Court Opinion

ID: 2721527
Source: CourtListenerOpinion
Date Created: 2014-08-28 05:00:26.581714+00
Date Added: 2024-06-11T10:02:46.235163
License: Public Domain

Case: 14-20098      Document: 00512747692         Page: 1    Date Filed: 08/27/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                    No. 14-20098                                FILED
                                                                          August 27, 2014
                                  Summary Calendar
                                                                           Lyle W. Cayce
                                                                                Clerk
JUSTO ARCE; RAFAEL TELLEZ,

                                                 Plaintiffs – Appellants
v.

AUSTIN INDUSTRIES, INCORPORATED; AUSTIN INDUSTRIAL,
INCORPORATED; AUSTIN MAINTENANCE & CONSTRUCTION,
INCORPORATED; RONALD J. GAFFORD; BARRY W. BABYAK,

                                                 Defendants – Appellees

                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:12-CV-1534

Before HIGGINBOTHAM, DENNIS, and GRAVES, Circuit Judges.
PER CURIAM:*
       The plaintiffs, Justo Arce and Rafael Tellez, sued various defendants in
federal court, alleging violations of the Fair Labor Standards Act (“FLSA”).
The case was stayed in favor of arbitration. Before the arbitration hearing was
held, the plaintiffs and defendants agreed to a settlement. In November 2013,
each plaintiff signed a settlement agreement stating the total settlement

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 14-20098     Document: 00512747692       Page: 2   Date Filed: 08/27/2014

                                   No. 14-20098
amount and specifying how the amount would be divided between the plaintiff
and his lawyers. On December 4, 2013, the plaintiffs filed a Rule 41(a)(1)(A)(ii)
stipulation of dismissal in the district court, dismissing all claims with
prejudice; the stipulation was also signed by counsel for the defendants. The
same day, the district court issued an order stating that “[i]n order to protect
the workers, no settlement or dismissal will be approved until the court has
reviewed its terms.”
      On December 11, 2013, the district court issued an order stating: “The
settlements are disallowed. Given the amount of work performed, there is
simply no reasonable justification for plaintiff’s counsel receiving nearly two-
thirds of the settlement.” Plaintiffs’ counsel responded with a letter to the
district court explaining that most of the money received by counsel under the
settlement went to reimburse costs and expenses of litigation, including $3,735
in expert fees. On January 15, 2014, the district court ordered the plaintiffs to
provide the expert’s “time sheets, work papers, and final report.” Plaintiffs’
counsel provided this material to the district court. On January 17, 2014, the
district court issued an order directing that “[t]he claimed $3,735 cost of [the
expert’s] ‘expertise’ and ‘work’ will be distributed equally to” the two plaintiffs.
The order stated further that “[t]he settlement is approved without other
modification.”
      The plaintiffs now appeal the district court’s order which, as
characterized in the plaintiffs’ brief, has the effect of “assessing expert fees
against Plaintiffs’ counsel, and not against Plaintiffs’ recovery . . . as stipulated
in the attorney fee agreement and the settlement agreement.” The plaintiffs’
sole argument on appeal is that the district court had no legitimate grounds to
modify an “arbitration award.” Accordingly, we do not consider the extent to
which court approval is required for a private settlement of claims under the
FLSA. See, e.g., Martin v. Spring Break ’83 Prods., L.L.C., 688 F.3d 247, 254-
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     Case: 14-20098      Document: 00512747692        Page: 3    Date Filed: 08/27/2014

                                     No. 14-20098
56 (5th Cir. 2012) (discussing circumstances in which court approval is not
required). Nor do we discuss further the curious fact that the plaintiffs are
pursuing an appeal that, if successful, would reduce their recovery by $3,735. 1
      The plaintiffs’ entire argument is based on the erroneous premise that a
private settlement agreement between the plaintiffs and defendants is an
“arbitration award.” The arbitrator did not award anything to anyone here.
As the plaintiffs’ own brief recognizes, the parties “reached an agreement short
of arbitration.” The plaintiffs have not shown that the arbitrator imposed the
terms of the settlement on the parties through any order or award.
Furthermore, the plaintiffs have cited no authority holding that a private
settlement that happens to take place while the parties are in arbitration is
tantamount to an arbitration award. Accordingly, the case law cited by the
plaintiffs concerning the deference given to an arbitration award is irrelevant.
      AFFIRMED.

      1  The defendants, obviously realizing that they have no stake in this dispute, have
declined to file an appellee brief in response.
                                            3