Both sides jointly appealed from trial court's refusal to recognize FLSA settlement

This case is unique because both sides wanted the Court of Appeals to reverse the district court's ruling. We are dealing with a class action settlement that the district court rejected. The Court of Appeals reverses and finds the trial court abused its discretion.

The case is Robertson v. Trinity Packaging Corp., a summary order issued on April 17. This is a Fair Labor Standards Act case asserting wage and hour violations. The parties agreed to settle, but the district court has to approve the settlement to ensure it is fair to the class. The trial court did not approve the settlement, finding that plaintiffs' lawyers could not adequately serve as class counsel based on their purportedly improper actions in a different case, what we will call the Bonura action. 

While the competence of plaintiff's class counsel (more precisely, the adequacy of counsel's representation) is one factor to consider in approving class certification and approval of the settlement, it is not the only factor. The Court of Appeals (Sack, Perez and Robinson) holds that while misconduct in a different case might impact this determination, "we would expect that misconduct to be clear, significant, and indicative of counsel's adequacy to represent the class in the case currently before the court. The Second Circuit cites a Seventh Circuit ruling for this proposition, so this is a new concept in the Second Circuit.

The trial court in this case said plaintiffs' counsel mishandled the Bonura case because they tried to settle the individual claims in that case without first seeking court approval. A magistrate judge in Bonura said as such. While the trial court in the Robertson case said that plaintiffs' counsel could not challenge the conclusion on Bonura because they did not object to the Report and Recommendation on that point, the R&R in Bonura did not actually sanction counsel for that maneuver or hold that counsel had violated the code of professional ethics. Without those findings, the Bonura case cannot impede settlement in the Robertson case. Also, counsel in Bonura did not have to litigate the issue of the propriety of their conduct because they negotiated a new settlement in their client's interests that satisfied the trial court's concerns. The Second Circuit further finds that counsel in Bonura did not act so improperly as to prevent the trial court in Robertson from approving the Robertson settlement.

The case returns to the Western District of New York for the court to reconsider whether to approve the settlement in this case.