Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-01529/USCOURTS-cand-5_15-cv-01529-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1441 Petition for Removal

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United States District Court

Northern District of California

E-filed 9/30/2016

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JUNHEE LEE, et al.,

Plaintiffs,

v.

ESRA JUNG, et al.,

Defendants.

Case No. 15-cv-01529-HRL 

ORDER DENYING JOINT MOTION 

FOR SETTLEMENT APPROVAL

Re: Dkt. No. 37

Plaintiffs sue Defendants for, inter alia, violations of the Fair Labor Standards Act 

(“FLSA”) and California’s Private Attorney General Act (“PAGA”). The parties signed a 

settlement agreement, but the settlement is ineffective as to the FLSA and PAGA claims absent 

court approval. Yue Zhou v. Wang’s Restaurant, 15-cv-0279-PVT, 2007 WL 2298046 at *1 (N.D. 

Cal. Aug. 8, 2007); Cal. Lab. Code § 2699. The parties jointly move the court to approve the 

settlement. Dkt. No. 37. Each party has consented to magistrate-judge jurisdiction, Dkt. Nos. 7, 

8, 10, 11, 40.

The motion for settlement approval is denied with leave to refile.

Discussion

A court may approve the settlement of FLSA claims if the settlement would be a “fair and 

reasonable resolution of a bona fide dispute.” Yue Zhou, 2007 WL 2298046 at *1. A court has 

discretion to approve the settlement of PAGA claims if the settlement would be “fair.” Nordstrom 

Commission Cases, 186 Cal. App. 4th 576, 581 (2010). 

The undersigned, at the hearing on this motion, expressed concern because the parties had 

provided virtually no facts to support their motion. The parties had submitted a copy of their 

settlement agreement, Dkt. No. 38-3, but had otherwise submitted no exhibits and no declarations. 

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Likewise, the memorandum filed in support of the parties’ motion contains few factual assertions; 

instead, it briefly summarizes Plaintiffs’ claims, asserts that a bona fide dispute exists as to 

whether Defendants are liable, and asserts without reference to any particular facts that a payment 

of $300,000 would “fairly compensate[] Plaintiffs” for their claims. Dkt. No. 37 at 5.

Plaintiffs’ counsel, in response to the court’s concerns, argued that the court need not 

review any specific facts before concluding that a settlement is fair and reasonable. Plaintiffs’ 

counsel elaborated that, in their view, the court may approve the settlement based solely on the 

fact that the experienced lawyers who have been working on this case assert that the settlement is 

fair and reasonable. The undersigned therefore ordered the parties to submit either: (1) legal 

authority to show the court may approve the settlement based solely on the fact that the lawyers on 

the case assert the settlement is fair and reasonable, or else; (2) supplemental facts that might 

support, upon independent review by the court, the conclusion that the settlement is fair and 

reasonable. 

The parties submitted neither. Instead, they filed a supplemental brief which generally 

discusses the applicable legal standards and which asserts, again without any factual support from 

exhibits or declarations, that the settlement is fair and reasonable. Dkt. No. 41. The parties have 

therefore failed to factually support their motion and have also failed to show, on the basis of any 

legal authority, that it might nevertheless be proper for the court to grant the motion. Indeed, the 

parties cite McKeen-Chaplin v. Franklin Am. Mortg. Co., 10-cv-5243-SBA, 2012 WL 6629608 at 

*2 (N.D. Cal. Dec. 19, 2012), for the basic proposition that courts may approve “reasonable” 

settlement agreements, Dkt. No. 41 at 4, but they do not seem to appreciate that in McKeenChaplin this court denied a motion for settlement approval due to a lack of factual support: 

Absent more information and analysis, the Court cannot conclude that the settlement 

is fair and reasonable. The parties have not provided the Court with any information 

that would enable the Court to evaluate whether $165,000 is a reasonable settlement 

in light of the maximum recovery Plaintiffs could have obtained if the action were 

concluded on the merits in their favor. The instant motion does not provide 

estimates regarding the number of overtime hours worked by each Plaintiff and 

information regarding the potential range of recovery for each Plaintiff. Indeed, the 

parties have not provided the Court with any specific information or analysis 

explaining how and why they arrived at the settlement amount of $165,000. Nor 

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have they identified the settlement payment received by each Plaintiff and explained 

how they arrived at the specific amount allocated to each Plaintiff.

Id. at *3 (internal citation omitted). The parties here, like the parties in McKeen-Chaplin, 

have failed to support their motion for settlement approval with detailed factual analysis, and so 

the undersigned has no sufficient basis from which he might conclude that the parties’ settlement 

would be fair. Since neither FLSA nor PAGA claims can be settled before a court rules that the 

settlement would be fair, the court fully denies the parties’ joint motion for settlement approval.

Conclusion

The parties’ joint motion for settlement approval is denied with leave to refile. The court 

advises the parties to draft any future joint motion for settlement approval in light of McKeenChaplin, 2012 WL 6629608 at *3-5.

1

IT IS SO ORDERED.

Dated: 9/29/2016

HOWARD R. LLOYD

United States Magistrate Judge

 

1 McKeen-Chaplin also shows another potential problem with the parties’ settlement 

agreement: it contains a general release of liability for all claims, whether known or unknown, that 

Plaintiffs have against “Defendants, their agents, officers, directors, shareholders, partners, 

attorneys and anyone acting by or through them[.]” Dkt. No. 38-3 at 4. The parties in McKeenChaplin “failed to demonstrate that it would be fair and reasonable for the Court to enforce” a 

broad release of liability, because they had failed to show that the claimants understood the 

breadth of the rights they were releasing and because they had failed to show the claimants 

received additional compensation in exchange for the release of unrelated and unknown liabilities. 

2012 WL 6629608 at *3-5 (citing Collins v. Cargill Meat Solutions, Corp., 274 F.R.D. 294, 303 

(E.D. Cal. 2011); Vasquez v. Coast Valley Roofing, Inc., 670 F. Supp. 2d 1114, 1126 (E.D. Cal. 

2009); Moreno v. Regions Bank, 729 F. Supp. 2d 1346, 1351 (M.D. Fla. 2010)).

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