Morales et al v. Farmland Foods
Filing
458
MEMORANDUM AND ORDER that plaintiffs' 437 Motion for Attorney Fees and 441 Motion for Attorney Fees are granted. The plaintiffs' 446 Motion for oral argurment is denied. The plaintiffs are awarded fees in the amount of $1, 858,172 for the services of Schneider Wallace Cottrell Konecky, LLP, and Berger & Montague, P.C.; $94,215 for the services of Walsh and Walsh; and $55,215 for the services of Philip Downey, resulting in a total attorney fees award of $2,008,142. The plaintiffs are awarded costs and expenses in the amount of $275,416. A judgment for attorney fees and costs in conformity with this Memorandum and Order will issue the date. Ordered by Judge Joseph F. Bataillon. (ADB)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
MARIA GUZMAN MORALES and
MAURICIO GUAJARDO, on behalf of
themselves and all other similarly situated
individuals;
Plaintiffs,
8:08CV504
MEMORANDUM AND ORDER
vs.
FARMLAND FOODS, INC.;
Defendant.
This matter is before the court on plaintiffs’ motions for attorneys’ fees and costs,
Filing Nos. 437 and 441.1 This is a collective action for recovery of unpaid wages under
the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. Plaintiffs seek recovery of
$2,881,472 in attorney fees for the services of lead counsel law firms Schneider
Wallace Cottrell Brayton Konecky, LLP (now known as Schneider Wallace Cottrell
Konecky and hereinafter referred to as “SWCK”), Berger & Montague, P.C. (“B&M”),
and Welsh & Welsh, P.C., L.L.O. (“W&W”).2 They also seek $275,739.67 for costs
incurred by those firms. Plaintiffs move separately for an award of $55,755 in fees for
co-lead counsel Philip A. Downey and $2,068.73 in costs incurred by Downey. The
defendant opposes the motions. See Filing No. 451, Response.
1
Plaintiffs also move for oral argument on the motion, Filing No. 446, but the court finds oral
argument is not necessary.
2
By firm, that amount can be broken down as follows: $1,706,252.50 in fees for SWCK,
$1,081,004.50 in fees for B&M and $94,215.00 in fees for W&W. Filing No. 442-2 at 241.
I. FACTS
The parties have entered into a Settlement Agreement that resolves this
litigation.
Filing No. 425-3, Ex. 1.
Settlement Agreement.
In the agreement, the
defendants have agreed to pay $275,000 to the class in damages, including $35,000 to
the named plaintiffs for statutory damages and service as class representatives.
2.
Id. at
Further, the defendant agreed to pay the costs and expenses of the claims
administrator.
Id. at 11.
The Settlement Agreement also provides for payment by
defendant of the plaintiffs’ attorney fees as costs, as determined by the court. Id. at 2,
14-15. The Settlement Agreement reserves to the court the resolution of “any issues as
to any Plaintiffs’ or Class Counsel’s claims for an award of attorneys’ fees or
reimbursement of expenses as a prevailing party pursuant to the Fair Labor Standards
Act.” Id. at 15. The Settlement Agreement also provides that the defendant will pay the
attorney fees and costs in addition to the funds the class members receive; the attorney
fees will not diminish the class payment. Id. at 2.
The notice disseminated to the class informed class members that the lead
plaintiffs would seek an award of fees. See Filing No. 425-3, Index of Evid., Ex. C,
Proposed Notice of Proposed Settlement at 3. Plaintiffs have shown that only one
individual requested to be excluded from the class and one individual objected to the
settlement. Filing No. 430-3, Index of Evid, Declaration of Sandra Roe at 5. The court
held a fairness hearing on the parties’ joint motion for final approval of class settlement
on August 2, 2012. Filing No. 434, text minute entry. No one appeared at the hearing
to object to the class settlement. The court approved the Settlement Agreement, finding
that it provides “substantial benefits to the participating class members for the claims
2
alleged in the complaint” and that “[t]he settlement is a fair, reasonable and adequate
resolution of a bona fide dispute.” Filing No. 425, Final Order of Approval of Settlement
and Dismissal.
All attorneys have submitted detailed time records, billing statements, expense
statements, and supporting documentation including invoices and receipts. Filing No.
440, Index of Evid., Ex. D, Declaration of Philip A. Downey (“Downey Decl.”); Filing No.
442, Index of Evid., Ex. A, Declaration of Carolyn H. Cottrell (“Cottrell Decl.”); Filing No.
443, Index of Evid., Exs. B, Declaration of Shanon J. Carson (“Carson Decl.”); Ex. C,
Declaration of Christopher Welsh (“Welsh Decl.”); Filing No. 447-2, Ex. 2, Supplemental
Declaration of Carolyn Cottrell (Cottrell Supp. Dec.”). Plaintiffs have documented that
they collectively expended more than 8,407.55 hours on this litigation, resulting in a
cumulative lodestar of $3,4744,759.20, before the exercise of counsel’s billing
judgment. Filing No. 442, Ex. A, Cottrell Decl. at 16, Ex. A3. In the exercise of billing
judgment, the plaintiffs’ counsel reduced their fees by approximately 17% and seek
recovery of $2,881,472 in attorney fees.3 Id. at 16-20. Exs. A1, A3, A7.
In support of their motion, plaintiffs have shown that attorneys employed by
SWCK, B&M, and W&W incurred a total of $3,474,759.2 in attorneys’ fees, representing
over 8,407 hours of work at hourly rates of $450 to $700 per hour for SWCK attorneys,
$215 to $615 for B&M attorneys and $100 to $350 or W&W attorneys, and $50 to $250
3
Further, plaintiffs have shown that counsel has made a good faith effort to reduce the hours
billed where appropriate. Filing No. 442-1, Ex. A, Cottrell Decl. at 17-20. The plaintiffs’ attorneys
voluntarily omitted billing for attorneys and staff who billed less than 50 hours on this case, omitted time
spent by attorneys on coming up to speed on the file and familiarizing themselves with the case; omitted
billing related to motions that the plaintiffs lost; deducted duplicative work, paralegal-type work by
attorneys, administrative time, billing related to opt-in plaintiffs who were later dismissed, and billing
entries that lacked sufficient detail. See id.; Filing No. 443-1, Ex. B, Carson Decl. at 6-8.
3
for law clerks and paralegals.4 They also seek an award of costs in the amount of
$133,346.02 for expenses incurred by SWCK and $140,002.13 for costs incurred by
B&M. See Filing No. 447-2, Ex. 2, Cottrell Supp. Decl., Amended Ex. A52, SWCK’s
Total Costs by Category and Detailed Summary of Costs. Co-class counsel Philip A.
Downey has shown he performed 228.5 hours of work at $250 per hour and seeks fees
in the amount of $55,755 and out-of-pocket costs in the amount of $2,068.73.5
Filing
No. 440, Index of Evid., Ex. 1, Billing Statement: Ex. 2, Expense Statement.
Plaintiffs’ counsel SWCK is a San Francisco, California law firm that specializes
in class and collective action litigation in federal and state courts and a substantial
number of the firm’s class and collective action cases are wage and hour cases. Filing
No. 442-1, Ex. A, Cottrell Decl. at 1, 10. B&M, based in Philadelphia, Pennsylvania, is a
specialty labor and employment firm with 67 attorneys that specializes in class action
litigation in federal and state courts. Filing No. 443-1, Ex. B, Carson Decl. at 1, Ex. B1,
Firm Resume. Plaintiffs have shown that co-lead counsel have extensive experience
litigating FLSA cases and have achieved substantial judgments and settlements against
meatpacking companies in similar cases. Filing No. 442-1, Ex. A, Cottrell Decl. at 4,
Exs. A63, A64, A65, A66; Filing No. 443-1, Ex. B, Carson Decl. at 1-2.
4
Much of the work was by attorneys at rates of $415 to $450 per hour, but substantial work was
done by Carolyn Cottrell, who charges $650 per hour, and by Russell Henkin and Shanon Carson who
charge $615 and $550 per hour, respectively. Filing No. 442, Ex. A, Cottrell Decl., Ex. A4, SWCK total
fees by timekeeper; Ex. A5, B&M total fees by timekeeper.
5
The total reimbursable costs incurred by plaintiffs’ counsel B&M and SWCK in this case amount
to $275,739.67 for the following categories of expenses: (1) long distance telephone calls; (2) travel
expenses; (3) reproduction/velobind; (4) document production expenses (e.g., scanning, Bates
numbering, OCR, hosting, etc.); (5) deposition fees and transcripts; (6) postage; (7) filing and
miscellaneous fees; (8) commercial copying and printing; (9) computer legal research; (10) expert
discovery; (11) delivery and freight; (12) mediation; (13) notice facilitation; (14) translation and interpreter
services; (15) faxes; and (16) bankruptcy counsel costs. See Filing No. 442-1, Ex. A, Cottrell Decl., Exs.
A52-A62; Filing No. 443-1, Ex. B, Carson Decl. at 12-14; Exs. B2-B14; Filing No. 447-2, Cottrell Supp.
Decl., Exs. A69, Amended Ex. A52.
4
Defendant Farmland is represented by Jackson Lewis, LLP, an employment
specialty law firm that employs over 700 attorneys at numerous offices nationwide.
Filing No. 441-1, Plaintiffs’ Memorandum at 61, 71. Jackson Lewis has an office in
Omaha, Nebraska, but Farmland was primarily represented in this action by Jackson
Lewis attorneys based in Atlanta, Georgia, and Greenville, South Carolina. Farmland
was also represented by local counsel Baird Holm, an Omaha law firm that employs
over 80 attorneys.
Plaintiffs also submitted evidence purporting to show that few, if
any, Omaha law firms litigate this type of case. Filing No. 443-7, Ex. D, Welsh Decl. at
2-3.
Plaintiffs have submitted affidavits showing that the hourly rate of partners in
Atlanta law firms whose practices focus on labor and employment law vary substantially
but generally range from $275 to $425 per hour for partners with 15-20 years of
experience; $350 to $500 for partners with 20-25 years of experience; $425 to $575 for
partners with 25-30 years of experience; and $600 and more for some partners with
more than 30 years of experience. Filing No. 442-8, Index of Evid., Ex. E, Declaration
of Hunter R. Hughes III at 3-4. The hourly rate for associate attorneys in Atlanta in the
same practice area with 0-5 years of experience generally ranges from $200 to $300
per hour and $250 to $375 for associates with 5-10 years of experience and the Atlanta
market rate for paralegals is generally between $125-$200. Id. at 4. Also, plaintiffs
have shown that various firms in Chicago charge between $250 and $700 per hour for
labor work by attorneys, depending upon the firm and the particulars of the individual
attorney performing the work, and the market rate for paralegals in the Chicago market
is over $125 per hour. Filing No. 443, Index of Evid., Exhibit F, Declaration of Ryan F.
5
Stephan (“Stephan Decl.”), Ex. F1, Stephan Decl. in Thomas
v. Matrix Commc’n
Servs., Inc., No. 10-cv-05093 (N.D. Ill.) at 2; Ex. F2 Stephan Decl. in Land v. Frontline
Commc’ns, Inc., No. 10-cv-07640 (N.D. Ill) at 2. Plaintiffs have also shown that the
Stephan Zouras Law firm in Chicago represents workers in class and collective actions
regarding unpaid wage disputes throughout Illinois and across the United States and
attorney Ryan Stephan’s hourly rate of $450 to $500 per hour has been approved by
courts overseeing his cases. Id., Ex. F, Stephan Decl. at 2; Exs. F1 and F2, Orders
approving awards of attorney fees. Plaintiffs have shown the hourly rate of $450 to
$500 is within the range of hourly rates charged by plaintiffs’ attorneys in Chicago,
Illinois, who specialize in handling wage and hour cases. See id., Ex. F at 2-3. Also,
the hourly rate charged for Stephan Zouras associates is $250 to $350, which is within
the range of reasonable hourly rates in the Chicago market. Id.
The record shows this action was filed in November of 2008.
It has been
pending for over four and a half years. There are over 450 total filings in this case.
Over 30 depositions have been taken and four experts have been retained and
deposed, requiring substantial travel.
See Filing No. 441-1, Motion, Ex. 1,
Memorandum of Law at 19-20. There have also been multiple site inspections, also
requiring travel.
Id. at 17-18.
The parties have exchanged voluminous written
discovery and there have been numerous discovery disputes. Id. at 7-15; see, e.g.,
Filing No. 405, Plaintiffs’ Motion to Compel. Over the course of the litigation, Farmland
moved to dismiss, vigorously opposed class certification, and moved to decertify the
class.
See Filing No. 364, Motion to decertify; Filing No. 408, Findings and
Recommendation; Filing No. 413, Objection; and Filing No. 415, Memorandum and
6
Order. In addition, it filed for summary judgment on numerous issues, none successful.
See Filing Nos. 105, 133, 137, 139, 141, Motions for Partial Summary Judgment; Filing
Nos. 143, 165, 169, 179; Motions to Dismiss; Filing No. 175, Motion for summary
judgment; Filing Nos. 208, 276, Memoranda and Orders. In all, Farmland filed ten
motions for partial summary judgment seeking judgment as a matter of law on issues
such as whether donning and doffing time is “de minimis,” whether employees should
be compensated for “reasonable” as opposed to “actual” time, whether employees are
entitled to compensation for donning and doffing nonunique equipment, whether walking
and waiting time are noncompensable preliminary and postliminary activities under the
Portal-to-Portal Act, whether personal protective equipment is “clothing” that is not
compensable under 15 U.S.C. § 203(o), and whether washing is also exempt under
Section 203(o). In addition, Farmland sought leave to pursue an interlocutory appeal,
which the court denied, noting that “defendant is attempting to perfect an interlocutory
appeal which will further delay the case and cause additional expense to the plaintiff.”
Filing No. 223, Motion to Amend and for Leave to File Interlocutory Appeal; Filing No.
276, Memorandum and Order. The action was eventually mediated and the parties
subsequently conducted back and forth negotiations regarding settlement for several
months thereafter. Filing No. 425-1, Index of Evid., Ex. A, Declaration of Carolyn H.
Cottrell in Support of Joint Motion for Preliminary Approval of Settlement at 6-7.
Farmland objects to the plaintiffs’ motions for attorney fees and costs. Filing No.
451.
It argues the court should award plaintiffs’ counsel no more than $57,600 to
$154,687 in fees, based on the “percentage of the benefit” method. Further, Farmland
argues that even under a lodestar method, fees must be subject to a large reduction
7
because of the degree of the plaintiffs’ success, or lack thereof. It urges the court to
award only 5% to 6% of the lodestar as a result of the plaintiffs’ lack of success. It also
argues that the court should award only local hourly rates. Further, it argues the court
should reduce the number of the plaintiffs’ claimed reasonable hours by at least half and
argues that the plaintiffs’ claimed fees, costs and expenses are inflated. Specifically, it
contends that certain expenses, including computerized legal research and expert
witness fees, are not recoverable.
Farmland argues that “[t]his case was drastically over-lawyered relative to the
issues and to the result achieved, including use of 21 lawyers and 18 paralegals.” Id. at
17. The defendant characterizes the request for fees as an attempt “to get a huge fee
for a token, nuisance-value settlement by artificially bloating the number of hours billed
and by demanding wildly-inflated hourly rates.” Id. at 18. In support of its opposition,
Farmland submits affidavits of local attorneys attesting to hourly rates of $250 per hour
in Omaha, Nebraska, and attesting that there are Nebraska-based counsel and law
firms in Nebraska, Iowa, South Dakota, Kansas, Oklahoma, Colorado and Missouri that
have brought FSLA claims, including donning and doffing claims. Filing No. 452-8,
Index of Evid., Ex. 6, Affidavit of Robert O’Connor; Filing No. 452-9, Index of Evid., Ex.
7, Affidavit of Eric Magnus; Filing No. 452-9, Index of Evid., Ex. 8, Declaration of Gillian
Ellis.
II. LAW
A thorough judicial review of fee applications is required in all class action
settlements. In re Diet Drugs, 582 F.3d 524, 537-38 (3d Cir. 2009); Johnson v.
Comerica Mortgage Corp., 83 F.3d 241, 246 (8th Cir. 1996) (noting that the district court
8
bears the responsibility of scrutinizing attorney fee requests). Courts utilize two main
approaches to analyzing a request for attorney fees: (1) the “lodestar” methodology
(multiplying the hours expended by an attorney’s reasonable hourly rate of
compensation to produce a fee amount that can be adjusted to reflect the individualized
characteristics of a given action); and (2) the “percentage of the benefit” approach
(permitting an award of fees that is equal to some fraction of the common fund that the
attorneys were successful in gathering during the course of the litigation). 6 Johnston,
83 F.3d at 244-45. It is within the court’s discretion to decide which method to apply.
Id.
Under fee-shifting provisions of federal statutes that allowing courts to award
attorney’s fees to the prevailing party, a plaintiff is a “prevailing party” only when he
obtains either (1) a judgment on the merits, or (2) a settlement agreement “enforced
through a consent decree.” Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep’t.
of Health and Human Res., 532 U.S. 598, 603–604 (2001). To be a prevailing party, a
plaintiff must achieve at least some relief on the merits that effectuates a “material
alteration in the legal relationship of the parties.” Id. at 605. A party that secures an
enforceable judgment on the merits or a court-ordered consent decree is a prevailing
party. Bill M. ex rel. William M. v. Nebraska Dep’t of Health and Human Servs., 570
6
In a common-fund settlement, the court approves distribution of a certain percentage of a
settlement fund as fees before the remainder of the fund is distributed to the class. See, e.g., Cortez v.
Nebraska Beef, Ltd., No. 8:08-cv-99 (D. Neb. May 14, 2012), Filing No. 452-3, at 298 of 300. A
percentage-of-benefit methodology is used in common-fund settlement class action cases. See, e.g., In
re US Bancorp Litig., 291 F.3d 1035, 1038 (8th Cir. 2002) (approving an award of 36% of the settlement
fund); Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1157 (8th Cir. 1999) (approving award of 24% of
monetary compensation to the class). To recover fees from a common fund, attorneys must demonstrate
that their services were of some benefit to the fund or that they enhanced the adversarial process. In Re
US Bancorp Litig., 291 F.3d at 1038. This is not a common fund case; the defendant has agreed to pay
attorney fees separately from and in addition to the settlement amounts paid to the class.
9
F.3d 1001, 1003 (8th Cir. 2009).
A settlement that entails judicial approval and
oversight is the equivalent of a consent decree. Id.
Although there is no precise formula for determining a reasonable fee, the district
court generally begins by calculating the lodestar—the attorney’s reasonable hourly rate
multiplied by the number of hours reasonably expended. Hensley v. Eckerhart, 461
U.S. 424, 433-37 (1983); .” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, —, 130 S.
Ct. 1662, 1671 n.3 (stating that there is a strong presumption that the lodestar is
sufficient); Marez v. Saint-Gobain Containers, Inc., 688 F.3d 958, 965 (8th Cir. 2012).
“Where a plaintiff has obtained excellent results, his attorney should recover a fully
compensatory fee.”
Hensley v. Eckerhart, 461 U.S. 424, 435 (1983) (stating that
“[n]ormally this will encompass all hours reasonably expended on the litigation, and
indeed in some cases of exceptional success an enhanced award may be justified.”);
Kenny A., 130 S. Ct. at 1669 (affirming that an increase is permitted in extraordinary
circumstances).
The lodestar—the product of a reasonable hourly rate and the reasonable
number of hours required by the case—creates a “presumptively reasonable fee.”
Kenny A., 130 S. Ct. at 1673. The lodestar amount remains the customary method by
which attorneys bill for litigation, and the lodestar generally remains sufficient to attract
competent counsel. Id.
The “lodestar” figure is the “the guiding light of [the Supreme
Court’s] fee-shifting jurisprudence.” Kenny A., 130 S. Ct. at 1672. Once a lodestar is
determined, “other factors ‘may lead the district court to adjust the fee upward or
downward, including the important factor of the ‘results obtained.’” Marez, 688 F.3d at
965 (quoting Hensley, 461 U.S. at 434). In this circuit, district courts also consider the
10
factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19
(5th Cir. 1974) to determine an appropriate fee.7 See Marez, 688 F.3d at 966 n.4.
Congress enacted fee-shifting statutes “in order to ensure that federal rights are
adequately enforced.” Kenny A., 130 S. Ct. 1662, 1671 n.3 (involving 42 U.S.C. §1988,
but noting that “[v]irtually identical language appears in many of the federal fee-shifting
statutes”). Under a fee-shifting statute, “a ‘reasonable’ fee is a fee that is sufficient to
induce a capable attorney to undertake the representation of a meritorious” action to
vindicate the rights protected under the statute. Id. at 1672. “Fee awards must be
structured so that attorneys of quality and experience with other profitable demands
upon their time will not need to sacrifice income available in alternative enterprises in
order to effect a public policy intended to protect all citizens.” Casey v. City of Cabool,
12 F.3d 799, 805 (8th Cir. 1993).
The FLSA provides that the court “shall, in addition to any judgment awarded to
the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant,
and the costs of the action.” 29 U.S.C. § 216(b) (2008) (emphasis added). An award of
attorney fees to a prevailing plaintiff under § 16(b) of the FLSA is mandatory, but the
amount of the award is within the discretion of the judge. Fegley v. Higgins, 19 F.3d
1126, 1134 (6th Cir. 1994).
“Since the FLSA does not discuss what constitutes a
reasonable fee, ‘[t]he determination of a reasonable fee must be reached through an
7
The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the
questions; (3) the skill requisite to perform the legal services properly; (4) the preclusion of other
employment by the attorney due to acceptance of the case; (5) the customary fee in the community; (6)
whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8)
the amount of time involved and the results obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship
with the client; and (12) awards in similar cases. Johnson, 488 F.2d at 717-19; but see Kenny A., 130 S.
Ct. at 1672 n.4 (criticizing the Johnson factors method).
11
evaluation of a myriad of factors, all within the knowledge of the trial court, examined in
light of the congressional policy underlying the substantive portions of the statute
providing for the award of fees.’” Fegley, 19 F.3d at 1134 (quoting United Slate, Tile &
Composition Roofers, Damp and Waterproof Workers Ass’n, Local 307 v. G & M
Roofing and Sheet Metal Co., 732 F.2d 495, 501 (6th Cir. 1984)).
The purpose of the FLSA attorney fees provision is to insure effective access to
the judicial process by providing attorney fees for prevailing plaintiffs with wage and
hour grievances. Fegley, 19 F.3d at 1134. Courts should not place an undue emphasis
on the amount of the plaintiff’s recovery because an award of attorney fees in an FLSA
case “encourage[s] the vindication of congressionally identified policies and rights.” Id.;
see also Allende v. Unitech Design, Inc., 783 F.Supp.2d 509, 511-12 (S.D.N.Y. 2011)
(“[i]n FLSA cases, like other discrimination or civil rights cases, the attorneys’ fees need
not be proportional to the damages plaintiffs recover, because the award of attorneys’
fees in such cases encourages the vindication of Congressionally identified policies and
rights”); see also City of Riverside v. Rivera, 477 U.S. 561, 574 (1986) (rejecting
proportionality requirement in a civil rights § 1988 claim and ultimately granting an
award seven times the amount of the recovery); Dressler v. Kansas Copters and Wings,
No. 09–1016, 2010 WL 5834819, at *2 (D. Kan. Dec. 22, 2010) (rejecting proportional
approach in an FLSA case); Tucker v. City of New York, 704 F. Supp. 2d 347, 359 n.10
(S.D.N.Y. 2010) (“It is settled case law that the setting of statutory [attorney’] fees does
not require proportionality between the plaintiff’s recovery and the amount of the fee
award”).
In fact, courts often award attorneys’ fees that far exceed the plaintiffs’
recovery in FLSA cases. See, e.g., Fegley, 19 F.3d at 1134-35 (affirming attorney fees
12
of $40,000 on a judgment of $7,680 for overtime compensation); Lucio-Cantu v. Vela,
239 Fed. Appx. 866 (5th Cir. 2007) (finding no abuse of discretion in award of $51,750
in attorney fees on a recovery of $4,679); Howe v. Hoffman-Curtis Partners Ltd., LLP,
215 Fed. Appx. 341, 342 (5th Cir. 2007) (affirming attorney fees of and $129,805.50 on
$23,357.30 in damages); Cox v. Brookshire Grocery Co., 919 F.2d 354, 358 (5th Cir.
1990) (affirming an award of $9,250 in attorneys’ fees on a $1,181 judgment for
overtime compensation); Bonnette v. California Health & Welfare, 704 F.2d 1465, 1473
(9th Cir. 1983) (affirming $100,000 in attorney fees on a judgment of $18,455 in
damages); Garcia v. Tyson Foods, 2012 WL 5985561 (D. Kan. Nov. 29, 2012)
(awarding over $3.2 million in attorney fees on a jury verdict of $533,011 in a collective
action); James v. Wash Depot Holdings, Inc., 489 F. Supp. 2d 1341 (S.D. Fl. May 14,
2007) (awarding attorney fees of $114,021 on a judgment of $3,493.62); Wales v. Jack
M. Berry, Inc., 192 F. Supp.2d 1313 (M.D. Fl. Dec. 21, 2001) (awarding attorney fees of
$352,225.40 on an FLSA recovery of $21,000); Holyfield v. F.P. Quinn & Co., No. 90 C
507, 1991 WL 65928, at *1 (N.D. Ill. Apr. 22, 1991) (awarding $6,922.25 in attorney fees
and costs on a judgment of $921, and noting that “[g]iven the nature of claims under the
FLSA, it is not uncommon that attorneys’ fee requests will exceed the amount of the
judgment in the case).
Indeed, courts have “have ‘upheld substantial awards of
attorney’s fees even though a plaintiff recovered only nominal damages.’” Fegley, 19
F.3d at 1134.
The lodestar figure “includes most, if not all, of the relevant factors constituting a
‘reasonable’ attorney’s fee,” and “an enhancement may not be awarded based on a
factor that is subsumed in the lodestar calculation.” Kenny A., 130 S. Ct. at 1673. The
13
novelty and complexity of a case and quality of an attorney’s performance are reflected
in the number of billable hours and the reasonable hourly rate. Id. Superior attorney
performance may properly provide a basis for enhancement of the lodestar in rare and
exceptional cases, with specific evidence that the lodestar fee would not have been
adequate to attract competent counsel. Id. at 1674.
Further, a reasonable attorney fee award must take into account whether the
defendant mounted an aggressive defense. See, e.g., Rivera, 477 U.S. at 580-81 n.11
(“The [defendant] cannot litigate tenaciously and then be heard to complain about the
time necessarily spent by the plaintiff in response”) (internal citation omitted); Frank
Music Corp. v. MGM, Inc., 886 F.2d 1545, 1557 (9th Cir. 1989) (“‘Although [defendants]
had the right to play hardball in contesting [plaintiffs’] claims, it is also appropriate that
[defendants] bear the cost of their obstructionist strategy’”); Robinson v. City of
Edmond, 160 F.3d 1275, 1284 (10th Cir. 1998) (“The Tenth Circuit has long accepted
the proposition that one of the factors useful in evaluating the reasonableness of the
number of attorney hours in a fee request is ‘the responses necessitated by the
maneuvering of the other side’”) (citations omitted); Rodriguez-Hernandez v. MirandaVelez, 132 F.3d 848, 860 (1st Cir. 1998) (justifying an increased fee award to the
plaintiffs due to the defendant’s “Stalingrad defense”); Wolf v. Frank, 555 F.2d 1213,
1217 (5th Cir. 1977) (“Obviously, the more stubborn the opposition, the more time would
be required . . . .”). One of the exceptions to the general rule that attorney performance
is subsumed in the lodestar and cannot provide the basis for an enhancement is a case
requiring an extraordinary outlay of expenses and exceptionally protracted litigation. Id.
at 1674-75 (noting that the court does not “rule out the possibility that an enhancement
14
may be appropriate where an attorney assumes these costs in the face of unanticipated
delay, particularly where the delay is unjustifiably caused by the defense”).
The market value in the relevant legal community of the legal services performed
is used to determine a reasonable attorney fee. Blum v. Stenson, 465 U.S. 886, 895
(1984) (stating “[i]n communities, the marketplace has set a value for the services of
attorneys, and the hourly rate charged by an attorney for his or her services will
normally reflect the training, background, experience and skill of the individual
attorney”); Kenny A., 130 S. Ct. at 1672 (stating that the market rate of legal time is the
opportunity cost of that time, the income foregone by representing the particular
plaintiff). Market rates are applied under fee-shifting statutes; “[a]ny other rule would
relegate civil rights enforcement (and the law that results) to those lawyers with belowmarket billing rates” whose rates “are usually below market for a reason.” Id.
Reimbursement for work performed by out-of-town lawyers charging out-of-town
rates is generally permitted, however, when in-town counsel with expertise in a
particular area cannot be located. See, e.g., Avalon Cinema Corp. v. Thompson, 689
F.2d 137, 140-41 (8th Cir. 1982). The relevant market for attorneys in certain matters
“may extend beyond the local geographic community”—a national market or a market
for a particular legal specialization may provide the appropriate market. Casey, 12 F.3d
at 805; see also Planned Parenthood, Sioux Falls Clinic v. Miller, 70 F.3d 517, 519 (8th
Cir. 1995) (awarding Chicago market rates in a South Dakota reproductive rights case).
Also, counsel’s rates must be analyzed in the context of the financial risk
plaintiffs’ counsel took in prosecuting the case, including a delay in payment and the
contingent nature of the fee.
See City of Burlington v. Dague, 505 U.S. 557, 567
15
(1992). A lodestar enhancement for contingency risk, however, is duplicative if the risk
is already factored into the hourly rates used to calculate the lodestar and is reflected in
the higher hourly rate for the attorney skilled and experienced enough to overcome this
risk).
Under the FLSA, costs include reasonable out-of-pocket expenses, beyond those
normally allowed under Fed. R. Civ. P. 54(d) and 28 U.S.C. § 1920.8 Smith v. Diffee
Ford-Lincoln-Mercury, Inc., 298 F.3d 955, 969 (10th Cir. 2002); Herold v. Hajoca Corp.,
864 F.2d 317, 323 (4th Cir. 1988) (allowing recovery of attorney travel expenses);
Reichman v. Bonsignore, Brignati & Mazzotta P.C., 818 F.2d 278, 283 (2d Cir. 1987)
(attorney’s fees include expenses that are “incidental and necessary” to the
representation, provided they are “reasonable.”). An attorney fees award under a feeshifting statute should be comparable to what is traditionally paid to attorneys who are
compensated by a fee-paying client. Missouri v. Jenkins by Agyei, 491 U.S. 274, 287
(1989). The “reasonable attorney’s fee” provided for by statute should compensate the
work of paralegals as well as that of attorneys, at market rate, if the prevailing practice
in a given community is to bill paralegal time separately at market rates. Id. at 289
(noting that separate billing for the services of paralegals and law students employed as
law clerks “appears to be the practice in most communities today”). Consistent with the
Supreme Court’s decision in Jenkins, 491 U.S. at 285, the Eighth Circuit Court of
Appeals allows the “award of ‘reasonable out-of-pocket expenses incurred by the
attorney which are normally charged to a fee paying client.’” Sturgill v. United Parcel
8
Under 28 U.S.C. § 1920, six specifically enumerated categories of expenses may be taxed as
costs: fees of the court clerk and marshal; fees of the court reporter; printing fees and witness fees;
copying fees; certain docket fees; and fees of court-appointed experts and interpreters. 28 U.S.C. §
1920. This list is exclusive. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987).
16
Service, Inc., 512 F.3d 1024, 1036 (8th Cir. 2008) (quoting Mota v. University of Texas
Houston Health Sci. Ctr., 261 F.3d 512, 529 (5th Cir. 2001)).9 “Expenses such as
reimbursement for travel, meals, lodging, photocopying, long-distance telephone calls,
computer legal research, postage, courier service, mediation, exhibits, documents
scanning, and visual equipment are typically recoverable [in FLSA actions].” Rutti v.
Lojack Corp., Inc., No. 06-cv-350, 2012 WL 3151077, at *12 (C.D. Cal. July 31, 2012);
see also Andrade v. Aerotek, Inc., No. 08-cv-2668, 2012 WL 983773, at *7 (D. Md. Mar.
21, 2012) (“Types of costs charged to losing defendants [in FLSA actions] include
‘necessary travel, depositions and transcripts, computer research, postage, court costs,
and photocopying.”)
Reimbursement of expert fees are routinely approved by courts in the Eighth
Circuit and around the country as a component of attorney fees rather than costs. See,
e.g., Lee-Thomas, Inc. v. Hallmark Cards, Inc., 275 F.3d 702 (8th Cir. 2002) (finding
that the lower court did not abuse its discretion in awarding $7,448.18 in expert fees).
In 1991, the Civil Rights Act was amended to permit recovery of expert fees as part of
the attorney fees award.10 See 42 U.S.C. § 1988(c). In that Act, Congress legislatively
9
The defendant cites Leftwich v. Harris–Stowe State Coll., 702 F.2d 686, 695 (8th Cir. 1983) and
Standley v. Chilhowee R–IV Sch. Dist., 5 F.3d 319, 325 (8th Cir. 1993) for the proposition that the law of
the Eighth Circuit is that computer-based legal research must be factored into the attorneys’ hourly rate,
hence the cost of the computer time may not be added to the fee award. Although the Eighth Circuit
Court of Appeals has not explicitly overruled Leftwich and Standley, those cases predate Sturgill, 512
F.3d at 1036, and In re UnitedHealth Group Inc. Shareholder Derivative Litig., 631 F.3d 913, 918 (8th Cir.
2011) (affirming the district court’s reimbursement of online-research expenses in a case involving a
negotiated settlement and noting that “[t]he prevailing view among other circuits is to permit awards to
reimburse counsel for the reasonable costs of online legal research.”); see Gilster v. Primebank, 884 F.
Supp. 2d 811, 880 (N.D. Iowa 2012) (finding that computerized legal research fees are traditionally billed
to clients and, thus, if reasonable and adequately documented, should be awarded in fee-shifting cases).
10
Farmland’s contention to the contrary is based on cases that predated the 1991 Civil Rights
Act, which amended § 1988 to permit recovery of expert fees as part of the attorney fees award. 42
U.S.C. § 1988(c).
17
overruled the Supreme Court’s holding in West Virginia Univ. Hosp. v. Casey, 499 U.S.
83, 102 (1991), that plaintiffs could not be reimbursed expert witness fees in excess of
$40 per day under Fed. R. Civ. P. 54 and 28 U.S.C. § 1920. See Zeigler Coal Co. v.
Dir., Office of Workers’ Comp. Programs, 326 F.3d 894, 900 n.2 (7th Cir. 2003).
Section 1988 now provides that a court, in its discretion, may include expert fees as part
of the attorney’s fee award, rather than as a component of costs. Id. Courts are now
expressly authorized to include expert fees and costs awarded under the fee-shifting
provisions of 42 U.S.C. § 1988. Landgraf v. USI Film Prods., 511 U.S. 244, 251 (1994);
Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d 694, 700 (3d Cir. 2005)
(permitting compensation of nontestifying experts); Zeigler Coal Co., 326 F.3d at 900
n.2.
III. DISCUSSION
To the extent any such finding is required, the court first finds the plaintiff class is
a prevailing party for purposes of an attorney fee award under the Fair Labor Standards
Act. The plaintiffs succeeded on a significant issue, achieving some of the benefit they
sought in bringing suit. The Settlement Agreement required court approval and is a
judicially sanctioned result. The amount of the plaintiffs’ recovery is not insignificant.
The average award of $1,000 is a substantial sum of money to a low-income wageearner. Accordingly, the court finds that the plaintiff class, as the prevailing party, is
entitled to attorney fees.
The court also finds fees should be awarded under the lodestar method. This is
not a “common fund” case in which the percent of the benefit methodology would be
appropriate. The court finds that the time spent on the litigation by plaintiffs’ counsel is
18
reasonable. Class Counsel have substantial experience in prosecuting class actions
and wage and hour actions. The court finds the quality of representation was good.
As noted, this action has been pending for over four years. There are presently
457 filings in this case. The record shows that this was an intensely litigated case that
included extensive discovery, a motion for FLSA conditional certification, ten motions for
partial summary judgment and summary judgment, and numerous additional motions.
The issues in the case required careful legal analysis, extensive research, and
considerable factual investigation. Whatever purported “over-lawyering” that occurred
in this case was largely the defendant’s own doing. Given the nature of the case, the
court finds the time and labor expended by lead counsel in this case is reasonable and
necessary to prosecute a case of this nature.
Much of the time plaintiffs’ counsel
devoted to the action was necessitated by the defendant’s aggressive tactics. Surely
the defendant was aware that its litigation strategy generated legal work, billing and
fees.
Further, the court finds the defendant should be held to the benefit (or risk) of its
bargain. In agreeing to pay for attorney fees as determined by the court, the defendant
exposed itself in the settlement to the possibility of a large award of fees, especially in
view of the contentious and lengthy history of this case. Defendant was well aware of
the fact that the plaintiffs’ counsel were from San Francisco and Philadelphia and surely
understood that a substantial outlay was required to prosecute the case. Defendant
cannot be heard to complain of fees engendered by its conduct.
The court has reviewed plaintiffs’ counsel’s timekeeping records and finds that
plaintiffs have met their burden to prove the number of hours spent on this litigation.
19
The records show which attorneys were completing each task and the time spent on
each task. The plaintiffs’ counsel have eliminated numerous entries in the exercise of
billing judgment. The court finds that plaintiffs’ counsel has made a good faith effort to
exclude time hours that was excessive, redundant, unnecessary or unsupported.
Further, the court declines to adjust the lodestar for the plaintiffs’ alleged lack of
success.
The court has already determined that the settlement was fair and
reasonable. The court is not persuaded by Farmland’s argument that the plaintiffs’ fees
should be reduced because the settlement amount is only a small percentage of the
plaintiffs’ initial estimate of damages. Conversely, the settlement amount represents a
significant increase from the amount (zero) of damages that the defendant contended
was due and owing to the plaintiffs.
Also, plaintiffs’ counsel succeeded in vindicating important rights. The court does
not agree with the defendant’s characterization of the action as a “nuisance value” case.
The court is familiar with “donning and doffing” cases and based on the court’s
experience, defendant meat packing companies’ litigation conduct generally reflects
“what can only be described as a deeply-entrenched resistance to changing their
compensation practices to comply with the requirements of FLSA.” Jordan v. IBP, Inc.,
542 F. Supp. 2d 790, 794 (M.D. Tenn. 2008). Plaintiffs’ counsel perform a recognized
public service in prosecuting these actions as a “private Attorney General” to protect the
rights of underrepresented workers.
The court has reviewed the award from the perspective of benefit to the class.
The request for fees was disclosed in the notice of the settlement and no class
members have objected to the settlement or to the motion for fees. The plaintiffs have
20
demonstrated that counsel’s services have benefitted the class. The defendants agreed
to an award of fees, as determined by the court, that will not diminish the award to the
class. The fundamental policies of the FLSA were vindicated and the rights of the
workers were protected.
The issue of hourly rates deserves some discussion. Based on its familiarity with
litigation of this sort, the court agrees with the plaintiffs that this type of case is
“undesirable” to some extent because counsel must
incur substantial fees and
expenses with no guarantee of recovery. Other factors, such as the transitory nature of
defendant’s primarily low-income, immigrant or undocumented, non-English speaking
workforce makes it difficult to develop the facts underlying the plaintiffs’ wage and hour
claims.
Also, counsel’s efforts can be hampered by the workers’ natural and rational
fear of reprisal.
Cultural differences, immigration status and unfamiliarity with the
American legal system also contribute to the difficulty and “undesirability” of these types
of cases.
All of these factors make a case of this nature expensive to prosecute;
pursuing these cases involves assuming a substantial financial risk and requires a
significant outlay of resources.
Class counsel undertook prosecution of this action
without any assurance of recovery, and engaged in significant litigation in a complex
wage and hour case, while facing tremendous risk of little to no recovery.
The court is familiar with hourly rates in this community and with the skill and
abilities of the attorneys involved in this litigation. The plaintiffs argue that they should
recover for their time at San Francisco and Philadelphia legal rates. The defendant
argues that the fees should be awarded at the prevailing rate in this community—$250
21
per hour.
Based on its familiarity with fees in this community, the court finds the
defendant’s figure is somewhat understated.
Notably, the defendant is represented by a national law firm and is presumably
paying rates that would be appropriate in the Atlanta market. The defendant gains the
advantage of the resources that a large, well-financed, “big-city” firm can bring to the
litigation. Under these circumstances it would not be fair to constrain the plaintiffs to low
legal rates and inadequate resources. Although Omaha firms undoubtedly have the
expertise for this type of litigation, there may be some merit to the contention that the
substantial capital outlays, inherent delays, statutory limits on potential monetary
recovery, and the obduracy of the meat packing industry defense combine to make
cases of this sort unattractive to local law firms who lack unlimited resources and
financial flexibility.
Under these circumstances, the court finds it may well be necessary for the
plaintiff class to pay more than local rates in order to attract competent counsel. The
“market” in connection with a meat-packing industry donning and doffing case is not
necessarily limited to the location of the plant.
Many similar cases are pending
nationwide and plaintiffs should be allowed to reap the benefits of the experience of
firms with a nationwide presence.
The court is convinced that there are large national Omaha firms that could
competently prosecute this case.
The court finds that these firms charge rates
commensurate with rates charged in the Chicago legal market. Therefore, an award of
so-called Chicago rates is appropriate. Chicago’s legal rates are approximately onethird lower than the rates in San Francisco and Philadelphia. Accordingly, the court
22
finds the rates for the attorneys, paralegals and law clerks at the SWCK and B&M law
firm should be reduced by one third. That rate is adequate to account for the difference
in local attorney fees, and is appropriate in light of the size of the settlement, the
vindication of employees rights, the complexity of the case, and the skills of the
attorneys.
Accordingly, the court will award fees for the services of SWCK and B&M in the
amount of $1,858,172. Because it charges local rates, the rates sought by W&W need
not be reduced and plaintiffs will be awarded $94,215 for the services of W&W.
Similarly, attorney Philip Downey also seeks a rate that is reasonable for legal services
in the Omaha areas and his requested fees need not be adjusted. Plaintiffs will be
awarded $55,755.00 for his services, for a total attorney fees award of $2,008,142.
The court has carefully reviewed the cost and expenses and finds the plaintiffs
have adequately documented the expenses and shown the expenditures were
reasonable and necessary to prosecute the action on behalf of the class.
The
categories of expenses incurred in connection with this case are the types of expenses
that are ordinarily charged to clients in this locality. Under Eighth Circuit precedent,
plaintiffs may properly be reimbursed for computerized legal research, expert witness
fees, copying costs and travel. The use of experts was reasonable and necessary to
the action in order to establish damages had the action proceeded to trial.
The
defendant has not shown that the costs incurred by plaintiffs are excessive, especially in
view of the prolonged and vexatious character of the case. Accordingly, plaintiffs will be
awarded costs and expenses in the amount of $275,416.
23
IT IS ORDERED:
1.
The plaintiffs’ motions for attorney fees (Filing Nos. 437 and 441) are
granted.
2.
The plaintiffs’ motion for oral argument (Filing No. 446) is denied.
3.
The plaintiffs are awarded fees in the amount of $1,858,172 for the
services of Schneider Wallace Cottrell Konecky, LLP, and Berger & Montague, P.C.;
$94,215 for the services of Walsh and Walsh; and $55,215 for the services of Philip
Downey, resulting in a total attorney fees award of $2,008,142.
4.
The plaintiffs are awarded costs and expenses in the amount of $275,416.
5.
A judgment for attorney fees and costs in conformity with this
Memorandum and Order will issue the date.
Dated this 18th day of April, 2013.
BY THE COURT:
s/ Joseph F. Bataillon
United States District Judge
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