Adrienne GALT and Nancy Murphy, for themselves and all others similarly situated v. EAGLEVILLE HOSPITAL
- Cited By
- 19 cases
- Status
- Published