Allen et al v. Enabling Technologies Corp.

Filing 64

MEMORANDUM. Signed by Judge William M Nickerson on 4/12/2017. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
WAYNE ALLEN et al.
Plaintiffs
v.
ENABLING TECHNOLOGIES CORP.
Defendant
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Civil Action No. WMN-14-4033

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MEMORANDUM
Plaintiffs Wayne Allen and Howard Cable filed this action
on December 30, 2014, against their former employer, Defendant
Enabling Technologies Inc., alleging violations of the federal
Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq., and
the Maryland Wage and Hour Law (MWHL), Md. Code Ann., Lab. &
Empl. §§ 3-401 et seq.

On or about September 9, 2016, the

parties reached a settlement of Plaintiffs’ claims whereby
Defendant agreed to settle those claims for a total of
$129,611.00, $69,902.00 to Plaintiff Allen and $60,609.00 to
Plaintiff Cable.

The parties were unable to reach an agreement

as to attorney’s fees but did stipulate in the settlement
agreement that Plaintiffs were the “prevailing parties” for
purposes of entitlement to an award of attorney’s fees under the
FLSA and MWHL.

Defendant reserved the right, however, to

challenge the reasonableness of those fees.

Before the Court is

Plaintiffs’ fee petition, ECF No. 51, which is fully briefed.

The parties are in agreement that, under § 216(b) of the
FLSA, the award of attorney’s fees and costs to the prevailing
plaintiff is mandatory.

29 U.S.C § 216(b).

are entitled to some award of fees.

Thus, Plaintiffs

“The amount of the

attorney's fees, however, is within the sound discretion of the
trial court.”

Burnley v. Short, 730 F.2d 136, 141 (4th Cir.

1984).
In the exercise of that discretion, courts have found that
“[t]he most useful starting point for determining the amount of
a reasonable fee is the number of hours reasonably expended on
the litigation multiplied by a reasonable hourly rate.”
v. Eckerhart, 461 U.S. 424, 433 (1983).

Hensley

This approach is

commonly known as the “lodestar” method.
Corp., 549 F.3d 313, 320 (4th Cir. 2008).

Grissom v. The Mills
In deciding what

constitutes a “reasonable” number of hours and a “reasonable”
rate under this method, courts look to a number of factors,
including:
(1) the time and labor expended; (2) the novelty
and difficulty of the questions raised; (3) the skill
required to properly perform the legal services
rendered; (4) the attorney's opportunity costs in
pressing the instant litigation; (5) the customary fee
for like work; (6) the attorney's expectations at the
outset of the litigation; (7) the time limitations
imposed by the client or circumstances; (8) the amount
in controversy and the results obtained; (9) the
experience, reputation and ability of the attorney;
(10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and
length of the professional relationship between
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attorney and client; and (12) attorneys' fees awards
in similar cases.
Barber v. Kimbrell's Inc., 577 F.2d 216, 226 n.28 (4th Cir.
1978) (adopting the twelve factors set forth in Johnson v. Ga.
Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)).

These

factors are frequently referred to as the Johnson factors.
Based upon their own calculations using this lodestar
method, Plaintiffs have asked for the award of $179,619.00 in
fees.

Plaintiffs assert that 475.66 hours were reasonably

expended by their attorneys and other professional at billing
rates ranging from $475.00 an hour for lead counsel, Philip
Zipin, to $135.00 for paralegals and a law clerk.

These billing

rates are consistent with accepted rates set forth in this
Court’s Local Rules.

Md. Local Rules, App. B(3).

In supporting the reasonableness of the number of hours
spent and the resulting fees under the Johnson factors, Mr.
Zipin particularly highlights the eighth factor, the “results
obtained.”

Mr. Zipin posits that the fact that he was able to

obtain “outstanding results” for his clients is “the obvious and
most salient fact in the Court’s determination regarding the Fee
Petition,” ECF No. 63 at 8, noting that, in his years of
practice representing hundreds of employees in overtime cases,
he could not recall a single instance of a larger recovery for
overtime wages on behalf of only two individuals.

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ECF No. 51 at

11.

Mr. Zipin also highlights, appropriately, his extensive

experience in employment cases, specifically overtime cases.
In challenging the fee petition, Defendant raises five
arguments as to why the requested fees should be significantly
reduced: 1) the time and labor devoted to this matter was
unnecessary; 2) the settlement payment was much less than the
claimed amount in controversy; 3) since the amount in controversy
was significant, charging attorney’s fees in excess of the results
obtained for Plaintiffs constitutes a violation of Mr. Zipin’s
ethical obligations; 4) Mr. Zipin’s fees include over-billing in
the form of high hourly rate lawyers doing basic legal research,
redundant charges, and excessive preparation time; and 5) Mr. Zipin
failed to comply with Appendix B of the Local Rules of the U.S.
District Court for the District of Maryland by failing to submit
quarterly statements.

In arguing that much of the time spent on this case was
unnecessary, Defendant runs through the two-year history of this
litigation and points to various stages where Defendant believes
the case should have or could have been settled.

Defendant

suggests that while Plaintiffs initially offered to arbitrate
this case in November of 2015, that offer proved to be
disingenuous and was inconsistent with Plaintiffs’ insistence
that the parties go forward with discovery before that
arbitration.

The Court recognizes, however, that Plaintiffs

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were not compelled to forgo discovery and submit to arbitration,
and there is no certainty that arbitration would have resolved
Plaintiffs’ claims.
Defendant asserts that Plaintiffs’ motions practice
resulted in unnecessary attorney’s fees of more than $54,000.00
Plaintiffs filed a motion for summary judgment, moved to strike
Defendant’s Reply memorandum on the ground that the Reply
exceeded the page limit set out in this Court’s Local Rules, and
also opposed Defendant’s motion for leave to amend its answer.
Both of Plaintiffs’ motions were denied and Defendant’s motion
was granted over Plaintiffs’ objection.
The Court agrees that this motions practice was of marginal
value.

As the Court noted in denying Plaintiffs’ summary

judgment motion, there were clear disputes of fact as to whether
Plaintiffs were exempt employees and the resolution of those
disputes would turn on the credibility of witnesses.
No. 44 at 21-22.

See ECF

Plaintiffs’ opposition to Defendant’s motion

to amend its answer to assert the “Computer Employee Exemption
Defense” was, as the Court also noted, putting form over
substance.

Id. at 9.

The primary focus, however, of Defendant’s argument that
the time and labor devoted to this matter was unnecessary is
Defendant’s contention that Mr. Zipin knew, or should have
known, that Plaintiffs grossly inflated the number of hours that
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they allegedly worked.

The Complaint alleges that Plaintiffs

were paid a salary based on a regular 40 hour work week but also
alleges that, every 4 to 6 weeks, they were “on call” which
involved being available to troubleshoot from 5 p.m. to 7:30
a.m. on weekdays and 24 hours a day on weekends.
9, 10.

ECF No. 1, ¶¶

Plaintiffs also allege in the Complaint that

“[t]hroughout their employment with Defendant, Plaintiffs
typically and customarily worked approximately sixty (60) hours
per week, on average,” id. ¶ 11, without specifying if that 60
hour average was for all weeks or just on-call weeks.
Defendant theorizes that Plaintiffs’ original allegation
only referred to on-call weeks, but, once they discovered that
Defendant maintained no records of time worked, Plaintiffs and
Plaintiffs’ counsel adopted the position that 60 hours per week
was the estimate for hours worked for all weeks.

To support

that 60 hour average, Plaintiffs asserted that they worked about
50 hours on “Regular Weeks,” and 92 hours on “On-call Weeks.”
Defendant posits that Mr. Zipin’s deliberate choice to advocate
for this highly inflated estimate of the number of hours worked
made achieving a settlement more difficult and the delay in
reaching a settlement resulted in the expenditure of significant
unnecessary effort, hours, and expenses.
The Court acknowledges that there are some dubious aspects
to Plaintiffs’ allegations of average hours worked.
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In denying

Plaintiffs’ motion for summary judgment, the Court opined that
it seems “unlikely that two employees working for different
clients, living in different states, would have worked identical
and exorbitant overtime hours.”

No. 44 at 22 n.15.1

Representations made by Plaintiffs’ former supervisor, James
Gilmer, in a state court case brought by Defendant against
Gilmer and Plaintiff Cable also undermine Plaintiffs’ current
estimate of hours worked in that he stated that Plaintiffs were
putting in an average of 60 hours per week “when on call.”

ECF

No. 60-12 at 7.
While acknowledging the somewhat questionable aspects of
the asserted average hours worked, the Court declines to make a
factual finding in the context of ruling on a petition for
attorney’s fees that Plaintiffs’ counsel suborned perjury.

That

said, accepting that Plaintiffs and Plaintiffs’ counsel believe
that Plaintiffs worked an average of 50 hours each normal week,
and an astounding average of 92 hours each on-call week,
seriously undermines the conclusion that Mr. Zipin obtained
“outstanding results.”

Based upon the exorbitant number of

hours that Plaintiffs claim to have worked and their assertion
that there was no factual dispute that they were non-exempt
employees, Plaintiff Cable sought an award of lost wages and
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On the other hand, the deposition testimony of both Plaintiffs
provides credible explanations as to how those hours could be
generated from their work assignments.
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liquidated damages in the amount of $271,628.99 and Allen sought
an award of lost wages and liquidated damages in the amount of
$157,692.50.

ECF No. 60-13.

In the settlement, Plaintiff Cable

received only about 22% of the amount to which he believed he
was entitled and Plaintiff Allen less than 44%.

While Mr.

Zipin’s recollection may be correct that this is the largest
recovery for overtime wages on behalf of only two individuals
that he has obtained, it is doubtful that he has represented
clients that worked such an exorbitant number of hours, for as
long as they did, without overtime pay, and as clearly nonexempt employees.
Given that Plaintiffs have identified the “results
obtained” as the “obvious and most salient fact” in the Court’s
determination regarding the award of fees, coupled with the
conclusion that much of Plaintiffs’ motion practice was
unnecessary or of limited value, the Court concludes that the
award of attorney’s fees should be reduced by 25% of that which
was requested.

This reduction effectively eliminates the need

to address Defendant’s remaining challenges to the fee petition.
A 25% reduction in fees brings the fees award roughly in line
with the award obtained by Plaintiffs in the settlement.

It

also more than covers those instances where Mr. Zipin performed
work that could have been performed by a member of the team with
a lower billing rate.

As for Defendant’s claim that Mr. Zipin
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failed to comply with Appendix B of the Local Rules by
submitting quarterly reports, the Court finds that he
substantially complied with that rule and Defendant was well
aware of the fees that were being incurred.

See ECF No. 60-27

(quarterly statements dated May 29, 2015, March 28, 2016, and
August 17, 2016) and ECF No. 60-13 (August 14, 2015, demand
letter including attorney’s fees incurred as of that date).
Plaintiffs also seek an award of an additional $5,359.50 in
attorney’s fees for the review of the 35-page Opposition to the
Fee Petition and preparation of the Reply in further support of
that Fee Petition.

The Court finds these fees to be reasonable.

The Court will also award the requested costs of $5,621.13
sought in the initial Petition.

Those costs relate

predominately to the depositions that were taken, some of which
Defendant argues would have been unnecessary were the case
resolved at an earlier stage by arbitration or settlement.

It

is not clear, however, that the case would have been resolved by
those means.
A separate order consistent with the Memorandum will issue.

_____
/s/_______
__________
William M. Nickerson
Senior United States District Judge
DATED: April 12, 2016

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