NY State Court Approves a $462.5K Settlement and Holds That Service Awards are Not Prohibited Under CPLR 909.

On June 11, 2020, Justice Kalish of the New York Supreme Court, New York County, approved a $462,500 settlement for a class of restaurant workers asserting minimum wage and tip credit violations.  The settlement provides for a complete 100% recovery of all economic damages claimed by class members.  See Reeves, et al. v. La Pecora Bianca, Inc, et al., No. 151153/2018 (N.Y. Sup. Ct. Jun. 11, 2020) (the “Decision”).

This Decision marks the first time a New York State Court analyzed the issuance of service awards to class representatives and concluded, in a well-reasoned decision, that such awards are not preclude by the CPLR.  See Decision at 5-7; see also Saska v. Metro. Museum of Art, 54 N.Y.S.3d 566, 575–76 (N.Y. Sup. Ct. 2017) (Court notes that a review of Westlaw shows no cases, aside from copy/paste form orders, where a court analyzed the current version of CPLR 909 and found that service awards were not prohibited.).  This Decision is critical as it properly places class representatives in state court class actions on equal footing with their federal court counterparts. 

In the past, New York State courts, including Justice Kalish, have considered CLPR 909 and held that because the statute does not expressly authorize service awards, courts are not permitted to grant them. E.g., Saska, 54 N.Y.S.3d at 576 (“Since the statute, as it currently reads, only authorizes attorneys’ fees, the court must deny the class representatives a service award.”); Reyes v. 600 W. 169th Rest. Inc., No. 159303/2016, 2019 WL 7212476, at *2 (N.Y. Sup. Ct. Dec. 23, 2019) (Kalish, J.) (citing Saska and concluding that “CPLR 909 does not permit service awards”).

Here, Class Counsel successfully argued that just because the CPLR does not expressly authorize such awards, does not mean that they are prohibited.  In fact, the CPLR does not expressly authorize a wide range of awards, such as cy pres awards, which are still routinely approved by New York State courts.  Class Counsel also stressed the importance of service awards to compensate class representatives for the enormous time, efforts, and risk they undertake for the benefit of the class.  

After a lengthy hearing on this issue, Justice Kalish approved the requested service awards for the named Plaintiffs, holding that “this Court now agrees, as argued by the Plaintiffs, that CPLR 909 does not automatically preclude the issuance of service awards and [it] is to be evaluated on a case-by-case basis and is appropriate in the instant case.”  Decision at 6. 

Faruqi & Faruqi Partner Innessa M. Huot served as Lead Class Counsel in the matter.