Ditsworth v. P & Z Carolina Pizza, LLC

CourtDistrict Court, W.D. Kentucky
DecidedJuly 13, 2021
Docket1:20-cv-00084
StatusUnknown

This text of Ditsworth v. P & Z Carolina Pizza, LLC (Ditsworth v. P & Z Carolina Pizza, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ditsworth v. P & Z Carolina Pizza, LLC, (W.D. Ky. 2021).

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY BOWLING GREEN DIVISION CIVIL ACTION NO. 1:20-CV-00084-GNS

REBECKA DITSWORTH PLAINTIFF

v.

P & Z CAROLINA PIZZA, et al. DEFENDANTS

MEMORANDUM OPINION AND ORDER This matter is before the Court on Plaintiff’s Unopposed Motion for Leave to File Final Approval of Settlement and Motion for Approval of Attorneys’ Fees Under Seal (DN 10), Plaintiff’s Sealed Motions for Approval of Settlement and Attorneys’ Fees and Costs (DN 11, 12), Defendants’ Motion for Leave to Seal Document File Supplemental Memoranda (DN 15), and Defendants’ Unopposed Motion for Leave to Seal Document (DN 23). The matters are ripe for adjudication. For the reasons discussed below, Plaintiff’s Motion for Attorneys’ Fees is GRANTED IN PART and DENIED IN PART, and the remaining motions are GRANTED. I. STATEMENT OF FACTS On May 5, 2020, Rebecka Ditsworth (“Ditsworth”) sued Defendants P&Z Carolina Pizza, LLC d/b/a Papa John’s, Charles H. Zoellers, and Daniel B. Patterson (collectively “Papa John’s”), seeking unpaid wages under the Fair Labor Standards Act (“FLSA”), and Kentucky and North Carolina state wage laws. (Compl. 7-8, DN 1). Ditsworth represents delivery drivers for Papa John’s who alleged they were not paid the federal minimum wage due to insufficient reimbursements for their vehicle expenses. (Compl. ¶¶ 23-33). Ditsworth subsequently filed an Amended Complaint on May 19, 2020. (Am. Compl., DN 4). The parties moved to conditionally certify a collective class under 29 U.S.C. § 216(b), preliminarily certify a putative class under Rule 23, and preliminarily approve the Settlement Agreement (“Agreement”). (Mot. Preliminary Approval of Class & Collective Action Settlement 1-2, DN 7). The Court granted the motion. (Order 1-2, DN 9). On October 16, 2020, the parties jointly moved for final approval of the Agreement and attorneys’ fees and costs. (Sealed Mot. Approval Settlement, DN 11; Sealed Mot. Approval Att’ys’ Fees & Costs, DN 12).

The Agreement is intended to settle claims on behalf of delivery drivers working for Papa John’s in Kentucky, North Carolina, and Tennessee during respective “Release Period[s]”.1 (Sealed Doc. Ex. A, ¶ 31, DN 6-1 [hereinafter Agreement]). The Agreement identifies a “Total Settlement Amount” of $755,412.32, which is defined as the “total gross settlement amount for purposes of calculating the amounts necessary to fund settlement class distributions under this Agreement”. (Agreement ¶ 30). The Agreement’s “Net Settlement Amount” of $506,126.26, is defined as “the portion of the Total Settlement Amount used for calculating the amounts necessary to fund settlement class distributions . . . .” (Agreement ¶ 17). The Net Settlement Amount is based on a $0.40/mile rate to compensate a class of 704 drivers. (Joint Suppl. Br. Final Approval

Class Settlement 2, DN 16-1). This amount is comprised of the “Kentucky Net Settlement Fund” of $186,559.49, the “North Carolina Net Settlement Fund” of $198,853.41, and the “Tennessee Net Settlement Fund” of $120,713.36. (Agreement ¶ 17). The Agreement provides a claims process which allows a class member to opt-in to the FLSA collective action by filing a claim and thereby recover a “Potential Settlement Payment”2.

1 The “Release Period” is the period of time from “June 21, 2014, through the date the Court grants Preliminary Approval for Kentucky Class Members, and from March 1, 2017, through the date the Court grants Preliminary Approval for North Carolina Class Members and Tennessee Class Members.” (Agreement ¶ 24). 2 A member’s “Potential Settlement Payment” is calculated by dividing the driver’s “Individual Miles” – total number of miles making deliveries during the Release Period – by the respective “State Class Miles” – the aggregate of all “Individual Miles” in each respective class member’s (Agreement ¶ 40). If a class member does not opt-out of the settlement, the Agreement provides an automatic award of $50.00 for the Rule 23 class. (Agreement ¶ 40(d)). This type of settlement agreement is commonly referred to as a hybrid class action. See Hendricks v. Total Quality Logistics, LLC, No. 1:10-CV-649, 2011 WL 13350901, at *6 (S.D. Ohio Mar. 11, 2011) (“This Court agrees with the reasoning of the courts that have permitted both the FLSA opt-in claim and

the state law opt-out class action claim to proceed in one hybrid case.”); see also Green v. Platinum Rests. Mid-Am., LLC, 333 F.R.D. 102, 105 (W.D. Ky. 2019) (certifying a hybrid FLSA and Rule 23 class). Tennessee class members, however, do not need to submit a claim; so long as a Tennessee class member does not opt out, the member will receive a pro rata share of the Tennessee FLSA Claim Fund. (Agreement ¶ 46(b)). The Agreement also contains a “clear sailing” provision, precluding Defendants from opposing class counsel’s request for attorneys’ fees of $248,307.85 and costs of $5,987.21. (Agreement ¶ 36). Additionally, the Agreement allocates any unclaimed funds to the “Reserve Fund”, which is “a fund designated for late claims and contingencies to be paid out of the Total

Settlement Amount, which shall not exceed . . . $15,000.00 . . . , plus any amounts remaining from the claim funds . . . .” (Agreement ¶ 25). The funds remain in the Reserve Fund for the “Reserve Fund Period”.3 (Agreement ¶ 39(d)). Ultimately, “[a]ny funds remaining after the Reserve Fund Period will be retained by Defendants.” (Agreement ¶ 39(d)).

state of employment. (Agreement ¶ 40(a)(i)). The result is the driver’s “Payment Ratio” which is then multiplied by the amount of the applicable state’s Net Settlement Fund to determine the member’s potential payment. (Agreement ¶ 40(a)(ii)). 3 The Reserve Fund Period begins “on the calendar day following close of the Notice Period through the expiration of the three-year statute of limitations under the Fair Labor Standards Act, which will be three years following Preliminary Approval.” (Agreement ¶ 24). II. DISCUSSION A. Settlement Agreement “Parties to [a] settlement must proffer sufficient evidence to allow the district court to review the terms and legitimacy of the settlement . . . .” Int’l Union, United Auto., Aerospace, & Agric. Implement Workers of Am. v. Gen. Motors Corp. (UAW), 497 F.3d 615, 635 (6th Cir. 2007)

(citation omitted). “[T]he Court’s role in approving a settlement of a FLSA collective action ‘is comparable to that of a court in a settlement of a class action brought pursuant to Fed. R. Civ. P. 23.’” Castillo v. Morales, Inc., No. 2:12-CV-650, 2015 WL 13021899, at *3 (S.D. Ohio Dec. 22, 2015) (citation omitted). In deciding whether to approve the proposed settlement, the Court must consider whether the settlement is “fair, reasonable, and adequate . . . .” Fed. R. Civ. P. 23(e)(2). In making this determination, the Court considers the following factors: (1) the risk of fraud or collusion; (2) the complexity, expense and likely duration of the litigation; (3) the amount of discovery engaged in by the parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel and class representatives; (6) the reaction of absent class members; and (7) the public interest.

UAW, 497 F.3d at 631 (citations omitted).

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