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Hughes v. Ozark Guidance Center, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

February 11, 2015

MARK HUGHES and RHONDA COOKSEY, each individually and on behalf of all other similarly situated plaintiffs, Plaintiffs,
v.
OZARK GUIDANCE CENTER, INC., Defendant.

MEMORANDUM OPINION AND ORDER

TIMOTHY L. BROOKS, District Judge.

On February 5, 2015, the parties came before the Court for a hearing regarding final approval of the proposed settlement of this case pursuant to the Fair Labor Standards Act ("FLSA"). At the hearing, the Court also addressed Plaintiffs' Motion for Attorneys' Fees and Expenses (Doc. 80) and Defendant's Response (Docs. 81-82).

The Court began the hearing by making specific inquiries of counsel regarding the procedure by which the class was provided notice of the claims in this matter, the class's response to the notice, and the nature of any objections or concerns regarding opt-in procedures. Plaintiffs' counsel then recited for the Court's benefit a summary of the procedural history of the case since conditional certification, as well as an explanation of how the parties came to agree on a settlement. Finally, the Court addressed the issue of Plaintiffs' Motion for Attorneys' Fees and Expenses, which was contested by Defendant.

After providing both parties the opportunity to make oral argument, the Court made certain rulings from the bench, all of which are memorialized in this Order. To the extent that the terms of this Order conflict with what was announced from the bench, this Order will control.

I. BACKGROUND

The parties filed a Joint Motion for Settlement (Doc. 78) of this FLSA collective action on December 18, 2014. Plaintiffs alleged that Defendant failed to pay overtime compensation to employees classified as Mental Health Paraprofessionals ("MHPP"). Defendant denied violating the FLSA and contested all claims asserted in the Complaint. After engaging in discovery, multiple settlement discussions, and a structured mediation, the parties negotiated a settlement and presented it to the Court for preliminary approval.

On December 22, 2014, the Court issued an Order (Doc. 79) granting the preliminary approval of the settlement, subject to further consideration at the final approval hearing. The Court observed in its Order that after conditional certification of a collective action was granted, Court-approved notice was sent to all those who met the class definition, and 36 individuals initially filed consents to join. Following class discovery, and through natural attrition by virtue of the litigation process, 24 opt-in plaintiffs remained in the case at the time of settlement.

The Settlement Agreement (Doc. 78-1) contemplates a total maximum settlement award of $450, 000.00 to be shared among the remaining 24 class members. Each class member's check is to include payments for both overtime compensation and liquidated damages. The Settlement Agreement also contemplates Defendant's payment of an award of attorney fees to class counsel in an amount to be determined by the Court. The payment of these attorney fees will not undercut the $450, 000.00 total settlement to be distributed to the class; however, an award of reasonable costs and expenses to class counsel could be, but does not have to be, paid on a pro-rata basis from the liquidated-damages portions of the class members' settlement checks.[1]

The Court will now analyze whether to grant final approval to the settlement and award class counsel the fees and costs they request.

II. DISCUSSION

A. Final Approval of FLSA Settlement

Based on the Court's review of the Settlement Agreement (Doc. 78-1) and the arguments of counsel during the final approval hearing, the Court makes the following findings:

1. Plaintiffs and Defendant engaged in a bona fide dispute that was contested, litigated, and ultimately settled as a result of arms-length negotiations, ...

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