United States District Court, D. Minnesota
Timothy C. Borup, Plaintiff,
The CJS Solutions Group, LLC d/b/a The HCI Group, Defendant. Shana Gray, Plaintiff,
The CJS Solutions Group, LLC d/b/a The HCI Group, Defendant.
MEMORANDUM AND ORDER
A. Magnuson United States District Court Judge
matter is before the Court on Plaintiff's Motion for
Approval of Settlement (Docket No. 74 in 19cv1008), the
parties' letter requests regarding settlement and
consolidation (Docket Nos. 87, 91 in 19cv1008), and
Defendant's Appeal of Magistrate Judge Decision (Docket
No. 94 in 18cv1647).
Order pertains to two related FLSA class-action cases
regarding worker classification. The Gray matter
originated in the Southern District of New York in August
2018, and the parties quickly reached a final settlement
agreement in February 2019. Shortly thereafter, Plaintiff in
the Borup matter moved to intervene and transfer the
Gray case, which was then transferred to the
District of Minnesota on April 11, 2019. Shortly before
transfer, Gray sought approval of the parties' settlement
agreement, but the New York District Court declined to
formally evaluate and approve the settlement before transfer.
(Docket No. 82-2 at 24-25 in 19cv1008.) The Gray
case was reassigned to this Court as related to the
counsel in Gray once again seeks approval of the
parties' February 2019 settlement agreement. Borup argues
that the settlement in Gray was improperly obtained
through a “reverse auction, ” and seeks limited
consolidation of these matters to resolve settlement issues.
Additionally, Defendant has appealed Magistrate Judge David
Schultz's Order (Docket No. 58) requiring Defendants to
produce certain information regarding putative class members
from the Gray case.
has presented the Court with several facts evidencing that a
“reverse auction” may have occurred in the
Gray case. A reverse auction occurs when “a
defendant, seeing competing class cases, cherrypicks the
attorneys willing to accept the lowest class recovery, in
exchange for enhanced fees.” Martin v. Cargill,
Inc., 295 F.R.D. 380, 388 (D. Minn. 2013) (Kyle, J.).
Gray settlement agreement includes some indicia of a
reverse auction: the settlement value for collective action
members is low, the attorney's fee total is high, and
“the fact that CJS took steps to cabin off these
litigations from each other is at least indicative evidence
of a reverse auction.” (Tr. of S.D.N.Y. Order (Docket
No. 82-2 in 19cv1008) at 21.) Accordingly, additional
discovery on the reverse auction issue is needed before the
settlement can be approved. Gray may renew her Motion for
Approval once the outstanding settlement issues have been
may consolidate certain matters, including on a limited
basis, as long as the matters involve common questions of law
or fact. Fed.R.Civ.P. 42(a)(2); Enter. Bank v.
Saettele, 21 F.3d 233, 235-36 (8th Cir. 1994). As Borup
points out, the New York District Court has already
determined that these matters share common questions of law
and fact. (Tr. of S.D.N.Y. Order (Docket No. 82-2 in
19cv1008) at 15.) Given the similarities between the
Plaintiffs' FLSA claims, the makeup of the collectives,
and the overlapping factual issues in the record, the Court
agrees that the cases share common questions of law and fact.
Therefore, limited consolidation is appropriate to streamline
and expedite the process of resolving the outstanding
settlement issues while avoiding unnecessary costs and delay.
Appeal of Magistrate Judge's Order
standard of review applicable to an appeal of a Magistrate
Judge's order on nondispositive pretrial matters is
extremely deferential.” Roble v. Celestica
Corp., 627 F.Supp.2d 1008, 1014 (D. Minn. 2007)
(Tunheim, J.). A reversal of a magistrate judge's
nondispositive order is “warranted only if the ruling
is clearly erroneous or contrary to law.” Coons v.
BNSF Ry. Co., 268 F.Supp.3d 983, 991 (D. Minn. 2017)
(Wright, J.). A magistrate judge's ruling is clearly
erroneous when “the reviewing court . . . is left with
the definite and firm conviction that a mistake has been
committed.” Wells Fargo & Co. v. United
States, 750 F.Supp.2d 1049, 1050 (D. Minn. 2010)
(Schiltz, J.) (quotation omitted).
objects to Magistrate Judge Schultz's Order (Docket No.
58 in 18cv1647) granting in part and denying in part
Borup's Motion to Compel. Specifically, Defendant
contends that the information it has been compelled to
produce is not relevant, raising concerns over the potential
settlement in Gray and overlap between opt-in
Plaintiffs in these cases. However, as stated above, there
are potential issues with the proposed settlement in
Gray and consolidation is proper to address those
issues. Defendant's concern regarding the effect of the
settlement and overlap between these matters is no longer
relevant. To the extent that Defendant is concerned about
individuals from the Gray collective mistakenly
opting into the Borup collective, those ...