Santinac v. Worldwide Labor Support of Illinois, Inc. et al

Filing 86

SECOND ORDER REQUIRING AFFIDAVITS AND ADDITIONAL INFORMATION re 83 Supplemental MOTION to Dismiss and Approval of Settlement Agreement filed by Henry Santinac, 80 Joint MOTION for Settlement Approval MOTION to Dismiss filed by Henry Santinac Signed by Chief District Judge Louis Guirola, Jr on 02/10/2017 (Guirola, Louis)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
HENRY SANTINAC, on behalf of himself
and those similarly situated
v.

PLAINTIFF
CAUSE NO. 1:15CV25-LG-RHW

WORLDWIDE LABOR SUPPORT OF
ILLINOIS, INC., a Mississippi Limited
Liability Company, and WAYNE A. COOK, JR.

DEFENDANTS

SECOND ORDER REQUIRING AFFIDAVITS
AND ADDITIONAL INFORMATION
BEFORE THE COURT are [80, 84] Motions requesting approval of the
settlement filed by the parties to this FLSA collective action. The Court required
additional briefing and information on the settlement by [82] Order dated January
13, 2017, specifically on the issue of attorney’s fees. In response, Plaintiffs’ counsel
has submitted its Employment Contract, with no billing information or affidavits
regarding a reasonable hourly rate or otherwise. As a result, while the Court is
prepared to approve the settlement as to the amount to be awarded to Plaintiffs, the
Court requires additional information before it can determine the reasonableness of
attorney’s fees and costs, and will not approve that portion of the settlement unless
and until it has sufficient information before it to do so.
Generally, FLSA claims can only be compromised after a court reviews and
approves the settlement. Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (11th Cir. 1982). “[T]o fully discharge its duty to review and approve [such
settlements], a district court must assess the reasonableness of the attorneys’ fees.”

See Strong v. BellSouth Telecomm., Inc., 137 F.3d 844, 849 (5th Cir. 1998). In
common fund cases like this one, courts in this Circuit are permitted to use either
the percentage method or the lodestar method to calculate attorneys’ fees. Union
Asset Mgmt. v. Dell, Inc., 669 F.3d 632, 644 (5th Cir. 2012). After utilizing the
percentage method, it is often helpful to perform a lodestar cross-check “to avoid
windfall fees, i.e., to ensure that the percentage approach does not lead to a fee that
represents an extraordinary lodestar multiple.” In re Heartland Payment Sys., Inc.
Customer Data Sec. Breach Litig., 851 F. Supp. 2d 1040, 1086 (S.D. Tex. 2012).
The lodestar cross-check helps confirm that the attorneys’ fees calculated
pursuant to the percentage method are reasonable. Id. The cross-check involves
calculation of the lodestar, as well as consideration of the Johnson factors. Strong,
137 F.3d at 850. Those factors are:
(1) the time and labor required; (2) the novelty and difficulty of the
questions involved; (3) the skill required to perform the legal service
properly; (4) the preclusion of other employment by the attorney due to
the acceptance of the case; (5) the customary fee; (6) whether the fee is
fixed or contingent; (7) the time limitations imposed by the client or
the circumstances; (8) the amount involved and the results obtained;
(9) the experience, reputation, and ability of the attorneys; (10) the
undesirability of the case; (11) the nature and the length of the
professional relationship with the client; and (12) awards in similar
cases.
Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).
Pursuant to the percentage method, the court awards a reasonable
percentage of the common fund to the attorneys. Dell, Inc., 669 F.3d at 642-43. The
court first determines the actual monetary value conferred to the class by the
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settlement. In re Heartland, 851 F. Supp. 2d at 1075.
If an agreement is reached on the amount of a settlement fund and a
separate amount for attorney fees and expenses, . . . the sum of the two
amounts ordinarily should be treated as a settlement fund for the
benefit of the class, with the agreed-on fee amount constituting the
upper limit on the fees that can be awarded to counsel.
Id. at 1072 (quoting Manual for Complex Litig. (4th) § 21.7 (2004)). After
determining the value conferred on the class, the court applies a benchmark
percentage to this value. Id. Finally, the court applies the Johnson factors to
determine whether the percentage should be adjusted upward or downward. Id.
The value conferred to the class here is $275,000.00. The fees requested total
$95,377.64, or approximately 34.68 percent of the value conferred to the class. This
percentage is somewhat higher than the amount of attorney’s fees typically
awarded in similar cases. See, e.g., Rodriguez v. Stage 3 Separation, LLC, No. 5:14cv-00603-RP, 2015 WL 12866212, at *5 (W.D. Tex. Dec. 23, 2015) (“A review of Fifth
Circuit precedent suggests a benchmark fee of 30%.”); see also Manual for Complex
Litig. (4th) § 21.7 (2004) (“Attorney fees awarded under the percentage method are
often between 25% and 30% of the fund.”). Thus, the Court finds it necessary to
perform a lodestar cross-check, which includes application of the Johnson factors to
determine whether the requested award is reasonable. However, the Court does not
have sufficient information to perform this analysis.
Under the lodestar method, the court first multiplies the reasonable number
of hours spent working on the case by the reasonable hourly rate for the attorney to

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determine the lodestar figure. Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir.
2013). “The party seeking attorneys’ fees must present an adequately documented
time record to the court. Using this time as a benchmark, the court should exclude
all time that is excessive, duplicative, or inadequately documented.” Watkins v.
Fordice, 7 F.3d 453, 457 (5th Cir. 1993). The party seeking fees must demonstrate
that the hours billed were reasonable and that the lawyers exercised billing
judgment by writing off unproductive, excessive, or redundant work. Black, 732
F.3d at 502.
Plaintiffs’ counsel states that he “has expended over two hundred and fifty
(250) hours to date . . . .” (Supp. Joint Mem. 15, ECF No. 84). He does not provide
any information as to his billing rate or the billing rate of other attorneys and/or
paralegals who have worked on the case. Nor is the Court able to determine
whether billing judgment was utilized.1 The Court has not been provided any
information in the form of affidavits or otherwise regarding a reasonable hourly
rate. See Tollett v. City of Kemah, 285 F.3d 357, 368 (5th Cir. 2002) (“Generally, the
reasonable hourly rate for a particular community is established through affidavits
of other attorneys practicing there.”). In addition, no breakdown of information has
provided for the nearly $4,000 in requested costs.
The parties, citing Dell, 669 F.3d 632, argue that “[a] stringent lodestar

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The Employment Contract discusses an hourly rate of $250 per hour.
Assuming 250 hours worked, Plaintiff has shown, at most, that the lodestar is
$62,500, which is over $30,000 less than what was requested.
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analysis to determine the reasonableness of attorneys’ fees is not required by the
Court in cases such as this one.” (Supp. Joint Mem. 12, ECF No. 84) (emphasis in
original). However, Dell makes clear that this is a choice for the Court, not counsel.
Furthermore, the Court is of the opinion that it does not have enough information
before it even to consider the Johnson factors, which is a necessary part of its
review even if it employs solely the percentage method. See Dell, 669 F.3d at 643
(“We join the majority of circuits in allowing our district courts the flexibility to
choose between the percentage and lodestar methods in common fund cases, with
their analyses under either approach informed by the Johnson considerations.”).
IT IS THEREFORE ORDERED AND ADJUDGED that the parties must
comply with the Court’s previous [82] Order within fourteen (14) days of the date
of this Order. Otherwise, the Court will enter an Order partially approving the
settlement insofar as the amount to be awarded to Plaintiffs, but will deny approval
with respect to the attorney’s fees and costs requested.
SO ORDERED AND ADJUDGED this the 10th day of February, 2017.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE

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