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Slavkov v. Fast Water Heater Partners I, LP

United States District Court, N.D. California

July 25, 2017

MIHAIL SLAVKOV, et al., Plaintiffs,


          JON S. TIGAR United States District Judge

         Before the Court is the parties' joint motion for approval of settlement. ECF No. 125.[1]The Court will grant the motion.

         I. BACKGROUND

         Plaintiffs Mihail Slavkov, Nikola Vlaovic, Martin Arnaudov, Dale Weise, Kevin Yarnell, Carlos Gomez, Francisco Magana, Robert Gutierrez and Jose Alfredo Vasquez (“Plaintiffs”), allege that Defendants Fast Water Heater Partners I, LP d/b/a Fast Water Heater Company; FWH Acquisition Company, LLC d/b/a Fast Water Heater Company; Jeffrey David Jordan; and Jason Sparks Hanleybrown (“Defendants”), violated the Fair Labor Standards Act (“FLSA”) and the Private Attorneys General Act (“PAGA”), among other allegations in the operative Third Amended Complaint (“TAC”). ECF No. 115. Defendants deny Plaintiffs' allegations. ECF No. 116.

         After multiple attempts, the parties reached a settlement, and on June 14, 2017, the parties filed a joint motion for approval of that settlement. ECF No. 125 (filing includes the motion and Settlement Agreement). The total amount of the settlement is $345, 000.00. Settlement Agreement ¶ V.A. Of that amount, $7, 500 is PAGA penalties, which will go to the California Labor and Workforce Development Agency. Settlement Agreement ¶ V.B. Plaintiffs will receive the following payments:


Settlement Amount


$8, 592.78


$4, 638.42


$7, 933.72


$18, 262.74


$26, 089.58


$19, 380.86


$14, 908.38


$11, 811.89


$11, 811.89

ECF No. 129 at 6-7. The remainder of the settlement compensates Plaintiffs' counsel for their fees and costs. ECF No. 125 at 6. The Settlement Agreement also includes a general release for the California Plaintiffs, and, for the Oregon Plaintiffs, a release of any claims that were or could have been brought based on the allegations in the TAC. Agreement ¶ VI. The parties agree that Court approval is required to settle Plaintiffs' FLSA and PAGA claims.

         II. ANALYSIS

         A. FLSA

         FLSA was enacted for the purpose of protecting workers from substandard wages and oppressive working hours. Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739 (1981). The Eleventh Circuit[2] has explained that, to approve a FLSA settlement, a court must conclude that the settlement agreement is “a fair and reasonable resolution of a bona fide dispute.” Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353-55 (11th Cir. 1982). In this district, courts have concluded that settlements are reasonable when they equal between 70% and 100% of a plaintiff's FLSA damages. See Lee v. The Timberland Co., No. C 07-2367 JF, 2008 WL 2492295, at *2 (N.D. Cal. June 19, 2008) (70%); Nen Thio v. Genji, LLC, 14 F.Supp.3d 1324, 1337-38 (N.D. Cal. 2014) (100%); Dunn v. Teachers Ins. & Annuity Ass'n of Am., No. 13-CV-05456-HSG, 2016 WL 153266, at *5 (N.D. Cal. Jan. 13, 2016) (over 100%); Kempen v. Matheson Tri-Gas, Inc., No. 15-CV-00660-HSG, 2016 WL 4073336, at *11 (N.D. Cal. Aug. 1, 2016) (100%). Here, the payments to the individual Plaintiffs represent 100-344% of their estimated FLSA damages. ECF No. 129 at 6-7. This is a reasonable resolution of Plaintiffs' claims, particularly in light of the significant risk in litigating the case through to trial. ECF No. 125 at 9 (e.g., Defendants would dispute liability and challenge joinder). Moreover, every Plaintiff endorsed the Settlement Agreement. ECF No. 125 at 9.

         The releases negotiated under the Settlement Agreement are also reasonable in light of the fact that they apply only to the individual Plaintiffs; the class claims were dropped from the TAC. ECF No. 115. Finally, Plaintiffs' attorneys have accepted a substantial reduction in fees compared with their lodestar in this case, which they further reduced to ensure that each named Plaintiff received 100% of his or her FLSA damages. ECF No. 125 at 9-10; ECF No. 129 at 6.

         The Court approves the settlement of Plaintiffs' FLSA claims.

         B. PAGA

         A reviewing court may judicially approve settlement of PAGA claims after a dispute has arisen. See Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348, 383 (2014); In re Uber FCRA Litig., No. 14-CV-05200-EMC, 2017 WL 2806698, at *7 n.4 (N.D. Cal. June 29, 2017). Here, the Court concludes that the $7, 500 PAGA payment is reasonable when measured against the total overall settlement and the possible weaknesses in Plaintiffs' case. Id. (approving $7, 500 PAGA payment); Chavez v. Lumber Liquidators, Inc., No. CV-09-4812 SC, 2015 WL 2174168, at *2 (N.D. Cal. May 8, 2015) ...

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