Patel et al v. Shah et al

Filing 52

MEMORANDUM OPINION AND ORDER - For the reasons explained above, the Court awards the plaintiffs costs in the amount of $888.06. The Court finds that the offers of judgment do not include fees, and under the FLSA, the plaintiffs are entitled to p ayment of reasonable fees. Within 45 days of entry of this order, the parties shall mediate their dispute concerning the amount of the fee award and submit their proposed resolution for Court approval. Signed by Judge Madeline Hughes Haikala on 2/7/2018. (KEK)

FILED
2018 Feb-07 PM 03:31
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
JIGAR PATEL, et al.,
Plaintiffs,
v.
AMISH SHAH, et al.,
Defendants.

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Case No.: 5:15-cv-01959-MHH

MEMORANDUM OPINION AND ORDER

On May 23, 2017, consistent with the plaintiffs’ acceptance of the
defendants’ offers of judgment and the Court’s approval of the offers of judgment
as a fair and reasonable settlement of the FLSA claims in this action, the Court
entered judgment against the defendants and in favor of the plaintiffs in varying
amounts. (Doc. 42). The plaintiffs then filed a motion for an award of attorney’s
fees in the amount of $33,803.50 and costs in the amount of $888.06. (Doc. 43).
The defendants do not oppose the plaintiffs’ request for $888.06 in costs. The
defendants contend that the plaintiffs are not entitled to a fee award because the
offers of judgment were silent with respect to attorney’s fees. Alternatively, the

defendants argue that the plaintiffs’ requested attorney fee award is too high. (Doc.
48).
For the reasons stated below, the Court awards the plaintiffs costs in the
amount of $888.06. The Court finds that the plaintiffs are entitled to a fee award.
The Court directs the parties to mediate their dispute with respect to the amount of
the fee award.
BACKGROUND
Plaintiffs Jigar Patel, Palak Patel, Kanu Patel, and Veena Patel filed this
action on October 30, 2015. (Doc. 1).1 In their amended complaint, the plaintiffs
alleged that their former employers, defendants Ashish Shah, Anthony Sharifi,
Sharifi, Inc., and Eat Fresh, Inc., violated the Fair Labor Standards Act, 29 U.S.C.
§§ 201 et seq. (Doc. 14). The plaintiffs worked for the defendants’ Subway
restaurants in Huntsville, Alabama as non-exempt hourly employees. (Doc. 14, ¶¶
5-8). The plaintiffs made sandwiches, served customers, and engaged in other
non-exempt jobs.

(Doc. 14, ¶¶ 1, 5-8).

The plaintiffs maintained that on

numerous occasions, the defendants required them to work more than 40
hours in a given workweek and refused to pay them overtime wages for those
hours. (Doc. 14, ¶¶ 1, 25, 29-31).

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Two other plaintiffs initially sued the defendants. (Doc. 25). The Court has dismissed those
plaintiffs’ FLSA claims. (Doc. 28).
2

On June 21, 2016, plaintiff Jigar Patel accepted the defendants’ offer of
judgment in the amount of $500.00. (Doc. 21; Doc. 22-1, p. 2). The offer of
judgment reads:
COME NOW the Defendants Ashish Shah, Anthony Sharifi,
Sharifi, Inc., and Eat Fresh, Inc., and pursuant to Rule 68 of the
Federal Rules of Civil Procedure, offer to allow judgment to be
taken against the Defendant, Eat Fresh, Inc., and in favor of the
Plaintiff, Jigar Patel, in the total sum of Five Hundred Dollars
($500.00), in complete resolution of all claims stated by this
plaintiff against any defendant in the above-styled action.
(Doc. 22-1, p. 2).
On October 5, 2016, consistent with the discussion during an October
4, 2016 status conference, the Court ordered the parties to mediate the
outstanding FLSA claims over the next two weeks. (Doc. 28). On three
occasions over the following month, the parties requested additional time to
engage in settlement discussions. (Docs. 30, 31, 32, 33, 34, 35, 37).
On November 18, 2016, plaintiffs Palak Patel, Veena Patel, and Kanu
Patel accepted the defendants’ offers of judgment in the amounts of $1,000,
$2,000, and $3,000, respectively. (Doc. 40-2; Doc. 40-3; Doc. 40-4).
The defendants’ offer of judgment concerning Palak Patel reads:
COME NOW the Defendants, Ashish Shah, Anthony Sharifi, and
Sharifi, Inc., and pursuant to Rule 68 of the Federal Rules of
Civil Procedure, offer to allow judgment to be taken against them
in favor of the Plaintiff, Palak Patel, in the total sum of One
Thousand Dollars ($1,000.00), in complete resolution of all
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claims stated by this plaintiff against any defendant in the abovestyled action.
(Doc. 40-2, p. 2).

The defendants’ offer of judgment concerning Veena Patel reads:
COME NOW the Defendants, Ashish Shah, Anthony Sharifi, and
Sharifi, Inc., and pursuant to Rule 68 of the Federal Rules of
Civil Procedure, offer to allow judgment to be taken against them
in favor of the Plaintiff, Veena Patel, in the total sum of Two
Thousand Dollars ($2,000.00), in complete resolution of all
claims stated by this plaintiff against any defendant in the abovestyled action.
(Doc. 40-3, p. 2).

The defendants’ offer of judgment concerning Kanu Patel reads:
COME NOW the Defendants, Ashish Shah, Anthony Sharifi, and
Sharifi, Inc., and pursuant to Rule 68 of the Federal Rules of
Civil Procedure, offer to allow judgment to be taken against them
in favor of the Plaintiff, Kanu Patel, in the total sum of Three
Thousand Dollars ($3,000.00), in complete resolution of all
claims stated by this plaintiff against any defendant in the abovestyled action.
(Doc. 40-4, p. 2).
On March 2, 2017, the parties filed a joint motion for approval of the
offers of judgment as a fair and reasonable settlement of this FLSA action.
(Doc. 40). In the motion, the parties noted that they were “not able to agree
regarding payment of attorneys’ fees or costs.” (Doc. 40, p. 5). The plaintiffs

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indicated that they planned to file a fee petition, and the defendants requested
an opportunity to respond. (Doc. 40, pp. 5-6).
On May 23, 2017, the Court approved the parties’ proposed resolution
of the claims of Jigar Patel, Palak Patel, Veena Patel, and Kanu Patel. (Doc.
41). The Court entered judgment against the defendants and in favor of the
plaintiffs in amounts consistent with the offers of judgment. (Doc. 42). After
the Court entered a final judgment, the plaintiffs petitioned the Court for an
award of costs and attorney’s fees. (Doc. 43).
DISCUSSION
Rule 68 of the Federal Rules of Civil Procedure provides, in relevant part:
At least 14 days before the date set for trial, a party defending against
a claim may serve on an opposing party an offer to allow judgment on
specified terms, with the costs then accrued. If, within 14 days after
being served, the opposing party serves written notice accepting the
offer, either party may then file the offer and notice of acceptance,
plus proof of service. The clerk must then enter judgment.
Fed. R. Civ. P. 68(a).
1.

Costs

The Supreme Court has held that if an offer of judgment “does not state that
costs are included and an amount for costs is not specified, the court will be
obliged by the terms of Rule to include in its judgment an additional amount which
in its discretion . . . it determines to be sufficient to cover the costs.” Marek. v.
Chesney, 473 U.S. 1, 6 (1985); see Utility Automation 2000, Inc. v.
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Choctawhatchee Elec. Coop., Inc., 298 F.3d 1238, 1241 (11th Cir. 2002) (“The
sole constraint Rule 68 places on offers of judgment is its mandate that an offer
include “costs then accrued.”).
In this case, although the defendants’ offers of judgment to Jigar Patel,
Palak Patel, Veena Patel, and Kanu Patel do not include costs, the Court is
bound by the terms of Rule 68 to award to the plaintiffs the costs that they had
accrued through the date on which the defendants made the offers of judgment.
See Marek, 473 U.S. at 6. The plaintiffs seek to recover costs in the amount of
$888.06. (Doc. 44, p. 18). This amount consists of $430.86 in filing and service
fees and $457.20 in fees for printed or electronically recorded transcripts. (Doc.
44, p. 18). The defendants do not object to the plaintiffs’ request for costs in the
amount of $888.06. (Doc. 48, p. 1). Therefore, consistent with Marek, the Court
will award the plaintiffs $888.06 in costs.
2.

Fee Award

In addition to costs, the plaintiffs seek an award of fees in the amount of
$34,691.56. (Doc. 44, p. 2). Citing the Eleventh Circuit’s decision in Arencibia v.
Miami Shoes, Inc., 113 F.3d 1212, 1214 (11th Cir. 1997), the defendants contend
that the plaintiffs are not entitled to an attorney’s fee award because the offers of
judgment are silent with respect to attorney’s fees. (Doc. 48, pp. 2-3). The Court
disagrees.
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In Arencibia, the plaintiff accepted an offer of judgment in the amount of
$4,000 to resolve his FLSA claims against the defendant. Arencibia, 113 F.3d at
1213.

The offer of judgment “did not mention costs or attorney’s fees.”

Arencibia, 113 F.3d at 1213. The district court entered a final judgment and
reserved jurisdiction to award costs and fees. Arencibia, 113 F.3d at 1213. The
Eleventh Circuit found that “the district court properly reserved jurisdiction in its
final judgment to determine costs awardable to” the plaintiff, but “the district court
erred in reserving jurisdiction to award” fees. Arencibia, 113 F.3d at 1214. The
Arencibia court explained that the costs contemplated by Rule 68 only include fees
“if the underlying statute defines ‘costs’ to include attorney’s fees,” and the
Eleventh Circuit vacated the portion of the district court’s judgment reserving
jurisdiction to award fees “[b]ecause §16(b) of the FLSA does not define ‘costs’ to
include attorney’s fees.” Arencibia, 113 F.3d at 1214.
Five years after Arencibia, the Eleventh Circuit clarified that “[t]he only
issue before this Court in Arencibia was whether the district court could grant
attorney’s fees as costs ‘by virtue of Rule 68.’” Utility Automation, 298 F.3d at
1241 (quoting Arencibia, 113 F.3d at 1214). In Utility Automation, the Eleventh
Circuit explained “in the appropriate circumstances a plaintiff may be entitled to
attorneys’ fees under the ‘costs then accrued’ phrase from Rule 68 itself, and
independently under the statute or other authority that gave rise to the suit.” Utility
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Automation, 298 F.3d at 1243. The Eleventh Circuit concluded that under the
circumstances, the plaintiff could not recover fees as Rule 68 “costs accrued,” but
the Court found that the plaintiff could recover fees pursuant to the terms of the
contract that gave rise to the underlying suit. Utility Automation, 298 F.3d at 1243.
The same rationale applies here.

Although the plaintiffs may not recover

fees as costs pursuant to Rule 68, see Arencibia, 113 F.3d at 1214, the plaintiffs are
entitled to fees pursuant to the plain language of the FLSA. The FLSA provides
that the “court in such action shall, in addition to any judgment award to the
plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant,
and costs of the action.” 29 U.S.C. § 216(b).
To the extent that the defendants argue that the offers of judgment were
inclusive of fees, the Court is not persuaded. Plaintiffs’ counsel have consistently
and firmly rejected the defendants’ argument that the defendants’ various offers of
judgment included fees. See, e.g., Docs. 37, 40.

Moreover, the Court must

construe ambiguities in the offers of judgment against the defendants. “Rule 68
requires that the responsibility for clarity and precision in the offer must
reside with the offeror,” and “any ambiguity in the terms of an offer must be
resolved against its drafter, and therefore, absent a clear indication to the
contrary the accepting party cannot de deemed to have received its fees or
waived the right to seek them.” Utility Automation, 298 F.3d at 1244. The
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Eleventh Circuit has explained that the rationale for this rule is based on the
parties’ respective positions relative to Rule 68 offers:
Rule 68 places the offerree in a most unusual posture in the landscape
of settlement contracts. While an offeree can respond to an ordinary
settlement offer through a counteroffer or seek to clarify or modify its
terms, a Rule 68 offeree is at the mercy of the offeror’s choice of
language and willingness to conform it to the understanding of both
parties. Only the offeror can ensure that the offer clearly includes or
excludes fees.
Utility Automation, 298 F.3d at 1244.
Here, the defendants’ four final offers of judgment state that the defendants
offer a certain sum to a particular plaintiff “in complete resolution of all claims
stated by” that plaintiff. (Doc. 22-1, p. 2; Doc. 40-2, p. 2; Doc. 40-3, p. 2;
Doc. 40-4, p. 2). The offers of judgment say nothing with respect to fees, and
nothing in the language of the defendants’ offers suggests that any of the
offers “includes fees or that accepting the offer[s] otherwise waive [the
plaintiffs’] ability to recover them under Rule 68 or any other authority.”
Utility Automation, 298 F.3d at 1244; see also Allen v. City of Grovetown, 681 Fed.
Appx. 841, 844-45 (11th Cir. 2017) (“[O]ffering to pay $100,000 to satisfy
Plaintiffs’ ‘claims for relief’ does not unambiguously communicate that the offer
includes fees.”). Thus, the Court finds that the offers of judgment do not include
fees.

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Because the FLSA grants to a prevailing FLSA plaintiff payment of
reasonable fees in addition to a judgment award and because the FLSA provides
for payment of fees separate from costs, the Court concludes that the plaintiffs are
entitled to an award of fees in addition to the judgment and costs amounts.
CONCLUSION
For the reasons explained above, the Court awards the plaintiffs costs in the
amount of $888.06. The Court finds that the offers of judgment do not include
fees, and under the FLSA, the plaintiffs are entitled to payment of reasonable fees.
Within 45 days of entry of this order, the parties shall mediate their dispute
concerning the amount of the fee award and submit their proposed resolution for
Court approval. 2
DONE and ORDERED this February 7, 2018.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

2

As an alternative to their argument that the plaintiffs are not entitled to a fee award, the
defendants submit that the requested fee award includes unreasonable hours and is not based on
the prevailing market rate. (Doc. 48, pp. 3-12). The plaintiffs disagree and contend that they
seek a fee award for required hours and that they have submitted appropriate evidence in support
of their hourly rate and the reasonableness of the fee award. (Doc. 51, pp. 9-15).
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