Reeser v. Henry Ford Hospital

Filing 129

OPINION AND ORDER granting in part 112 plaintiff's Motion for Attorney Fees. Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

NATALIE REESER,
Plaintiff,
CASE NO. 14-CV-11916
HONORABLE GEORGE CARAM STEEH

v.
HENRY FORD HEALTH SYSTEM,
Defendant.
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OPINION AND ORDER GRANTING IN PART
PLAINTIFF’S MOTION FOR ATTORNEY FEES (Doc. 112)
Plaintiff Natalie Reeser brought this lawsuit alleging retaliatory discharge in
violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 291 et seq., and
Michigan’s Whistleblower’s Protection Act (“WPA”), M.C.L. § 15.362, for reporting
defendant Henry Ford Health System’s (“HFHS”) failure to pay her for lunch breaks to
the Michigan Department of Licensing and Regulatory Affairs (“LARA”). Prior to trial,
defendant offered $10,000 to $15,000 to settle the case, but made no formal offer of
judgment. A jury returned a verdict of no cause on the FLSA retaliation claim, but
awarded damages for lost wages and fringe benefits in the amount of $3,200 on the
WPA retaliation claim. The jury awarded no emotional distress damages. Now before
the court is plaintiff’s request for attorney fees. Plaintiff seeks fees in the amount of
$315,133.32. For the reasons set forth below, and giving due consideration to the
modest nature of plaintiff’s partial victory at trial, the court shall award attorneys’ fees in
the amount of $10,000.
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A. Standard of Law
The WPA provides the court with discretion to award attorneys’ fees to a
prevailing complainant. Specifically, Michigan Compiled Laws § 15.364 provides in
relevant part, “[a] court may also award the complainant all or a portion of the costs of
litigation, including reasonable attorney fees and witness fees, if the court determines
that the award is appropriate.” Attorney fees to prevailing plaintiffs in WPA cases are
not mandatory, but are within the court’s discretion. See Heckmann v. City of Detroit,
No. 267391, 2007 WL 1989518, at *10 (Mich. Ct. App. July 10, 2007); Lease
Acceptance Corp. v. Adams, 724 N.W.2d 724, 733, n.8 (Mich. Ct. App. 2006); Gomery
v. Crest Fin., Inc., No. 20881, 2005 WL 658818, at *1-2 (Mich. Ct. App. Mar. 22, 2005).
Plaintiff bears the burden of proving the reasonableness of the requested fee. Smith v.
Khouri, 481 Mich. 519, 528-29 ( 2008). In determining a reasonable fee, the court
considers the following non-exhaustive list of factors: “(1) the professional standing and
experience of the attorney; (2) the skill, time, and labor involved; (3) the amount in
question and the results achieved; (4) the difficulty of the case; (5) the expenses
incurred; and (6) the nature and length of the professional relationship with the client.”
Wood v. Detroit Auto. Inter-Ins. Exch., 413 Mich. 573, 588 (1982) (internal quotation
marks and citation omitted). It would indeed be within this court’s discretion to deny
attorneys’ fees altogether. However, in its discretion and for the reasons stated below,
this court will award a modest attorneys’ fee.

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B. Analysis
1. Prevailing Party Analysis Inapplicable
Defendant argues that plaintiff does not qualify as a prevailing plaintiff because
she did not recover more than it offered to settle the case, and thus, is not entitled to
any attorney fees as a matter of law. In support of its position, defendant relies on
Gomery, supra, 2005 WL 658818, at *1-2. Such reliance is misplaced. Gomery
involved a formal offer of judgment in compliance with certain Michigan court rules
which provide for cost shifting to the prevailing party. In Gomery, the court noted that a
party must be a “financially successful or prevailing party” to be eligible for an award of
fees and costs under the WPA. 2005 WL 658818, at *1. A plaintiff is considered a
prevailing party if her position is improved by the litigation. Id. A plaintiff’s position is
improved when she receives a judgment “in an amount greater than the offer made by
defendants.” Id. Defendant argues that here, plaintiff’s position was not improved by
the litigation because the jury awarded plaintiff only $3,200, significantly less than
defendant’s pre-trial settlement offers of $10,000 and $15,000. (Doc 121, Pg ID 3898).
However, the test referred to in Gomery applies to cases where the defendant has
made a formal offer of judgment in accordance with Michigan court rules. The Gomery
court specifically noted that settlement offers were not to be considered, only formal
offers of judgment. 2005 WL 658818, at *1.
Here, the defendant made settlement offers during pre-trial negotiations, but did
not make any formal offers to stipulate to the entry of a judgment. See Fed. R. Civ. P.
68; Mich. Ct. R. 2.405. While it is certainly debatable whether Michigan fee shifting
rules could ever apply to this federal case, even if they did, Gomery does not render
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plaintiff ineligible for attorneys’ fees here where no formal offer of judgment was ever
made. Even so, although the settlement offers defendant made in this case do not
preclude an award of fees per se, they are nevertheless one factor that the court
considers in its analysis below.1
2.

Evaluation of Factors Weighs in Favor of Modest Attorney Fee Award
Considering all of the factors to be weighed in determining an appropriate fee

award, the court determines that plaintiff’s counsel is entitled to only a modest fee.
Most significantly, the court finds that the modest results achieved and the unnecessary
protraction of the litigation outweigh the other factors. Plaintiff’s counsel’s expenditure
of 1,189.7 hours of time on this case was not reasonable given the weakness of
Plaintiff’s damages evidence and the size of her ultimate recovery. Likewise, although
the parties dispute the amount of hourly fees, the court’s determination of an
appropriate hourly fee is irrelevant here because plaintiff’s limited recovery necessitates
a significant fee reduction. Even if the court were to accept the hourly billing rate sought
by plaintiff’s counsel, the court cannot sanction the extensive time expended.
This court recognizes plaintiff’s attorneys’ experience and professional
reputation; however, the total attorneys’ fees requested are unreasonable. The case
could have been more straightforward and handled more efficiently. Any complexities in
the lawsuit were the result of a lack of cooperation between the parties, the filing of
numerous in limine and discovery motions that the parties should have been reasonably
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Defendant also argues that no attorney fees should be awarded as a sanction
for discovery abuses. That is the subject of a separate motion and forms no basis of
the court’s analysis here. Also, the court has not considered defendant’s argument that
plaintiff herself engaged in misconduct at trial in reaching its decision here.
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expected to resolve on their own, and the otherwise overly litigious conduct of counsel
for both parties. Recognizing that defendant significantly contributed to the
unnecessary complexities of what should have been a more streamlined case, the court
does not base its decision here solely on the fact that the hours plaintiff’s counsel
expended on the case were clearly excessive. The court’s decision here is rooted
primarily on the need for proportionality between the costs of representation and the
ultimate success of the prevailing party.
In determining the fee award, defendant urges the court to consider its settlement
offers of $10,000 and $15,000. Plaintiff had made a settlement demand of $50,000 in
August, 2014, and defendant did not make a counter offer until two years later. Given
this significant delay in settlement negotiations, plaintiff argues that her decision to
proceed to trial was reasonable. Plaintiff’s argument might have persuasive value
should her ultimate recovery have exceeded or approximated defendant’s settlement
offer. Defendant appears to have staked its settlement position on its belief that
plaintiff’s case lacked merit, and was worth at most, a nuisance value. Given the fact
that the jury issued a no cause verdict on the FLSA claim, awarded a pittance on the
lost wages claim under the WPA, and awarded no emotional distress damages on the
WPA claim, defendant appears to be vindicated on its analysis of the minimal to nonexistent settlement value of the case. The $3,200 lost wages award is less than 33
percent of what defendant offered at the pre-trial settlement conference and less than
22 percent of what defendant offered before trial.
Contrary to plaintiff’s position, defendant cannot be faulted for not offering more
to settle the case than it did, or for not making a counter-offer sooner, when the jury
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clearly agreed with its conclusion that plaintiff’s claim was worth very little. Thus,
although the court agrees with plaintiff that defendant did not engage in any meaningful
settlement negotiations until the eve of trial, the fact remains that those settlement offers
did exceed the ultimate value of the case as determined by the jury. For this reason,
defendant cannot be faulted for maintaining its conviction that the case had little – to no
settlement value. Thus, the court considers plaintiff’s rejection of defendant’s
settlement offer as one factor, among many, for awarding modest fees.
Most significantly, the court bases its decision here on plaintiff’s nominal
recovery. The law is well settled that the court may reduce an award of attorney fees on
the basis of a plaintiff’s limited success. Carlson v. Optima Oil Enter., Inc., No.
2579603, 2009 WL 2136879, at *2 (Mich. Ct. App. July 16, 2009) (citing Schellenberg v.
Rochester Mich. Lodge No. 2225, 228 Mich. App. 20, 45-47 (1998)). In fact, the Sixth
Circuit has stressed that the degree of success obtained is the most critical factor to
determining a reasonable fee. McKelvey v. Sec’y of U.S. Army, 768 F.3d 491, 495 (6th
Cir. 2014) (citing Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)). One way to think
about the degree of success is to compare the damages awarded to the amount sought.
Id. (citing Farrar v. Hobby, 506 U.S. 103, 114 (1992)). “Few, if any, reasonable litigants
would call a monetary judgment that comes in well under the money offered to settle the
case a success.” Id. Numerous courts have reduced attorney fee awards based on a
plaintiff’s limited success. See Gratz v. Bollinger, 353 F. Supp. 2d 929, 938 (E.D. Mich.
2005) (imposing 50 percent reduction given plaintiff’s limited success); Collister v.
Sunshine Food Stores, Inc., 166 Mich. App. 272 (1988) (awarding $2,000 in attorney
fees where plaintiff recovered $6,400); Richard v. Oak Tree Grp. Inc., No. 1:06-CV-362,
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2009 WL 3234159, at *4 (W.D. Mich. Sept. 30, 2009) (decreasing attorney fee award by
85 percent to $3,082 where plaintiff recovered minimal statutory damages).
Here, the jury awarded plaintiff less than 0.5 percent of the $730,000 plaintiff
sought at trial and significantly less than defendant offered to settle the case.
Accordingly, the court determines that plaintiff is entitled to a reduced attorney fee
award that is proportional to plaintiff’s mild success in the case. The court determines
that an award of $10,000 is appropriate, and notes that this amount is over three times
the amount of the jury verdict. The court finds this award to be consistent with the
remedial aim of the WPA, given the unique circumstances of this case where plaintiff
recovered, in defendant’s words, a “paltry” amount.
D. Conclusion
Based largely on the very modest results of the lawsuit, and for the additional
reasons set forth above, this court grants, in part, plaintiff’s motion for attorney fees
(Doc. 112) and awards plaintiff attorneys’ fees in the amount of $10,000.
IT IS SO ORDERED.
Dated: August 17, 2016
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 17, 2016, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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