Mongue v. The Wheatleigh Corporation: Rule 23(e) Allows Approval of a “Global” Settlement Negotiated by Counsel Representing Both a Class and Individual Plaintiffs Absent a Realized Conflict

Introduction

Mongue v. The Wheatleigh Corporation (1st Cir. Jan. 21, 2026) arises from four wage-and-hour suits against the Wheatleigh Hotel and related individual and corporate defendants (collectively, “Wheatleigh”): three individual actions (Brown, Harris, Hamel) and one Rule 23 class action brought by Arleta Mongue on behalf of tipped/service employees. All plaintiffs—including the certified class—were represented by the same lawyer.

The parties negotiated a global resolution via December 2021 emails setting a lump-sum settlement fund and allocation framework. Wheatleigh later attempted to escape the deal, arguing (among other points) that class counsel’s simultaneous representation of the class and individual plaintiffs created an inherent conflict that should have prevented enforcement and later approval of the class settlement.

The core issues on appeal were: (1) whether Mongue lacked Article III standing; (2) whether the district court properly enforced the email settlement; (3) whether the class settlement had to be rejected because of alleged counsel conflicts; (4) whether class certification should have been revisited; and (5) whether the attorney-fee award was an abuse of discretion.

Summary of the Opinion

The First Circuit affirmed across the board. It held that Mongue’s asserted unpaid wages (including unpaid overtime) were a sufficient concrete injury for Article III standing, rejected Wheatleigh’s attempt to re-litigate merits issues post-settlement, upheld enforcement of the December 2021 email agreement as an enforceable settlement resolving all four cases, and affirmed final approval of the Rule 23 class settlement.

Most notably, the court rejected the argument that class counsel was per se inadequate because he simultaneously represented the class and three individual plaintiffs in negotiating a “global settlement.” Because the record showed no actual conflict-induced shortfall—class members received more than their claimed unpaid wages, outcomes were comparable to the individual plaintiffs’ recoveries, and no class member objected—the district court did not abuse its discretion in approving the settlement under Rule 23(e).

The First Circuit also affirmed the attorney-fee award, emphasizing the district court’s careful percentage-of-fund analysis, lodestar cross-check, and the reality that fee percentages can appear high when the underlying claims are modest. It further rejected Wheatleigh’s complaint about hours attributed to undisclosed assisting counsel, finding no legal basis for reversal and no prejudice given that the requested fees were well below the lodestar even excluding those hours.

Analysis

Precedents Cited

Standing and the boundary between jurisdiction and merits

Me. People's All. & Nat. Res. Def. Council v. Mallinckrodt, Inc.: Provided the standard of review (de novo) for standing determinations, framing standing as a threshold legal issue.
In re Nexium Antitrust Litig.: Reinforced that named plaintiffs must maintain standing throughout litigation stages, supporting the court’s posture that standing remains live even at settlement approval.
Lujan v. Defs. of Wildlife: Supplied the evidentiary principle that standing elements must be supported with evidence appropriate to the litigation stage. The First Circuit used this to reject Wheatleigh’s unsupported effort to characterize Mongue’s injury as merely “informational.”

Settlement enforcement and appellate posture

Fid. & Guar. Ins. Co. v. Star Equip. Corp. and Quint v. A.E. Staley Mfg. Co.: Provided the “mixed question” / “sliding scale” clear-error framework for reviewing whether an enforceable settlement existed. These cases underwrote deference to the district court’s settlement-enforcement findings.
Robinson v. National Student Clearinghouse: Recognized that settlement approvals are appealable, but the panel distinguished that from attempting to re-litigate the merits of claims already settled.
Pinto v. Aberthaw Construction Co.: Invoked by Wheatleigh for an “express waiver” theory; the First Circuit rejected the implication, emphasizing that settlement’s function is to end litigation absent reservation.

Class conflicts, fiduciary oversight, and adequacy under Rule 23

In re Pharm. Indus. Average Wholesale Price Litig.: Central to the court’s articulation that class actions are “rife with potential conflicts of interest,” requiring careful judicial scrutiny of settlement terms and counsel performance.
In re Lupron Mktg. & Sales Pracs. Litig.: Cited for the proposition that courts have been described as owing a fiduciary duty to absent class members, reinforcing the district court’s role as guardian at the Rule 23(e) stage.
Mirfasihi v. Fleet Mortg. Corp., In re Warner Commc'ns Sec. Litig., and Grunin v. Int'l House of Pancakes: These out-of-circuit authorities supported the principle that courts must ensure settlements are fair and not collusive and that absent class members’ interests were adequately represented.
Amchem Prods., Inc. v. Windsor: Anchored the view that adequacy includes competency and conflicts of class counsel, tying Rule 23(a)(4) adequacy to counsel’s role and the settlement context.
Murray v. Grocery Delivery E-Servs. USA Inc. and Cohen v. Brown Univ.: Provided the circuit’s modern framework for analyzing conflicts and adequacy. The panel distinguished Murray—where an objector challenged an allocation that disadvantaged stronger claims—from this case, where no class member objected and class members recovered more than their alleged unpaid wages.

Fee awards (percentage-of-fund and lodestar)

Heien v. Archstone: Supplied the abuse-of-discretion framework for reviewing fee awards (improper factor, ignored factor, or serious weighing error).
In re Thirteen Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litig.: Provided the circuit’s articulation of the two principal fee methodologies: lodestar and percentage-of-fund.
Ark. Tchr. Ret. Sys. v. State St. Bank & Tr. Co.: Used as a reference point for typical percentage ranges in common-fund cases.
Fisher v. SD Prot. Inc. and City of Riverside v. Rivera: Supported rejecting a proportionality requirement between fees and damages in fee-shifting/remedial contexts; the court used this logic to explain why “steep” fee percentages may still be reasonable when damages are small.
Rodriguez v. Municipality of San Juan: Applied to Wheatleigh’s underdeveloped “public policy” argument (waiver by perfunctory briefing).

Legal Reasoning

1) Standing: concrete wage loss defeats a “mere informational injury” theory

The court treated Wheatleigh’s “informational injury” argument as both unsupported by the record and improperly merits-laden. Wheatleigh’s cited spreadsheet reflected asserted monetary damages (including unpaid overtime), which the district court correctly deemed sufficient for injury-in-fact. The panel emphasized that disputes about damage calculations or statutory-claim “deficiencies” are merits issues that should have been litigated before Wheatleigh agreed to settle.

2) Enforcing a settlement reached by email: “global” does not mean “single document”

Wheatleigh attempted to avoid enforcement by arguing that the district court wrongly “split” a single global settlement into four. The First Circuit rejected the premise: a package deal resolving four lawsuits naturally contemplates separate dismissals/judgments in each case, and nothing in “global settlement” language required a single consolidated settlement instrument. Because the emails reflected a meeting of the minds and defense counsel had undisputed authority, the court held Wheatleigh to the deal.

3) Adequacy and conflicts: Rule 23(e) focuses on actual performance, not speculative structural concerns

The opinion’s most consequential move is its framing of the conflict issue as retrospective under Rule 23(e)(2)(A): the question is whether counsel “adequately represented the class” in fact, not whether a hypothetical conflict might have existed in the abstract. While acknowledging treatise disagreement and the general risk of conflicts in aggregate litigation, the panel found no conflict-induced deficiency here because:

Class members recovered more than their claimed unpaid wages, giving up only the chance of additional multiples beyond actual damages.
The recovery “uplift” for class members (about 29%) was comparable to that for individual plaintiffs (about 33%).
Notice disclosed counsel’s simultaneous representation and potential additional fees, yet no class member opted out or objected.
Even an asserted “tip pool” theory tension (manager misclassification vs. tip-pool dilution) did not matter because the settlement paid both sides at least full claimed wages.

The panel distinguished Murray v. Grocery Delivery E-Servs. USA Inc. on two pivotal axes: an objector existed in Murray, and the settlement allocation there plausibly underpaid stronger claims. Here, no class member objected and the settlement did not plausibly shortchange the class.

The result is a practical, outcome-focused adequacy rule: simultaneous representation of individual plaintiffs and a class in a “global settlement” negotiation is not automatically disqualifying at the settlement-approval stage where the record shows robust class recovery and no evidence of collusion or compromised advocacy.

4) Post-settlement attacks on certification are generally out of play

Wheatleigh’s attempt to revisit class certification (including on numerosity-type themes) failed because Wheatleigh settled without reserving such a challenge, and the only cognizable concerns for absent class members were already addressed in the Rule 23(e) adequacy and fairness analysis.

5) Attorney fees: deferential review, cross-checked by lodestar, and contextualized for small-value litigation

The panel expressed some skepticism about Wheatleigh’s standing to challenge fees that came out of a fixed lump sum, but still affirmed on the merits. The district court used a percentage-of-fund approach (27.2% of the class allocation) and demanded a lodestar cross-check given the aggregate fee optics (about 49.6% of the total global fund). The district court found: significant class recovery, no objections, experienced counsel, substantial litigation and enforcement work, contingency risk, and fees that were “significantly” below the lodestar.

The First Circuit added an important policy gloss: in low-dollar wage cases, a rigid proportionality rule between fees and recovery would undermine the remedial goals of statutes like the FLSA, echoing Fisher v. SD Prot. Inc. and City of Riverside v. Rivera.

On the “undisclosed co-counsel” issue, the panel found no authority requiring reversal for the alleged nondisclosure and no prejudice because the requested fees remained below lodestar even excluding those hours; the adequacy inquiry was also satisfied on the record.

Impact

The decision’s principal impact is to reduce the force of categorical conflict objections in settlement approval where counsel simultaneously represents a class and individual plaintiffs against the same defendant. The First Circuit did not announce an across-the-board permission structure for such representations at the outset of a case; instead, it held that, on these facts, the district court could approve the settlement under Rule 23(e) because no concrete harm to the class appeared in counsel’s “actual performance.”

Practically, Mongue may influence future settlement approval fights in wage-and-hour and other small-claim class actions by:

Encouraging courts to analyze alleged conflicts through outcomes, allocation metrics, and class reaction (opt-outs/objections), not speculation.
Supporting enforcement of email-based “global” settlements even when implemented through multiple case-specific agreements and judgments.
Reinforcing that high percentage fee awards can still be reasonable when damages are modest and the lodestar supports the request.

Complex Concepts Simplified

Article III standing: A federal court can only hear a case if the plaintiff has suffered a concrete injury. Here, alleged unpaid wages are a classic concrete injury; disputes about the exact amount are usually merits questions.
“Informational injury”: Harm based on being denied legally required information. The First Circuit did not decide whether a pure notice violation alone would suffice, because Mongue alleged wage loss.
Rule 23(a)(4) adequacy: The class representative (and, in practice, class counsel) must fairly protect absent class members. Conflicts matter because counsel might trade away class value for someone else’s benefit.
Rule 23(e) settlement approval: Even if parties agree, the court must independently decide whether the settlement is fair to absent class members. The rule requires a finding that counsel “adequately represented the class.”
Percentage-of-fund vs. lodestar: “POF” awards fees as a percentage of the money obtained for the class; “lodestar” multiplies reasonable hours by reasonable rates. Courts often use one method and cross-check with the other.
Decree nisi: A provisional court order that becomes final unless someone timely shows a reason it should not.

Conclusion

Mongue v. The Wheatleigh Corporation affirms a pragmatic Rule 23(e) approach: simultaneous representation of a class and individual plaintiffs in negotiating a global settlement is not, by itself, disqualifying where the settlement record shows strong class recovery, no evidence of collusion or compromised advocacy, and no class-member objections. The decision also underscores that settlements reached by email can be enforced according to their terms, that post-settlement merits and certification challenges are generally foreclosed absent reservation, and that fee awards—especially in modest-value wage cases— are reviewed deferentially and may be upheld where supported by a lodestar cross-check and meaningful relief to the class.