Lechuga v. Elite Eng'g, Inc.

559 F.Supp.3d 736

David LECHUGA and Shamsadin Muhammad, on behalf of themselves and all similarly situated employees, Plaintiffs,

v.ELITE ENGINEERING, INC., et al., Defendants.

No. 20 C 3378

United States District Court, N.D. Illinois, Eastern Division.

Signed September 10, 2021

Mark Alan Potashnick, Weinhaus & Potashnick, St. Louis, MO, for Plaintiffs.

Richard James Miller, Miller Law Firm, PC, Schaumburg, IL, for Defendants.

Memorandum Opinion and Order

Elaine E. Bucklo, United States District Judge

The named plaintiffs in this action allege on behalf of themselves and others similarly situated that they performed work for defendants as de facto employees of Elite Engineering, but defendants misclassified them as independent contractors. As a result, plaintiffs claim, they were denied overtime pay to which they were entitled under the Fair Labor Standards Act ("FLSA") and parallel laws of Missouri, New York, Ohio, and Wisconsin. Plaintiff Lechuga also asserts individual and class claims under New York law, alleging that defendants failed to provide appropriate wage notices and wage statements.

According to the Amended Complaint, plaintiffs and the class members were cable television installation technicians who performed defendants’ primary business activity of installing cable television in the above-named states. Defendants’ answer denies that either named plaintiff was an employee of Elite Engineering; denies that Muhammad performed any work for Elite Engineering at all; and denies that defendants misclassified the members of the FLSA collective and putative class or compensated any of them unlawfully. Defendants also assert various affirmative defenses.

In October of 2020, I granted plaintiffs’ motion for conditional certification of the FLSA claim pursuant to 29 U.S.C. § 216(b). I later stayed the case by agreement while the parties exchanged information bearing on liability and damages and engaged in mediation. In an unopposed, "consent" motion, plaintiffs now seek: (1) certification of a Fair Labor Standards Act ("FLSA") collective action and Missouri, New York, Ohio, and Wisconsin class actions for settlement purposes, (2) approval of the parties’ collective action settlement, (3) preliminary approval of the parties’ class action settlement, (4) approval of notice to the putative claimants, and (5) a hearing for final approval of the class action settlement agreement. The motion is granted as to collective and class certification and is otherwise denied without prejudice for the reasons explained below.

In deciding a motion for preliminary approval of a class action settlement and certification of a settlement class, I must undertake two essential inquiries: First, I must "conduct an independent class certification analysis," giving "heightened attention" to the requirements of Rule 23, given the parties’ non-adversarial posture. In re Nat'l Collegiate Athletic Ass'n Student-Athlete Concussion Inj. Litig. , 314 F.R.D. 580, 588 (N.D. Ill. 2016). Second, I must decide whether the proposed settlement is "within the range of possible approval," as the first of two steps to determine whether the proposed Rule 23 settlement is fair, adequate, reasonable, and not a product of collusion. Armstrong v. Bd. of Sch. Dirs. of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other grounds by Felzen v. Andreas , 134 F.3d 873 (7th Cir. 1998).

A. Class Certification

The parties seek to certify one settlement class defined as:

All Technicians who performed work for Defendants between June 8, 2017 and December 4, 2021[,] and all persons who have previously filed with the Court a consent to join the FLSA claim asserted in the Litigation.

Mot. at 4. This class, they agree, comprises seventy-five individuals, all of whom have been identified.

District courts have broad discretion to determine whether certification of a class is appropriate. Arreola v. Godinez , 546 F.3d 788, 794 (7th Cir. 2008). Nevertheless, courts must perform a "rigorous analysis" to ensure that each prerequisite of Rule 23(a) —numerosity, commonality, typicality, and adequacy of representation—is satisfied, as well as one subsection of Rule 23(b). Gen. Tel. Co. of Sw. v. Falcon , 457 U.S. 147, 161, 102 S. Ct. 2364, 2372, 72 L. Ed. 2d 740 (1982) ; see also Oshana v. Coca–Cola Co. , 472 F.3d 506, 513 (7th Cir. 2006). In combined actions, i.e., suits alleging both FLSA violations on behalf of a collective and state law violations on behalf of a class, "the question whether a class should be certified under Rule 23(b)(3) will turn—as it always does—on the application of the criteria set forth in the rule." Ervin v. OS Rest. Servs., Inc. , 632 F.3d 971, 974 (7th Cir. 2011).

Numerosity: To satisfy Rule 23 ’s numerosity requirement, the proposed class must be "so numerous that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). The proposed class comprises 75 individuals, which is well over the number the Seventh Circuit has found sufficient to satisfy Rule 23(a). See, e.g. Mulvania v. Sheriff of Rock Island Cnty. , 850 F.3d 849, 859-60 (7th Cir. 2017) ("While there is no magic number that applies to every case, a forty-member class is often regarded as sufficient to meet the numerosity requirement."). The proposed class meets this criterion.

Commonality: Rule 23(a)(2) requires that there be "questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). Plaintiffs must "demonstrate that the class members have suffered the same injury" and that their claims "depend upon a common contention ... capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc. v. Dukes , 564 U.S. 338, 349-50, 131 S. Ct. 2541, 2551, 180 L. Ed. 2d 374 (2011). This requirement is satisfied in this case because all class members held the same job, were compensated in the same manner, and assert the same legal theory based on the "economic reality test"—which they seek to establish using common evidence. See Mot. at 9.

Typicality: "Typicality is closely related to commonality." In re AT & T Mobility Wireless Data Servs. Sales Litig. , 270 F.R.D. 330, 342 (N.D. Ill. 2010) (citing Keele v. Wexler , 149 F.3d 589, 595 (7th Cir. 1998) (a "plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory.")). That, too, is the case here: the parties agree that there are seventy-five individuals in the class, and plaintiffs allege that all of them were wrongly classified as independent contractors when the evidence—WhatsApp logs, text messages, and other communications between defendants and technicians—establishes that they were employees based on the "economic reality of the working relationship." Hollins v. Regency Corp. , 867 F.3d 830, 835 (7th Cir. 2017) (internal quotation marks and citation omitted).

Adequacy of Representation: Rule 23(a)(4) requires plaintiffs to establish that "the representative parties will fairly and adequately protect the interests of the class." Amchem Prod., Inc. v. Windsor , 521 U.S. 591, 625, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). The adequacy inquiry comprises two parts: "(1) the adequacy of the named plaintiffs as representatives of the proposed class's myriad members, with their differing and separate interests, and (2) the adequacy of the proposed class counsel." Gomez v. St. Vincent Health, Inc. , 649 F.3d 583, 592 (7th Cir. 2011), as modified (Sept. 22, 2011). The first prong is satisfied, as the parties propose just one settlement class, and the named plaintiffs’ interests are aligned with the interests of the absent class members: their individual claims are typical of the class claims, as the named plaintiffs held the same position and suffered the same injury, based on the same payment scheme, during the same time period as all other class members. No conflicts of interest are apparent.

As for the second prong, there is no question that class counsel are highly experienced in this type of litigation and that they have the resources and expertise to represent the class competently. Nevertheless, their submissions bear the hallmarks of a high-volume law practice, including occasional but significant errors that I presume result from the recycling of materials previously prepared in conjunction with other class settlements. Compare , e.g., Settlement Release Agreement, Exh. 1 at 3 (defining "Total Settlement Amount" as "the total payments required of Defendants under this Agreement and for purposes of calculating the Gross Settlement Amount, which shall not exceed $400,000") with Notice of Settlement Form, Exh. 2 at 2 (notifying class members that "[t]he proposed settlement obligates Defendants to pay up to a gross settlement amount (referred to in the Settlement Agreement as the ‘Maximum Settlement Amount’) of $274,971.22."); and compare Settlement Release Agreement, Exh. 1 at 3 (providing "Service awards to Named Plaintiff David Lechuga of $5,000.00 and to Named Plaintiff Shamsadin Muhammad of $2,000 each (sic)" with Notice of Settlement Form, Exh. 2 at 4 ("The Class Representatives will request the Court to approve a service award of $5,000.00 to be paid to each of them to be paid from the Maximum Payout"). See also Potashnick Decl. at ¶ 11 (referring to settlement payments "providing a fixed amount to all delivery drivers and a proportional amount of the remainder to all delivery drivers who file timely claims based on the number of deliveries they performed"); Forester Decl. at caption (naming incorrect defendant). While plaintiffs’ counsel are qualified to represent the class, such errors of inattention, if they persist, may cause me to revisit my finding that they are adequate representatives of the class in this case.

Rule 23(b)(3):...