United States District Court, E.D. Pennsylvania
BLOFSTEIN ET AL.
MICHAEL'S FAMILY RESTAURANT, INC. ET AL.
BARCLAY SURRICK, J.
before the Court is Plaintiffs' Unopposed Motion for
Final Settlement Approval. (ECF No. 36.) For the following
reasons, the Motion will be granted.
Factual Background of Litigation
Blofstein and Alexis Flores (“Named Plaintiffs”)
filed this class and collective action on behalf of
themselves and other similarly situated restaurant servers,
alleging that Defendants violated the Fair Labor Standards
Act, 29 U.S.C. § 201, et seq.
(“FLSA”), and the Pennsylvania Minimum Wage Act
of 1968, 43 P.S. § 333.101, et seq.
(“PMWA”). Plaintiffs allege that Defendants
permitted servers at four of their restaurants-Country Club
Diner, Tiffany Diner, Warminster West Diner, and Mayfair
Diner (first shift)-to work more than 40 hours per week,
while maintaining a policy against logging overtime hours on
the clock and maintaining an illegal tip pool. With regard to
the tip pool, Plaintiffs maintain that the servers were made
to pay a fixed amount from their tips to an illegal tip pool
to benefit other restaurant employees (bussers and food
runners), but that the money from the pool was actually used
by Defendants to pay these employees' wages and not tips.
Plaintiffs filed the class and collective action Complaint on
December 13, 2017. (ECF No. 1.) On April 20, 2018, Plaintiffs
filed an Amended Complaint, which asserts an additional claim
of retaliation on behalf of Named Plaintiff Blofstein. (Am.
Compl., ECF No. 16.)
2018, the parties participated in a settlement conference
with Magistrate Judge Lynn A. Sitarski. Although no
settlement was reached, the parties subsequently engaged in
discovery aimed at permitting more informed settlement
discussions in private mediation. In July 2018, the parties
participated in a private mediation. Again, unable to reach a
resolution, they pursued additional discovery and
participated in a second full day of mediation with the same
mediator in September 2018. At this mediation, the parties
reached an agreement to settle Plaintiffs' claims. The
Settlement Agreement was signed on November 1, 2018.
Preliminary Settlement Approval
Unopposed Motion for Preliminary Class and Collective Action
Settlement Approval was granted on March 12, 2019. (ECF No.
34.) The Order was subsequently amended on March 20, 2019, to
reflect a later deadline for class members to submit
“opt-out requests, objection requests, and requests to
withdraw consent to join.” (Am. Order, ECF No. 35.) The
Court preliminarily certified two classes: the Settlement
Class under the PMWA, and the Settlement Class under FLSA.
The PMWA Settlement Class is defined as:
All current or former Servers who are Pennsylvania residents
and who were employed at the Country Club Diner, Tiffany
Diner, or Warminster West Diner from December 13, 2014 to
July 5, 2018, plus all current or former Servers who are
Pennsylvania residents and who were employed during the first
shift at Mayfair Diner from December 13, 2014 to July 5,
(Am. Order ¶ 2.)
FLSA Settlement Class is defined as:
All current or former Servers employed at the Country Club
Diner, Tiffany Diner, or Warminster West Diner from December
13, 2014 to July 5, 2018, plus all current or former Servers
employed during the first shift at Mayfair Diner from
December 13, 2014 to July 5, 2018.
(Id. ¶ 3.)
reviewing the settlement terms proposed by the parties, the
Court determined that the Settlement Agreement “appears
to be the product of serious, informed, and extensive
arm's- length negotiations between the Parties and
appears to be fair, adequate and reasonable to the Settlement
Class so as to fall within the range of possible final
approval.” (Id. ¶ 6.)
Notice Period and Class Participation
March 29, 2019, Atticus Administration, LLC
(“Atticus”) mailed notice of the proposed
settlement agreement and claim forms (the “Notice
Packet”) to the 424 potential class members. (Atticus
Decl. ¶ 3, 4, Pls.' Stmt. Mot. Ex. C, ECF No.
Atticus was able to reach 378 of the 424 potential class
members. (July 10, 2019 Hr'g Tr. 4, ECF No. 40.) This
represents 89 percent of potential class members reached.
(Id.) The remaining potential class members could
not be reached. (Id.) Potential class members were
notified that the deadline to submit claim forms was May 28,
2019, which was 60 days after the Notice Packets were mailed.
(Atticus Decl. ¶ 5.) During this period, the claims
administrator received 146 completed claim forms, which
represents about 40% of the delivered Notice Packets. (July
10 Hr'g Tr. 4.) There have been no objections to, or
requests for exclusion from, the proposed settlement from any
proposed class members. (Id. at 5.)
Final Settlement Hearing was held on July 10, 2019. (Min.
Entry, ECF No. 39.)
The Proposed Settlement Agreement
the Settlement Agreement, Defendants have agreed to pay $750,
000 to resolve the litigation. (July 10 H'rg Tr. 6.) This
amount includes: (1) approximately $465, 000 to pay damages
to the Settlement Class members; (2) $15, 000 as an award to
be split by the Named Plaintiffs for their participation in
the litigation; (3) $10, 000 to Ms. Blofstein for settlement
of her retaliation claim against Defendants; (4)
attorneys' fees in the amount of $250, 000; and (5) costs
in the amount of $10, 000. (July 10 Hr'g Tr. 10.) Each of
the 145 class members will receive a pro rata portion of the
of the damages amount based on the number of work weeks that
they worked during the class period, as a fraction of the
total work weeks by all participating settlement class
members. (Supp. Atticus Decl. ¶ 8, ECF No. 38.) The
calculation is described as follows:
award = $465, 000 x Total weeks worked by participating
class member Total weeks worked by all
Stmt. Mot. 4.) Based upon this calculation, if all claim
forms received were to be paid, the total payout is estimated
to total $228, 034.04, which is 49% of the total $465, 000
damage fund. The highest claim is approximately $4, 000 and
the lowest claim amount is approximately $22. (Supp. Atticus
Decl. ¶ 8.) The average claim value to the class member
is approximately $1, 600. (Id.; July 10 Hr'g Tr.
parties informed the Court at the Final Settlement Hearing
that Defendants intend to take out a loan in order to fund
this settlement. (July 10 Hr'g Tr. 7.) This is because
Defendants do not have sufficient assets to handle the
settlement claims. (Id.) Defendants' financial
situation became relevant during negotiations of this
consideration of the proposed settlement will include the
following: (1) whether the proposed PMWA class action meets
the requirements of Rule 23 of the Federal Rules of Civil
Procedure and is entitled to final certification; (2) whether
final certification of the FLSA collective action is
appropriate; (3) whether the settlement proposed by the
parties is fair and adequate; (4) whether the service payment
awards to the Named Plaintiffs and the settlement of Ms.
Blofstein's retaliation claim are fair and reasonable;
and (5) whether Plaintiffs' request for attorneys'
fees and costs merits approval.
Class Certification of PMWA Class Under Rule 23
determining whether the proposed settlement warrants
approval, we must first determine whether Plaintiffs have met
the elements of final certification of the PMWA class. We
previously granted preliminary certification to the PMWA
class to include all Pennsylvania residents who were servers
at Country Club Diner, Tiffany Diner, Warminster West Diner
and Mayfair Diner (first shift) from December 13, 2014 to
July 5, 2018. (Am. Order ¶ 2.)
certification under Rule 23 has two components. The party
seeking class certification must first establish the four
requirements of Rule 23(a):
(1) the class is so numerous that joinder of all members is
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately
protect the interests of the class.
Fed. R. Civ. P. 23(a); see also In re Hydrogen Peroxide
Antitrust Litig., 552 F.3d 305, 309 n.6 (3d Cir. 2008).
all four requirements of Rule 23(a) are met, a class of one
of three types (each with additional requirements) may be
certified” under Rule 23(b). In re Hydrogen
Peroxide Antitrust Litig., 552 F.3d at 309 n.6.
Plaintiffs seek certification under Rule 23(b)(3), which
states that “[a] class action may be maintained if Rule
23(a) is satisfied and if: (3) the court finds that the
questions of law or fact common to class members predominate
over any questions affecting only individual members, and
that a class action is superior to other available methods
for fairly and efficiently adjudicating the
controversy.” Fed.R.Civ.P. 23(b)(3). These are known as
the predominance and superiority factors of Rule 23(b)(3).
party seeking class certification “bears the burden of
establishing each element of Rule 23 by a preponderance of
the evidence.” Marcus v. BMW of N. Am., LLC,
687 F.3d 583, 591 (3d Cir. 2012). Certification is only
proper “‘if the trial court is satisfied, after a
rigorous analysis, that the prerequisites of Rule 23 are