1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

IN RE MORGAN STANLEY SMITH 

BARNEY LLC WAGE AND HOUR 

LITIGATION

MDL 2280

Civ. No. 2:11-3121

OPINION

WILLIAM J. MARTINI, U.S.D.J.:

Plaintiffs Jimmy Kuhn, Nick Pontilena, Howard Rosenblatt and Denise Otten 

(collectively “Plaintiffs”) bring this putative collective action under the Fair Labors 

Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and three putative wage and hour class 

actions against Defendants Morgan Stanley Smith Barney LLC and Morgan Stanley & Co., 

Inc. (together “MSSB”). This matter comes before the Court on the parties’ joint motion 

for judicial approval of their settlement agreement. There was no oral argument. Fed. R. 

Civ. P. 78(b). For the reasons set forth below, the parties’ motion is DENIED.

I. BACKGROUND

The Court assumes the parties’ familiarity with the facts and procedural history of 

the instant case and writes solely for their benefit.1 On February 28, 2017, the Court 

granted summary judgment in favor of MSSB and dismissed all of Plaintiffs’ outstanding 

claims with prejudice. See Order, ECF No. 168. Plaintiffs subsequently filed an appeal. 

See Notice of Appeal, ECF No. 169. The parties now jointly move for judicial approval of 

their settlement agreement. See Joint Mot. in Supp. of Judicial Approval of Settlement 

(“Joint Mot.”), ECF No. 175-1. 

II. LEGAL STANDARD

“When employees bring a private action under the FLSA, and present to the district 

court a proposed settlement . . ., the district court may enter a stipulated judgment if it 

determines that the compromise reached ‘is a fair and reasonable resolution of a bona fide 

dispute over the FLSA provisions.’” See Brumley v. Camin Cargo Control, Inc., No. 08-

cv-1798, 2012 WL 1019337, at *2 (D.N.J. Mar. 26, 2012) (quoting Lynn’s Food Stores, 

Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir. 1982)). “While the Third Circuit has 

not directly addressed the factors to be considered in deciding motions for approval of 

FLSA settlements, district courts have typically looked to the considerations set forth in 

Lynn’s Food, cited infra.” Id. (citing multiple cases). “While factors for evaluating 

 

1 For a detailed summary of the case history, see the Court’s summary judgment opinion. ECF No. 167.

Case 2:11-cv-03121-WJM-SCM Document 178 Filed 12/19/17 Page 1 of 3 PageID: 4346
2

‘fairness’ of a settlement in an FLSA collective action have not been definitively set out 

by the Third Circuit, district courts in this Circuit have utilized the Girsh factors established 

for approving Rule 23 class action settlements . . . .” See id. at *4–5 (citing Girsh v. Jepson, 

521 F.2d 153, 156–57 (3d Cir. 1975)).

III. DISCUSSION

The parties’ motion essentially requires that the Court reverse itself. As a threshold 

matter, the Court finds that the Lynn’s Foods holding is inapplicable here. In that case, the 

Eleventh Circuit was concerned with a settlement agreement between an employer and 

employees reached outside of the adversarial context of a lawsuit. See 679 F.2d at 1354. 

In that same opinion, however, it noted that when parties reach an agreement within the 

adversarial context, the “employees are likely to be represented by an attorney who can 

protect their rights under the [FLSA]” and the agreement is, therefore, “more likely to 

reflect a reasonable compromise.” See id. Here, competent attorneys have duly 

represented the parties at all times and the concern voiced in Lynn’s Foods is not present. 

Furthermore, as noted above, the Court previously granted summary judgment in 

favor of MSSB and dismissed all claims with prejudice. In so doing, the Court undertook 

an extensive review of the facts in the record and determined that under no circumstance 

would Plaintiffs’ claims prevail. “[A] bona fide dispute must be determined to be one over 

factual issues . . . .’” See Brumley, 2012 WL 1019337, at *2 (citing Lynn’s Foods, 679 

F.2d at 1354) (quotation omitted). In granting summary judgment for MSSB, the Court 

specifically determined that there are no genuine disputes as to any material fact that a 

reasonable jury could find in favor of Plaintiffs. Consequently, there is no “bona fide 

dispute over the FLSA provisions” currently before the Court.2

Notwithstanding the above, the Court is mindful of the parties’ desire to end this 

litigation after more than six years. In the Third Circuit, “[a] strong public policy exists in 

favor of settlements.” See Edwards v. Born, Inc., 792 F.2d 387, 390 (3d Cir. 1986). The 

settlement agreement consists of wage payments to the four named plaintiffs and attorneys’ 

fees that amount to the expenses incurred by counsel throughout the course of litigation. 

See Joint Mot. at 4, 8. The parties entered into this agreement because Plaintiffs would 

rather receive the payment than risk receiving nothing after appeal and because MSSB 

prefers to avoid incurring the substantial costs of defending the appeal. See id. at 4. 

Assuming this Court’s approval was required, it would find the agreement fair and 

reasonable under the circumstances. 

Nonetheless, this Court cannot approve a settlement of a case when it has already 

determined the outcome. When an appeal has been docketed, as here, the parties are free 

to make whatever agreement they deem reasonable and voluntarily dismiss that appeal on 

 

2 The Girsh factors are equally inapplicable here. The factors were designed to protect the rights of absentee class 

members from an unfavorable settlement agreement in which they had no say. See Girsh, 521 F.2d at 157 (citing 

Greenfield v. Villager Indus., Inc., 483 F.2d 824, 832 (3d Cir. 1973). In the instant case, the Court expressly denied 

class certification. See Order, ECF No. 147. Consequently, there are no absentee class members to protect.

Case 2:11-cv-03121-WJM-SCM Document 178 Filed 12/19/17 Page 2 of 3 PageID: 4347
3

their own undertaking. See Fed. R. App. P. 42(b); Clarendon Ltd. v. Nu-West Indus., Inc., 

936 F.2d 127, 128 (3d Cir. 1991) (“The parties may make whatever arrangement they agree 

on and need not notify or involve the court of appeals panel.”). Moreover, when confronted 

with a joint motion for settlement approval after the district court’s grant of summary 

judgment, the Third Circuit provided:

“‘When a clash between genuine adversaries produces a precedent, . . . the 

judicial system ought not allow the social value of that precedent, created 

at a cost to the public and other litigants, to be a bargaining chip in the 

process of settlement. The precedent, a public act of a public official, is 

not the parties’ property.’”

Clarendon, 936 F.2d at 129 (quoting In re Mem’l Hosp. of Iowa Cnty., Inc., 862 F.2d 1299, 

1302 (7th Cir. 1988)). 

This Court’s “duty lies not in the direction of an automatic acquiescence to the 

parties’ request, but rather with a deliberate consideration of the policy that will best serve 

the public good.” See id. The Court’s summary judgment opinion produced a precedent 

concerning the FLSA’s application at considerable cost to the public in the form of the 

Court’s time and resources, which it will not diminish by approving the parties’ agreement. 

Simply put, there is nothing to settle. The parties are free to dismiss their appeal of the 

rulings in this case at a price acceptable to them, for which they do not need this Court’s 

permission. See Clarendon, 936 F.2d at 128. Accordingly, the parties’ joint motion for 

settlement approval is DENIED.

IV. CONCLUSION

For the reasons stated above, the parties’ joint motion for judicial approval of 

settlement is DENIED. An appropriate order follows.

 

/s/ William J. Martini 

 WILLIAM J. MARTINI, U.S.D.J.

Date: December 19, 2017

Case 2:11-cv-03121-WJM-SCM Document 178 Filed 12/19/17 Page 3 of 3 PageID: 4348