Hoenninger et al v. Leasing Enterprises, Ltd.

Filing 260

REPORT AND RECOMMENDATION of the United States Magistrate Judge re Plaintiffs' 256 Renewed Motion for Attorneys' Fees. Signed by Judge Andrew W. Austin. (lt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
JOEL HOENNINGER, et al.,
V.
LEASING ENTERPRISES, LTD.
D/B/A PERRY’S RESTAURANT, LLC

§
§
§
§
§
§

A-14-CV-798- LY

REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO:

THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court are Plaintiffs’ Renewed Motion for Attorneys’ Fees (Dkt. No. 256), Perry’s

Response (Dkt. No. 258), as well as the original motions, response and reply (Dkt. Nos. 239, 246,
and 248-250). The District Court referred the motions to the undersigned for a Report and
Recommendation pursuant to 28 U.S.C. §636(b) and Rule 1(d) of Appendix C of the Local Court
Rules.
I. GENERAL BACKGROUND
This is a collective action under the Fair Labor Standards Act (“FLSA”) brought by nearly
350 plaintiffs against Leasing Enterprises, Ltd. d/b/a Perry’s Restaurant (“Perry’s”). On May 30,
2018, following a bench trial, the District Court entered Findings and Facts and Conclusions of Law,
holding that Perry’s was liable to employees for reducing the tips on bills paid with a credit card by
3.25%, that Perry’s did not willfully violate the FLSA, and that Perry’s violation was a good faith
error. Dkt. No. 222. The parties subsequently conferred and reached an agreement on claimant
eligibility and the amount of wages each eligible claimant was entitled to recover, and on March 27,
2019, the District Court entered Final Judgment. Dkt. No. 238.

That judgment awarded 170

plaintiffs a total of $640,234.48, and found 176 others were not eligible for relief based on when they

were employed. Following entry of the judgment, Plaintiffs filed a motion seeking an award of
attorney’s fees and costs (Dkt. No. 239), which they later amended to correct calculation errors (Dkt.
No. 246). Perry’s responded (Dkt. No. 248) and the Plaintiffs replied (Dkt. No. 250). The Plaintiffs
also filed a notice of appeal, challenging the “no willfulness” finding (which limited the “look back”
period for damages to two years instead of three) and the good faith finding (which denied the
Plaintiffs liquidated damages). In light of the appeal, Judge Yeakel dismissed without prejudice the
Plaintiffs’ original motion for fees. When, roughly one year later the Fifth Circuit affirmed the Final
Judgment (see Dkt. No. 255), the Plaintiffs reurged their motion for fees, stating that they were not
requesting any additional fees beyond those originally sought, and they would stand on their prior
briefing. Dkt. No. 256. Perry’s responded by relying on its prior briefing as well. Dkt. No. 258.
Because it bears on many of the challenges Perry’s makes to the requested fees, the Court
will briefly review the procedural history of this case. The case was originally filed on August 20,
2014. The original complaint noted that prior to this case being filed, “a lawsuit was filed in the
Southern District of Texas . . . against the Defendant for the same practices alleged in this Complaint
for the time period of December 15, 2010 through January 17, 2013.” Dkt. No. 1-1 at 5. Perry’s first
response to the suit was a motion to dismiss, which Judge Yeakel denied on the recommendation of
the undersigned. The Plaintiffs then moved forward, seeking conditional certification of the case
as a collective action. At the same time, a final judgment was entered in the Houston case, which
Perry’s had appealed to the Fifth Circuit. Because the question on that appeal—whether a credit card
tip fee was permitted by the FLSA—was also in question in this case, Perry’s requested that the
Court abate this case pending the Fifth Circuit’s decision. The Plaintiffs were not opposed to a stay
so long as they were permitted in the meantime to get notice to potential plaintiffs and it was clear
that no plaintiff’s period of potential recovery was shortened by virtue of the stay. After a hearing
2

at which the parties presented their respective positions on a stay to Judge Yeakel, he directed the
parties to prepare an order consistent with those discussions. The parties were unable to agree to an
order, however, and filed a “motion for help” asking for further direction on the logistics of a stay
and sending out notice. Another hearing ensued and further direction by the Court was given, and
the parties were once again instructed to submit an order consistent with the discussions. Once
again, the parties could not agree on that order, and ultimately, on August 27, 2015, Judge Yeakel
entered his own order conditionally certifying the class, and abating the case pending the outcome
of the appeal of the Houston litigation.
The Fifth Circuit released its opinion in the Houston case on June 14, 2016, and on June 16,
2016, Judge Yeakel ordered the parties to submit a joint status report. The parties were unable to
agree on a joint report, and instead submitted opposing statements. After two ensuing status
conferences, a new scheduling order was entered, setting a bench trial for the month of October
2017. The Plaintiffs filed a summary judgment motion on the issues of willfulness and good faith,
which Judge Yeakel denied. The parties then filed pretrial materials, including, the week before
trial, a stipulation on the issues decided in the Houston case, and the bench trial took place on
October 23, 2017. Judge Yeakel issued his Findings of Fact and Conclusions of Law on May 30,
2018, as noted above. After several months of discussions between the parties to apply the final
legal conclusions to the various plaintiffs’ circumstances, the parties filed a status report of their
actions. Dkt. No. 234. A subsequent status report reflected that the parties intended to mediate the
issue of attorney’s fees, and requested that Judge Yeakel postpone entry of judgment until the
mediation was completed. The mediation was unsuccessful, and after being notified of this, Judge
Yeakel entered a final judgment on March 27, 2019. This motion for fees and the Fifth Circuit
appeal followed.
3

The parties have very different views of the case, and of what an appropriate award of
attorney’s fees should be. The Plaintiffs note that the case included nearly 350 plaintiffs, and raised
a number of complex logistical and other issues, requiring a great deal of work. They further note
that they were successful with their primary claim that Perry’s method of paying tips violated the
FLSA, which led to a judgment in the not-insignificant amount of just over $640,000. Based on this,
they request attorney’s fees of $761,248.20, and costs in the amount of $48,680.43. Perry’s views
the case as much less complex, and claims that the primary legal work in the case was accomplished
in the related Houston litigation. It takes a very aggressive “red pen” to the Plaintiffs’ fee request,
argues categorically that no compensation should be awarded for any work done in a two year time
frame, and ultimately claims that the Plaintiffs should be awarded less than 10% of what they have
requested in fees ($72,850), and less than 1.5% of what they ask for in costs ($638). Dkt. No. 248.
II. ANALYSIS
A.

Standard for Awarding Fees
The Fair Labor Standards Act provides that “[t]he 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 costs of the action.” 29 U.S.C. § 216(b). While, as in all cases where a court entertains a motion
for attorney’s fees, “the most critical factor in determining a fee award is the degree of success
obtained,” Singer v. City of Waco, Tex., 324 F.3d 813, 829 (5th Cir. 2003) (quoting Romaguera v.
Gegenheimer, 162 F.3d 893, 896 (5th Cir. 1998)), in an FLSA action, “‘an attorney’s failure to
obtain every dollar sought on behalf of his client does not automatically mean that the modified
lodestar amount should be reduced.’” Id. at 830 (quoting Spegon v. Catholic Bishop of Chi., 175 F.3d
544, 558 (7th Cir. 1999)).

4

The Fifth Circuit uses a two-step process to calculate attorney’s fees. Heidtman v. Cnty. of
El Paso, 171 F.3d 1038, 1043 (5th Cir. 1999). First, a court calculates a “lodestar” figure “by
multiplying the number of hours reasonably expended by an appropriate hourly rate in the
community for such work.” Id. In so doing, the court considers whether the attorneys demonstrated
proper billing judgment by “writing off unproductive, excessive, or redundant hours.” Walker v.
U.S. Dep't of Hous. & Urban Dev., 99 F.3d 761, 769 (5th Cir. 1996). The plaintiff has the burden
of showing the reasonableness of the hours billed and proving the exercise of billing judgment. Id.
at 770.

“The court should exclude all time that is excessive, duplicative, or inadequately

documented [and] [t]he hours surviving this vetting process are those reasonably expended in
litigation.” Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). After calculating the lodestar, the
court may increase or decrease it based on the factors set forth in Johnson v. Georgia Highway
Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), abrogated on other grounds by Blanchard v.
Bergeron, 489 U.S. 87 (1989); Heidtman, 171 F.3d at 1043.1
Where a prevailing party is only partially successful, the court must consider two further
issues: first, the relationship between the claims the plaintiff succeeded on and those he did not, and
second, whether the plaintiff achieved a level of success that makes the hours expended a satisfactory
basis for a fee award. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Specifically, in a suit where
the plaintiff presents “distinctly different claims for relief that are based on different facts and legal

1

Those factors are: (1) the time and labor required by the litigation; (2) the novelty and
difficulty of the issues; (3) the skill required to perform the legal services properly; (4) the preclusion
of other employment by the attorney; (5) the customary fee; (6) whether the fee is fixed or
contingent; (7) the time limitations imposed by the client or circumstances; (8) the amount involved
and results obtained; (9) the experience, reputation, and ability of the attorney; (10) the undesirability
of the case; (11) the nature and length of the professional relationship with the client; and (12) the
award in similar cases. Id. at 1043 n.5 (citing Johnson, 488 F.2d at 717-19).
5

theories[,] . . . work on an unsuccessful claim cannot be deemed to have been expended in pursuit
of the ultimate result achieved,” and a fee award for that work may not be appropriate. Id. at 434-35
(internal quotes omitted). In contrast, where the suit “involve[d] a common core of facts” or was
“based on related legal theories,” the court “should focus on the significance of the overall relief
obtained by the plaintiff in relation to the hours reasonably expended on the litigation.” Id. at 435.
B.

The Plaintiffs’ Application
It is an understatement to say the billing records Plaintiffs have submitted with their fee

application are “confusing.” As is mentioned in more depth below, the original document
submitted—a 144-page spreadsheet in small font with minimal explanatory content (Dkt. No. 239-1
at 61-204)—was not the correct attachment, and had to be replaced. The replacement was not filed
until after Perry’s response was submitted, though the Plaintiffs did file an Amended Application
before Perry’s responded that contained yet a different spreadsheet (Dkt. No. 246-16, a 116-page
spreadsheet). The (apparently) correct spreadsheet was then filed twice, and is also a 144-page tinyfont spreadsheet with minimal detail. Dkt. Nos. 249, 250-1. It includes the time entries of 34
employees who worked on the case—attorneys, paralegals, and other support—undivided by name
or job title. See Dkt. No. 246 at 14. Within the massive document, the person responsible for a
particular entry is often identified only by a partial name or initials, making ascertaining who
performed a task and what role that person played very hard. Moreover, while Steele’s affidavit
identifies the 13 attorney timekeepers (see Dkt. No. 246-1 at ¶¶ 22-34), there is nothing identifying
the remaining 21 timekeepers, or their roles. See Dkt. No. 246 at 14.
C.

Perry’s Objections
Complicating matters further, rather than join issue with the Plaintiffs’ application head-on,

Perry’s instead contends that the Court should divide the requested fees into four “quadrants” based
6

on when the work was done, categorically exclude all of the fees in one of the quadrants, and then
in the other three quadrants consider six separate objections, and reduce the requested fees in varying
amounts across those quadrants based on the objections. Perry’s summarizes their arguments with
the following chart:

Dkt. No. 248 at 17-18. For each of the six categories of objections, plus the one categorical
exclusion, Perry’s attaches spreadsheets of its own listing each entry Perry’s believes should be
disallowed. Dkt. Nos. 248-13 to 248-19. These spreadsheets appear to have been built off of the
“master” spreadsheet the Plaintiffs submitted, but because neither the Plaintiffs’ spreadsheet nor
Perry’s appendices were submitted to the Court as Excel files, and do not contain line numbers or
other unique identifiers, the Court cannot easily compare Perry’s appendices to the Plaintiffs’
spreadsheet. So, if the Court were inclined to accept some, but not all, of Perry’s objections, using
Perry’s spreadsheets to apply those reductions to the Plaintiffs’ request would be a “challenge.”
D.

Recommendations
Given all of this, the Court will take its own path in determining the appropriate fees to award

in this case, and declines Perry’s suggestion that it divide the fees into four time-based categories.
Notably (and—in light of the submissions—happily), a “court need not explicitly calculate the
lodestar to make a reasonable award” and it has the discretion to instead reduce fees by an across7

the-board percentage when attorney’s fees are due only for a portion of the litigation, provided that
the fee documentation is adequate. Jimenez v. Paw-Paw's Camper City, Inc., 2002 WL 257691 at
*23 (E.D. La. 2002) (overall time reduced by 5% to reflect clerical tasks). “Trial courts need not, and
indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either
party) is to do rough justice, not to achieve auditing perfection. So trial courts may take into account
their overall sense of a suit, and may use estimates in calculating and allocating an attorney’s time.”
Fox v. Vice, 563 U.S. 826, 838 (2011); see also Ramirez v. Lewis Energy Grp., L.P., 197 F. Supp.
3d 952, 958 (S.D. Tex. 2016) (remedy for failure to exercise billing judgment was a percentage
reduction).
1.

Billing for Unsuccessful Claims

From a dollar standpoint, Perry’s most significant objection contends that the Court should
disallow over $445,000 in fees because, Perry’s claims, those fees must have been incurred working
on two claims the Plaintiffs lost. It reaches that conclusion based on the argument that any work
done by Plaintiffs’ counsel between July 2016 and July 2018 must have been spent working on the
willfulness and good faith claims. Perry’s contends that once the Fifth Circuit affirmed the ruling
in the Houston Case and the abatement of this case was lifted, Perry’s committed to paying all
eligible plaintiffs the very amounts they were ultimately awarded. Despite this, the Plaintiffs insisted
on going to trial on the questions of whether the violations were willful and whether Perry’s had
acted in good faith. Perry’s characterizes the decision to pursue these claims as “relitigating” the
issues (because those issues were also raised in the Houston case), and states that Judge Yeakel’s
conclusion in Perry’s favor on the issues was “predictable.” Dkt. No. 248 at 3, 5. But its primary
argument is that—categorically—every single action Plaintiffs’ counsel took from the time the Fifth

8

Circuit decided the Houston case (July 2016), to the date Judge Yeakel handed down his Findings
of Fact and Conclusions of Law (July 2018), was dedicated to these two losing issues.
There are many fallacies in Perry’s argument. It is notable that Perry’s does not point to the
billing records themselves to support the claim that all of Mr. Steele and his co-counsel’s time during
these two years was spent on the willfulness and good faith issues. Instead, it seeks to exclude all
work during the two years on the proposition that Perry’s was immediately willing to pay eligible
employees back wages calculated using the Houston court’s findings, and the only other issues
litigated after July 2016 were the willfulness and good faith questions. As the Plaintiffs point out,
Perry’s is essentially arguing that it is entitled to the relief Rule 68 would have provided Perry’s had
it made an offer of judgment after the Fifth Circuit affirmed the Houston case. But Perry’s never
made an offer of judgment—though it certainly could have—and it is thus plainly not entitled to the
benefits of Rule 68. More to the point, Perry’s entire argument is based on the false assumption that
all of the work Plaintiffs’ attorneys did between July 2016 and July 2018 was dedicated to the
willfulness and good faith issues. That assumption is easily proven false by a quick glance at Perry’s
own Appendix B (the time entries it wants to exclude), which, on the first page alone includes entries
for tasks such as “Receive emails and telephone calls from clients with updated contact and personal
information consents,” and “Confer with counsel regarding FLSA damages issues.” Dkt. No. 248-13
at 3. In the 52 pages that follow there are literally hundreds of entries for tasks that appear to have
nothing to do with the Plaintiffs’ decision to contest the issues of whether Perry’s actions were
willful and taken in good faith.
It is also remarkable that at the same time that Perry’s is claiming Plaintiffs spent all
$445,000 incurred in this time frame on these issues alone, it critiques the extremely limited nature
of Plaintiffs’ discovery and trial presentations on these issues. Thus, it points out that Plaintiffs took
9

only one 40 minute deposition before trial, and that the trial lasted less than a day. Dkt. No. 248 at
3-4. But rather than advancing the “no fees for quadrant three” argument, these facts are instead
evidence that Plaintiffs did not in fact focus all of their work during these two years on the wilfulness
and good faith issues on which the Plaintiffs did not prevail, but instead were doing a lot of other
work related to the case.
Where a plaintiff has failed to prevail on a claim that is distinct in all respects from his
successful claims, the hours spent on the unsuccessful claim should be excluded in considering the
amount of a reasonable fee. See Fox v. Vice, 131 S. Ct. 2205, 2214 (2011) (“The fee award, of
course, should not reimburse the plaintiff for work performed on claims that bore no relation to the
grant of relief.”). But the Fifth Circuit has noted that “a party may recover for time spent on
unsuccessful motions so long as it succeeds in the overall claim.” DP Solutions, Inc. v. Rollins, Inc.,
353 F.3d 421, 434 (5th Cir. 2003). While the Fifth Circuit’s decision in the Houston case eventually
obviated the need for a trial on the merits of Plaintiffs’ base wage claim, Perry’s did not stipulate to
liability until the week before trial. Dkt. No. 204. And the parties continued litigating questions
related to Perry’s’s liability in this case, including which Plaintiffs had legitimate claims, and what
their damages were, as the Findings of Fact and Conclusions of Law demonstrate. Dkt. No. 222.
Having said this, there is no doubt that Plaintiffs did expend time on these issues, that their
arguments re-hashed those presented in the Houston litigation, and that they did not prevail on these
points. A reduction is therefore warranted. Exercising its discretion, the undersigned recommends
that the Plaintiffs’ overall fees be reduced by 15% ($114,187.20) to reflect this.
2.

Duplicative or Excessive Billing

Perry’s next claims Plaintiffs’ counsel spent an excessive amount of time educating newly
hired attorneys, receiving and filing consents of individuals agreeing to opt-in as claimants, tracking
10

the participants, and communicating with claimants. Dkt. No. 248 at 10-12. It also challenges the
fees Plaintiffs are requesting for preparing the application for attorney’s fees. In the response,
Perry’s describes a handful of items it believes are suspect, but then refers the Court to an appendix
containing hundreds of specific entries, with brief annotations on some of the disputed entries, and
others for which it does not provide any specific explanation of why it objects to them. Dkt. No.
248-14.
With regard to the claim that an excessive amount of time was spent receiving consents from,
tracking, and communicating with opt-in plaintiffs, the Court disagrees. There were 350 parties for
counsel to keep up with. If each of them only called the attorney four times a year, that would
amount to more than five such phone calls each day, which would, in addition to the time speaking
with the client itself, also necessitate time to document the call and do the follow up it may have
required.2
With regard to the general complaints of inefficiency, Mr. Steele’s affidavit indicates that to
account for such matters he exercised billing judgment by reducing the overall fees by just under
8.5% and also did not bill much of the time he spent working on the case. He devotes several pages
of his affidavit describing how he exercised judgment to reduce the bill. He concludes that
discussion by stating that through these actions:
The fees were reduced from $784,305.82 to $718,345.70 The reduced amount
represents a total reduction of approximately 8.41%. In my opinion, a total reduction
of 8.41% is an adequate exercise of my billing judgment. The case has spanned over
6 years and we have 350 clients in which we communicate with on a routine basis.
These amounts again do not account for my time that was not included on the billing,
nor does it account for time I previously wrote off. This amount represents all of the
time records by timekeepers in our time-keeping system prior to the exercise of

2

The math: 350 plaintiffs x 4 phone calls per year = 1400 phone calls. There are (roughly)
250 work days in a year. 1400 phone calls ÷ 250 days = 5.6 calls per day.
11

additional billing judgment described below. After exercising significant billing
judgment for the prosecution of this case as well as the preparation of the application
for attorney’s fees, the total number of hours for which I seek compensation is more
than reasonable in my professional opinion.
Dkt. No. 246-1 at 7-8 (paragraph numbers and formatting omitted). This billing judgment, in the
undersigned’s opinion, more than adequately responds to the minor complaints Perry’s makes that
certain time entries reflect duplicative or unproductive time.
Perry’s also complains about numerous entries for Mr. Steele’s time containing the
description “Confer regarding class members and strategy.” The combined fees containing these
entries are $13,900. Dkt. No. 248-14 at 7-8. Perry’s complaint is that these entries do not reveal the
performance of legal work. Id. at 12. In the reply, the Plaintiffs push back on this claim:
Defendants . . . alleg[e] that times incurred where counsel “confer regarding class
members and strategy” did not reveal performance of legal work. That conclusion is
baseless as it has been stated that client communication with hundreds of clients
occurred frequently. Each entry relates to a claimant or potential claimant with whom
Mr. Steele personally interviewed or discussed the status of the case. Again, this case
involved hundreds of Plaintiffs. Each individual Plaintiff was interviewed by counsel
to fully investigate the case. On many days, as evidence[d] by the billing records,
many hours were expended doing such.
Dkt. No. 250 at 9. The Court agrees. Given the size of the class, and the lack of evidence to
contradict the Plaintiffs’ records, the Court rejects this objection.
Perry’s also takes issue with the number of hours Plaintiffs billed in preparing the application
for fees. In general, attorney’s fees incurred to prepare a fee application are compensable. Riley v.
City of Jackson, 99 F.3d 757, 760 (5th Cir. 1996). As with any other request, the fees must be
reasonable and necessary. See Hensley, 461 U.S. at 433. There is an overriding problem with this
objection: it is based on incorrect information contained in erroneous billing records filed by the
Plaintiffs. As a result of an analysis of the massive spreadsheet Plaintiffs attached to the original fee
application, Perry’s concluded that the Plaintiffs were seeking to recover over 300 hours of time,
12

totaling more than $66,000, for the preparation of the Application for Attorney’s Fees. Dkt. No. 248
at 14-15. But in the reply, Plaintiffs point out the document Perry’s based these conclusions on was
“the wrong exhibit” that Plaintiffs had filed due to a “clerical error,” and they had “resubmitted the
Amended Application with the corrected exhibit.” Dkt. No. 250 at 3; see also Dkt. No. 246 (the
Amended Application). In the corrected exhibit, Plaintiffs detail 59 hours of attorney work related
to the fee application, for a total of $17,735 in fees. And in the reply Plaintiffs note that, in the
exercise of billing judgment, Mr. Steele had further reduced that amount by 20% or ($3,547), and
thus state they are only seeking $14,188 for preparing the fee request—not the $66,000 Perry’s
objected to. Dkt. No. 250 at 9. All of this was set out in the affidavit of Plaintiffs’ lead counsel,
Howard Steele, included with the Amended Application for Attorney’s Fees that was filed two
weeks before Perry’s submitted its response. Dkt. No. 246-1 at ¶ 38 (“Although our team spent in
excess of 59 hours going through the hundreds of pages of billing records in a case that has spanned
over 5 years, I have exercised billing judgment and reduced the amount by 20%. I wanted to ensure
the court that the application was thorough. I utilized a CPA, and several attorneys and paralegals
to do our best job for the court.”).
Having reviewed of all of this, the Court concludes that the amount requested by Plaintiffs
for preparing the fee application is reasonable. In fact, it is not even clear at this point whether
Perry’s objects to the final amount requested—$14,188. The amount it objected to was $66,000, and
the reply made it clear that was not the amount the Plaintiffs were asking for. All of this was
contained in the briefing that pre-dated the Fifth Circuit appeal. When the case was returned to this
Court a year later and Plaintiffs reurged their motion, had Perry’s wanted to quibble with the $14,188
figure, it had the opportunity to do so. But it chose not to, as it made no new arguments and simply

13

“incorporated the entirety of its Original Response.” Dkt. No. 258 at 2. The Court therefore rejects
any objection, if one remains, to the fees for preparing the fee application.
Perry’s also objects to time entries for Andrea Lester. Dkt. No. 248 at 11. It appears that Ms.
Lester is the accountant that Mr. Steele referred to as having hired to assist with the preparation of
the Application for Attorneys Fees. See Dlt. No. 246-1 ¶ 38. Plaintiffs do not respond to this point,
nor do they offer any authority for the Court compensating a claimant for the costs of an accountant
who compiled the records needed for a fee application. The Court will therefore disallow the fees
attributed to her ($5,985). See Dkt. No. 248-14 at 11-12.
Perry’s final complaint in this category is that Plaintiffs both bill time directly for attorney
Taylor Jones, and also include costs under her name as a “contract attorney.” Dkt. No. 248 at 11.
Specifically, in the costs spreadsheet, there are two entries listed with an “Expense Type” of
“contract labor” (and, oddly, a description of “transcripts Perry’s Austin”) that list the vendor as
Taylor Jones. Dkt. No. 246-21 at 1, 7. The entries are for $2,173.12 and $3,818.09, respectively,
for a total of $5,991.21. According to Perry’s spreadsheet listing disputed entries, there are also 13
time entries for Ms. Jones, totaling 1.6 hours, billed at $295 per hour, for a total of $472.3 Dkt. No.
248-14. In his affidavit, Mr. Steele states that Ms. Jones is a 2016 graduate of the Georgetown
University Law Center who has been licensed to practice in Texas since 2018, and was an attorney
with the Steele Law Group. Perry’s suggests that listing Ms. Jones’ time as both a cost and part of
the fees is double counting. At the end of the day, the Court need not sort this issue out, given that
the Court recommends that the costs attributable to Ms. Jones be disallowed. Thus, to the extent

3

As a demonstration of the disconnect between Perry’s and the Plaintiffs’ spreadsheets, there
are 21 entries for Taylor Jones in the Plaintiffs’ fees list, which total 3.5 hours, and are also billed
at $295 per hour, totaling on the Plaintiffs’ list $1,032.50. See Dkt. No. 249 at 135-40.
14

there was any double counting with regard to Ms. Jones’ time, that has been remedied by the costs
portion of her time being disallowed.
3.

Clerical Work

Perry’s next contends Plaintiffs improperly seek attorney’s fees for clerical work performed
by attorneys or paralegals. Dkt. No. 248 at 12-13; Dkt. No. 248-15. It is well established that
“[c]lerical work performed by an attorney is not recoverable at an attorney’s rate.” Johnson, 488
F.2d at 717. While no single test determines whether a task is legal or clerical, clerical work
generally includes “factual investigation, . . . assistance with depositions, interrogatories, and
document production; compilation of statistical and financial data; checking legal citations; and
drafting correspondence.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 (1989). After a thorough
review of the record, the Court finds that the entries Perry’s asserts are “clerical” were in fact related
to client communication, client intake, and drafting and filing consent forms for opt-in claimants,
and the requested reduction is not warranted. See Dkt. No. 248-15.
4.

Vague Entries

The court may properly reduce or eliminate hours when the supporting documentation is too
vague to permit meaningful review. La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 326 (5th Cir.
1995). The Fifth Circuit has not precisely defined the appropriate standard for vagueness, instead
leaving the district court with leeway within which to accept or reject fee applications where the
court deems the records “not illuminating as to the subject matter” or “vague as to precisely what
was done.” Id. (quoting and citing Leroy v. City of Hous., 906 F.2d 1068, 1080 (5th Cir. 1990)). The
burden is on the party requesting an award of fees to produce supporting documentation that allows
the court to verify the applicant’s entitlement to a specific award. Gagnon v. United Technisource,
Inc., 607 F.3d 1036, 1044 (5th Cir. 2010). Courts have rejected descriptions such as “library
15

research,” “analyzing documents,” “reading background documents,” “phone interviews,” “revise
memorandum,” “review pleadings,” “review documents” and “correspondence.” See Walker, 99
F.3d at 773; LP & L, 50 F.3d at 326 n.11.
The vast majority of the entries Perry’s identifies in this category were made by Mr. Steele
and contain the description “confer with client(s)” or “correspond with client(s).” See Dkt. No. 24816 at 4. These entries are very similar to those discussed above, where Mr. Steele used the
description “confer regarding class members and strategy.” As with those entries, while the
descriptions “confer with client” or “correspond with client” are terse, they are not so vague as to
make it impossible to know what they purport to describe. They all describe Mr. Steele either
speaking with or emailing one or more of the plaintiffs in this case. Perry’s does not contend that
such communications are not compensable. And as Plaintiffs noted with regard to the similar
complaint already addressed above, “this case involved hundreds of Plaintiffs. Each individual
Plaintiff was interviewed by counsel to fully investigate the case. On many days, as evidence[d] by
the billing records, many hours were expended doing such.” Dkt. No. 250 at 9. There being no
evidence to the contrary, the Court rejects these objections.
5.

Time Spent on Marketing, Other Cases, or Traveling

In this category, Perry’s identifies a number of hours Plaintiffs’ timekeepers spent working
on what it contends were marketing tasks, such as “Analyze features for website” and “Research
regarding facebook and advertisement,” and “Prepare social media.” Dkt. No. 248-17 at 9. Given
that this was a collective action, and that it is common to use websites and social media to give
parties notice of their right on opt in, and to keep opt-in parties up to date on the progress of the case,
such entries are not necessarily “marketing” work as Perry’s contends. Indeed, the very notice the
Court approved in this case included Twitter and Facebook links within the notice. Dkt. No. 53 at
16

2. And the parties filed a number of briefs regarding, and argued at a hearing about, a website put
up by the Plaintiffs’ counsel and whether it should be removed. Many of the complained-of entries
appear to be related to these motions. See Dkt. 248-17 at 7 (nearly half of challenged entries on this
page relate to work preparing a response to Perry’s motion to remove a class website). The Court is
not persuaded by Perry’s argument regarding these entries.
Perry’s next identifies several entries for work spent on other cases, including Plaintiffs’
Houston suit. See Dkt. No. 248-17 at 4, 6, 10. Plaintiffs do not respond to this argument. These time
entries should therefore be disqualified from consideration, which results in a reduction of $6,962.50.
Finally, Perry’s also identifies a number of entries in which Plaintiffs’ counsel billed time
for travel between his Houston office and Austin for his attendance at hearings, depositions, and
mediation. See Dkt. No. 248-17. When no legal work is performed during the travel, it is
appropriate to reduce travel time to reflect this. Courts in this circuit typically compensate travel
time at 50% of the attorney’s rate in the absence of documentation that any legal work was
accomplished during travel time. Watkins, 7 F .3d at 459; Hopwood v. State, 999 F.Supp. 872, 914
(W.D. Tex. 1998), aff'd in relevant part & rev'd in part on other grounds, 236 F.3d 256, 281 n.107
(5th Cir. 2000), cert. denied, 121 S.Ct. 2550 (2001). It is unclear from the record whether any legal
work was performed during counsel’s travel. Because Plaintiffs have not shown that legal work
related to this case was performed during travel, the travel time should be reduced to reflect this.
As noted, the appropriate reduction is 50%, which results in a travel time reduction of $2,106.25.
6.

“Austin Rate” Reduction

Reasonable hourly rates are determined by looking to the prevailing market rates in the
relevant legal community for similar services by attorneys of “reasonably comparable skills,
experience, and reputation.” McClain v. Lufkin Indus., Inc., 649 F.3d 374, 381 (5th Cir. 2011)
17

(quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). These rates are usually established through
affidavits of other attorneys practicing in the relevant community. Tollett v. City of Kemah, 285 F.3d
357, 368 (5th Cir. 2002). The Fifth Circuit has interpreted the “relevant community” to mean the
city in which the district court sits. See, e.g., Walker v. U.S. Dep't of Hous. & Urban Dev., 99 F.3d
761, 770 (5th Cir. 1996) (describing the relevant community as the “Dallas legal market”).
Plaintiffs seek fees for thirty-four timekeepers in this case, ranging in hourly rate from $45
to $525 per hour. Dkt. No. 246 at 14. Perry’s argues that Plaintiffs improperly utilized Houston
attorney and paralegal rates, when Austin is the relevant community. Dkt. No. 248 at 16-17.
Accordingly, Perry’s requests that the Court apply an “Austin Hourly Rate Differential,” to adjust
the rates for Plaintiffs’ lead counsel, Howard Steele, and the Plaintiffs’ paralegals, to reflect the
appropriate Austin rates. Id. at 17; Dkt. No. 248-19. In their Reply, Plaintiffs agree with Perry’s that
Austin rates apply in this case. Dkt. No. 250 at 8. Perry’s calculated the reduction in the total fee
amount that occurs by applying these reduced rates to be $8,222,4 and Plaintiffs do not contest this.
7.

Summary

Aggregating the reductions identified above, the Court concludes that Plaintiffs’ requested
fees should be reduced by a total of $137,462.95, resulting in a total of $623,785.25.
B.

Costs
Plaintiffs also seek an award of their costs. Under 28 U.S.C. § 1920, a court may tax the

following costs: (1) fees of the clerk and marshal; (2) fees for printed or electronically recorded
transcripts necessarily obtained for use in the case; (3) fees and disbursements for printing and
witnesses; (4) fees for exemplification and the costs of making copies of any materials where the
4

Perry’s refers to this amount in its response as “$8,822.” A review of the underlying
figures, however, suggests that this was a typo, as tallying the underlying figures results in the sum
of $8,222.
18

copies are necessarily obtained for use in the case; (5) docket fees; and (6) compensation of
court-appointed experts, interpreters, and special interpretation services. 28 U.S.C. § 1920. Perry’s
argues costs beyond those authorized by 28 U.S.C. § 1920 are not permitted. Id. at 19-21. However,
a number of district courts in Texas disagree, and have determined that certain costs beyond those
taxable under § 1920 may be included as part of the award of attorney’s fees under the FLSA. See
Castro v. Precision Demolition LLC, 2017 WL 6381742, at *10 (N.D. Tex. Dec. 14, 2017); Rouse
v. Target Corp., 181 F. Supp. 3d 379, 392 (S.D. Tex. 2016); Alex v. KHG of San Antonio, LLC, 125
F. Supp.3d 619, 630 (W.D. Tex. 2015). These include such things as costs for travel, meals, lodging,
photocopying, long-distance telephone calls, computer legal research, postage, courier service,
mediation fees, exhibits, document scanning, and visual equipment litigation expenses. Id.
In determining an appropriate award of costs the Court has broad discretion. Gibbs v. Gibbs,
210 F.3d 491, 500 (5th Cir. 2000). The Court is, however, to give “careful scrutiny” to the items
proposed by the prevailing party. La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 335 (5th Cir.
1995) (citing Farmer v. Arabian American Oil Co., 379 U.S. 227, 235 (1964)). The burden of proof
is on the party seeking recovery of its costs to demonstrate the amount and necessity of its costs.
Holmes v. Cessna Aircraft Co., 11 F.3d 63, 64 (5th Cir. 1994). The Court is free to decline to award
costs where the expenses are not deemed to have been “reasonably necessary” to the litigation. See,
e.g., Cypress–Fairbanks Indep. Sch. Dist. v. Michael F., 118 F.3d 245, 257-58 (5th Cir. 1997). As
one district judge put it:
If the party against whom costs are taxed does not specifically object, the costs
sought are presumed necessary for the case. If there is an objection, the party seeking
costs has the burden of supporting its request with evidence documenting the costs
incurred, and proof, if applicable, as to whether the challenged amount was
necessarily incurred in the case.

19

Kellogg Brown & Root Int'l, Inc. v. Altanmia Commercial Mktg. Co. W.L.L., 2009 WL 1457632, at
*3 (S.D. Tex. May 26, 2009).
Perry’s raises several objections to these costs. First, it contends that Plaintiffs’ claims for
costs are improper because they were not reasonably incurred to the extent they were the result of
the suit being filed in Austin, not Houston. Dkt. No. 248 at 18-19. Perry’s argues that Plaintiffs
needlessly caused costs of travel, lodging, and meal expenses that could have been avoided if they
had filed the matter in Houston, where Plaintiffs’ counsel resides, rather than “forum-shopping” and
filing in Austin. Id. Perry’s cites no authority for this argument, venue was plainly proper in this
Court, and the Court therefore rejects the argument. More substantively, Perry’s contends that
Plaintiffs failed to substantiate their requests for costs with a demonstration of how the costs were
undertaken in the pursuit of a claim upon which Plaintiffs prevailed. Dkt. No. 248 at 21-22. Perry’s
points out as examples the $1,757.71 in costs for printing and reproduction, $2,693.74 in transcript
costs, and $5,902.17 in research fees, all of which are included among the items Plaintiffs seeks
compensation for. None of these items include any explanation of their connection to the claims
presented or how the expenses were necessary to the litigation.
In fact, the fee application itself barely mentions costs, and only includes a difficult-tonavigate exhibit that appears to be a bare list of all of the expenses Plaintiffs seek compensation for.
Dkt. No. 246-21.5 The total costs sought, based on the amount set out in this document, is
$46,419.26. Separately, in an attachment listing the fees and expenses from Mr. Sturm’s firm, there
is a line item for “travel expense for trial” in the amount of $2,261,17. Dkt. No. 239-1 at 58. The
5

The exhibit is difficult to navigate because it appears to be a poorly formatted spreadsheet,
where the first three columns are printed on one page, and the next three columns are printed on a
second page, with all of the first pages grouped together, followed by all of the second pages. Thus,
to look at what should be the first page of the spreadsheet, one has to look at pages 1 and 7 of the
exhibit, page two of the spreadsheet is actually pages 2 and 8 of the exhibit, and so forth.
20

total costs Plaintiffs request are thus $48,680.43. From what one can deduce from the spreadsheet,
these costs relate to travel, meals, lodging, photocopying, transcript orders, e-filing fees, postage and
delivery fees, and process server fees. See Dkt. No. 246-21. To provide an example of the
information in the spreadsheet, the first and third lines of the spreadsheet (had they been printed on
a single page) are reproduced here:
Vendor

Date

Description

Expense Type

Account

Amount

Hudson

01/06/2014

CHECKCARD 0104 HUDSON
AMSCYS PHO PHOENIX
AZ 55432864005000204037192
CKCD 5994
5348750000215277

Books & Journals

Business advantage Chk
(6001)

$31.39

Arlinda
Rodriguez

09/03/2015

transcripts Perry’s Austin

Contract Labor

Business Advantage Chk
(6001)

$419.65

Dkt. No. 246-21 at 1, 7. The spreadsheet itself contains several hundred entries, much like these.
Plaintiffs’ application provides no additional description of what each entry was for, how it relates
to the case, or why it was necessarily obtained for use in the case. Thus, for example, with regard
to the first item the Court is at a complete loss to know even what it is, much less how it relates to
this case. The second item, on the other hand, appears to reflect the cost of a transcript of a hearing
in this case, but the Court can deduce that only because it knows Arlinda Rodriguez is the court
reporter for Judge Yeakel’s court. But it is not clear which hearing this was, why a transcript was
needed, and whether it was necessary to a claim on which the Plaintiffs prevailed.
As already noted, the burden is on the party seeking costs to demonstrate they are entitled to
recover them. As Judge Rosenthal noted in Kellogg Brown & Root, if there is no objection to a
request for costs, a court should presume they were necessary for use in the case. But where there
is an objection—as there is here—then “the party seeking costs has the burden of supporting its
request with evidence documenting the costs incurred, and proof, if applicable, as to whether the
challenged amount was necessarily incurred in the case.” Kellogg Brown & Root, 2009 WL
21

1457632, at *3. Plaintiffs have completely failed to offer such proof. In fact, the only response
Plaintiffs provide to Perry’s objections is the following, contained in the reply:
In the five years of litigating this case, Plaintiffs have incurred costs related to
ordering transcripts of hearings, e-filing fees, travel costs, printing costs, postage and
delivery fees, and process server fees. The costs incurred were reasonably related to
the case and have been itemized to show every expense requested by Plaintiffs.
Dkt. No. 250 at 7-8. This is far less than what is required to justify the award of expenses as “costs,”
particularly in light of how cryptic so many of the entries in Plaintiffs’ costs spreadsheet are. The
only costs Perry’s does not object to are the filing fees in the case, which total $638. Perry’s
objections to Plaintiffs’ costs are well taken, given the dearth of information Plaintiffs have provided
the Court regarding their expenses and how they relate to the claims here. Therefore, the undersigned
recommends that Plaintiffs only be award costs of $638.00.
III. RECOMMENDATION
Based upon the foregoing, the undersigned RECOMMENDS that the District Court
GRANT IN PART and DENY IN PART Plaintiffs’ Renewed Motion for Attorneys’ Fees (Dkt. No.
256). Specifically, the undersigned RECOMMENDS that the District Court GRANT the Plaintiffs
$623,785.25 in attorney’s fees, and $638.00 in costs, and DENY all other relief requested.
The Clerk is directed to remove this case from the undersigned’s docket and return it to the
docket of the Honorable Lee Yeakel.
IV. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections. See
Battle v. United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987). A party’s failure to file
written objections to the proposed findings and recommendations contained in this Report within

22

fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo
review by the District Court of the proposed findings and recommendations in the Report and, except
upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed
factual findings and legal conclusions accepted by the District Court. 28 U.S.C. § 636(b)(1)(c);
Thomas v. Arn, 474 U.S. 140, 150-53, 106 S. Ct. 466, 472-74 (1985); Douglass v. United Servs.
Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).
SIGNED this 12th day of February, 2021.

_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE

23