Ganci v. MBF Inspection Services, Inc.

District Court, S.D. Ohio·Decided December 3, 2019·No. 2:15-cv-02959·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

THOMAS GANCI,

Plaintiff,

v. Civil Action 2:15-cv-2959 Magistrate Judge Chelsey M. Vascura

MBF INSPECTION SERVICES, INC.,

Defendant.

OPINION AND ORDER This matter is before the Court on the parties’ Joint Motion for Final Approval of Class and Collective Action Settlement (ECF No. 148). Plaintiff, Thomas Ganci (“Plaintiff” or “Mr. Ganci”), individually and on behalf of similarly situated individuals, seeks final approval of the proposed class action settlement described in the parties’ Settlement Agreement (ECF No. 143- 3) (the “Settlement”). Notice was given to members of the Settlement Class, and a Fairness Hearing was held before the undersigned on December 2, 2019. Also before the Court is Plaintiff’s unopposed Motion for an Award of Attorneys’ Fees, Costs, and Class Representative Service Awards (ECF No. 149). Having considered the Settlement and the arguments in support of final approval, the Motions (ECF Nos. 148–49) are GRANTED. I. BACKGROUND A. Procedural History This action arises out of Defendant MBF Inspection Services, Inc.’s (“Defendant” or “MBF”) classification of inspectors as exempt from overtime under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (the “FLSA”), and Ohio state wage and hour laws. Plaintiff alleged that MBF incorrectly classified him and other similarly-situated inspectors as exempt, improperly paid them on a day-rate basis rather than an hourly basis, and denied them overtime premiums to which they were entitled. Plaintiff commenced this action on October 30, 2015. (ECF No. 1.) Defendant contested

class treatment both under the FLSA and Rule 23; however, the Court conditionally certified the case as a collective action under the FLSA on September 20, 2016, (ECF No. 26), and granted class certification under Federal Rule of Civil Procedure 23 of the Ohio wage and hour claims on October 27, 2017, (ECF No. 95). Both parties engaged in written discovery, took over a dozen depositions, and exchanged approximately 18,000 pages of documents. (Helland Dec. ¶ 2, ECF No. 143-2.) The parties then filed cross-motions for summary judgment and Defendant moved to decertify the FLSA collective. (ECF Nos. 103, 105, 107.) The parties further engaged in multiple mediation sessions with two different third-party mediators in April 2018 and May 2019. The latter of these mediations resulted in a signed memorandum of understanding,

followed by a fully executed Settlement Agreement in July 2019. Although MBF filed for bankruptcy in June 2018 in the District of New Mexico, the parties sought and obtained a modification of the automatic stay for the limited purpose of allowing settlement approval to proceed in this court. (ECF Nos. 133, 140, 142.) B. Preliminary Approval On September 6, 2019, the Court approved the Settlement under the FLSA and granted preliminary approval of the Settlement under Rule 23. (ECF No. 145.) The Court had previously certified the following class under Federal Rules of Civil Procedure 23(a) and 23(b)(3), and the Court adopted the same class definition for settlement purposes: All inspection personnel, other than chief inspectors and lead inspectors, who were paid a day rate and who worked for Defendant in Ohio under a Spectra contract at any time since two years prior to filing of this Complaint. (Prelim. Approval Order 5, ECF No. 145.) The Settlement encompasses 120 individuals: 53 FLSA opt-in Plaintiffs, and 72 Rule 23 class members; 5 individuals are both opt-in plaintiffs and class members. (Brome Dec. ¶ 2, ECF No. 149-2.) C. The Settlement Agreement Defendant has agreed to pay a total settlement amount of $2,225,000.00. This includes payments to all accepting Plaintiffs, enhancements awards, attorneys’ fees, litigation costs, and expenses of Class Counsel, but excludes the employer’s share of payroll taxes. (Settlement § 3, ECF No. 143-3.) The settlement agreement distributes pro rata shares of the Settlement amongst Opt-In Plaintiffs who return release forms and all Rule 23 Class Members, determined based on the individual’s work history within the applicable statute of limitations, the individual’s pay rate, and a uniform assumption of daily overtime worked. Each individual entitled to compensation will receive a minimum of $200. The settlement amount is non-reversionary. (Id. § 7.) The amounts allocated to Plaintiffs who did not accept the settlement payments will be reallocated to Accepting Plaintiffs and will

not revert to Defendant. (Id.) If checks remain uncashed after 90 days, those amounts will be donated to a cy pres recipient. (Id.) The Settlement will be paid according to a bankruptcy plan in the bankruptcy case. As a condition of the settlement, the Parties agreed that the bankruptcy plan must contain certain features. First, the plan must provide for one hundred percent (100%) payment of the settlement amount. (Id. § 8.) Additionally, the plan must provide that Defendant will pay fifty percent (50%) of the amount due under the Settlement Agreement on or before the effective date of the bankruptcy plan and the remaining fifty percent (50%) in equal semi-annual installments over a period of two (2) years, accruing interest at the rate of 5.00% per annum. (Id.) The first such payment will be due six (6) months after the effective date of the bankruptcy plan. (Id.) Defendant will deliver all settlement checks to Class Counsel and the parties agree to work together in good faith to ensure that all Settlement checks are received and cashed by the Accepting Plaintiffs. (Id.)

D. Notice Following preliminary approval, notice of the settlement was sent to the 120 Rule 23 Class Members and Opt-in Plaintiffs. (Skold Dec. ¶ 2, ECF No. 148-2.) None of the Rule 23 Class Members have objected or opted-out of the settlement. (Id. ¶ 6.) Class Counsel re-mailed notice to seven FLSA Opt-In Plaintiffs (id. ¶ 3) and two Rule 23 Class Members (id. ¶ 4). In total, six notices were returned as undeliverable, but all were re-mailed to new addresses and were not returned undeliverable. (Id. ¶ 4.) Of the fifty-three (53) FLSA Collective members, all but four have submitted release forms. (Id. ¶ 5.) Several attempts have been made to contact these four individuals via telephone and email to determine whether they intend to submit release forms. (Id.) Having had

no response, Plaintiff requested at the Fairness Hearing that these four individuals be dismissed from the action and their allocated compensation be re-allocated among the remaining Opt-In Plaintiffs and Rule 23 Class Members. II. APPROVAL OF THE PROPOSED CLASS SETTLEMENT The undersigned presided over a Fairness Hearing on December 2, 2019, (ECF No. 150), to hear evidence and argument as to the adequacy of the proposed Settlement. At the Fairness Hearing, the undersigned heard argument from counsel for Plaintiffs and Defendant. 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. Poplar Creek Dev. Co. v.

Free access — add to your briefcase to read the full text and ask questions with AI

Ganci v. MBF Inspection Services, Inc., (S.D. Ohio 2019).

Ganci v. MBF Inspection Services, Inc. (Ganci v. MBF Inspection Services, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Mills v. Electric Auto-Lite Co.
396 U.S. 375 (Supreme Court, 1970)
Everett Hadix, C. Pepper Moore v. Perry Johnson
322 F.3d 895 (Sixth Circuit, 2003)
Moulton v. United States Steel Corp.
581 F.3d 344 (Sixth Circuit, 2009)
In Re Cardinal Health Inc. Securities Litigations
528 F. Supp. 2d 752 (S.D. Ohio, 2007)
In Re Telectronics Pacing Systems, Inc.
137 F. Supp. 2d 985 (S.D. Ohio, 2001)
In Re Austrian & German Bank Holocaust Litigation
80 F. Supp. 2d 164 (S.D. New York, 2000)
Amber Gascho v. Global Fitness Holdings, LLC
822 F.3d 269 (Sixth Circuit, 2016)
Hughes v. Gulf Interstate Field Services, Inc.
878 F.3d 183 (Sixth Circuit, 2017)
Jeff Faludi v. U.S. Shale Solutions, L.L.C.
936 F.3d 215 (Fifth Circuit, 2019)
Hainey v. Parrott
617 F. Supp. 2d 668 (S.D. Ohio, 2007)
IUE-CWA v. General Motors Corp.
238 F.R.D. 583 (E.D. Michigan, 2006)
In re Broadwing, Inc. Erisa Litigation
252 F.R.D. 369 (S.D. Ohio, 2006)
Ramey v. Cincinnati Enquirer, Inc.
508 F.2d 1188 (Sixth Circuit, 1974)
Williams v. Vukovich
720 F.2d 909 (Sixth Circuit, 1983)
Granada Investments, Inc. v. DWG Corp.
962 F.2d 1203 (Sixth Circuit, 1992)