Gortat v. Capala Bros.

949 F. Supp. 2d 374, 22 Wage & Hour Cas.2d (BNA) 1407, 2013 WL 2566622, 2013 U.S. Dist. LEXIS 82784
CourtDistrict Court, E.D. New York
DecidedJune 12, 2013
DocketNo. 07 CV 3629(ILG)
StatusPublished
Cited by32 cases

This text of 949 F. Supp. 2d 374 (Gortat v. Capala Bros.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gortat v. Capala Bros., 949 F. Supp. 2d 374, 22 Wage & Hour Cas.2d (BNA) 1407, 2013 WL 2566622, 2013 U.S. Dist. LEXIS 82784 (E.D.N.Y. 2013).

Opinion

MEMORANDUM AND ORDER

GLASSER, Senior District Judge.

Plaintiffs are laborers and foremen formerly employed by Capala Brothers, Inc. (“Capala Bros.”), a construction services company, Robert Capala, and Pawel Capala (collectively “defendants”) who seek to recover on behalf of themselves and others similarly situated unpaid wages and overtime arising out of defendants’ alleged failure to comply with the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), and New York Labor Law, N.Y. [378]*378Lab. Law § 650 et seq. (“NYLL”).1 After extensive pretrial litigation, the Court bifurcated the trial into liability and damages phases. Dkt. No. 292. On May 10, 2013, a jury returned a verdict finding defendants liable for violating both the FLSA and NYLL, and finding for the plaintiffs on defendants’ counterclaims. On May 13, 2013, the jury found that defendants’ violations were willful.

The jury verdict prompted a flurry of motions. In what is described as a “letter brief’ dated May 16, 2013, plaintiffs moved to request (1) “service awards” for named plaintiffs, (2) “stacked liquidated damages under both the FLSA and New York Labor Law,” and (3) prejudgment interest. Pis.’ Letter Br. (Dkt. No. 358). On May 22, 2013, defendants moved to decertify the class pursuant to Rule 23(c)(1)(C) of the Federal Rules of Civil Procedure and for judgment as a matter of law notwithstanding the verdict pursuant to Rule 50(b). Memorandum of Law In Support of Decertification of Class Action after Trial (“Defs.’ Mem.”) (Dkt. No. 361-8). Finally, on June 5, 2013, plaintiffs moved for entry of judgment. Dkt. No. 374. For the reasons set forth below, plaintiffs’ motions are GRANTED in part and DENIED in part, and defendants’ motions are DENIED.

Discussion

I. Plaintiffs’ Motions

Plaintiffs make three motions; I turn to a consideration of each.

A. Service Awards

Plaintiffs’ advocacy for those awards begins with a string citation of cases ending with Rodriguez v. West Publ’g Corp., 563 F.3d 948, 959 (2009) (noting that such awards “are generally sought after a settlement or a verdict has been achieved”). Not mentioned, however, is the observation that “[s]uch awards are discretionary,” and, more notably, that the district court denied incentive awards in their entirety because, among other reasons, the amounts requested were unreasonable; the circuit court affirmed. Id. at 958-60, aff'g, 2007 WL 2827379, at *14-22 (C.D.Cal. Sept. 10, 2007).

The staggering amount requested as incentive awards for the seven named plaintiffs is breathtaking and were the Court to grant it, would be an exercise of discretion inexcusably abused. It seeks $30,000 for each of five named plaintiffs and $15,000 each for the remaining two for a total of $180,000, an award that would be 61.74% of the total amount of the award granted to all plaintiffs including the members of the class.2 A conclusion that the request is unreasonable is, on the recita[379]*379tion of those numbers, without more, compelled. An extended discussion of the factors the Court considers in deciding whether to make incentive awards would not be a productive exercise on the facts of this case. Those factors are reviewed at length by the district court in Rodriguez and by the cases cited by counsel in support of his request. Each of those is a major class action in which a huge sum was involved and was settled without objection to the incentive awards agreed upon. Castagna v. Madison Square Garden, L.P., No. 09-ev-10211, 2011 WL 2208614 (S.D.N.Y. June 7, 2011); Willix v. Healthfirst, Inc., No. 07 Civ. 1143, 2010 WL 5509089 (E.D.N.Y. Nov. 29, 2010); Khait v. Whirlpool Corp., No. 06-6381, 2010 WL 2025106 (E.D.N.Y. Jan. 20, 2010).

Why a plaintiff in a class action is materially different from a plaintiff in any other civil action and whether the factors generally recited to accept that difference in support of an incentive award can withstand a rigorous analysis pursued against a background of experience and reality has been the subject of considerable discussion in the literature. See, e.g., Eisenberg & Miller, supra; Ann K. Wooster, Propriety of Incentive Awards or Incentive Agreements in Class Actions, 60 A.L.R.6th 295 (2010).

In that regard, a case decided more than 130 years ago is informative. Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1881). There, one Vose, a large holder of bonds of a Florida Railroad, on behalf of himself and other bondholders sued trustees of a Florida Internal Improvement Fund for wasting assets ostensibly affecting the bonds negatively. He sought to set aside what he claimed were fraudulent conveyances. The litigation succeeded and other bondholders benefitted by it. Vose bore the entire burden of the litigation, advanced most of the expenses, and sought an allowance out of the fund thus created for his expenses and services. The Court allowed compensation for reasonable costs, counsel fees, and expenses incurred in the prosecution of the case, but found an allowance for personal expenses “decidedly objectionable” — those being for the personal services and private expenses of Vose, charges for which, the Court wrote, “we can find no authority whatever.” Id. at 537. The Court then went on to write:

Where an allowance is made to trustees for their personal services, it is made with a view to secure greater activity and diligence in the performance of the trust, and to induce persons of reliable character and business capacity to accept the office of trustee. These considerations have no application to the case of a creditor seeking his rights in a judicial proceeding. It would present too great a temptation to parties to intermeddle in the management of valuable property or funds in which they have only the interest of creditors, and that perhaps only to a small amount, if they could calculate upon the allowance of a salary for their time and of having all their private expenses paid. Such an allowance has neither reason nor authority for its support.

Id. at 537-38.

The concern express by the Court was not misplaced. In Incentive Awards to Class Action Plaintiffs, supra, the authors acknowledge that:

[It] has long been recognized [that class action] cases tend to be dominated by entrepreneurial attorneys who effectively control all phases of the litigation. The ‘named’ or ‘representative’ plaintiff, who supposedly acts as the champion of the class, is sometimes little more than an eponym. Yet, despite suggestions that class action procedures should dispense with the named plaintiff as a [380]*380meaningless figurehead ... the trend of the law ... has been to the contrary.

Eisenberg & Miller, supra, at 1304-05.

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949 F. Supp. 2d 374, 22 Wage & Hour Cas.2d (BNA) 1407, 2013 WL 2566622, 2013 U.S. Dist. LEXIS 82784, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gortat-v-capala-bros-nyed-2013.