United States District Court, D. Hawaii
OVERRULING OBJECTIONS IN PART, AND ADOPTING AS MODIFIED
FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART
DEFENDANT MATSON TERMINALS, INC.'S MOTION FOR APPROVAL OF
FLSA SETTLEMENT AND DISMISSAL OF CLAIMS WITH PREJUDICE, ECF
Michael Seabright Chief United States District Judge.
the court are Plaintiff Alden Kaiaokamalie's
(“Kaiaokamalie”) Objections, filed pursuant to 28
U.S.C. § 636(b)(1) and Local Rule 72.4, to a June 20,
2016 Findings and Recommendation of Magistrate Judge Richard
Puglisi to Grant in Part and Deny in Part Defendant Matson
Terminals, Inc.'s Motion for Approval of FLSA Settlement
and Dismissal of Claims with Prejudice (“Findings and
Recommendation”). ECF No. 90. The twenty-three other
Plaintiffs (“Non-objecting Plaintiffs”), as well
as Defendant Matson Terminals, Inc. (“Matson”),
do not object -- they ask the court to overrule
Kaiaokamalie's Objections and adopt the Findings and
Recommendation. ECF Nos. 94, 96 & 103. Based on the
following, the court OVERRULES the Objections in part and
ADOPTS the Findings and Recommendation as modified.
Kaiaokamalie, Christian Aarona, Darren Chu, Hensley Enos,
Jesse Brown, Joseph C. Ulii, Joshua Smith, Melvin Luke, Nate
Jackson, Phillip Pavao, Jr., Scott Kaeo, Arthur Smith,
Barrett Gueco, Derwin Gealon, George Calventas, Keahilele
Meyers, Matthew Murphy, Walter Harada, Wilsam Keanaaina,
Carlton Kenui, Matthew Bright, Peter Kaapuni, Ia Saipaia, and
Lawrence Dalija (collectively, “Plaintiffs”)
filed this action on July 30, 2013. ECF No. 1. Count One of
the Fourth Amended Complaint alleges that Matson violated the
Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 201 et seq., by failing to pay Plaintiffs “the
regular salary and overtime pay owed to them as non-salaried,
non-exempt employees.” Fourth Am. Compl. ¶ 46, ECF
No. 26. Among other relief, Plaintiffs sought “three
years of regular and overtime pay for their uncompensated
labor[.]” Id. ¶ 47. Counts Two, Three and
Four concern only Kaiaokamalie; they allege that Matson
retaliated against him in violation of Hawaii Revised
Statutes § 378-63, and committed negligent and
intentional infliction of emotional distress. Id.
¶¶ 48-67. Count Five concerns Plaintiff Luke,
alleging a claim for breach of contract. Id.
extensive discovery, the parties participated in a two-day
mediation conducted by former State of Hawaii Circuit Judge
Riki May Amano on August 24 and 25, 2015. See E.
Zorc Decl. (Mar. 22, 2016) ¶ 3, ECF No. 63-2 at PageID
431. At the conclusion of the mediation, the parties reached
an agreement to settle all issues in the litigation, with the
terms of the agreement set forth in an August 2015
“Term Sheet” that was signed by all Plaintiffs
(including Kaiaokamalie) and by counsel for both sides. ECF
No. 96-3; see also E. Zorc Decl. (Oct. 27, 2016)
¶ 3, ECF No. 96-1.
Findings and Recommendation correctly summarizes:
The Term Sheet provides that, in exchange for releasing all
claims against Defendant, Plaintiffs will receive from
Defendant a payment of $625, 000, to be split among
Plaintiffs by a formula provided by Plaintiffs' counsel,
as well as Defendant's promise to pay Plaintiffs at an
overtime premium rate for hours worked in excess of forty in
a workweek. ECF No. 63-4. The Term Sheet also provides that
Plaintiffs will continue to be paid a fixed salary covering
forty hours of work in a workweek and provides for the
calculation of overtime payments based on weekly salary.
Id. The Term Sheet further provides that Plaintiffs
will no longer be paid any “premium payments”
they currently receive, that Plaintiffs with an annual salary
of over $100, 000 per year will not receive overtime
payments, that Plaintiffs will receive overtime payments for
work on holidays as opposed to any premium payments they
currently receive, and that overtime will begin upon
“completion of the settlement agreement” and not
upon court approval of the settlement. Id. Finally,
among other things, the Term Sheet requires Plaintiffs to
“cooperate in submitting any documentation to aid in
the process of obtaining Court approval and dismissal with
prejudice of the entire lawsuit.” Id. Although
not all of the Plaintiffs were present at the mediation,
between August 25 and August 31, 2015, all of the Plaintiffs,
as well as the parties' counsel, signed the Term Sheet.
Findings and Recommendation at 3, ECF No. 74.
Term Sheet also provided that “[t]his settlement will
be memorialized in a formal settlement agreement to be
drafted by the Parties, which will include standard
language.” ECF No. 96-3. Accordingly, the parties
conducted further negotiations regarding that “formal
settlement agreement, ” resulting in a December 2, 2015
written settlement agreement. ECF No. 68-6. Thereafter,
however, only eighteen of the twenty-four Plaintiffs (along
with counsel for Matson) signed the December 2, 2015 written
settlement agreement. ECF No. 68-2. Later, three additional
Plaintiffs “committed to signing” the December 2,
2015 written settlement agreement, leaving three Plaintiffs
(Kaiaokamalie, Luke, and Keanaaina) who refused to sign it.
See E. Zorc Decl. (Mar. 22, 2016) ¶ 6, ECF No.
March 22, 2016, Matson filed a Motion for Approval of FLSA
Settlement and Dismissal of Claims with Prejudice, ECF No.
63, which was referred to Magistrate Judge Richard Puglisi
under 28 U.S.C. § 636(b)(1). On June 20, 2016, Judge
Puglisi issued his Findings and Recommendation, recommending
granting Matson's Motion in part and denying it in part.
ECF No. 74. The Findings and Recommendation concluded that
the Term Sheet constituted an enforceable agreement between
the parties, containing all the essential terms of an
agreement to settle this litigation. Id. at 8. It
found that the Term Sheet provides for a payment by Matson of
a specific sum of money as well as for future overtime
payments, in consideration for a release by Plaintiffs of all
claims in the litigation, with details as to how such future
overtime payments will be calculated. Id. It
concluded that the Term Sheet was enforceable, having been
signed by all parties within a week after the August 2015
mediation. Id. The Findings and Recommendation further
found, as a reasonable time implied by the record, that
Matson's obligation to make overtime payments began on
December 13, 2015. Id. at 11-12.
scrutinizing the settlement under Lynn's Food Stores,
Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir.
1982) (requiring a court to determine whether a settlement in
an FLSA action is “a fair and reasonable resolution of
a bona fide dispute over FLSA provisions”), the
Findings and Recommendation concluded that the settlement is
fair and reasonable, and recommended that it be approved.
Id. at 17.
4, 2016, Kaiaokamalie, Aarona, Enos, Keanaaina and Luke filed
written objections to the June 20, 2016 Findings and
Recommendation. ECF No. 75. On July 20, 2016, Aarona, Enos,
Keanaaina and Luke withdrew their objections, leaving only
Kaiaokamalie as an objecting party. ECF No. 78. On August 2,
2016, Plaintiffs' counsel (given a conflict of interest)
withdrew from representing Kaiaokamalie. ECF Nos. 83, 84.
October 6, 2016, Kaiaokamalie (having retained separate
counsel) filed renewed Objections to the Findings and
Recommendation. ECF No. 90. On October 26 and 27, 2016, the
Non-objecting Plaintiffs and Matson filed Responses to
Kaiaokamalie's Objections. ECF Nos. 94, 96. Kaiaokamalie
filed supplemental declarations in support of his Objections
on November 15, 2016, ECF No. 97, and on December 7, 2016,
ECF No. 101. And on December 12, 2016, the Non-objecting
Plaintiffs filed a Supplemental Reply. ECF No. 103. The court
held a hearing on December 14, 2016. ECF No. 104.
STANDARD OF REVIEW
party objects to a magistrate judge's findings or
recommendations, the district court must review de novo those
portions to which the objections are made and “may
accept, reject, or modify, in whole or in part, the findings
or recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1); see also United States v.
Raddatz, 447 U.S. 667, 673 (1980); United States v.
Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (“[T]he district judge must review the magistrate
judge's findings and recommendations de novo if
objection is made, but not otherwise.”).
de novo standard, this court reviews “the matter anew,
the same as if it had not been heard before, and as if no
decision previously had been rendered.” Freeman v.
DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006);
United States v. Silverman, 861 F.2d 571, 576 (9th
Cir. 1988). The district court need not hold a de novo
hearing; however, it is the court's obligation to arrive
at its own independent conclusion about those portions of the
magistrate judge's findings or recommendation to which a
party objects. United States v. Remsing, 874 F.2d
614, 618 (9th Cir. 1989).