Coleman v. Home Health Resources Incorporated et al
Filing
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ORDER - IT IS THEREFORE ORDERED that Defendants' request for award of attorney's fees on its discovery motion is granted in the amount of $3,840.00. IT IS FURTHER ORDERED that Defendants' Motion for Attorneys' Fees (Doc. [11 8]) is granted in the additional amount of $50,625.00. IT IS FURTHER ORDERED that the Clerk of the Court enter judgment in favor of Defendants Home Health Resources, Inc. and The Crossing: Hospice Care, Inc. against Plaintiffs Norma Coleman and Booker Coleman, jointly and severally, in the amount of $54,465.00 plus interest at the federal rate of 2.24% per annum from the date of judgment until paid. (See document for complete details). Signed by Senior Judge Neil V Wake on 5/11/18. (SLQ)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Norma Coleman and Booker Coleman,
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Plaintiffs,
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ORDER
v.
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No. CV-15-01332-PHX-NVW
Home Health Resources, Inc., and The
Crossing: Hospice Care, Inc.,
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Defendants.
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Plaintiffs Norma and Booker Coleman sued Norma Coleman’s former joint
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employers, Defendants Home Health Resources, Inc. and The Crossing: Hospice Care,
Inc., alleging retaliation under Title VII of the Civil Rights Act of 1964 and the Age
Discrimination in Employment Act of 1967. On August 28, 2017, this Court granted
summary judgment in favor of Defendants. See generally Coleman v. Home Health Res.
Inc., 269 F. Supp. 3d 935 (D. Ariz. 2017). Now before the Court are Defendants’ Motion
for Award of Attorneys’ Fees (Doc. 118), the Response, and the Reply.
I.
FACTUAL BACKGROUND
The summary judgment order (Doc.116) states the underlying facts of the case.
The Court assumes familiarity with that order but reiterates the following for ease of
reference.
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A.
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Plaintiff Norma Coleman (“Coleman”) is an African-American woman. She was
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jointly employed by Defendants Home Health Resources, Inc. and The Crossing: Hospice
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Care, Inc. (“Defendants”) from February 7, 2007, until July 11, 2011.
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Pre-Litigation
Coleman was first hired as their chief financial officer, which primarily involved
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bookkeeping.
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Roughly six months after starting, she was promoted to Human Resource/Payroll
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Manager. Coleman’s new position carried her original bookkeeping duties but also
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included managerial duties in the human resources department.
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Three months later, she received a positive performance evaluation.
Her next three
performance reviews were uniformly positive.
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Coleman began to suspect she was being paid less than Defendants’ younger, non-
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African-American employees. She approached her supervisor in early fall of 2010 and
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asked for a pay raise—a request that was denied because of a supposed pay freeze. But
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Coleman had heard of other employees receiving raises, so she asked again and was
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again rejected. She received a discretionary bonus at the end of 2010.
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Shortly after first requesting a raise, on October 15, 2010, Coleman’s supervisor
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issued her a “written warning for work performance,” which identified four areas
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“requiring immediate improvement.” Coleman failed to include complete information in
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personnel files, ran a backlog of work, exhibited an inappropriate attitude, and
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demonstrated unfamiliarity with the requirements of her job. Coleman says Defendants
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had a policy of providing verbal warnings before written ones, a policy not adhered to in
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this instance.
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Coleman filed a Charge of Discrimination with the EEOC on November 1, 2010
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(the “2010 EEOC Charge”). She alleged race, gender, and age discrimination, as well as
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retaliation. The EEOC dismissed the Charge on October 19, 2011.
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On November 10, 2010, without knowledge of the 2010 EEOC Charge,
Defendants gave Coleman a verbal warning. But Coleman pointed to other conduct that
she interpreted as retaliatory for having made the Charge:
o Defendants’ CEO expressed “bewilderment” about the Charge and
suggested, in a way that “intimidated” and “scared” Coleman, that Coleman
withdraw it.
o On December 13, 2010, Coleman’s supervisor admonished her for failing
to update files in a timely fashion, which may have been someone else’s
fault.
o On May 24, 2011, Defendants gave Coleman a written warning for missing
a work-related telephone hearing. Coleman was actually seven minutes
late, not missing entirely.
o Defendants assigned Coleman to work the office reception desk on top of
her other duties. She claims to have been the only managerial employee
required to work at the desk.
o Defendants excluded Coleman from meetings relevant to her human
resources work. They also excluded her from employee exit interviews,
despite having previously required that she attend them.
o Management staff stopped greeting Coleman and “virtually refused to
speak to her.”
Once, Coleman greeted the CEO, and she responded,
“[W]hy are you still here.”
o Defendants invited everyone except Coleman to a co-worker’s office
birthday party.
o Coleman’s supervisor told employees to stop directing employee-related
documents to Coleman.
o Coleman’s May 31, 2011 performance evaluation showed a “needs
improvement” rating in nine areas. She exceeded the standard in one area,
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and met the standard in three others. Her supervisor refused to go over the
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evaluation with Coleman when Coleman asked her to do so. Coleman
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asked the CEO to review the evaluation with her. The CEO said she would
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do so upon returning from a vacation. But Coleman was terminated on July
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11, 2011, before any meeting ever took place.
Coleman filed a second Charge of Discrimination with the EEOC on September
26, 2011 (the “2011 EEOC Charge”). The 2011 EEOC Charge alleged Defendants
retaliated against Coleman for the 2010 EEOC Charge. On October 19, 2011, the EEOC
found reasonable cause to believe Defendants retaliated against Coleman by terminating
her for engaging in a protected activity.
It “made no finding regarding any other
allegations raised in this charge.” (Doc. 131-1, Ex. A.)
B.
Litigation
Nearly four years later, on July 15, 2015, Coleman filed this action. Coleman’s
original Complaint categorized itself as redressing “racial discrimination and retaliation
in the workplace.” (Doc. 1 at ¶ 1.) It contained 22 paragraphs of various facts and events
without differentiating what was discrimination and what was retaliation.
The
discrimination allegations originally included in the 2010 EEOC charges were time
barred.
On December 16, 2015, in response to a motion, Coleman amended her
Complaint to list her husband as a co-plaintiff. (Doc. 33.) On January 19, 2016,
Coleman again amended her Complaint with the same 22 paragraphs of substantive
allegations as the original and first amended complaints. The only substantive difference
between the 22 paragraphs of the Second Amended Complaint and the original
Complaint was in the first line of the first paragraph. Instead of characterizing the
complaint as alleging “racial discrimination and retaliation in the workplace,” it now
characterized it as redressing only “retaliation in the workplace.” (Doc. 38.)1 Thus, only
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Plaintiffs also now said that “Coleman believed that Defendants were
discriminating against her” rather than just alleging they did. (Id. at ¶ 10 (emphasis
added).)
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the retaliation claims, brought under Title VII of the Civil Rights Act of 1964 and the
Age Discrimination in Employment Act of 1967 (“ADEA”), remained.
This Court granted summary judgment in favor of Defendants on August 28, 2017.
(Doc. 116). It explained that Coleman’s only protected activity was filing the 2010
EEOC Charge. 269 F. Supp. 3d at 941. It was not a protected activity to ask for higher
pay or to challenge the truth of the pay freeze, which Coleman styled an “informal
complaint,” because she “pointed to nothing in the record here indicating she even hinted
at discrimination on the basis of any status protected under Title VII or the ADEA.” Id.
at 941-42. Next, the Court analyzed which of Defendant’s actions could be construed as
adverse employment actions—non-trivial actions that would deter reasonable employees
from making Title VII complaints. It concluded that only the termination and negative
performance reviews and admonishments (the December 13, 2010 admonishment, the
May 24, 2011 written warning, and the May 31, 2011 performance evaluation) qualified.
Id. at 943. All other claims failed either because they reflected mere ostracism, lacked
evidentiary support, or were otherwise too trivial to deter a reasonable employee as a
matter of law. Id. at 943-45.
Next, the Court found that there was no prima facie causal link between
Coleman’s discharge and her 2010 EEOC Complaint because there was an eight-month
gap between the Complaint and her termination. Id. at 945. With only the performance
reviews and admonishments remaining, the Court determined that Defendants
indisputably had a legitimate, non-retaliatory rationale: Coleman “was not able to meet
the demands of the job.” Id. at 946. In addition to various specific instances, pre- and
postdating her 2010 EEOC Complaint, Defendants had an independent, outside
consultant “who identified at least twelve significant deficiencies in Coleman’s job
performance that could expose Defendants to liability and advised them to hire a ‘human
resources professional’ to take over.”
Id.
Consequently, as recommended by the
independent consultant, Defendants eliminated Coleman’s position entirely “and brought
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in a number of outside groups to run the department before settling on someone
satisfactory.” Id. Finally, the Court found no genuine dispute that the proffered rational
was non-pretextual: Coleman received good performance reviews until Defendants
discovered the undisputed deficiencies in her work. Id. at 947. “Overpromotion, if that’s
what it was, does not vest an employee with a Title VII or ADEA right to tenure after the
employer discovers its mistake and takes action to get the job done.” Id.
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C.
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This Motion
Defendants now move for fees on three bases. First, they seek fees against
Plaintiffs under Title VII and the ADEA. Second, they seek fees against Plaintiffs’
counsel personally under 28 U.S.C. § 1927. Finally, they seek fees relating to this
Court’s order awarding attorneys’ fees during discovery pursuant to Federal Rule of Civil
Procedure 37(a)(5).
(Doc. 68.)
In total, they “seek an award of approximately
$130,000.” (Doc. 118 at 2.)
II.
FEES UNDER TITLE VII AND ADEA
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A.
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Defendants seek fees under both Title VII and the ADEA.
Legal Standards
They contend
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Plaintiffs’ claims were completely meritless. For the following reasons, the Court will
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consider awarding fees in this case only under Title VII and only in a partial amount.
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1.
Attorneys’ Fees Under Title VII
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Title VII contains an attorney’s fees provision. In any action brought under the
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statute, “the court, in its discretion, may allow the prevailing party . . . a reasonable
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attorney’s fee (including expert fees) as part of the costs.” 42 U.S.C. § 2000e-5(k).
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Civil rights law must strike a balance between chilling legitimate actions on the
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one hand and indulging unfounded accusations on the other. Blue v. Dep’t of Army, 914
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F.2d 525, 535 (4th Cir. 1990). Consequently, it is much more difficult for prevailing
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defendants to recover fees in Title VII cases than it is for prevailing plaintiffs. CRST Van
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Expedited, Inc. v. EEOC, 136 S. Ct. 1642, 1654 (2016) (Thomas, J., concurring) (noting
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the asymmetry). Defendants may recover attorneys’ fees only “upon a finding that the
plaintiff’s action was frivolous, unreasonable, or without foundation, even though not
brought in subjective bad faith.” Christianburg Garment Co. v. EEOC, 434 U.S. 412,
421 (1978).
Thus, there are three bases for assessing fees against a plaintiff in Title VII action:
frivolity, unreasonableness, or lack of foundation. “Without foundation” is nebulous and
begets the very post hoc fallacy the Court warned against. See id. at 421-22 (“[I]t is
important that a district court resist the understandable temptation to engage in post hoc
reasoning by concluding that, because a plaintiff did not ultimately prevail, his action
must have been unreasonable or without foundation.”).
But “frivolous” and
“unreasonable” are both terms of art in the law. “Frivolous” means “[l]acking a legal
basis or legal merit; not serious; not reasonably purposeful.” Black’s Law Dictionary 692
(8th ed. 1999). “Unreasonable” means “[n]ot guided by reason; irrational or capricious.”
Id. at 1574. “Courts should therefore ask whether the action was irrational, capricious,
not guided by reason, not serious, or not reasonably purposeful.” Watson v. Cty. of
Yavapai, 240 F. Supp. 3d 996, 1000 (D. Ariz. 2017). Of course, “if a plaintiff is found to
have brought or continued such a claim in bad faith, there will be an even stronger basis
for charging him with the attorney’s fees incurred by the defense.” Christianburg, 434
U.S. at 422 (emphasis in original).
2.
Attorneys’ Fees Under the ADEA
The “ADEA does not provide attorney’s fees to a prevailing defendant.” Hoover
v. Armco, Inc., 915 F.2d 355, 357 (8th Cir. 1990). Nevertheless, in certain ADEA cases,
some courts have looked to an exception to the general American rule that the prevailing
party may not recover attorneys’ fees. See, e.g., id. at 356-57 (citing Alyeska Pipeline
Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258-59 (1975)); Glass v. Intel Corp., Inc.,
No. CV-07-1835-PHX-MHM, 2010 WL 11515224, at *2 (D. Ariz Feb. 9, 2010) (same).
In Alyeska Pipeline, the Supreme Court noted that the federal courts have the inherent
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power, unless expressly forbidden by Congress, to sanction a losing party who “has acted
in bad faith, vexatiously, wantonly, or for oppressive reasons.” 421 U.S. at 258-59
(internal quotation marks omitted). But there the Court also explained that the American
rule “is deeply rooted in our history and in congressional policy.” Id. at 271.
In Chambers v. NASCO, Inc., 501 U.S. 32 (1991), the Court cautioned that
“[b]ecause of their very potency, inherent powers must be exercised with restraint and
discretion.” Id. at 44. As the Ninth Circuit has clarified, imposing sanctions under the
inherent power when a litigant has a colorable claim requires a finding that the “litigant is
substantially motivated by vindictiveness, obduracy, or mala fides.” B.K.B. v. Maui
Police Dep’t, 276 F.3d 1091, 1108 (9th Cir. 2002) (quoting Fink v. Gomez, 239 F.3d 989,
992 (9th Cir. 2001)).
Defendants urge the Court to use its inherent power to award fees under the
ADEA. (Doc. 118 at 2, 9-10.) This case does not call for the extraordinary departure
from the American rule that occurs when a court uses its inherent powers. The facts of
this case do not match the facts of cases where other courts have used the inherent power
to sanction.
Defendants seek fees for the same reasons under Title VII and the ADEA. Fees
are sometimes available, as explained, for prevailing defendants under Title VII. As
discussed below, Plaintiffs unreasonably pressed their claim past discovery. But the
evidence of intense bad faith is not persuasive. The analysis that follows will therefore
rely only on fee shifting under Title VII.
B.
Analysis
Defendants believe they should be awarded fees for two reasons. First, Coleman
supposedly lied to them and failed to amend her Complaint to remove her time-barred
claims, as she stipulated she would. Second, Coleman’s claims were frivolous and
unreasonable.
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Although it was unclear whether Coleman dismissed her timebarred claims, the demands of the statute are too stringent to
award fees on that basis.
Coleman’s original Complaint asserted claims of discrimination.
(Doc. 1.)
Defendants contend that the discrimination claims were time barred by failure to file an
action after the first EEOC charge. Plaintiffs do not dispute this.
During the scheduling conference on October 27, 2015, Defendants announced
they intended to move to dismiss all claims except those based on retaliation. (Doc. 29 at
5.) Coleman admitted that her “primary cause of action is one of retaliation . . . .” (Id.)
She did not “really have a good harassment claim in the first place.” (Id.) Accordingly,
on November 12, 2015, Defendants’ counsel sent Plaintiffs’ counsel a message asserting
that the discrimination claims were time barred and that alleging them violated Rule 11.
(Doc. 118-4, Ex K.) Plaintiffs’ counsel responded on November 20, 2015, stipulating “to
the dismissal of all claims, except those Title VII claims predicated” on the 2011 EEOC
Charge, which was solely for retaliation. (Doc. 82-2, Ex. B.) Defendants say they relied
on Plaintiffs’ counsel and stipulated to allowing Coleman to amend her Complaint. (Doc.
118 at 6.)
The Second Amended Complaint states in its first few words, “This is an action
seeking to redress retaliation in the workplace . . . .” (Doc. 38 at ¶ 1.) The original
Complaint, by contrast, began, “This is an action seeking to redress racial discrimination
and retaliation in the workplace . . . .” (Doc. 1 at ¶ 1 (emphasis added).) Yet as noted
above, all the substantive allegations in the Second Amended Complaint are the same as
those in the original Complaint. No facts were dropped out.
Nevertheless, few if any specific facts relating to discrimination were ever alleged
in the Complaints.2 The Complaints claimed only that Defendants had lied about the pay
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Coleman had alleged specific facts elsewhere: the 2010 EEOC charge alleged her
younger, male, non-African-American subordinate was paid more than she was. (Doc.
38-1, Ex. A.)
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freeze and that Defendants paid Coleman less, or Coleman believed they paid her less,
than her younger, male, non-African-American colleagues. By contrast, the Complaints
listed specific examples of retaliation: “Defendants subjected Ms. Coleman to a series of
undeserved disciplinary reprimands, gave her an inaccurate, unfair, negative performance
evaluation, assigned her a series of clerical tasks unrelated to her duties as Human
Resource Manager, and excluded her from company meetings that were in the area of
human resources and Ms. Coleman’s expertise.” (Doc. 1 at ¶ 16; Doc. 38 at ¶ 17.)
On summary judgment Defendants argued that Plaintiffs had alleged time-barred
claims of discrimination.3 In light of the fully repeated substantive allegations and the
vagueness of what allegations related to what statute in the catch-all, one-count pleading,
Defendants were justified in thinking Plaintiffs were reasserting the time-barred claims.
Plaintiffs should have submitted a stipulation to partially dismiss or unilaterally
dismissed partially under Rule 41. But Defendants could have submitted a stipulation as
well or inquired again before briefing the time-barred claims on summary judgment. The
greater fault lies with Plaintiffs, whose conduct did not comport with customary candor.
But the Court finds no example of similar conduct and vagueness in which fees were
awarded. In light of the extremely stringent demands of the statute, the Court cannot
conclude they are met here.
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Plaintiffs should have known most of their action was meritless
by the close of discovery, and Defendants are therefore entitled
to attorneys’ fees for work performed in moving for summary
judgment on the frivolous claims.
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At the threshold, Coleman’s non-discharge retaliation claims, though weak,
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required analysis and comparison to precedents. Defendants’ Motion does not address
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Defendants incorrectly claimed in their Motion for Summary Judgment that
Coleman continued “to assert a claim under 42 U.S.C. § 1981.” (Doc. 82 at 10.) The
Second Amended Complaint dropped the § 1981 cause of action, which was not
separately pled (nothing was separately pled) but identified only by statutory citation in
the second paragraph.
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them specifically. They were not frivolous, and attorneys’ fees cannot be awarded based
on those claims.
The claim of retaliation by discharge may not have been frivolous and
unreasonable at the outset, but it emerged to be so after discovery closed.
Despite the ultimate weakness of her case, Coleman did have an EEOC finding of
reasonable cause to believe Defendants had retaliated against her for engaging in a
protected activity. This EEOC finding is probative, especially at the start of the case.
See Plummer v. W. Int’l Hotels Co., Inc., 656 F.2d 502, 505 (9th Cir. 1981). The EEOC
determination regarding Coleman’s retaliation claim covered both Title VII and the
ADEA. (Doc. 131-1, Ex. A (“I have considered all the evidence obtained during the
investigation and find there is reasonable cause to believe Respondent retaliated against
Charging Party in violation of Title VII and the ADEA . . . .”).) Defendants therefore go
too far in asserting that Plaintiffs had no basis from the beginning to file this action.
However, Coleman should have known after the close of discovery that her case
for retaliatory discharge was no longer rational, serious, or guided by reason. Watson,
240 F. Supp. 3d at 1000. See also id. at 1002 (“[C]ontinuing to litigate after discovery
turns up nothing may render an action unreasonable from that point forward.”). As the
Court explained in its Summary Judgment Order, Defendants “brought in an independent,
outside consultant to assess the state of the Human Resources department.
The
consultant identified at least twelve significant deficiencies in Coleman’s job
performance that could expose Defendants to liability and advised them to hire a ‘human
resources professional’ to take over.” Id. at 946 (internal citation omitted). Plaintiffs
offered no basis to believe that this finding was pretextual or that the auditor was biased.
(Indeed, Plaintiffs failed to depose the auditor. (Doc. 118 at 7 n.3.)) Defendants adopted
the auditor’s plan, outsourcing Coleman’s position and cycling through “a number of
different outside groups before settling on someone satisfactory.” 269 F. Supp. 3d at 946.
Plaintiffs also pointed to no evidence that the deficiencies in Coleman’s performance
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were manufactured or inaccurate. Id. at 947. There was simply no genuine dispute that
Coleman was not adequately performing her job and that Defendants received and relied
on independent, non-biased expert advice to terminate the position and outsource the
work. Id.
In short, Defendants’ reasons to terminate Coleman and outsource the job were
unquestionably legitimate, non-discriminatory, and true. Plaintiffs presented no colorable
basis of pretext. As a result, it was objectively unreasonable for Plaintiffs to continue to
press the question of retaliatory discharge into the summary judgment stage.
Therefore, Defendants are entitled to an award of attorneys’ fees incurred in
pursuing summary judgment on the discharge claim but not on the non-discharge
retaliation claims. Fox v. Vice, 563 U.S. 826, 829 (2011) (holding that, when a plaintiff
asserts “both frivolous and non-frivolous claims,” a court may grant fees “only for the
costs that the defendant would not have incurred but for the frivolous claims”).
The Court reviewed Defendants’ attorneys’ fees sustained from September 19,
2016, the date on which their attorneys began work on the Motion for Summary
Judgment. By the Court’s calculation, Defendants were actually billed for 124.9 hours, at
various rates, in preparation for summary judgment. (This excludes hours related to the
oral argument. Those hours are discussed below.) The Court disregarded the few entries,
added after September 19, 2016, for discovery disputes preceding the motion for
summary judgment. It also disregarded the spoliation research conducted on October 6,
2016, because it is not clear whether this research tied into the summary judgment
argument on damages.
Defendants state that they spent 5.6 hours, billed at John Doran’s rate of
$545/hour, on the portion of the summary judgment motion addressing the time-barred
claims. (Doc. 118 at 12 n.5; Doc. 123-4, Ex. I.) The Court will allow those fees. As
explained, Plaintiffs’ poorly amended Complaint was not an independent ground to
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assess fees. It was, however, reasonable and necessary to address the potentially extant
time-barred claims on summary judgment.
All told, the facially allowable fees related to summary judgment come to
$54,621. But one thorn remains: it is impossible to discern from Defendants’ counsel’s
billing logs how work on summary judgment was divided between the frivolous and nonfrivolous claims. The Court can grant only the fees caused solely by the frivolous claims.
Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1189 (2017) (“A sanctioning
court must determine which fees were incurred because of, and solely because of, the
misconduct at issue.”). The “essential goal in shifting fees is to do rough justice, not to
achieve auditing perfection.”
Id. at 1187 (quoting Fox, 563 U.S. at 838) (internal
quotation marks omitted). “Accordingly, a district court may take into account [its]
overall sense of a suit, and may use estimates in calculating and allocating an attorney’s
time.” Id. (internal quotation marks omitted) (modification in original).
The aspects of claimed retaliation that were not revealed to be clearly groundless
upon completion of discovery were not weighty. It is not feasible to break down those
services time entry by time entry. Rather, the Court will err in favor of caution by
reducing the awarded fees by more than enough to take account of non-frivolous claims
of retaliation. A 20% reduction of the fees incurred on summary judgment will assure
that the fee award reaches only the fees incurred on summary judgment concerning the
retaliation claim that was by then shown to be groundless and unreasonable. Fees will be
awarded pursuant to Title VII in the amount of $43,700.00, plus a reduced amount of
$6,925.00 for oral argument on the motion for summary judgment as discussed below.
3.
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Once excessive billing for oral argument is subtracted, the fee
award is reasonable.
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Local Rule 54.2(c)(3) sets forth the factors the Court considers in evaluating the
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reasonableness of the requested attorneys’ fees award. These include, but are not limited
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to, (A) the “time and labor required of counsel,” (B) the “novelty and difficulty of the
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questions presented,” (C) the “skill requisite to perform the legal service properly,”
(D) the “preclusion of other employment by counsel because of the acceptance of the
action,” (E) the “customary fee charged in matters of the type involved,” (F) whether the
fee is fixed or contingent, (G) any “time limitations imposed by the client or the
circumstances,” (H) the “amount of money, or the value of the rights, involved, and the
results obtained,” (I) the “experience, reputation and ability of counsel,” (J) the case’s
“undesirability,” (K) the “nature and length of the professional relationship between the
attorney and the client,” (L) awards “in similar actions,” and (M) any “other matters
deemed appropriate under the circumstances.”
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Plaintiffs say it is “shocking” how much time Defendants’ attorneys spent on this
case. (Doc. 131 at 6.) They argue defense counsels’ time sheets show over-staffing and
over-billing, but they fail to point to specific examples. (Id. at 7.) This failure violates
Local Rule 54.2(f), which requires the response in opposition to “identify with specificity
. . . each and every disputed time entry or expense item.” Plaintiffs’ “objection,” such as
it is, is rejected. In any event, Defendants explain that one attorney was on extended
leave during part of the case, and the other attorneys performed distinct and separate
tasks. (Doc. 132 at 10.)
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Plaintiffs’ single concrete, well-taken objection is that Defense counsel spent a
total of 33.5 hours preparing for and attending oral argument on Defendants’ summary
judgment motion. (Doc. 131 at 7.) The Court agrees this was an excessive number of
hours.
In its discretion, the Court will reduce the total number of oral-argument-
preparation hours to be charged to Plaintiffs to 15. Ten of these hours will be at Doran’s
rate of $545/hour ($5,450 total), as Doran was the lead attorney who ultimately argued
the case. The remaining five hours will be split between Lindsay Hesketh ($315/hour)
and Lori Keffer ($265/hour). Hesketh actually billed 13.6 hours related to the oral
argument, and Keffer billed 6.3. Accordingly the Court will allow three hours billed at
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Hesketh’s rate ($945 total) and two hours billed at Keffer’s ($530 total).
Defendants are entitled to $6,925 for fees related to the oral argument.
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Thus, Defendants will be awarded $43,700.00 for fees related to summary
judgment and $6,925.00 for fees related to oral argument on the motion, for a total of
$50,625.00
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In sum,
This award comports with the requirements of Local Rule 54.2(c)(3). The time
required has been adjusted to be reasonable and to reflect the difficulty of the case and
the skill required. The rates are not excessive given the levels of experience of the
attorneys involved. Finally, the award is comparable to awards to defendants in similar
civil rights cases. See, e.g., Russell v. Mountain Park Health Ctr. Props., LLC, No. CV
07-00875-PHX-NVW, 2012 WL 369576 (D. Ariz. Feb. 6, 2012) ($50,000, the amount
requested); Johnnie v. Target Corp., No. CV 06-00826-PHX-MHB (D. Ariz. Mar. 31,
2008) ($114,588).
III.
FEES UNDER 28 U.S.C. § 1927
A.
Legal Standard
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28 U.S.C. § 1927 provides, “Any attorney . . . who so multiplies the proceedings
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in any case unreasonably and vexatiously may be required by the court to satisfy
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personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of
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such conduct.” “Sanctions pursuant to section 1927 must be supported by a finding of
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subjective bad faith.” New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th
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Cir. 1989). “Bad faith is present when an attorney knowingly or recklessly raises a
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frivolous argument or argues a meritorious claim for the purpose of harassing an
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opponent. Tactics undertaken with the intent to increase expenses may also support a
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finding of bad faith.” Id. (internal quotation marks and citations omitted). The district
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court must make a specific finding of subjective bad faith; negligence is not enough.
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MGIC Indem. Corp v. Moore, 952 F.2d 1120, 1122 (9th Cir. 1991). Thus, for his
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behavior to be sanctionable under § 1927, an attorney must knowingly engage in
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vexatious dilatory conduct, or he must demonstrate recklessness so severe that it
necessarily implies subjective bad faith.
B.
Analysis
Defendants seek fees from Plaintiffs’ counsel for asserting time-barred claims.
They say this violated of Rule 11, especially when he continued to assert them. (Doc.
118 at 10-11.) Defendants do not present persuasive evidence that Plaintiffs’ counsel
filed the Complaints with a vexatious, dilatory purpose or in subjective bad faith.
Defendants also take issue with Plaintiffs’ counsel supposedly shifting around the
time of the parties’ mediation in bad faith. Plaintiffs originally chose a mediator but,
according to Plaintiffs, changed their mind and “ultimately concluded that [the
mediator’s] retainer fee” was unreasonable. (Doc. 131 at 5.) Defendants assert this is a
lie, as the mutually-agreed-upon replacement mediator charged similar fees. (Doc. 132 at
6-7.) No evidence is before the Court to assess this assertion. The parties both point to
the courtesies they refused to extend each other, including not scheduling Coleman’s
deposition when she would already have been in Phoenix for the mediation. (Doc. 131 at
5.) The mediation was canceled because the Court ordered Defendants’ CEO to be
present, and the CEO was out of the country. (Doc. 132 at 7.) Defendants make the
muddled, unsupported claim that Plaintiffs’ counsel “continued to drag his feet on
mediation scheduling,” causing Defendants to give up. (Id.) Again, Defendants do not
provide enough to prove Plaintiffs’ counsel acted with a vexatious, dilatory purpose or to
allow the Court to infer subjective bad faith.
Defendants provide a list of Plaintiffs’ counsel’s failure to conform to deadlines
and requests for extensions in various other matters. (Id. at 8-9.) To the trivial extent the
list is relevant, it does not demonstrate vexatious conduct or bad faith. Negligence is not
enough for § 1927 sanctions. MGIC Indem. Corp., 952 F.2d at 1122.
Finally, Defendants and Plaintiffs both present the Court with email exchanges
that cast the other side in an unfavorable light.
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Defendants contend these emails
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demonstrate “a vexatious personal animus.” (Doc. 118 at 12.) Plaintiffs themselves
claim the “facts warrant fees” against defense counsel. (Doc. 131 at 6.) Neither side
emerges from these exchanges looking good. As explained above, Plaintiffs’ counsel did
not engage in sanctionable conduct, and rude emails are not a basis for sanctions. The
Court admonishes Mr. Montoya for his grave breaches of professionalism and civility.
(See Doc. 118-4, Ex. J; Doc. 131-1, Exs. E, F.) But it cannot award sanctions under 28
U.S.C. § 1927.
IV.
FEES UNDER FEDERAL RULE OF CIVIL PROCEDURE 37
A.
Legal Standard
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A party may move for an order compelling discovery after a good-faith conference
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with the party failing to disclose. Fed. R. Civ. P. 37(a)(1). If the motion is granted, “the
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court must, after giving an opportunity to be heard, require the party or deponent whose
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conduct necessitated the motion, the party or attorney advising that conduct, or both to
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pay the movant’s reasonable expenses incurred in making the motion, including
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attorney’s fees.” Fed. R. Civ. P. 37(a)(5).
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B.
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After complying with Rule 37(a)(1), Defendants filed a Discovery Motion. (Doc.
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68.) Plaintiffs responded, and the Court granted the motion. (Doc. 78.) The dispute
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centered on Plaintiffs responding to Defendants’ discovery requests by repeatedly
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pointing them to 721 undifferentiated documents. The Court concluded that Plaintiffs’
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failure to specify which documents were responsive to which request was not
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substantially justified. (Id. at 1, 2.) It noted in its Order that attorneys’ fees incurred in
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connection with Defendants’ motion would “be awarded against Plaintiffs in an amount
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to be quantified at the conclusion of this case.” (Id. at 2.) The case having concluded,
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Defendants now seek $3,840. Their attorneys spent 10.8 hours, billed at various rates, on
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the discovery dispute. (Doc. 123-3, Ex. D.)
Analysis
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Plaintiff misreads the itemized fee statement, contending that “Defendants’
counsel claims that they spent over ten hours organizing documents Ms. Coleman
produced.” (Doc. 131 at 6.) It is true that Defendants claim Plaintiffs failed to comply
with the Court’s order and that they had to sort through the documents themselves. (Doc.
118 at 13.)
But they specifically note that the $3,840 “does not include any fees
associated with sorting Plaintiffs’ document dump after Plaintiffs failed to follow this
Court’s Order.” (Id.) A review of their itemized statement confirms Defendants are
correct.
Defendants are entitled to what they request. The Court noted in its discovery
order that all of Defendants’ claims would be well founded if they had not been mooted
by Plaintiffs’ Response. (Doc. 78.) Defendants should not have needed their attorneys to
put the work into the motion in the first place, and they will be awarded the $3,840 in
fees that went into it.
IT IS THEREFORE ORDERED that Defendants’ request for award of attorney’s
fees on its discovery motion is granted in the amount of $3,840.00.
IT IS FURTHER ORDERED that Defendants’ Motion for Attorneys’ Fees (Doc.
118) is granted in the additional amount of $50,625.00.
IT IS FURTHER ORDERED that the Clerk of the Court enter judgment in favor
of Defendants Home Health Resources, Inc. and The Crossing: Hospice Care, Inc. against
Plaintiffs Norma Coleman and Booker Coleman, jointly and severally, in the amount of
$54,465.00 plus interest at the federal rate of 2.24% per annum from the date of judgment
until paid.
Dated: May 11, 2018.
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