Solis v. SCA Restaurant Corp. et al
Filing
90
ORDER granting 86 Motion for Attorney Fees. For the reasons discussed herein, the Court grants plaintiff's motion for attorneys' fees and costs. Plaintiff is awarded $8,183.45 in costs and $5,062.50 in attorneys' fees. SO ORDERED. Ordered by Judge Joseph F. Bianco on 3/14/2014. (Gibaldi, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 09-CV-2212 (JFB) (ETB)
_____________________
SETH D. HARRIS, ACTING SECRETARY OF LABOR, UNITED STATES DEPARTMENT
OF LABOR,
Plaintiff,
VERSUS
SCA RESTAURANT CORP. D/B/A LUIGI Q ITALIAN RESTAURANT, A CORPORATION
AND LUIGI QUARTA, INDIVIDUALLY AND AS OWNER,
Defendants.
___________________
MEMORANDUM AND ORDER
March 14, 2014
__________________
JOSEPH F. BIANCO, District Judge:
Memorandum and Order detailing its
findings of fact and conclusions of law,
concluding that the Secretary had met her
burden of proof on all of her claims.
Plaintiff Seth D. Harris, 1 Acting
Secretary of Labor, United States
Department of Labor (“the Secretary”) brings
this action against SCA Restaurant
Corporation, d/b/a Luigi Q Italian Restaurant
(“SCA Restaurant Corp.”) and Luigi Quarta
(“Quarta”) (collectively, “defendants”),
asserting claims under the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§ 201 et
seq. A bench trial was held on April 9 and
April 10, 2012, as well as on October 4, 2012,
to determine defendants’ liability, if any. On
April 5, 2013, this Court issued a
On May 2, 2013, the Secretary filed a
motion for attorneys’ fees and costs.
Specifically, the Secretary argues that he is
entitled to reasonable attorneys’ fees for
work that was performed in response to
Quarta’s attempted retaliatory conduct
against his employees. In addition, the
Secretary argues that, as the prevailing party,
he is entitled to all taxable costs incurred in
this matter.2 For the reasons set forth below,
attorney’s fees under 29 U.S.C. § 216(b), it is clear that
fees under that provision are only available to private
plaintiffs. Thus, as discussed at the April 11, 2013
conference, the Secretary is only seeking attorney’s
fees in connection with the retaliatory discrimination
claim under 29 U.S.C. § 215(a)(3) which was proven
1
Secretary of Labor Hilda L. Solis was previously the
plaintiff in this matter. However, pursuant to Fed. R.
Civ. P. 25(d), Seth D. Harris is substituted for Hilda L.
Solis.
2
As a threshold matter, the Court notes that, to the
extent the Court’s April 5, 2013 Memorandum and
Order suggested that the Secretary could seek
1
the Court grants the Secretary’s motion and
awards attorneys’ fees in the amount of
$5,062.50 and costs in the amount of
$8,183.45. In particular, with respect to the
attorney’s fees, the Court finds that the
defendants’ retaliatory discrimination against
trial witnesses constituted bad faith conduct
in this litigation and, in its discretion pursuant
to its inherent power, concludes that
attorney’s fees (for the work performed in
response to that conduct) should be awarded
as a sanction.
dishwasher, testified that on April 5, 2012,
Quarta asked Acosta whether he intended to
testify in court. (Apr. Tr. at 142–43.) When
Acosta answered in the affirmative, Quarta
told him that, if he testified, “then there’s no
more work for you.” (Id. at 142.) Acosta also
stated that an employee of the restaurant told
him that Quarta said if Acosta appeared in
court that “he would look for other workers.”
(Id. at 145.) After being told that he would
lose his job if he testified, Acosta felt afraid.
(Id. at 147.)
I. BACKGROUND
Juan Carlos Cantos-Chavez (“CantosChavez”), who prepared the salads, also
testified that, several days prior to the
commencement of the trial, Quarta told the
employees, using another employee as a
translator, that if they came to court they
“would only have work there until Saturday”
(id. at 199), and “if [they] showed up in court
then [they] . . . would not have a job
anymore” (id. at 202). Quarta also told the
employees that it was their decision whether
to come to court, because they could “either
come to court or [could] go to work.” (Id. at
201.) Following these conversations, CantosChavez felt pressure not to testify and
questioned whether he would testify in court,
and was afraid and nervous. (Id. at 202, 214.)
Familiarity with the facts is assumed in
light of the Court’s previous opinion in this
matter. See Solis v. SCA Rest. Corp., 09-CV2212, 2013 WL 1401396 (E.D.N.Y. Apr. 5,
2013).
On April 6, 2012, just days before trial in
this matter was set to begin, the Court issued
a temporary restraining order preventing
defendants from discharging or taking
discriminatory action against two employees
whom defendants threatened to fire due to
their involvement in this lawsuit. (See
Temporary Restraining Order, Apr. 6, 2012,
ECF No. 61.) The Court issued a preliminary
injunction on April 19, 2012 barring
defendants from firing or discriminating
against any employees in violation of Section
15(a)(3) of the FLSA until the Court
adjudicated this matter. (See Preliminary
Injunction, Apr. 19, 2012, ECF No. 67.)
After the initial trial, the Secretary
amended her complaint on April 13, 2012 to
add the retaliation claim, and defendants filed
an answer on April 27, 2012. The parties
undertook additional discovery regarding the
retaliation claim. The Court held a bench trial
on October 4, 2012 so that defendants could
present any additional evidence with respect
to the retaliation claim.3 Quarta was the only
During the trial, defendants’ employees
testified regarding Quarta’s retaliatory
conduct. Jose Anibal Acosta (“Acosta”), a
both in connection with the preliminary injunction and
at trial.
3
With the consent of both sides, the Secretary was
permitted to present evidence regarding the retaliation
claim during the trial on April 9 and 10. However, to
avoid any potential prejudice to defendants, the Court
required the Secretary to formally amend the
complaint to add the retaliation claim in order to give
defendants the opportunity to conduct additional
discovery on that claim and then present any
additional evidence regarding such claim. Thus, the
Secretary presented no additional evidence regarding
the retaliation claim on October 4, 2012.
2
witness for defendants on the remaining
retaliation claim. However, as stated infra,
the Court found Quarta’s testimony not
credible, and determined that “the evidence
established that Quarta intentionally
attempted to prevent two of his current
employees from testifying, including
threatening those employees with discharge
if they testified, and that his conduct was
calculated to dissuade a reasonable worker
from testifying at the proceeding.” Id. at *16.
anti-retaliation provisions of the FLSA. Id. at
*15–16. The Court awarded the Secretary
$2,000 in compensatory damages for
emotional distress ($1,000 each for Mr.
Acosta and Mr. Cantos–Chavez), but
declined to award punitive damages. Id. at
*20.
At the continuation of the bench trial on
October 4, 2012, Quarta testified that, when
he told Acosta and Cantos-Chavez not to
come to work if they testified, he meant that
they did not need to show up because he
would have either closed the restaurant for
the day or obtained temporary replacements.
(Oct. Tr. at 2, 5–7.)
On May 2, 2013, the Secretary filed a
motion for attorneys’ fees. Specifically, the
Secretary requested that the Court sanction
defendants for Quarta’s retaliatory conduct
against two of his employees and his attempt
to dissuade these witnesses from testifying
against him at trial. The Secretary has only
requested fees specifically arising from the
addition of the retaliation claim and the
motions for a temporary restraining order and
preliminary injunction, all of which stemmed
from Quarta’s witness tampering.
II. DISCUSSION
A. Attorneys’ Fees
In this Court’s April 5, 2013
Memorandum and Order, the Court found the
testimony of Acosta and Cantos-Chavez
credible, and the testimony of Quarta not
credible. The Court stated:
1. Are Sanctions Appropriate for
Quarta’s Conduct?
It is clear from the evidence,
including an evaluation of the
credibility of the witnesses, that there
was no misunderstanding by the
employees of the substance of
Quarta’s statements. Quarta clearly
intended to communicate, and did
communicate, his intention to
terminate these employees if they
testified, in an attempt to retaliate
against them and dissuade them from
doing so. Therefore, the Court finds
that defendants attempted to
intimidate
employees
from
cooperating with the DOL and
testifying at the trial.
a. Applicable Law
“Courts of justice are universally
acknowledged to be vested, by their very
creation, with power to impose silence,
respect, and decorum, in their presence, and
submission to their lawful mandates.”
Chambers v. NASCO, Inc., 501 U.S. 32, 43,
(1991) (citation and internal quotation marks
omitted); see also United States v. Int’l Bhd.
of Teamsters, Chauffeurs, Warehousemen &
Helpers of Am., AFL-CIO, 948 F.2d 1338,
1345 (2d Cir. 1991) (stating that courts may
impose sanctions pursuant to “its inherent
power”). These powers are “necessarily
vested in courts to manage their own affairs
so as to achieve the orderly and expeditious
disposition of cases.” Chambers, 501 U.S. at
SCA Rest. Corp., 2013 WL 1401396, at *5.
The Court then found that the Secretary had
demonstrated that defendants violated the
3
43 (citation and internal quotation marks
omitted).
Milltex Indus. Corp. v. Jacquard Lace Co.,
55 F.3d 34, 38 (2d Cir. 1995) (citation and
internal quotation marks omitted). In
addition, “the court’s factual findings of bad
faith must be characterized by a high degree
of specificity.” Id. (citation and internal
quotation marks omitted).
Under this inherent power, “a court may
assess attorney’s fees when a party has acted
in bad faith, vexatiously, wantonly, or for
oppressive reasons.” Id. at 45–46 (citation
and internal quotation marks omitted). 4 A
court may award fees both if “fraud has been
practiced upon it . . . [or] when a party shows
bad faith by delaying or disrupting the
litigation or by hampering enforcement of a
court order.” Id. at 46 (citations and internal
quotation marks omitted). “The imposition of
sanctions in this instance transcends a court’s
equitable power concerning relations
between the parties and reaches a court’s
inherent power to police itself, thus serving
the dual purpose of vindicating judicial
authority without resort to the more drastic
sanctions available for contempt of court and
making the prevailing party whole for
expenses caused by his opponent’s
obstinacy.” Id. (alterations, citations, and
internal quotation marks omitted). In
addition, the Second Circuit has instructed
“district courts to focus on the purpose rather
than the effect of the sanctioned” conduct.
Enmon v. Prospect Capital Corp., 675 F.3d
138, 145 (2d Cir. 2012).
b. Analysis
Quarta threatened two of his employees
with termination if they testified against him
in this case. It is beyond dispute that
“[w]itness tampering is extremely serious
misconduct.” Ty Inc. v. Softbelly’s Inc., 353
F.3d 528, 537 (7th Cir. 2003). Even noncoercive efforts attempting to dissuade a
witness from testifying is a federal crime,
punishable by up to twenty years
imprisonment. See United States v. Amato, 86
F. App’x 447, 450 (2d Cir. 2004); 18 U.S.C.
§ 1512(b); see also 18 U.S.C. § 1512(d).
Quarta’s actions were entirely without
color. Although Quarta testified that he made
those statements to notify his employees that
he would either find a temporary replacement
or would close the restaurant for the day, the
Court found his testimony not credible.
Instead, the evidence demonstrated that
Quarta attempted to intimidate his employees
into believing that they would lose their jobs
if they testified against him. Such an action is
inherently motivated by an improper
purpose; Quarta made these threats with the
intent of undermining the Secretary’s lawsuit
and shielding himself from significant
monetary damages.
However, “[b]ecause of their very
potency, inherent powers must be exercised
with restraint and discretion.” Chambers, 501
U.S. at 44; see also Int’l Bhd. of Teamsters,
948 F.2d at 1345. In this Circuit, sanctions
may only be imposed upon “a particularized
showing of bad faith.” Int’l Bhd. of
Teamsters, 948 F.2d at 1345. Specifically,
“sanctions are not appropriate unless the
challenged actions are (1) entirely without
color and (2) motivated by improper
purposes, such as harassment or delay.”
Having presided over the bench trial in
this matter and having both reviewed the
testimony of the witnesses and judged their
credibility, the Court finds by clear and
4
A district court possesses this inherent power to
award attorneys’ fees “unless such an award [is]
forbidden by Congress.” Herman v. Davis Acoustical
Corp., 196 F.3d 354, 357 (2d Cir. 1999). In Herman,
the Second Circuit found “no such prohibition in the
FLSA.” Id.
4
plaintiff’s key witness “was effectively
removed from the case by the improper
actions of the defendant . . . the proper
sanction is to declare that the complaint is
true and that [defendant] is liable for
damages.” Id. at *6.
convincing
evidence,
not
just
a
preponderance of the evidence, that Quarta
attempted to intimidate these witness and that
such action was taken in bad faith. See
Shepherd v. Am. Broad. Cos., 62 F.3d 1469,
1477 (D.C. Cir. 1995) (“[C]ourts require
clear and convincing evidence of misconduct
before imposing attorneys’ fees under their
inherent power.”).
Defendants’ sole argument in opposition
to plaintiff’s motion for fees is that plaintiff
never sought attorneys’ fees in the complaint.
However, as stated supra, the Court is
awarding attorneys’ fees under its inherent
power, not pursuant to a statutory scheme or
the Federal Rules of Civil Procedure. See
Chambers, 501 U.S. at 43–46. Moreover,
defendants received notice regarding
plaintiff’s motion and an opportunity to
submit opposition papers.
Although requests for sanctions
following witness tampering are not common
in federal court, other courts have held that
witness tampering is sanctionable under a
court’s inherent power. In Synergetics, Inc. v.
Hurst, the jury returned a verdict in favor of
the plaintiff. 04-CV-318, 2007 WL 2422871,
at *6 (E.D. Mo. Aug. 21, 2007). After the
trial, the court found that the chief executive
officer of the plaintiff “wrongfully induced”
a witness not to testify. Id. at *1. The court
concluded that, although it “would be
justified in [vacating] the judgment,” id. at
*7, a more appropriate sanction would be
requiring the plaintiff to return one-half of the
total damages the jury awarded. See id. at
*15; see also id. at *7 (“Witness tampering is
an extremely serious offense, and strikes at
the heart of the litigation process. Our system
of justice relies on witnesses coming to court
and telling the truth. Interference with the
process taints trials and threatens the integrity
of the justice system. The court has inherent
authority to sanction such conduct, and this is
an appropriate case for sanctions.” (internal
citation omitted)). In HomeDirect, Inc. v.
H.E.P. Direct, Inc., the court imposed an
even harsher sanction. See No. 10 C 812,
2013 WL 1815979 (N.D. Ill. Apr. 29, 2013).
In HomeDirect, the CEO of the defendant
agreed to forgive some of the debt plaintiff’s
key witness owed him in exchange for a
declaration refuting the accusations in
plaintiff’s complaint. See id. at *2–3. The
court held that “[p]aying a crucial witness for
the purpose to ensure they are useless to the
opposing party is egregious” and that because
The Court has considered if there are
other possible sanctions to punish defendants
for this egregious conduct but, given the
circumstances of this case, concludes that a
monetary sanction is the most appropriate
sanction. Accordingly, plaintiff is entitled to
reasonable attorneys’ fees for the work
performed in response to Quarta’s attempted
witness intimidation.
2. Are the Requested Fees Reasonable?
a. Applicable Law
Under Second Circuit jurisprudence,
when determining whether an attorneys’ fee
is reasonable, the court must determine the
“presumptively reasonable fee,” keeping “in
mind all of the case-specific variables that
[the Second Circuit] and other courts have
identified as relevant to the reasonableness of
attorney’s fees in setting a reasonable hourly
rate.” Arbor Hill Concerned Citizens
Neighborhood Ass’n v. Cnty. of Albany, 522
F.3d 182, 190 (2d Cir. 2008); see Millea v.
Metro-N. R.R. Co., 658 F.3d 154, 166 (2d Cir.
2011); see generally Perdue v. Kenny A. ex
rel. Winn, 559 U.S. 542 (2010). “In order to
5
calculate the presumptively reasonable fee,
the Court must first determine a reasonable
hourly rate for the legal services performed.”
Finkel v. Rico Elec., Inc., No. 11-CV-4232,
2012 WL 6569779, at *13 (E.D.N.Y. Oct. 1,
2012) (Report and Recommendation).
“Courts should generally use the hourly rates
employed in the district in which the
reviewing court sits in calculating the
presumptively reasonable fee.” Simmons v.
N.Y.C. Transit Auth., 575 F.3d 170, 174 (2d
Cir. 2009) (citation and internal quotation
marks omitted). Additionally, in calculating a
reasonable hourly rate, courts must balance
the following factors:
the complexity and difficulty
of the case, the available
expertise and capacity of the
client’s other counsel (if any),
the resources required to
prosecute the case effectively
(taking account of the
resources being marshaled on
the other side but not
endorsing scorched earth
tactics), the timing demands
of the case, whether an
attorney might have an
interest (independent of that
of his client) in achieving the
ends of the litigation or might
initiate the representation
himself, whether an attorney
might have initially acted pro
bono (such that a client might
be aware that the attorney
expected low or non-existent
remuneration), and other
returns (such as reputation,
etc.) that an attorney might
expect
from
the
representation.
(1) the time and labor
required; (2) the novelty and
difficulty of the questions; (3)
the level of skill required to
perform the legal service
properly; (4) the preclusion of
employment by the attorney
due to acceptance of the case;
(5) the attorney’s customary
hourly rate; (6) whether the
fee is fixed or contingent; (7)
the time limitations imposed
by the client or the
circumstances; (8) the amount
involved in the case 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.
Id. at 184.
In addition, the fact that the legal work in
this case was performed by government
attorneys, as opposed to private individuals,
has no effect on the court’s calculation of a
reasonable fee. See NLRB v. Local 3, Int’l
Bhd. of Elec. Workers, 471 F.3d 399, 407 (2d
Cir. 2006) (“[D]istrict courts in this Circuit
generally employ market rates to calculate
awards of government attorneys’ fees.”);
Adams v. N.Y. State Educ. Dep’t, 630 F.
Supp. 2d 333, 348 (S.D.N.Y. 2009) (same).
Arbor Hill, 522 F.3d at 186 n.3. When
“determining what a reasonable, paying
client would be willing to pay,” the Second
Circuit has also instructed courts to balance:
6
b. Analysis
and Goldstein have reduced the amount of
time they worked on this matter, most
notably by not including travel time to and
from the courthouse in Central Islip, and by
not including the time spent on this motion.
(Hennefeld Decl. ¶ 12; Goldstein Decl. ¶ 6.)
In addition, the Secretary is not requesting
fees for the supervising attorneys who
reviewed and advised Hennefeld and
Goldstein. (Hennefeld Decl. ¶ 12; Goldstein
Decl. ¶ 6.)
The Secretary requests a rate of $225 per
hour for the work performed by Department
of Labor trial attorneys Daniel Hennefeld
(“Hennefeld”)
and
Elena
Goldstein
(“Goldstein”) in connection with defendants’
retaliatory conduct. Hennefeld has more than
five years of litigation experience (Decl. of
Daniel Hennefeld, May 2, 2013 (“Hennefeld
Decl.”) ¶ 9), and Goldstein has been an
attorney for nine years, with nearly four years
of litigation experience at the Department of
Labor (Decl. of Elena Goldstein, May 2,
2013 (“Goldstein Decl.”) ¶ 3). After
considering the prevailing market rate in this
district, and the relevant factors set forth in
Arbor Hill (since most of those
considerations are not applicable to this
case), the Court finds that $225 is a
reasonable rate in this matter. See Eu Yan
Sang Int’l Ltd. v. S & M Enters. (U.S.A.)
Enter. Corp., No. 09-CV-4235, 2010 WL
3824129, at *7 (E.D.N.Y. Sept. 8, 2010)
(Report and Recommendation) (stating that
in this district, reasonable rates range from
“$200 to $250 an hour for senior associates”);
see also Callier v. Superior Bldg. Servs., Inc.,
No. 09-CV-4590, 2010 WL 5625906, at *8
(E.D.N.Y. Dec. 22, 2010) (Report and
Recommendation) (awarding $250 an hour to
attorney with eight years experience in a
“relatively straightforward FLSA” case).
Because the Secretary has requested a
reasonable fee of $225 an hour for the work
of Hennefeld and Goldstein, and because the
hours billed on this matter are quite modest
and supported by the record, the Court
awards attorneys’ fees of $5,062.50 in its
discretion, pursuant to its inherent power.5
B. Costs
Under Federal Rule of Civil Procedure
54(d), costs are awarded to “the prevailing
party.” The term costs, as used in Rule 54, is
defined by 28 U.S.C. § 1920 and includes,
inter alia, fees for transcripts, docket fees,
and compensation of court appointed experts
and interpreters.
The Secretary seeks reimbursement for:
(1) transcription costs for the bench trial on
April 9 and 10, 2012; (2) transcription costs
for the deposition of Quarta; (3) the
statutorily required witness fees of the four
witnesses the Secretary subpoenaed; and (4)
interpreters’ fees for translating the testimony
of four witnesses at trial that did not speak
English (not including travel expenses).
(Hennefeld Decl. ¶¶ 3–7.) Defendants do not
oppose plaintiff’s motion for costs.
The Secretary requests compensation for
11.25 hours of work performed by Hennefeld
and 11.25 hours of work performed by
Goldstein in connection with the retaliation
claim and the motions for a temporary
restraining order and a preliminary
injunction. (Hennefeld Decl. ¶ 11; Goldstein
Decl. ¶ 5.) These hours actually undercompensate the Secretary for the work
performed by his attorneys. Both Hennefeld
Having reviewed Hennefeld’s declaration
and the supporting documentation, the Court
5
The Court notes that defendants have not submitted
any opposition regarding the requested hourly rate or
the number of hours expended by Hennefeld and
Goldstein.
7
finds that these costs are reasonable.
Accordingly, the Court awards the Secretary
costs of $8,183.45.
III. CONCLUSION
For the foregoing reasons, the Court
grants the Secretary’s motion for attorneys’
fees and costs. Plaintiff is awarded costs of
$8,183.45 and attorneys’ fees of $5,062.50.
SO ORDERED.
_______________________
JOSEPH F. BIANCO
United States District Judge
Dated: March 14, 2014
Central Islip, NY
***
Plaintiff is represented by Daniel M.
Hennefeld and Elena S. Goldstein, U.S.
Department of Labor, Office of the Solicitor,
201 Varick Street, Room 983, New York,
N.Y. 10014. Defendant is represented by
Raymond Nardo, 129 Third Street, Mineola,
N.Y. 11501.
8
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