The federal court approved on Friday an agreement that requires two poker operators and their principals to pay $200,000 in settlement to their current and former four cashiers who sued them for allegedly not paying them the minimum wage and overtime pay.
U.S. District Court for the NMI Chief Judge Ramona V. Manglona found that the proposed amended settlement agreement to be fair and reasonable.
Katrina Del Gallego Demapan, Ma. Gina Tiozon, Mary Jane G. Muhi, and Emelinda E. Sanchez filed the lawsuit in April 2018 against two defendants—Zeng’s American Corp., owner of Happy Poker, and Zeng American Corp.’s principal, Jin Dong Zeng, for alleged violation of the Fair Labor Standards Act.
When the original lawsuit was filed, Demapan, Tiozon, and Sanchez were then current employees of the defendants. Tiozon was no longer an employee.
In November 2018, the plaintiffs filed an amended complaint, naming two more defendants—Dong Fang Trading Corp., owner of Happy Poker II, and its principal, Xiu Fang Huang.
The parties then reached a settlement deal.
Under the settlement deal, the poker operators will provide an initial payment of $50,000 to the plaintiffs and a 24-month installment plan for the balance of the $200,000 settlement.
Individual defendants Zeng and Huang have provided security to the settlement in the form of two mortgages in their leasehold and subleasehold interests in property on Saipan.
Manglona, however, denied the parties’ first motion for approval of settlement because it found that the proposed settlement agreement was not fair and reasonable.
Pertaining to the first motion for approval of settlement, Manglona determined that there is a bona fide dispute in this case and held that the first proposed settlement deal was mostly fair and reasonable, “save an overly broad release of claims provision.”
The parties then amended the release provision to address the judge’s concerns about its breadth.
In her order Friday granting the parties’ joint second amended request for approval of settlement, Manglona said plaintiffs Demapan, Sanchez and Muhi received $2,000 in independent consideration for the release of their all FLSA and non-FLSA claims related to their employment.
Manglona said Tiozon did not receive any independent consideration, but her release was limited to claims that could be brought under the FLSA.
Additionally, the judge noted that the amended provision includes an acknowledgement that plaintiffs understand the nature and consequences of the release.
Manglona found that these provisions are sufficient to make the release fair and reasonable.
In her earlier ruling, Manglona approved plaintiffs’ attorney Mark B. Hanson’s 33 percent contingency fee as fair and reasonable.
The contingency fee proposed would result in attorney’s fees totaling $65,529.
The judge said Hanson obtained a very successful settlement for his client, recovering 100 percent of their unpaid wages and 100 percent liquidated damages for their FLSA claims.
Manglona said applying the contingency fee to this amount, plaintiffs still receive 100 percent of their back wages as well as 48.5 percent of their liquidated damages.
Manglona said there is nothing to indicate a conflict of interest between plaintiffs and their attorney to taint the settlement amount.
Second, the judge said, plaintiffs’ recovery is spread out over a two-year period, which extends their attorney’s representation until April 2021.
Third, she said, the risk of non-payment by the defendants is shared equally by plaintiffs and their attorney, Hanson.
Manglona said Hanson diligently researched public records to identify the correct defendants and establish his clients’ claims.