Coles v. Deltaville Boatyard, LLC et al
Filing
129
MEMORANDUM OPINION. Signed by Magistrate Judge Dennis W. Dohnal on 12/19/11. (kyou, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
COREY L. COLES,
Plaintiff,
v.
DELTAVILLE BOATYARD, LLC,
Defendant.
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CIVIL NO. 3:10cv491-DWD
MEMORANDUM OPINION
This matter is before the Court by consent of the parties pursuant to 28 U.S.C. §
636(c)(1) on the Plaintiff’s Motion for Attorney’s Fees (ECF No. 112). The matter has been
adequately briefed by the parties’ submissions and the Court dispenses with oral argument,
finding that it will not materially aid in the decisional process. For the reasons set forth herein,
the Plaintiff’s Motion for Attorney’s Fees (ECF No. 112) shall be GRANTED, in part, and
DENIED, in part, and the Plaintiff shall be awarded a sum of fifty-nine thousand one-hundred
sixteen and 67/100 dollars ($59,116.67) for attorney’s fees and three-thousand three-hundred
twenty-two and 59/100 dollars ($3,322.59) in costs accrued in pursuit of this action, for a
combined award of sixty-two thousand four-hundred thirty-nine and 26/100 dollars ($62,439.26).
I. BACKGROUND
Plaintiff Corey L. Coles (“Coles” or the “Plaintiff”) brought this action against his former
employer, Deltaville Boatyard, LLC (“Deltaville Boatyard”), asserting claims for unlawful
retaliation in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”) and 42 U.S.C. §
1981. The Court will dispense with a recitation of the facts of the case, because they are fully set
forth in the Court’s Memorandum Opinion in which findings of fact and conclusions of law were
recorded following trial without a jury. It is sufficient to summarize the Court’s conclusion that
Deltaville Boatyard had “warned” two of Coles’ subsequent employers that he might file an
EEOC charge against them, and that it did so in retaliation for his having pursued a complaint
against Deltaville Boatyard. Specifically, the Court found that such “warnings” were issued to
one John Crown (“Crown”), the owner of Crown Marine, and one Janie Ruark (“Ruark”), then
the owner of Deagles Boatyard. However, the Court found that no such retaliation occurred with
regard to a third employer, one Rick Farinholt (“Farinholt”), the owner of Chesapeake Marine
Railway.
The Court also found that Coles suffered no lost wages as a result of any of the retaliatory
acts, thereby eliminating his claim for seven-hundred sixty-eight dollars ($768.00) of economic
losses. Moreover, the Court found that his claim for compensatory damages of emotional
distress, while viable to some degree, was significantly exaggerated.1 The Court concluded that
one-thousand dollars ($1,000.00) was an appropriate award for emotional distress. Also, the
Court concluded that Deltaville Boatyard’s second act of retaliation was done “with reckless
indifference” to Coles’ Title VII rights, thus leading the Court to award one-thousand dollars
($1,000.00) in punitive damages. (Mem. Op. of Oct. 11, 2011 at 20, ECF No. 110.) In rendering
this decision, the Court specifically instructed the parties to brief the issue of how the “de
1
The Court clarifies one point about its ruling on the merits. Deltaville Boatyard asserts that, at
trial, Coles’ claims “were revealed to be baseless and exaggerated.” (Def.’s Br. Opp’n Mot.
Award Atty.’s Fees (“Def.’s Br.”) at 13.) While the Court concluded that the evidence of
extensive damages for emotional distress were “exaggerated,” liability was still found to have
been clearly established. (Mem. Op. of Oct. 11, 2011 at 8-9, 15-16, ECF No. 110.) So although
the harm to Coles may not have been proven to the extent initially alleged, Deltaville Boatyard’s
retaliation was nevertheless established at trial, sufficient to mandate an award of damages.
2
minimis” 2 damages award should impact the award of attorney’s fees, if at all. (Id.)
For purposes of addressing the Plaintiff’s Motion for Attorney’s Fees, it is also necessary
that the Court take note of several relevant procedural aspects of the case. First, Deltaville
Boatyard filed a total of four dispositive motions. (See Def.’s Mot. Dismiss, ECF No. 10; Def.’s
Mot. Sum. J., ECF No. 74; Def.’s Mot. J. Partial Findings, ECF No. 98; Def.’s Mot. Alter or
Amend J., ECF No. 117.) Each of those motions appeared to demonstrate good faith arguments
for relief, although none were wholly granted by the Court. More importantly, perhaps, at least
for purposes of assessing a reasonable award of fees, throughout the time that dispositive relief
was being pursued, Deltaville Boatyard, unbeknownst to this Court, repeatedly threatened to file
a motion for sanctions and attorney’s fees against Plaintiff’s counsel pursuant to Fed. R. Civ. P.
11. (Pl.’s Br. Sup. Mot. Atty.’s Fees (“Pl.’s Br.”) at 5.)
Deltaville Boatyard never pursued the Rule 11 procedure it had threatened. However, the
mere threat of sanctions and liability for attorney’s fees led Coles’ counsel to involve his law
partner in what would have otherwise been a reasonably straightforward retaliation case.
Coupled with the threat of sanctions, each dispositive motion led to extensive time spent by
Plaintiff’s counsel researching and investigating numerous legal issues that might not otherwise
have had to be researched, at least so extensively.
Upon conclusion of the litigation, counsel for Coles has submitted a detailed, itemized
2
In its Conclusions of Law, the Court “emphasize[d] the de minimis results obtained” and
invited the parties to brief the issue of how the results obtained should impact an award of
attorneys’ fees. (Oct. 11, 2011 Mem. Op. at 20, ECF No. 110.) “[D]e minimis” was admittedly a
poor choice of words, as the Court did not intend to hold that two-thousand dollars ($2,000.00)
is, by itself, a “trifling” or “minimal” sum of money. See Black’s Law Dictionary 464 (8th ed.
2004). Instead, the Court’s intention was to suggest that the sum was relatively minimal
compared to the damages sought in this case, or those typically obtained in Title VII retaliation
cases. The Court invited briefing and analysis on an issue that was intentionally left unresolved
at that time.
3
report of all attorney’s fees and costs incurred, supported by the declaration of lead counsel,
Christopher N. North (“North”). (Pl.’s Mot. Atty.’s Fees (“Pl.’s Mot.”) at Exs. 1-2, ECF Nos.
112-1, 112-2.) In addition to his own time entries, North’s Declaration attests to the time spent
by his co-counsel, William L. Downing (“Downing”). (Id.) Moreover, Coles has submitted the
declaration of one David R. Simonsen, Jr. (“Simonsen”), a respected member of the bar of this
Court, not involved in this matter, but who is quite familiar with the local legal “market” relative
to employment litigation. (Pl.’s Mot. at Ex. 3, ECF No. 112-3.) Simonsen’s Declaration opines
as to both the reasonableness of North and Downing’s respective rates, as well as the
reasonableness of the time they expended on the matter. (Id.)
In total, North spent one-hundred seventeen and one-quarter hours (117.25) on the case at
a billable hour rate of three-hundred dollars per hour ($300.00/hour), for a total fee of thirty-five
thousand one-hundred seventy-five dollars ($35,175.00). (Pl.’s Mot. at Exs. 1-2.) Downing
spent a total of two-hundred fourteen hours (214.00) on the matter at an hourly rate of twohundred fifty dollars per hour ($250.00/hour), for a total fee of fifty-three thousand five-hundred
dollars ($53,500.00). (Id.) Coles also claims costs totaling three-thousand twenty-two and
59/100 dollars ($3,322.59). (Id.) Deltaville Boatyard opposes any award of fees or costs,
characterizing the damages as merely “nominal,” and otherwise challenging the reasonableness
of the fees and costs incurred.
II. STANDARD OF REVIEW
A trial court’s award of attorneys’ fees is reviewed for an abuse of discretion. EEOC v.
Cent. Wholesalers, Inc., 573 F.3d 167, 178 (4th Cir. 2009) (citing Johnson v. City of Aiken, 278
F.3d 333, 336 (4th Cir. 2002)). Such a review is “sharply circumscribed” because federal
appellate courts recognize that the trial court “has close and intimate knowledge of the efforts
4
expended and the value of the services rendered,” so the award will not be overturned unless
“clearly wrong.” Plyler v. Evatt, 902 F.2d 273, 277-78 (4th Cir. 1990). The lodestar method, the
product of the hours reasonably expended times a reasonable rate, generates a presumptively
reasonable fee. Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546,
564 (1986) (Delaware Valley I); Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th
Cir. 2009) (“In calculating an award of attorney’s fees, a court must first determine a lodestar
figure”). Although “there is a ‘strong presumption’ that the lodestar figure is reasonable, . . . that
presumption may be overcome in those rare circumstances in which the lodestar does not
adequately take into account a factor that may properly be considered in determining a
reasonable fee.” Perdue v. Kenny A., __ U.S. __, 130 S. Ct. 1662, 1673 (2010). While it is well
within the discretion of the district court to determine the amount of the fee, and to adjust the
lodestar product upward or downward as it deems appropriate, “this must be done on a principled
basis, clearly explained by the court.” Lyle v. Food Lion, Inc., 954 F.2d 984, 989 (4th Cir.
1992).
III. ANALYSIS
Deltaville Boatyard argues against any award of attorneys’ fees. To that end, it first
argues that the damages were nominal and, secondly, that the amount of the fees requested
“shock the conscience” so as to be denied pursuant to Fair Hous. Council v. Landlow, 999 F.2d
92 (4th Cir. 1993). The first argument must fail because the award, while relatively insignificant
in value compared to most employment cases, is more than merely nominal. The second
argument must also fail because, although the fees requested are more than forty times the
amount of recovery, the fees are not so gross as to “shock the conscience” under the
circumstances in which the case was litigated. In the alternative, Deltaville Boatyard otherwise
5
argues for a significant reduction in the total fee award.
In general, the Court agrees that the fee award should be reduced, albeit to a much lesser
degree than that proposed by Deltaville Boatyard. In support of its position urging a reduction of
fees, Deltaville Boatyard asserts five arguments: (1) that because certain specific allegations
contained in the Complaint, First Amended Complaint, and Second Amended Complaint were
not specifically listed among this Court’s findings of fact, Coles should not be deemed a
“prevailing party”; (2) that Defense counsel’s admitted threats of sanctions should have no
bearing on the measure of appropriate attorney’s fees; (3) that fees incurred after a particular
point in time before trial (March 2011) could have been avoided if Coles had accepted a pending
settlement offer; (4) that the evidence offered in support of the lodestar calculation is
insufficient; and (5) that certain specific time entries are unreasonable for a variety of listed
reasons.3 Not one of Deltaville Boatyard’s noted arguments is of assistance to the Court in
determining the extent of a fee reduction because none of the approaches is related to the reason
for any reduction -- namely, the degree of success achieved and the amount of damages
recovered.
Coles has proposed his own fee reduction of twenty percent of the fees incurred by Mr.
Downing’s work as well as a reduction of fees specifically incurred as a result of certain aspects
of the case that were unsuccessful (e.g. interviews of certain witnesses not called to testify at trial
and efforts to prove a third retaliatory act). The Court agrees with such a proportional rationale,
3
Deltaville Boatyard has appended to its Opposition Brief two spreadsheets which contain
specific arguments challenging the reasonableness of individual attorney time entries and costs
incurred. (Def.’s Br. at Exs. 6, 7, 8.) These documents are not evidence, but appear, instead, to
be an attempt to extend the page limit for argument without prior leave of Court (and to do so in
a form not in conformity with E.D. Va. Loc. R. 7(F)(3)). Accordingly, the Court need not
consider those submissions. However, the Court endeavors to consider those arguments
generally, infra at Section III(D), finding such arguments to lack merit.
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but finds that it should be related more closely to the results obtained. Thus, the Court has
concluded that it is appropriate to reduce the total fee award by one-third, as is more fully
explained in Section III(C), infra.
A.
An Award of Attorney’s Fees Is Proper In this Case
It is well-recognized that “a prevailing [Title VII] plaintiff should ordinarily recover an
attorney’s fee unless special circumstances would render such an award unjust.” Hensley v.
Eckerhart, 461 U.S. 424, 429 (1983). “Section 1988 serves an important public purpose by
making it possible for persons without means to bring suit to vindicate their rights.” Perdue, 130
S. Ct. at 1676. Thus, where liability is established, Congress has sought to shift to the employer
the attorney’s fees incurred by a prevailing employee. 42 U.S.C. § 1988(b).
Before the Court can proceed to analyze the value of the requested award, the Court must
address the threshold question of whether fees are appropriate at all. In Farrar v. Hobby, the
Supreme Court explained that a plaintiff is a “prevailing party” for purposes of awarding
attorney’s fees pursuant to 28 U.S.C. § 1988 when he obtains a judgment, however small, and
even if it is a nominal judgment. 506 U.S. 103, 113-14 (1992). However, the Supreme Court
also cautioned that “[i]n some circumstances, even a plaintiff who formally ‘prevails’ under §
1988 should receive no attorney’s fees at all.” Id. at 115. “When a plaintiff recovers only
nominal damages because of his failure to prove an essential element of his claim for monetary
relief, the only reasonable fee is usually no fee at all.” Id. (emphasis added) (internal citation
omitted). In reaching such a conclusion, the Supreme Court relied heavily on the notion that “the
degree of a plaintiff’s overall success goes to the reasonableness of a fee award.” Id. at 114
(citation and internal quotation marks omitted). The Court also reiterated its previous holding
that “the most critical factor in determining the reasonableness of a fee award is the degree of
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success obtained.” Id. (citation and internal quotation marks omitted).
In a concurring opinion, Justice O’Connor explained that “the de minimis exclusion is in
fact part of the reasonableness inquiry.” Id. at 118 (O’Connor, J., concurring). While she agreed
with the majority, she cautioned that not “all nominal damages awards are de minimis. Nominal
relief does not necessarily a nominal victory make.” Id. at 121 (emphasis in original). She also
set forth three factors that ought to be considered in determining whether a “victory” is nominal,
regardless of whether the damages are nominal: (1) the extent of relief obtained; (2) the
significance of the legal issue; and (3) the public purpose served by the litigation. Id. at 122.
The Fourth Circuit, the appellate authority governing this jurisdiction, has adopted these factors,
now known in this Circuit as the “Farrar-Mercer Factors.” Mercer v. Duke Univ., 401 F.3d 199,
204 (4th Cir. 2005).
1.
Coles’ Victory Is More than Nominal
In the first instance, Coles’ recovery was not merely “nominal” because he obtained onethousand dollars in compensatory damages for pain and suffering. He did not “fail[] to prove an
essential element of his claim for monetary relief ”; he simply obtained a lesser amount of relief
than he had sought. Farrar, 506 U.S. at 115. By their very nature, compensatory damages are
not nominal. This follows from the precept that “the awarding of nominal damages [] highlights
the plaintiff’s failure to prove actual compensable injury.” Farrar, 506 U.S. at 115. And in terms
of the total amount of Coles’ damages, two-thousand dollars ($2,000.00), while not a significant
recovery, is by no means a mere “pittance.” See Id. at 120 (O’Connor, J., concurring). Thus, the
Court could conclude its analysis on such a basis, finding that the award of compensatory
damages itself renders Coles’ victory more than merely nominal. Nevertheless, the Court will
proceed to address and apply the Farrar-Mercer factors.
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First, the total damages obtained are not grossly disproportionate to those sought. At
trial, Coles sought no more than seven-hundred sixty-eight dollars ($768.00) in economic
damages for lost wages, signaling from the outset of the trial that a large sum was never
expected. Although the Court found that he did not prove his economic damages, his total
compensatory damages for pain and suffering exceed his alleged lost wages. And while Coles
cited cases awarding between $50,000 and $300,000 for emotional distress, he never sought any
particular figure in his case. (See Pl.’s Post Trial Br. at 27.) Coles’ failure to identify a precise
value for his pain and suffering, coupled with the Court’s conclusion that some of the pain and
suffering was, in essence, exaggerated, led the Court to award compensatory damages of onethousand dollars ($1,000.00). At most, Coles hoped to receive a five-figure verdict for pain and
suffering. But because he requested no more than $768.00 in economic damages, the case never
appeared to be one seeking significant monetary recovery. Thus, two-thousand dollars
($2,000.00) in total recovery is not grossly disproportionate to the damages sought. such is
especially true when compared to Farrar, where one dollar was awarded to a plaintiff who sought
a recovery of some seventeen million dollars. 506 U.S. at 121 (O’Connor, J., concurring).
Accordingly, the first Farrar-Mercer factor does not weigh against an award of attorney’s fees
here.
The second Farrar-Mercer factor concerns the significance of the legal issue in the case.
From the outset, the Court recognized that the case falls within a well-recognized category of
retaliation cases in which a former employer disparages the employee to subsequent or
prospective employers. (See Feb. 14, 2011 Mem. Op. at 13 n.5, ECF No. 23 (collecting cases);
May 6, 2011 Mem. Op. at 7, ECF No. 74 (same).) Nevertheless, Deltaville Boatyard has
repeatedly taken the position that it may lawfully “warn” Coles’ subsequent employers that he
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might file an EEOC charge against them -- action that this Court has found to be retaliatory in
nature under the circumstances presented. So although the legal issue may be settled, it appears
that the particular instance of retaliation presented in the case required the Court to clarify the
point. Thus, the second Farrar-Mercer factor favors an award of at least some attorney’s fees.
For similar reasons, the third Farrar-Mercer factor favors awarding Coles’ some
attorney’s fees because it serves the public goal of insulating protected activity from retaliation.
In passing Title VII’s anti-retaliation provision, Congress sought “to secure [its] primary
objective by preventing an employer from interfering (through retaliation) with an employee’s
efforts to secure or advance enforcement of the Act’s basic guarantees.” Burlington Northern &
Santa Fe Ry. v. White, 548 U.S. 53, 63 (2006). If an employee believes that engaging in
protected activity will lead to “warnings” issued to future employers, he is unlikely to rely on
Title VII’s protections without considerable pause. That is exactly the sort of chilling effect of
retaliation that Congress sought to avoid, and cases like this one therefore serve the public
purpose of redressing such wrongs. Contrary to Deltaville Boatyard’s argument, Coles’ failure
to request declaratory or injunctive relief is of no consequence. The result obtained against
Deltaville Boatyard in this litigation will guide other employers’ conduct, both during litigation
and in avoidance of it. “In our legal system, with its reliance on stare decisis and respect for
precedent, a case involving the claim of a single individual, without any request for wide-ranging
declaratory or injunctive relief, can have a profound influence on the development of law and on
society.” Mercer, 401 F.3d at 208. Thus, the third factor favors an award of attorney’s fees in
this case as well.
It is also significant that retaliation was well-established in this case. Although the
Fourth Circuit has not explicitly recognized the rule, this Court has heretofore cited the
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proposition recognized by another court that “[a]n employer who retaliates can not [sic] escape
liability merely because the retaliation falls short of its intended result.” EEOC v. L.B. Foster
Co., 123 F.3d 746, 754 (3d Cir. 1997). It similarly follows that an unsuccessful defendant cannot
avoid its liability for attorney’s fees simply because the retaliatory acts failed to result in the
plaintiff losing his job (or that the plaintiff successfully mitigated most damages). So although
the level of damages might counsel some reduction from the lodestar, infra at Section III(C), it
does not countenance a complete elimination of a fee award.
2.
The Fee Request Does Not “Shock the Conscience”
Deltaville Boatyard also asks this Court to deny any award of attorney’s fees as “so
outrageously excessive so as to shock the conscience of the court.” Fair Hous. Council, 999 F.2d
at 94. The issue turns not on whether a fee is appropriate, but on whether the requested amount
is so unreasonably excessive that the Court ought not to consider it at all. In Fair Hous. Council,
the Fourth Circuit reversed the district court’s award of a $20,000 fee request where the initial
request was $537,113.4 In that case, counsel’s time records provided only general descriptions
that could not be associated with particular efforts in the case, such as “review discovery and
draft discovery – 4.5 hours.” Id. at 95. The Court has reviewed all of the time entries submitted
in this case and finds that they are very detailed, allowing the Court to associate each entry with
specific tasks performed in pursuit of the case. (Pl.’s Mot. at Ex. 2.)
The Court in Fair Hous. Council also emphasized the plaintiff’s failure to make any effort
to deduct time entries related to unsuccessful claims. Here, counsel for Coles has made some
4
Coles emphasizes that the figure sought would be significantly higher in today’s dollars once
inflation is included as part of the calculus. Without considering the particular dollar amount in
terms of today’s dollars, the Court nevertheless accepts the obvious proposition that the figure
would be significantly higher in today’s legal market, in which rates have dramatically increased
without regard to inflationary pressures.
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good faith effort to do so by his proposed reductions, rendering his proposed fee award more
reasonable than that in Fair Hous. Council. Although the Court will reject Coles proposal, opting
instead for a one-third overall reduction, his effort to submit a reasonable fee request contrasts
sharply with that at issue in Fair Hous. Council. Thus, Coles’ requested fee award does not
“shock the conscience,” and will be considered according to the required lodestar analysis.
B.
Lodestar Analysis
Coles has submitted evidence of the hours spent in pursuit of his claims, the fees charged
for those hours, and declaratory evidence in support of the reasonableness of those fees. Such
evidence is all that is required in order for the Court to utilize the lodestar calculus. See
Delaware Valley I, 478 U.S. at 564. Without any evidence to the contrary, Deltaville Boatyard
simply argues that such evidence is insufficient to calculate a lodestar figure. To the contrary,
the Simonsen Declaration provides a competent third-party opinion that both the hours expended
and rates charged are reasonable for the relevant legal market.
1.
Rates are Reasonable
Coles has cited this Court’s recent decision concerning attorney’s fee decision in Stewart
v. VCU Health Systems, No. 3:09cv738, 2011 U.S. Dist. LEXIS 114475, at *3 (E.D. Va. Oct. 4,
2011) to note that the Court found even higher fees reasonable for counsel in a Title VII case in
the same legal market. While such a comparison may be appropriate to establish the reasonable
rates in some cases, the itemized list of time entries and the declarations of North and Simonsen
submitted in this case are sufficient to establish the reasonable rates that should apply. In that
regard, the Court accepts that three hundred dollars per hour ($300/hour) is a reasonable rate for
North’s time and that two-hundred fifty dollars per hour ($250/hour) is a reasonable rate for
Downing’s time.
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2.
Hours are Reasonable
At first glance, the Court might have considered the total hours spent on this case to be
excessive, given Coles’ admission that his claimed economic losses were relatively low.
However, the Court accepts as true Simonsen’s Declaration, which opines that the hours spent on
the matter were reasonably necessary. (Pl.’s Mot. at Ex. 3.) And, as the Fourth Circuit has
recognized, the trial court’s exercise of discretion is based upon its “close and intimate
knowledge of the efforts expended and the value of the services rendered.” Plyler, 902 F.2d at
277-78. In that respect, two aspects of the case weigh in favor of Coles’ counsel’s significant
efforts. First, Deltaville Boatyard sought dispositive relief on four separate occasions, which
reasonably required significant efforts in response on the part of Coles’ attorneys. In addition,
Deltaville Boatyard’s repeated threats of Rule 11 sanctions led Coles’ counsel to reasonably
spend additional time on research and investigation than may have otherwise been necessary.
Thus, the Court concludes that the total hours spent on this matter were, indeed, reasonable.
a.
Deltaville Boatyard’s Four Dispositive Motions
Having ruled on each of Deltaville Boatyard’s four dispositive motions, the Court is
familiar with the additional efforts required by Plaintiff’s counsel as a result.5 At the same time,
the Court does not believe that any of those motions were filed in bad faith, as each was
supported by a well-reasoned argument based on existing law. The fact that the Court denied
dispositive relief simply indicates that there were issues of disputed material fact, not that it was
improper for Deltaville Boatyard to pursue such dispositive relief.
At the same time, it cannot be ignored that Coles ultimately prevailed. In reaching a
5
The subject motions were: (1) Deltaville Boatyard’s Motion to Dismiss (ECF No. 10); (2)
Deltaville Boatyard’s Motion for Summary Judgment (ECF No. 33); (3) Motion for Judgment on
Partial Findings (ECF No. 98); and (4) Motion to Alter Judgment (ECF No. 117).
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favorable result, Coles’ counsel was required to ably defend against each motion for dispositive
relief. The Court can no more fault Coles for resisting each motion than it could fault Deltaville
Boatyard for seeking such relief. Obviously, the efforts in resisting each motion were reasonably
necessary for Coles to obtain the ultimate judgment in his favor. Knowing that it may have to
pay attorney’s fees in the event that Coles prevailed at trial, Deltaville Boatyard cannot now be
surprised by the extensive time entries arising out of each response to its own dispositive
motions. Such aspects of the case support the significant time spent on the matter, further
supporting the Court’s finding that the considerable number hours spent by Coles’ counsel were
reasonable.
b.
Deltaville Boatyard’s Repeated Threats of Rule 11 Sanctions
It also cannot be ignored that much of Coles’ counsel’s efforts were made necessary by
Deltaville Boatyard’s repeated threats to file sanctions pursuant to Rule 11. Such unfounded
threats, as they appear to the Court to have been, inappropriately employed Rule 11 as a sword.
Rule 11 is designed to “streamline” the litigation process. Cooter & Gell v. Hartmarx Corp., 496
U.S. 384, 393 (1990). In some instances, however, the abuse of Rule 11 may, itself, serve to
increase a party’s expenses while needlessly delaying resolution of the substantive dispute
between the parties. See, e.g., Greeley Publ’g Co. v. Hergert, 233 F.R.D. 607, 611 (D. Colo.
2006) (“A Rule 11 motion for sanctions should never be employed as a means to achieve some
tactical advantage”).
Here, counsel for Deltaville Boatyard threatened sanctions against Coles throughout the
course of the proceedings before the Court, forcing Coles’ attorneys to repeatedly evaluate the
factual and legal basis of their claims well beyond the “reasonable” investigation mandated by
Rule 11. As in all cases, adversarial counsel have offered varying constructions of the facts in
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their respective clients’ favor. Regardless of how counsel for either side may have previously
construed the facts in their favor, the Court has now concluded that on at least two occasions,
Ruse contacted Coles’ future employers to “warn” them that Coles might engage in further
protected activity against those employers. Nevertheless, even to this day, counsel for Deltaville
Boatyard continues to assert that the case is a patently frivolous lawsuit, threatening Rule 11
sanctions against Coles, while never once actually engaging the proper Rule 11 procedures.
Such accusations and sanction-based litigation strategy rightfully led Coles’ counsel to expend
additional time investigating and researching the case. Having caused the additional fees by its
own conduct, Deltaville Boatyard cannot now claim that the related fees are unreasonable.
There also exists an inexplicable inconsistency in Deltaville Boatyard’s counsel’s Rule
11 position. On the one hand, Coles’ counsel is accused of pursuing a frivolous lawsuit – in
which they succeeded. On the other hand, in opposing the propriety of fees according to the
Farrar-Mercer factors, it is now argued that the case has no precedential value whatsoever.
While the Court may agree with the latter assessment, it would do so only because there already
exists considerable authority supporting Coles’ legal theory. Such is exactly the reason why
Deltaville Boatyard’s repeated threats of Rule 11 sanctions were without merit. If defense
counsel’s Rule 11 threats had any arguable merit, then the case would indeed establish
significant precedent. Of course, such is not the case, and counsel’s threats served only to
needlessly increase the cost of litigation, thus supporting an award of attorney’s fees.
The hours that Coles’ counsel spent on the matter were reasonable, and all that remains
for the Court to calculate the lodestar is to multiply those hours by the reasonable rates. North
spent 117.25 hours on this case at a rate of $300.00/hour, for a lodestar of $35,175.00. Downing
spent a total of 214.00 hours on this case at a rate of $250.00/hour, for a lodestar of $53,500.00.
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Together, the total lodestar comes to $88,675.00.
C.
Adjustments to the Lodestar
The lodestar does not adequately account for the result in this case for two reasons.6
First, the damages actually suffered, though tangible, were difficult to prove and relatively small
compared to those cases in which an employee is without employment for some significant time.
While it seems appropriate to adjust the attorney’s fee award such that it relates to the outcome
of the case in some respect, the reasonable efforts of counsel were the result of efforts to prove
liability much more than damages. Thus, the fee award cannot be based exclusively on the
numeric value of Coles’ verdict.
Coles has proposed a twenty percent (20%) reduction of Downing’s fees (but none for
North’s fees) due to his relative inexperience in the area of employment litigation. (Pl.’s Br. at
17.) However, the Court has not perceived any deficiency in Downing’s representation of Coles
to warrant applying a discount to his efforts alone. His lower rate of pay already accounts for his
relatively lower level of experience in employment litigation, as compared to North, and so an
adjustment to the lodestar on that basis is not appropriate and is otherwise unnecessary. See
Delaware Valley I, 478 U.S. at 565. Rather, the Court’s basis for a downward adjustment from
the lodestar is that the results obtained, while not insignificant, are notably lower than Coles had
sought. And because the reduction is outcome-driven, there is no reason that it should apply
only to Downing, and not to North as well.
6
The Court has also considered whether any of the twelve factors set forth in Johnson v. Georgia
Highway Express, Inc., 488 F.2d 714 (1974) ought to result in a departure from the lodestar. See
also Robinson, 560 F.3d at 243-44. However, as is increasingly recognized by other federal
courts, most of those factors that would have any import here are “subsumed” by the lodestar
calculation itself. Delaware Valley I, 478 U.S. at 564 (citation omitted). Only the predominant
factor considering the amount of recovery has any bearing on the Court’s analysis in this case.
See Farrar, 506 U.S. at 114.
16
There is simply no available way to relate any individual time entry with the results
obtained. In the aggregate, however, a proportional approach best accounts for the amount of
recovery in the case. Adjusting the lodestar downward by a factor of one-third will achieve the
goal. The Court arrives at such a percentage reduction by considering two variables related to
the recovery in this case: (1) Coles failed to prove any economic losses, which are approximately
one-third of the value of the total judgment actually obtained; and (2) Coles proved at trial only
two out of three acts of retaliation alleged.
Coles’ unproven claim for economic losses consisting of lost wages in the amount of
$768.00 are approximately one-third of the $2,000.00 actually recovered in this case. Alone,
such a coincidental circumstance would not necessarily mandate a downward adjustment from
the lodestar. Moreover, there is no authority to suggest that attorney’s fees should always be
awarded proportionally to the value of the verdict divided by the ad damnum. While there was
no particular ad damnum for emotional distress damages in the case, Coles asserted a generalized
request for emotional distress damages at a level which the Court concluded was unsubstantiated
-- thus giving rise to the downward adjustment.
A one-third reduction strikes the Court as appropriate for a second reason -- the evidence
at trial supported two of the three acts of retaliation, and the Court’s award of compensatory and
punitive damages was based solely on those two acts. Each of Coles’ counsel’s time entries
doubtlessly involved some overlap between the circumstances of all three alleged acts of
retaliation. Some entries may reflect an investigation of only those acts of retaliation actually
proven, while some entries might arise out of the unsuccessful efforts to prove the third allegedly
unlawful act. However, it is impossible for the Court to accurately segregate the effort for each
entry. Accordingly, the Court deems that the most appropriate method is to reduce all fees by
17
one-third which, in effect, accounts for the failure to prove the third act of retaliation.
It similarly follows that total damages of two-thousand dollars ($2,000.00) would have
been increased to at least three-thousand dollars ($3,000.00) had the third act been proven (or
even higher had Coles proven that actual damages resulted therefrom). Thus, a reasoned
proportional reduction ought to be one-third. The approach follows from the Supreme Court’s
recent guidance that adjustments “must be calculated using a method that is reasonable,
objective, and capable of being reviewed on appeal.” Perdue, 130 S. Ct. at 1674.7 While
imperfect, the proportional approach is reasoned, as opposed to an “arbitrary” numerical
approach, which the Supreme Court has rejected. Id. at 1675.
In reaching the result, the Court similarly rejects the specific itemized reductions
proposed by Coles, finding that they do not sufficiently relate to the outcome of the case. For
example, Coles proposes to eliminate all costs and attorneys’ fees incurred specifically as a result
of Rick Farinholt’s testimony, since he was at the center of the third, unproven act of retaliation.
(Pl.’s Br. at 17.) However, some more general entries obviously reflect research and
investigation into all three allegations of retaliation, such as those preparations for the deposition
of Ruse. Again, in the aggregate, it can be fairly assumed that counsel devoted an equal effort to
each claimed instance of unlawful retaliation. Thus, to reflect the fact that two out of three
instances of retaliation were proven at trial, two-thirds of the costs and attorneys’ fees ought to
be awarded.
The Court’s approach is also consistent with the Supreme Court’s guidance that “a
‘reasonable’ fee is a fee that is sufficient to induce a capable attorney to undertake the
7
In Perdue, the Court considered whether an enhancement to the lodestar was appropriate. The
same logic applies here where the Court considers a reduction to the lodestar is appropriate.
18
representation of a meritorious civil rights case.” Perdue, 130 S. Ct. at 1672 (citing Delaware
Valley I, 478 U.S. at 565). “[A] reasonable attorney’s fee is one that is adequate to attract
competent counsel, but that does not produce windfalls to attorneys.” Blum v. Stenson, 465 U.S.
886, 897 (1984) (emphasis added). Adjustments to the lodestar ought to “consider[] the
relationship between the extent of success and the amount of the fee award.” Farrar, 506 U.S. at
115-16 (citation and internal quotation marks omitted). Here, reducing the fee in proportion to
those proven acts of unlawful retaliation serves to adequately reward counsel for successful
efforts, while simultaneously avoiding a “windfall” for counsel’s unsuccessful effort. Id.
At the same time, the Court cautions one not to apply such an approach in all other cases.
Here, it is the Court’s conclusion that the lodestar should be adjusted downward to reflect the
results actually obtained. The nature of the case is peculiar in the sense that the wrongful acts
were clearly established by the evidence, but there were no proven economic damages. Only
compensation for emotional distress and punitive damages were awarded, and the fee should be
adjusted to reflect such a result.
It is also important for the Court to note a distinction between its approach and that
proposed by Deltaville Boatyard. In its Brief in Opposition to Motion for Award of Attorneys’
Fees, Deltaville Boatyard listed no fewer than thirty-eight facts contained in a combination of
each of the three complaints filed by Coles in the case which the Court did not explicitly find had
been proven. (Def.’s Opp’n at 3-6.) Citation to allegations contained in the initial Complaint
and the First Amended Complaint is disingenuous where trial on the merits occurred within the
framework of a Second Amended Complaint. More significantly, however, many of those
factual allegations did not require the Court’s attention in rendering its ultimate verdict. It is
sufficient that Coles proved facts supporting both of his claims of liability, but that he did so by
19
proving only two of the three allegedly retaliatory acts. So, while the Court cannot reasonably
engage in a “line-by-line” post hoc evaluation of each allegation in the pleadings, it can generally
reduce the damages in proportion to the proven retaliation.
Applying its one-third reduction to the lodestar of $88,675.00, the Court concludes that
the appropriate fee award in this case is $59,116.67.
D.
Specific Itemized Deductions and Costs
As the Court has already acknowledged, supra at note 3, Deltaville Boatyard has
appended to its Brief in Opposition a spreadsheet arguing against a myriad of particular time
entries and costs incurred in this case. Having reviewed each of those arguments, the Court finds
that they are without merit. Each seeks to scrutinize whether any time entry or cost is related to
the particular claims proven at trial. While counsel’s investigation of claims against Chesapeake
Marine Railway, for example, did not lead to a claim specifically against that company, it
certainly related to the factual developments of the case ultimately tried before the Court. Thus,
each time entry appears to have been reasonably necessary under the conditions in which this
case was litigated. And in the aggregate, the Court’s one-third reduction already accounts for
Coles’ failure to prove the third act of retaliation.
The same is generally true of the itemized costs. For example, a transcript of the
discovery deposition of Tanya Brown appeared to be “reasonably necessary at the time of its
taking.” Francisco v. Verizon South, Inc., 272 F.R.D. 436, 442 (E.D. Va. 2011) (internal
quotation marks omitted) (quoting Jop v. City of Hampton, 163 F.R.D. 486, 488 (E.D. Va.
1995)). Likewise, the mileage and service fees to secure the trial testimony of Janie Ruark
appeared to be necessary “at the time” that the cost was incurred because Deltaville Boatyard
had not yet agreed to stipulate to the use of her deposition testimony at trial. Thus, each of the
20
costs sought is properly taxed against Deltaville Boatyard as the non-prevailing party. Id. The
total cost incurred is three-thousand three-hundred twenty-two and 59/100 dollars ($3,322.59).
IV. CONCLUSION
For the reasons set forth herein, the Court concludes that Coles is entitled to an award of
fifty-nine thousand one-hundred sixteen and 67/100 dollars ($59,116.67) for attorney’s fees and
three-thousand three-hundred twenty-two and 59/100 dollars ($3,322.59) in costs accrued in
pursuit of this action, for a combined award of sixty-two thousand four-hundred thirty-nine and
26/100 dollars ($62,439.26).
An appropriate Order will issue.
/s/
Dennis W. Dohnal
United States Magistrate Judge
Richmond, Virginia
Dated: December 19, 2011
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