Tsouris v. Environmental Systems Corporation et al
Filing
110
ORDER that Plaintiff's Statement of Fees and Costs 92 is hereby GRANTED in part and DENIED in part. Plaintiff is AWARDED $80,499.14 in attorneys' fees and $5,706.01 in costs, for a total of $86,205.15. Signed by Chief District Judge Thomas A Varlan on 3/28/13. (ABF)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
WARREN GRANT,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
SHAW ENVIRONMENTAL, INC.,
Defendant.
No.: 3:08-CV-350
(VARLAN/SHIRLEY)
MEMORANDUM OPINION AND ORDER
This civil action is before the Court on the Report and Recommendation of
Magistrate Judge C. Clifford Shirley, Jr., entered on January 30, 2013 [Doc. 107] (the
“R&R”), which addresses plaintiff’s request for an award of attorneys’ fees and expenses.
The parties briefed the issue and appeared before the magistrate judge for a hearing.
After consideration of plaintiff’s request, Magistrate Judge Shirley recommends that the
Court grant in part and deny in part plaintiffs’ request for attorneys’ fees and expenses
and award plaintiff $80,499.14 in attorneys’ fees and $5,706.01 in costs, for a total of
$86,205.15.
Defendant
Shaw
Environmental,
Inc.
(“defendant”
or
“Shaw
Environmental”) filed an objection to the R&R [Doc. 108], and plaintiff responded [Doc.
109].
I.
Standard of Review
A court must conduct a de novo review of those portions of a magistrate judge’s
report and recommendation to which a party objects unless the objections are frivolous,
conclusive, or general. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Smith v.
Detroit Fed’n of Teachers, Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987); Mira v.
Marshall, 806 F.2d 636, 637 (6th Cir. 1986). “Objections disputing the correctness of the
magistrate’s recommendation, but failing to specify the findings believed to be in error
are too general and therefore insufficient.” Stamtec, Inc. v. Anson, 296 Fed. App’x 516,
519 (6th Cir. 2008) (citing Spencer v. Bouchard, 449 F.3d 721, 725 (6th Cir. 2006)). The
Court “may accept, reject, or modify, in whole or in part, the findings or
recommendations” made by the magistrate judge. 28 U.S.C. § 636(b)(1).
II.
Analysis
Defendant asserts three objections: (1) that Magistrate Judge Shirley failed to
consider plaintiff’s lack of success on the merits; (2) that Magistrate Judge Shirley failed
to consider plaintiff’s rejection of settlement offers; and (3) that the hours submitted by
plaintiff’s counsel were excessive.
A.
Lack of Success on the Merits
Defendant argues that the magistrate judge acknowledges but fails to address
defendant’s position that plaintiff’s fee petition should be reduced because plaintiff
received less than one third of his claimed damages as a result of losing on the issues of
good faith, which would have provided for liquidated damages, and willfulness, which
would have added a year to plaintiff’s back-pay claim. In response, plaintiff asserts he
was successful on the merits and that he deducted $25,088.53 in fees from the requested
amount given his unsuccessful attempt to prove willfulness.
2
While Magistrate Judge Shirley noted defendant’s argument that plaintiff’s
attorneys’ fees should be reduced due to his limited success on the merits, it seems he did
not consider this point in determining the award of attorneys’ fees but should have done
so. Cf. Hensley v. Eckerhart, 461 U.S. 424, 440 (1983) (holding that extent of plaintiff’s
success is a “crucial factor” in award of attorney’s fees under 42 U.S.C. § 1988). The
Court, therefore, SUSTAINS defendant’s objection.
Having sustained defendant’s objection, the Court must determine whether it will
reduce the award of attorneys’ fees given plaintiff’s limited success. The Sixth Circuit
has said:
The Supreme Court has given guidance on the extent to which a fee
should be adjusted when a plaintiff wins on some claims and loses
on others. See Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933,
76 L.Ed.2d 40 (1983). First, it is necessary to see whether the claims
on which the plaintiff won and the claims on which the plaintiff lost
are related. If they employ “a common core of facts or [are] based
on related legal theories,” id. at 435, 461 U.S. 424, 103 S.Ct. 1933,
76 L.Ed.2d 40, the court should consider “the significance of the
overall relief obtained by the plaintiff in relation to the hours
reasonably expended on the litigation.” Id. The Supreme Court
noted that there was no “precise formula” for determining a
reasonable fee, id. at 436–37, 461 U.S. 424, 103 S.Ct. 1933, 76
L.Ed.2d 40, and stressed the district court’s discretion in this area,
id. at 437, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40, but it
specifically rejected a “mathematical approach” that compared the
number of issues on which the plaintiff prevailed to the total number
of issues in the case, finding that such an approach was not helpful
in setting a reasonable fee. Id. at 435 n. 11, 461 U.S. 424, 103 S.Ct.
1933, 76 L.Ed.2d 40. The Court noted that litigants often raise
alternative grounds and that rejection of some of those grounds
should not lead to a reduced fee if the plaintiff has been successful.
Id. at 435, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40. The Sixth
3
Circuit has followed suit in finding that attorney’s fees should not be
reduced by the ratio of successful claims to claims overall. See
Phelan [v. Bell], 8 F.3d 369, 374 (6th Cir. 1993).
Moore v. Freeman, 355 F.3d 558, 565–66 (6th Cir. 2004) (first alteration in original).
Here, plaintiff asserted claims against defendants The Shaw Group, Inc. and Shaw
Environmental for unpaid overtime wages and liquidated damages as well as damages on
the basis that defendants’ actions were willful. The Court dismissed the claims against
The Shaw Group, Inc. because it was not plaintiff’s employer for purposes of the Fair
Labor Standards Act (“FLSA”). And while plaintiff successfully litigated his claim for
unpaid overtime against Shaw Environmental, he was unsuccessful in establishing that
defendant willfully violated the FLSA as well as in seeking liquidated damages. Despite
this limited success, the Court, having familiarity with the record, finds that the claims
are related [See Doc. 81]. Because the claims are related, the Court declines to reduce the
award of attorneys’ fees. See Fegley v. Higgins, 19 F.3d 1126, 1135–36 (6th Cir. 1994)
(noting that “[c]ourts should not place an undue emphasis on the amount of the plaintiff’s
recovery because an award of attorney fees [in the FLSA context] encourage[s] the
vindication of congressional identified policies and rights” (last alteration in original and
citation and internal quotation marks omitted)).
B.
Rejection of Settlement Offers
Defendant argues that the magistrate judge acknowledges but fails to address
defendant’s position that plaintiff’s fee petition should be reduced due to plaintiff’s
refusal of settlement offers that exceeded his recovery at trial. In response, plaintiff
4
asserts that the magistrate judged asked questions about both parties’ settlement demands
during the hearing and “noted [d]efendant’s position” in the R&R [Doc. 109 p. 3].
In the R&R, Magistrate Judge Shirley acknowledges that defendant argues
plaintiff should not be allowed to recover attorneys’ fees because “on June 24, 2011,
before any of the fees requested were incurred, [defendant] offered $10,000 to settle this
case, and on July 20, 2011, [defendant] offered $15,000 to settle this case” [Doc. 107 p.
5]. He further acknowledges that “these offers exceeded [plaintiff’s] ultimate recovery”
[Id.]. While not located in the “Analysis” section of the R&R, the magistrate judge
dismisses this argument by noting defendant conceded that “these offers were offers to
settle not offers of judgment” [Id.]. He also, in a footnote, recognizes that the Court of
Appeals for the Sixth Circuit found a “district court did not abuse its discretion in
refusing to consider [a] settlement offer that exceeded recovery in awarding attorneys[’]
fees under [the Fair Debt Collection Practices Act and the Real Estate Settlement
Procedures Act]” [Id. p. 5 n.3 (citing Dowling v. Litton Loan Servicing LP, 320 F. App’x
442 (6th Cir. 2009))].
Reviewing this objection de novo, the Court agrees with Magistrate Judge Shirley
that the award of attorneys’ fees should not be reduced as a result of plaintiff’s rejection
of settlement offers, but for reasons different from those cited by the magistrate judge.
First, even if defendant’s offers to settle this case were offers of judgment, as defined by
5
Rule 68,1 Rule 68 has no application when awarding attorneys’ fees under 29 U.S.C. §
216. See Fegley, 19 F.3d at 1134 (Rule 68 does not apply in the context of § 216 because
§ 216(b) does not refer to attorneys’ fees as part of the costs (citation omitted)).
Second, the Sixth Circuit in Dowling did not say, as the magistrate judge said in
the R&R, that it was not an abuse of discretion to refuse to consider a settlement offer
that exceeded the ultimate recovery; rather, it ruled that it was not an abuse of discretion
for a district court to decline to reduce a fee award where the defendant made an offer of
settlement that was greater than the plaintiff’s ultimate award. See Dowling, 320 F.
App’x at 449. In Dowling, the plaintiff received $26,000 in damages after rejecting a
$30,000 offer from the defendant to settle the lawsuit. Id. The Sixth Circuit ruled it was
not abuse of discretion to decline to reduce the attorneys’ fee award—$49,560—in light
of this rejection because the $30,000 offer was inclusive of attorneys’ fees and at the time
the offer was made plaintiff had already incurred $16,410 in legal fees. Id. Thus, the
value of the offer was only $13,590. Id.
The Court finds the reasoning of Dowling applicable here. From documents in the
record, the Court discerns that at the time defendant made the offers of $10,000 and
$15,000, plaintiff had incurred more than $15,000 in legal fees [see Doc. 93-4]; hence,
1
Rule 68 of the Federal Rules of Civil Procedure, entitled “Offer of Judgment,” provides
that “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted
offer, the offeree must pay costs incurred after the offer was made.” The Supreme Court has
held that where a plaintiff recovers less than a defendant’s Rule 68 offer, the plaintiff should not
recover attorneys’ fees incurred after that offer if “the underlying statute defines ‘costs’ to
include attorney’s fees.” Marek v. Chesney, 473 U.S. 1, 9 (1985).
6
the values of the offers were less than plaintiff ultimately received at trial. For this
reason, the Court finds it appropriate to decline to reduce the attorneys’ fee award on the
account of plaintiff refusing defendant’s offers of settlement. Defendant’s objection is
hereby OVERRULED.
C.
Excessive Hours
Defendant states it “agrees with Magistrate Judge Shirley’s analysis that
[p]laintiff’s counsel expended excessive, redundant and otherwise unnecessary hours[,]”
but objects to “Magistrate Judge Shirley’s conclusion that all of these excessive hours
support only a 10% reduction in [p]laintiff’s fee request” [Doc. 108 p. 2]. Defendant
believes a fifty percent reduction in “[p]laintiff’s counsel’s claimed hours” is more
appropriate and asks the Court to award attorneys’ fees not greater than $25,000 [Id.].
This is not a specific objection, but one disputing the correctness of the magistrate’s
recommendation. The Court thus declines to consider it.
III.
Conclusion
After reviewing the record in this case, including the R&R and the underlying
briefs, as well as the relevant law, the defendant’s objections to the R&R, and the
response to the defendant’s objections, the Court agrees with the magistrate judge’s
recommendation concerning plaintiff’s petition for an award of attorneys’ fees and
expenses, subject to the Court’s analysis set forth herein.
Accordingly, Plaintiff’s
Statement of Fees and Costs [Doc. 92] is hereby GRANTED in part and DENIED in
7
part. Plaintiff is AWARDED $80,499.14 in attorneys’ fees and $5,706.01 in costs, for a
total of $86,205.15.
IT IS SO ORDERED.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?