Matthews, et al v. NPMG Acquisition Sub, LLC

Filing 85

ORDER denying 73 Motion for Attorney Fees. (See document for further details). Signed by Judge Frederick J Martone on 1/17/12.(LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Calvin Matthews, Tyrone Hunt, and)
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Michael Buckner,
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Plaintiffs,
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vs.
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NPMG Acquisition Sub, LLC,
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Defendant.
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No. CV 09-2326-PHX-FJM
ORDER

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We have before us defendant's motion for attorneys' fees and non-taxable expenses
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(doc. 73), defendant's memorandum in support (doc. 77), plaintiffs' response (doc. 82), and
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defendant's reply (doc. 83). Plaintiffs' counsel also filed a separate response on his own
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behalf (doc. 81). Defendant requests an award of $99, 531.73, based on 287.3 hours of work
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at rates between $100 and $415 per hour. This includes electronic research costs of
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$4,283.23.
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Plaintiffs Calvin Matthews, Tyrone Hunt, and Michael Buckner ("Matthews") sought
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a judgment against defendant NPMG Acquisition Sub, LLC ("NPMG") for racial
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discrimination in violation of 42 U.S.C. § 1981. Plaintiffs were former employees of NPMG.
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The EEOC filed an action against NPMG, naming the three plaintiffs in this case as charging
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parties. EEOC v. iPayment, Inc. and NPMG Acquisition Sub, LLC, No. CV 08-01790-PHX28

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SRB ("EEOC v. NPMG"). This action was terminated through a consent decree which

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"resolve[d] all claims of the Commission and of Mssrs. Matthews, Hunt, [and] Buckner . .

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. against [NPMG] . . . including any and all claims for back pay, compensatory and punitive

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damages, interest, injunctive relief, and attorney's fees and costs arising out of the issues that

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were or could have been raised in this lawsuit" (doc. 36, ex. 1 at 8). Plaintiff Matthews

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received $100,000, and plaintiffs Hunt and Buckner each received $90,000 as part of the

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settlement.

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Plaintiffs proceeded to file this § 1981 action less than two months later. We granted

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defendant's motion for summary judgment. Order of September 13, 2011 (doc. 68).

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Defendant now requests fees pursuant to 42 U.S.C. § 1988(b), A.R.S. § 12-341.01, and 28

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U.S.C. § 1927.

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II

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In any case brought under § 1981, "the court, in its discretion, may allow the

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prevailing party, other than the United States, a reasonable attorney's fee as part of the costs."

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42 U.S.C. § 1988(b). Attorneys' fees may be recovered by a prevailing defendant in a civil

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rights action only upon finding that the action was "frivolous, unreasonable, or groundless,

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or that the plaintiff continued to litigate after it clearly became so." Hughes v. Rowe, 449

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U.S. 5, 15, 101 S. Ct. 173, 178-79 (1980) (quoting Christiansburg Garment Co. v. EEOC,

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434 U.S. 412, 422, 98 S. Ct. 694, 701 (1978)). NPMG contends that plaintiffs' action was

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"unreasonable, frivolous, meritless, [and] vexatious" and therefore fees are warranted. Allen

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v. City of Los Angeles, 66 F.3d 1052, 1058 n.2 (9th Cir. 1995).

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The facts of this case do not meet the onerous standard necessary for fees for

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defendants under § 1988. Although plaintiffs' claims clearly overreach, Judge Murguia held

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that it was possible for both the EEOC and individual plaintiffs to proceed. Therefore,

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plaintiffs' action could not be unreasonable or frivolous within the meaning of this one-sided

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statute.

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III
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A.R.S. § 12-341.01(A) provides for fee shifting "[i]n any contested action arising out

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of a contract, express or implied." This is not an action arising out of contract. The plaintiffs

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here brought a federal statutory claim to which § 1988 occupies the field. A.R.S. § 12-

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341.01 has no application to a claim under § 1981.

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IV

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Defendant also seeks fees under 28 U.S.C. § 1927, which provides that an attorney

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"who so multiplies the proceedings in any case unreasonably and vexatiously may be

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required by the court to satisfy personally the excess costs, expenses, and attorneys' fees

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reasonably incurred because of such conduct." This provision "applies only to unnecessary

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filings and tactics once a lawsuit has begun." In re Keegan Management Co., Securities

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Litig., 78 F.3d 431, 435 (9th Cir. 1996). Filing a complaint may not be sanctioned pursuant

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to § 1927. Defendant did not attempt to divide its expenses between those incurred in the

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normal course of litigation and those incurred because of unreasonable, vexatious

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multiplication of proceedings. As a result, we decline to sanction plaintiffs' attorney under

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this statute.
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IT IS THEREFORE ORDERED DENYING defendant's motion for attorneys' fees
(doc. 73).
DATED this 17th day of January, 2012.

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