Category Archives: Attorney’s Fees

April 22, 2012 · 9:42 am

W.D.N.Y.: Defendant’s Attorneys’ Billing Records Relevant and Discoverable Where Defendant Put Reasonableness of Hours and Rates Charged by Employee’s Attorneys at Issue, By Opposing Plaintiffs’ Motion For Attorneys’ Fees

Mendez v. Radec Corp.

Following an order granting the parties’ joint motion for approval of settlement agreement, the plaintiff moved for award of attorneys’ fees and renewed his motion to reopen discovery to discover defense counsel’s billing records. Over defendant’s objection, the court granted plaintiff’s motion, reasoning that the billing records were relevant and discoverable, because the defendant had put the reasonableness of hours and rates charged by plaintiff’s counsel at issue, by opposing plaintiff’s motion for attorneys’ fees.

Initially the court noted that cases have come down on both sides of the issue, with some courts holding that defenses counsel’s billing records are discoverable, while others have held that they are not.

Discussing the applicable law generally, the court explained:

The general principle underlying these divergent results seems to be that whether such information is discoverable depends on the nature of the objections raised to the fee request. Where the opposing party challenges the reasonableness of the rate or hours charged by the moving party’s counsel, courts are more likely to find that evidence of the nonmoving party’s counsel’s fees are relevant and discoverable. See State of New York v. Microsoft Corp., No. 98–1233, 2003 WL 25152639, at *2 and n. 3 (D.D.C. May 12, 2003) (stating that “some of the cases explicitly note that ‘ [w]hether discovery is appropriate depends, in part, on the objections raised by the opponent to the fee petition going to the reasonableness of the fee petition’ “) (quoting Murray v. Stuckey’s Inc., 153 F.R.D. 151, 152–53 (N.D.Iowa 1993)) (collecting cases); see, e.g., Pollard, 2004 WL 784489, at *3 (stating that because “DuPont objected to the excessiveness of the fees requested in the fee petition for the preparation of the fee petition …, it appears that DuPont’s own counsel’s time spent in preparing a response to Pollard’s petition for fees would serve as a logical yardstick from which to determine the reasonableness of such time expended by the plaintiff’s counsel”).

Addressing and rejecting the defendant’s contentions that their billing records were not subject to discovery, the court reasoned:

In the case at bar, defendants have not only challenged the reasonableness of the fees sought by plaintiffs, they have also expressly referenced their own fees in support of their arguments. For example, in their memorandum of law, defendants cite the specific fees and costs sought, and hours claimed, by plaintiffs’ counsel, and contrast them with those of defense counsel, noting that “Plaintiffs seek almost 3 times as much compensation for prosecuting this action as Radec spent to defend.” Dkt. # 334 at 6. Later, in discussing plaintiffs’ counsel’s hourly rates, defendants state that “the rates charged to Radec in this case are instructive.” Id. at 12. Similarly, defendants state that over a certain period, “Radec was charged only the flat fee of $175,000,” whereas “Plaintiffs claim $764,915.00 in fees for the same period….” Id. at 19.

Thus, defense counsel themselves have put at issue the reasonableness of the hours and rates charged by plaintiffs’ attorneys, and have used their own hours and rates as yardsticks by which to assess the reasonableness of those sought by plaintiffs. I therefore find that defense counsel’s billing records are relevant and discoverable. Cf. Marks Constr. Co. v. Huntington Nat’l Bank, No. 1:05CV73, 2010 WL 1836785, at *7 (N.D.W.Va. May 5, 2010) (“absent an attempt [by defendants] to claim a comparison between what Defendants paid and the claims of Plaintiffs as the basis for challenging the reasonableness of Plaintiffs’ claimed fees, there is no relevance shown with respect to the issues of the amount and reasonableness of attorneys fees and costs claimed by Plaintiffs’ counsel that justifies the required production of the billing records of [defense counsel]“).

Defendants’s argument that their detailed billing records are not discoverable because their opposition to plaintiffs’ fee request only cited the total hours and rates charged to defendants by their attorneys, see Def. Mem. of Law (Dkt. # 344) at 3, misses the point. In arguing that the hours claimed by plaintiffs’ attorneys are unreasonable, defendants have focused on specific hours and entries in plaintiffs’ counsel’s billing records. Defendants have stated, for example, that plaintiffs’ request for $15,000 for time spent preparing affidavits in connection with a particular motion is excessive, that one of plaintiffs’ attorneys billed 1.5 hours for a hearing that only took a half hour, and that plaintiffs’ allocation of 1443.2 hours of work on preparing binders is “outrageous.” Dkt. # 334 at 17–18. It is precisely because defense counsel then cite only their total time spent on the case that renders it difficult to determine whether this is a fair comparison.

While the court recognized that there may be significant differences in the ways that plaintiffs’ counsel and defense counsel litigate a case, and that this could cause a disparity between the two sides’ respective hours and hourly rates, the court explained that any such a disparity would not necessarily mean that one side’s fees were necessarily unreasonable or excessive. Further, the court held that such considerations go to the weight to be assigned to defense counsel’s billing records rather than rendering them non-discoverable. Thus, the court granted plaintiff’s motion.

Click Mendez v. Radec Corp. to read the entire Decision and Order.

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January 25, 2012 · 7:33 am

S.D.Fla.: Defendants Did Not Moot FLSA Case By Tender of Unpaid Wages and Liquidated Damages Without Attorneys Fees and Costs

Diaz v. Jaguar Restaurant Group,  LLC

In the first post-Dionne II case, a court in the Southern District has denied an FLSA defendants’ motion to dismiss based on tender of unpaid wages and liquidated damages, absent payment of attorneys fees and costs.  The bizarre procedural history involved the defendants “tender” of wages and liquidated damages, only after prevailing at trial, and reversal at the Eleventh Circuit due to the trial court’s order permitting the defendants to amend their answer to assert a previously unpled exemption during the trial.

The Order reads in part:

“To a great extent, the pending motion to dismiss has now been rendered moot by the Eleventh Circuit’s substitute opinion entered in the case of Dionne v. Floormasters Enterprises, Inc., No. 09-15405 (11th Cir. Jan. 13, 2012), which clarified that the Court’s opinion in that case is limited to its very narrow facts and, specifically, requires a concession of mootness and does not apply to the tender of full payment of amounts claimed by the employee in a FLSA case before trial or after judgment. The pending motion is based entirely upon a proposed extension of the Court’s now-withdrawn original opinion. Moreover, other cases that considered the issues raised here rejected attempts to expand the scope of the original opinion. See, e.g., Tapia v. Florida Cleanex, Inc., No. 09-21569 (S.D. Fla. Oct. 12, 2011) (Ungaro, J., D.E. 67, collecting cases). Judge Ungaro’s opinion has now been sustained by the Eleventh Circuit on rehearing. And, even under the original panel opinion, the Court could not possibly find that Defendant’s unilateral actions taken after a trial and an appeal rendered Plaintiff’s claim for damages and attorneys’ fees moot. But, in any event, the entire issue is now moot for purposes of this case.”

Click Diaz v Jaguar Restaurant Group, LLC to read the entire Order (contained in the Docket Sheet for the case at Docket Entry 108).

Thanks to Rex Burch for the head’s up on this Order.

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January 14, 2012 · 8:40 am

11th Cir.: Following Tender of Unpaid Wages and Liquidated Damages, an Employer Only Moots a Case if the Plaintiff Agrees to Dismissal, Absent Payment of Mandatory Fees and Costs

Dionne v. Floormasters Enterprises, Inc.

Following a controversial opinion that created more questions than it answered, the Eleventh Circuit reconsidered it’s prior Opinion in this case and in so doing largely restricted its holding to the unique facts presented in the case.  Previously the Court had held that  an employer, who denies liability for nonpayment for overtime work, need not pay attorney’s fees and costs pursuant to 29 U.S.C. § 216(b) of the Fair Labor Standards Act (“FLSA”) if the employer tenders the full amount of overtime pay claimed by an employee, and moves to dismiss on mootness grounds where the employee concedes that “the claim for overtime should be dismissed as moot.  Although the prior Opinion seemed restricted to these unique facts where the employee conceded that the overtime claim should be dismissed (but attempted to reserve as to fees/costs), courts throughout the Eleventh have since expanded the holding to scenarios where the employee makes no such stipulation.  Here, the Eleventh Circuit affirmed the prior decision, but clarified and limited its applicability.

Significantly, the Eleventh Circuit included the following footnote in its new Opinion:

“Our decision in this matter addresses a very narrow question: whether an employee who conceded that his claim should be dismissed before trial as moot, when the full amount of back pay was tendered, was a prevailing party entitled to statutory attorney’s fees under § 216(b). It should not be construed as authorizing the denial of attorney’s fees, requested by an employee, solely because an employer tendered the full amount of back pay owing to an employee, prior to the time a jury has returned its verdict, or the trial court has entered judgment on the merits of the claim.”

It remains to be seen exactly how the new Dionne Opinion will be applied by trial courts, but it does appear that much of the uncertainty created by the initial Opinion has now been resolved.  To that end, it appears that a Plaintiff who has suffered a theft of his or her wages can now safely accept tender of such wages (and liquidated damages) in response to a lawsuit to collect same, without fear that the employer can avoid payment of mandatory fees and costs, as long as they do not agree that the tender moots the case.

Click Dionne v. Floormasters Enterprises, Inc. to read the entire Opinion on Petition for Rehearing.

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May 27, 2011 · 9:50 am

2d. Cir.: Award of Attorney’s Fees for All Time Worked Cannot Be Based Solely Upon Court’s Observation of Counsel

Scott v. City of New York

This case was before the Second Circuit for the second time on the issue of attorney’s fees.  The plaintiffs prevailed in the underling case, but the plaintiffs’ attorney failed to keep contemporaneous time records.  Nonetheless, following judgment for employees in a Fair Labor Standards Act (FLSA) suit, the trial court awarded plaintiffs’ attorney partial attorney fees.  On the first appeal, the defendant appealed, and plaintiffs’ attorney cross-appealed from denial of certain fees.  In a decision discussed here, the Court of Appeals, 626 F.3d 130, vacated the initial fee award and remanded because the district court did not explain the basis on which attorney was excepted from requirement to submit contemporaneous time records with fee application.  Upon remand, the District Court, 2011 WL 867242, reinstated original award, and based the award on its own observations of plaintiffs’ counsel during the case.  Both parties appealed.  The Second Circuit held that the district court’s personal observation and opinions of attorney (alone) did not constitute exceptional circumstances that permitted award of attorney’s fees.  Thus, the case was again remanded for a finding as to reasonable attorney’s fees.

The court reasoned:

“An award based entirely on the district court judge’s personal observation and opinions of the applying attorney, however, is contrary to Carey and must be vacated. If nothing else, permitting that basis for what should be a rare exception is completely unfair to an attorney who has done identical work, failed to keep the required contemporaneous records but whose reputation is unknown to the judge. It would also be unfair to that lesser-known attorney who has done good work but for one reason or another has failed to impress the judge. Moreover, such an “exception” is not an exception to the Carey rule at all. It is an abrogation. We interpreted Carey as conditioning attorney’s fees on contemporaneous records in all but the “rarest of cases.” Scott, 626 F.3d at 133. A district court judge has an opportunity to see and evaluate a lawyer’s work in all cases. On appellate review there are additional considerations. As we recognized in Carey, it is difficult if not impossible for courts of appeal to meaningfully review awards based entirely on a district court’s sense of fairness. 711 F.2d at 1147. Without contemporaneous records “we have little choice but to show considerable deference to the District Court’s conclusion as to how many hours were reasonably compensable.” Id. Abuse of discretion review in these instances, however, requires a more searching inquiry. While it is true that we will—by default—need to rely on a district court’s estimate of compensable time when Carey’s narrow exception is triggered, such deference is a necessary evil brought about only by some other good reason. It is not a justification unto itself.

We have been pointed to no evidence that would permit us to conclude that this case falls within an exception to the Carey rule that would justify an award of all the fees for time that might be documented by an attorney’s contemporaneous records. Nonetheless, we are persuaded that Puccio should be eligible to recover limited fees for any contemporaneously documented time that he was physically before the district court. We thus hold that entries in official court records (e.g. the docket, minute entries, and transcriptions of proceedings) may serve as reliable documentation of an attorney’s compensable hours in court at hearings and at trial and in conferences with the judge or other court personnel. Where the court’s docket reflects that Puccio was in the courtroom participating in trial or was in chambers in conference with the judge and other counsel, these entries, comparable to contemporaneous attorney time records, may be effective substitutes for Puccio’s own contemporaneous records. In so holding, we hasten to add that this is not an invitation for district courts to engage in the type of conjecture that has occurred here with respect to Puccio’s purported 120 hours of trial time. Instead, attorneys seeking fees must point to entries in the official court records that specifically and expressly demonstrate their presence before the court and indicate with reasonable certainty the duration of that presence. No accommodation is to be made for travel time or out-of-court preparation because that will vary from attorney to attorney and issue by issue. Finally, we emphasize that the onus of gathering the applicable docket entries and other court records, if any, is on the applying attorney, not the district court. The district courts are under no obligation to award fees based on such time. Our holding today merely clarifies that using such remedies in this limited fashion will not run afoul of Carey if the district court chooses to do so. We believe that such a regime prevents a totally inequitable result in cases such as this while, at the same time, preserving the strong incentive Carey creates for lawyers to keep and submit contemporaneous records.”

Accordingly, the Second Circuit vacated the district court’s order reinstating plaitniffs’ attorney’s fees, and remanded the case to the district court so that plaintiff could submit a new application for attorney’s fees based exclusively on official court records.

As some have noted, the series of decisions rendered in this case seem to be in contradiction to previous Second Circuit jurisprudence, which has not required contemporaneous time records in order to support an award of fees.  Since the Second Circuit did not explicitly overrule its prior cases, it will be interesting to see what effect, if any, the Scott decisions will have on future cases.

Click Scott v. City of New York to read the entire Second Circuit opinion.

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March 28, 2011 · 6:37 am

S.D.Ind.: FLSA Defendant Not Entitled to Discovery of Plaintiff’s Attorney’s Billing Records, Until Such Time Plaintiff Is “Prevailing Party”

Johnson v. Bridges of Indiana, Inc.

This case was before the court on the defendant’s motion to compel discovery of plaintiff’s attorney’s billing records.  In denying the motion, the court noted that only a “prevailing” plaintiff is entitled to attorney’s fees.  As such, the request was premature.

Denying the motion to compel, the court explained:

“The FLSA directs courts to award reasonable attorneys’ fees and costs to prevailing plaintiffs.” Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 550 (7th Cir.1999) (emphasis added). Federal Rule of Civil Procedure 54(d)(2) and the common practice in this District requires the court to establish an appropriate fee after the Plaintiff has prevailed at trial.  Plaintiff has not yet, and may never, become a “prevailing plaintiff.” Rule 26(b)(1) of the Federal Rules of Civil Procedure explains: “Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense ….  Because Plaintiff has not yet become a prevailing party, her attorney’s billing records are not relevant to any claim she has raised against Defendants, nor is it relevant to any defense that Defendants might raise.”

Click Johnson v. Bridges of Indiana, Inc. to read the entire decision.

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January 2, 2011 · 12:51 pm

D.Ariz.: Employee Who Resolved His Claims For Unpaid Overtime Prior To Lawsuit Entitled To Award Of Attorney’s Fees Under § 216

McBurnie v. City of Prescott

Before the court was plaintiff’s motion for summary judgment regarding entitlement to attorneys fees following his presuit acceptance of a check that purported to resolve all of his claims for unpaid overtime wages and attorneys fees.  Noting that an empl0yee can not waive his or her rights to substantive FLSA rights absent a settlement supervised by either the DOL or a court, the court held that notwithstanding Plaintiff’s prior acceptance of payment for his unpaid overtime, he was entitled to an award of attorneys fees under the FLSA.

In November 2007, Plaintiff filed a grievance against his then supervisor, alleging that the City’s forced use of compensatory time in lieu of overtime pay violated the Fair Labor Standards Act, 29 U.S.C. § 207.  In February 2009, prior to the institution of Plaintiff’s lawsuit, the Defendant sent two checks to plaintiff-one in the amount of $26,000 for overtime compensation and the other in the amount of $5,778.32 for attorney’s fees.  The settlement letter enclosed with the two checks stated that “[b]y cashing either or both of these two checks your client is accepting these funds as resolution of any and all overtime issues; we have indicated that on each of these checks.”  Plaintiff accepted and cashed the $26,000 settlement offer, but returned the check for attorney’s fees to the City.

In August, 2009, Plaintiff filed his lawsuit.  Among other claims, he sought attorney’s fees related to the settlement of his FLSA wage claim.

Reasoning that Plaintiff was entitled to an award of attorneys fees and granting Plaintiff summary judgment with regard to same, the court explained:

“Plaintiff moves for summary judgment on Count 12, his claim for attorney’s fees under the Fair Labor Standards Act, 29 U.S.C. §§ 207 and 216 (“FLSA”). The FLSA was enacted for the purpose of protecting workers from substandard wages and oppressive working hours. Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 1444 (1981). The Act provides that an employee shall receive overtime wages “at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U .S.C. § 207(a)(1). The FLSA further provides that any employer who violates the overtime wage provision will be liable to the affected employee in the amount of unpaid overtime wages, plus an additional equal amount as liquidated damages. Id. § 216(b).

Because of the unequal bargaining power between employers and employees, Congress made the FLSA provisions mandatory. D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 116, 66 S.Ct. 925, 929 (1946) (“neither wages nor damages for withholding them are capable of reduction by compromise”). An individual may not relinquish rights under the Act, even by private agreement between the employer and employee, “because this would ‘nullify the purposes’ of the statute and thwart the legislative policies it was designed to effectuate.”   Barrentine, 450 U.S. at 740, 101 S.Ct. at 1445 (quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 902 (1945)).

The FLSA provides two avenues for claim resolution. Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353-54 (11th Cir.1982). First, under section 216(c), the Secretary of Labor can supervise an employer’s voluntary payment to employees of unpaid wages. 29 U.S.C. § 216(c). An employee who accepts such supervised payment waives his right to file an action for both the unpaid wages and for liquidated damages. Id. Or, under section 216(b), an employee can bring a private action for back wages under the FLSA and can “present to the district court a proposed settlement, [and] the district court may enter a stipulated judgment after scrutinizing the settlement for fairness.” Lynn’s Food Stores, 679 F.2d at 1353 (citing D.A. Schulte, Inc, 328 U.S. at 113 n. 8, 66 S.Ct. at 928 n. 8). Settlements that do not follow the two methods authorized by the Act are unenforceable. Hohnke v. United States, 69 Fed. Cl. 170, 178-79 (Fed.Cl.2005).

Here, we have neither an agreement supervised by the Department of Labor, nor entered as a stipulated judgment by a court. The settlement agreement regarding back wages is fully consummated and the parties do not seek court approval. Therefore, the settlement falls outside the two statutorily-prescribed avenues of FLSA claim resolution.

An award of attorney’s fees to a prevailing party in an action brought under section 216(b) is mandatory. “The court in such action 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) (emphasis added); Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 415 n. 5, 98 S.Ct. 694, 697 n. 5 (1978) (referring to § 216 of the FLSA as one of the “statutes [that] make fee awards mandatory for prevailing plaintiffs”). The payment of the attorney’s fees discharges a statutory, not a contractual, duty. Because the FLSA was intended to provide workers with the full compensation due under the law, requiring a claimant to pay attorney’s fees incurred to enforce his FLSA rights would frustrate the statute’s underlying purpose. See Maddrix v. Dize, 153 F.2d 274, 275-76 (4th Cir.1946) (stating that Congress intended that a claimant “should receive his full wages plus the penalty without incurring any expense for legal fees or costs”).

Thus, the statement in the settlement letter that “[b]y cashing either or both of these two checks your client is accepting these funds as resolution of any and all overtime issues” in unenforceable as to plaintiff’s claim for attorney’s fees under the FLSA. Plaintiff has not waived his right to attorney’s fees under the Act. We grant summary judgment in favor of plaintiff on Count 12.”

Click McBurnie v. City of Prescott to read the entire opinion.

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December 11, 2010 · 10:41 am

2d. Cir.: Contested Attorney’s Fee Petition Must Be Accompanied By Contemporaneous Time Records

Scott v. City of New York

After prevailing at trial, the Plaintiff in this Fair Labor Standards Act (FLSA) case, moved for an award of attorney’s fees and costs pursuant to 216(b).  The Defendant opposed the amount of attorney’s fees sought by Plaintiff’s attorney.  The trial court awarded plaintiffs’ attorney partial attorney fees, based on the fees asserted.  The Defendant appealed the award, asserting that the fee award was improper, inasmuch as the Plaintiff’s attorney had not submitted contemporaneous time records in support of his fee application.  Plaintiff’s attorney cross-appealed from denial of certain of those fees.  On appeal, the Second Circuit held that a contested attorney’s fee petition must be accompanied by contemporaneous time records.  Therefore, they remanded the case back to the trial court in order to make a detailed finding regarding appropriate fees to be awarded (or in the alternative to state the basis for an exemption from such requirements).

Click Scott v. City of New York to read the entire opinion.

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November 30, 2010 · 7:37 am

E.D.Tex.: Notwithstanding Settlement Agreement Stating Plaintiffs Were Not “Prevailing Party,” Plaintiffs Were Prevailing Party, Entitled To Attorneys Fees And Costs Under FLSA

Champion v. ADT Sec. Services, Inc.

The case was before the court on Plaintiffs’ motions for attorneys fees and costs, following the settlement of their FLSA claims.  The Defendant argued that Plaintiffs were not entitled to recover attorneys fees and/or costs, because the settlement agreement contained language stating that Plaintiffs were not the “prevailing party,” despite the fact that they had successfully resolved their case by settlement.

Rejecting Defendant’s argument, the court reasoned:

“The Court concludes that Plaintiffs are prevailing parties, for the purposes of the fee-shifting statute, and are thus entitled to attorney’s fees. Under the FLSA, the court may award reasonable attorney’s fees to the prevailing party. Saizan, 448 F.3d at 799. “A typical formulation is that plaintiffs may be considered prevailing parties’ for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (internal quotes omitted); see also Abner v. Kansas City S. Ry. Co., 541 F.3d 372, 379 (5th Cir.2008). The Court holds that the plaintiffs are prevailing parties for these purposes because the plaintiffs succeeded in procuring a favorable settlement. ADT initially made payments for the owed overtime to seven of the named plaintiffs that totalled $11,324.48, and the settlement obtained for those seven plaintiffs totalled $48,500.00. (See P’s Reply Br., Dkt. No. 57 at 13-14.) Thus, the plaintiffs have certainly “achiev[ed] some of the benefit the parties sought in bringing suit.” Hensley, 461 U.S. at 433. In the present case, however, Defendant ADT argues Plaintiffs are not prevailing parties for two reasons: (1) this case was resolved by settlement; and (2) the settlement agreement signed by the parties states that Plaintiffs shall not be deemed a prevailing party. For the following reasons, the Court disagrees with Defendant on both points and concludes that Plaintiffs are prevailing parties.

First, settlement does not preclude Plaintiffs from being considered prevailing parties. The Supreme Court has held that settlement agreements enforced through a consent decree may serve as the basis for an award of attorney’s fees. Maher v. Gagne, 448 U.S. 122, 129-30, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980). “Although a consent decree does not always include an admission of liability by the defendant … it nonetheless is a court-ordered change in the legal relationship between the plaintiff and the defendant.”   Buckhannon Bd. & Care Home, Inc. v. +West Virg. Dep’t of Health & Human Resources, 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001) (internal quotes omitted). In the present case, the Court entered a consent decree in the Court’s Order approving the settlement as a fair and reasonable compromise of the dispute under the FLSA. (Dkt. No. 50.) Therefore, the settlement does not limit Plaintiffs’ ability to be prevailing parties.

Second, regarding the settlement agreement signed by both parties and submitted to this Court, the agreement states in one part:

No Admission of Liability. The Parties agree and acknowledge this Agreement is the result of a compromise and shall not be construed as an admission of liability, responsibility, or wrongdoing as alleged in the Lawsuit. It is expressly understood by the Parties that [plaintiffs] shall not be deemed a “prevailing party” for any purpose, including any fee shifting statute, rule, or agreement.  (Plaintiff’s Unopposed Motion to Approve FLSA Settlement, Settlement Agreement, Dkt. No. 48, Ex. 1, ¶ E.) Defendant argues this settlement agreement, which was signed by the parties and submitted to the Court, means the plaintiffs are not prevailing parties because the settlement agreement acknowledges that they are not prevailing parties. The Court disagrees.

As an initial matter, the settlement agreement is treated as a contract and will be interpreted under Texas law.  The Texas Supreme Court has recently explained the law:

In construing [a contract], we first determine whether it is possible to enforce the contract as written, without resort to parol evidence. Deciding whether a contract is ambiguous is a question of law for the court. Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983). In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.1980); City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968). To achieve this objective, we must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 158 (1951). No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument. Myers v. Gulf Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex.1962); Citizens Nat’l Bank v. Tex. & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003, 1006 (1941). A contract is unambiguous if it can be given a definite or certain legal meaning. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996). On the other hand, if the contract is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties’ intent. Id. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003). Further, under Texas law, “[c]ourts interpreting unambiguous contracts are confined to the four corners of the document, and cannot look to extrinsic evidence to create an ambiguity.” Texas v. Am. Tobacco Co., 463 F.3d 399, 407 (5th Cir.2006). Parol evidence may only be used if the contract is first found to be ambiguous. Id.

Keeping these principles in mind, the Court concludes that the contract is unambiguous and the plaintiffs are entitled to attorney’s fees, or in other words, the settlement agreement does not prevent the plaintiffs from being considered prevailing parties. The Court recognizes that the settlement agreement states that the plaintiffs “shall not be deemed a prevailing party’ for any purpose, including any fee shifting statute, rule, or agreement.” (Plaintiff’s Unopposed Motion to Approve FLSA Settlement, Settlement Agreement, Dkt. No. 48, Ex. 1, ¶ E.) But the agreement also states:

The parties have made no agreement regarding the payment of Champion’s attorney fees, court costs and a portion of the mediation fees, beyond that provided for in Paragraph A above. Champion’s counsel intends to apply to the Court for an award of attorney’s fees, and ADT reserves the right to contest this application.(Plaintiff’s Unopposed Motion to Approve FLSA Settlement, Settlement Agreement, Dkt. No. 48, Ex. 1, ¶ B.) The Court concludes the contract is unambiguous when considering only the four corners of the document and attempting to “harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless.”  The parties agreed that there was “no agreement regarding the payment of [Plaintiffs'] attorney fees.” (Plaintiff’s Unopposed Motion to Approve FLSA Settlement, Settlement Agreement, Dkt. No. 48, Ex. 1, ¶ B.)

But on the other hand, the parties agreed that the plaintiffs shall not be “deemed” a prevailing party. (Id. at ¶ E.) In harmonizing these statements together, the Court concludes that when the agreement states that the plaintiffs shall not be “deemed” a prevailing party, the parties were agreeing that whether the plaintiffs are a prevailing party is to be determined by the Court. In other words, the parties were not deeming the plaintiffs as a prevailing party. Further, the specific language stating the plaintiffs “shall not be deemed a prevailing party” is located in the section of the agreement titled “No Admission of Liability,” which confirms the parties’ intention was merely to not admit the plaintiffs were the prevailing party. (Id.) Rather, the parties were confirming that “ADT reserves the right to contest this application” of awarding attorney’s fees. (Id. at ¶ B.)

Therefore, the Court interprets the settlement agreement as unambiguously allowing the Court to determine whether the plaintiffs are the prevailing parties and entitled to attorney’s fees. The Court concludes for the abovementioned reasons that the plaintiffs are prevailing parties for the purposes of the statute and are entitled to attorney’s fees.”

Not quoted here, the court noted that there were emails between counsel prior to the settlement agreement, wherein the parties made clear that they intended the settlement agreement to resolve the issue of damages only and not the issue of attorneys’ fees or costs.

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April 17, 2010 · 8:24 am

11th Cir.: Rehearing En Banc Denied On Refusal To Award Prevailing FLSA Plaintiff Attorney’s Fees; Strong Dissents

Sahyers v. Prugh, Holliday & Karatinos, P.L.

In a decision discussed here previously, the 11th Circuit had affirmed the trial court’s decision to award no attorneys fees or costs, in a case where they reasoned that attorney civility towards one another trumped the mandatory fee provisions of the FLSA.  The case was again before the 11th Circuit, this time on Plaintiff’s Motion for a Rehearing En Banc.  Although the Court denied the Motion for Rehearing, significantly, there was very strong dissent, perhaps signaling that the case may be ripe for review at the United States Supreme Court, who just this week signaled they will begin hearing more cases than they have in recent years.

Citing legal principle, but little statutory authority for the Court’s position, in a concurring opinion, one Judge explained, in part:

“About this case, I have a few observations to make. Lawyers, as members of the Courts’ Bars (that is, as officers of the Courts) are often, and in a variety of ways, treated by the Courts better or worse than nonlawyers. I stress that I do not see the Courts’ inherent powers to supervise the members of their Bars as “overriding” (that is, cancelling) the FLSA statute’s treatment of fees. The statute is law, general law tied to the outcome of FLSA suits.

I see the Courts’ inherent powers over Bar members as a separate and pre-existing font of law and legal authority that specifically governs the conduct of lawyers as lawyers, regardless of the outcome of the case: the law of inherent powers supplements the FLSA statute to make up the whole of the applicable law in this case. Therefore, I see the whole applicable law to run this way: When the outcome favors the plaintiff, fees shall be awarded unless the District Court, in the reasonable exercise of its power to supervise lawyers in their practice in cases before the Court, determines that an award of fees (given the specific circumstances of a particular case) is not right-not right directly because of lawyer conduct related to the specific case. Thus, fees nearly always are to be awarded; but never are the Courts altogether stripped of the power to supervise lawyer conduct through the grant or withholding of fees.

That Courts have the inherent and main-if not exclusive-authority (along with the duty and responsibility) to supervise their Bar members is, I believe, no innovative idea. And that Courts can use the control of attorney fees as a means of exercising the inherent power to supervise lawyer conduct in particular cases seems uninnovative too. See Chambers v. NASCO, Inc., 111 S.Ct. 2123, 2133 (1991) (court may per inherent power assess attorneys fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive purposes); Roadway Express, Inc. v. Piper, 100 S.Ct. 2455, 2463 (1980) (federal courts have inherent powers to assess attorneys fees against counsel).”

With separate strongly worded dissents, Circuit Court Judges Barkett and Wilson, sternly warned that the Eleventh Circuit had exceeded their authority by attempting to ignore the FLSA, a federal statute, without any basis.

BARKETT, Circuit Judge, dissenting:

“En banc review is warranted in this case because district courts do not have the power, inherent or otherwise, to directly contravene a federal statute. The panel decision, holding that the district court could deny attorneys’ fees mandated by the Fair Labor Standards Act (“FLSA”), is contrary to settled United States Supreme Court precedent providing that the use of a district court’s inherent supervisory powers is invalid when it conflicts with a statutory command. See, e.g. Bank of Nova Scotia v. United States, 487 U.S. 250, 254 (1988); Thomas v. Arn, 474 U.S. 140, 148 (1985). As Judge Wilson notes in his dissent, there is no dispute that the language of the statute is mandatory, see29 U.S.C. § 216(b) (“The court in such action shall, in addition to any judgment awarded to plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”), and has been previously so construed by our court. Dale v. Comcast Corp., 498 F.3d 1216, 1223 n.12 (11th Cir.2007).

The panel characterizes the denial of attorneys’ fees as an informal sanction of Sahyers’ lawyer for suing fellow lawyers without first attempting to resolve the dispute through informal means. In his concurrence to the denial of rehearing, Judge Edmondson stresses that the district court based its decision on local litigation customs and practices, but the district court opinion references no such customs or practices. The district court simply says that, in its view, it is “reasonable” to call another lawyer prior to filing suit. That is not enough to give notice to Sahyers’ attorney. District courts do not have the authority to sanction lawyers for conduct not proscribed by law or rule-which is the case here-without first providing them with notice that their conduct may warrant sanctions. Fed.R.Civ.P. 83(b) (“No sanction or other disadvantage may be imposed for noncompliance with any requirement not in federal law, federal rules, or the local rules unless the alleged violator has been furnished in the particular case with actual notice of the requirement.”). Because Sahyers’ attorney was given no actual notice, the district court had no authority to sanction him for failing to contact the defendants or their lawyers before filing suit. See In re Mroz, 65 F.3d 1567, 1575 (11th Cir.1995) (“Due process requires that the attorney (or party) be given fair notice that his conduct may warrant sanctions and the reasons why.” (citation omitted)). Accordingly, there is no authority for disregarding the mandatory language of FLSA on this basis.

The panel’s only supporting authority for its contention that a court may deny an award of litigation expenses to which a client is otherwise entitled by law is Litton Syss., Inc. v. Am. Tel. & Tel. Co., 700 F.2d 785 (2d Cir.1983). However, that decision does not permit a district court to simply disregard the express language of a statute that mandates attorneys’ fees and costs. Rather, it affirms a sanction imposed under Federal Rule of Civil Procedure 37 for “gross negligence” and “willful misconduct” by the plaintiff’s lawyers. Id. at 826-28. The failure to notify an opposing lawyer prior to suit in the absence of any known requirement to do so can hardly qualify as negligence or willful misconduct.

Because the panel opinion disregards the express mandate of Congress, this case warrants en banc review.”

WILSON, Circuit Judge, dissenting:

“The Court affirms a decision by a district court that denies a prevailing plaintiff’s lawyer his entitlement to an attorney’s fee under the Fair Labor Standards Act (“FLSA”) on account of his failure to give the defendant, a lawyer, advance notice of the lawsuit. I am concerned about the precedent this case sets. First, an award of attorneys’ fees to a prevailing party is mandatory under the FLSA. Second, I have found no authority that requires plaintiff’s counsel to provide pre-suit notice when another lawyer is the defendant. Although well-intentioned, I doubt that the federal courts have the inherent authority to ignore and override a statutory mandate in the interest of promoting a professional courtesy. I also do not believe that Congress intended to single out lawyers for exclusive treatment under the FLSA. Since it is now within the inherent authority and discretion of the district courts in our Circuit to hold that no attorney’s fee is a reasonable fee when no pre-suit notice is extended to defendants who are lawyers, I would consider this case en banc before permitting this new Circuit precedent to stand.

The facts are these. Plaintiff Christine Sahyers worked as a paralegal for the defendant law firm Prugh, Holliday & Karatinos, P.L. On January 9, 2007, Sahyers filed a lawsuit against her former employer and its three owners and principals, Timothy F. Prugh, James W. Holliday, II, and Theodore Karatinos (collectively the “defendants”), pursuant to the FLSA to recover unpaid overtime compensation. The defendants filed an answer, denying liability. The case proceeded to discovery, and less than one month after a failed court-ordered mediation, the plaintiff accepted an offer of judgment pursuant to Federal Rule of Civil Procedure 68. The next day, the district court entered final judgment against the defendants in the amount of $3,500.

Thereafter, the plaintiff filed a motion for attorneys’ fees and expenses, in which she sought $15,640.70, comprised of $13,800 in attorneys’ fees and $1,840.70 in costs. The district court determined that the plaintiff was a prevailing party under the FLSA. However, recognizing that the FLSA provides for a mandatory award of reasonable attorneys’ fees, the district court was persuaded to conclude that this case presented “special circumstances” and decided that “a reasonable fee is no fee.” Sahyers v. Prugh, Holliday & Karatinos, P.L., No. 8:07-cv-52-T-30MAP, slip op. at 3 (M.D.Fla. Feb. 1, 2008) (“District Court Order”).

The district court found that the plaintiff subjected the defendants to “unnecessary litigation” and refused to reward such behavior because at no time prior to filing the lawsuit did the plaintiff or the plaintiff’s attorney make a written demand for payment of the overtime compensation. Id. at 3-5. Further, the district court stressed that the plaintiff’s attorney should have notified the defendant law firm, because prior to filing suit in the Middle District of Florida, “it is still reasonable to pick up the phone and call another lawyer so it won’t be necessary to file suit.” Id. at 4. The district court dismissed the plaintiff’s counsel’s claim that his client did not want him to make a pre-suit demand, “remind[ing] [plaintiff's counsel] that the lawyer is the officer of the Court, not the client.” Id. at 5. The plaintiff appealed the denial of attorneys’ fees and costs, and defendant Karatinos cross-appealed the district court’s determination that the plaintiff was a prevailing party.

With the benefit of oral argument, the Sahyers opinion affirmed. The Sahyers opinion framed the issue in this way: “This appeal is about the power of a district court to supervise the work of the lawyers who practice before it.” Sahyers v. Prugh, Holliday & Karatinos, P.L., 560 F.3d 1241, 1243 (11th Cir.2009). The Sahyers opinion construed the District Court Order as creating an “exception” to the FLSA’s mandatory fee statute based on the district court’s “inherent powers to supervise the conduct of the lawyers who come before it and to keep in proper condition the legal community of which the courts are a leading part.” Id. at 1244. It explained that “at least in the absence of very clear words from Congress, we do not presume that a statute supersedes the customary powers of a court to govern the practice of lawyers in litigation before it.” Id. at 1245 n.6. I disagree-well-settled Supreme Court precedent rejects the Sahyers opinion’s “very clear words” standard.

“In the exercise of its supervisory authority, a federal court ‘may, within limits, formulate procedural rules not specifically required by the Constitution or the Congress.’ ” Bank of Nova Scotia v. United States, 487 U.S. 250, 254 (1988) (quoting United States v. Hasting, 461 U.S. 499, 505 (1983)) (emphasis added). One of those limits on a federal court is when Congress has spoken: “[e]ven a sensible and efficient use of [a court's] supervisory power, however, is invalid if it conflicts with constitutional or statutory provisions.” Thomas v. Arn, 474 U.S. 140, 148 (1985). “A contrary result ‘would confer on the judiciary discretionary power to disregard the considered limitations of the law it is charged with enforcing.’ ” Id. (quoting United States v. Payner, 447 U.S. 727, 737 (1980)). Applied here, the Sahyers opinion’s denial of attorneys’ fees and costs as an exercise of its supervisory authority over the practice of lawyers conflicts with the plain language of the FLSA.

The FLSA is a mandatory fee statute, and we have not recognized any exception to it. “The court in such action 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) (emphasis added). The Supreme Court, our Circuit, and our sister circuits have consistently interpreted § 216(b) as mandatory. FN1 We have gone so far as to declare expressly that “[p]revailing plaintiffs are automatically entitled to attorneys’ fees and costs under the FLSA.” Dale v. Comcast Corp., 498 F.3d 1216, 1223 n.12 (11th Cir.2007) (emphasis added).

FN1. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 415 & n.5 (1978) (referring to § 216(b) of the FLSA as one of the “statutes [that] make fee awards mandatory for prevailing plaintiffs”); Singer v. City of Waco, 324 F.3d 813, 829 n.10 (5th Cir.2003) (“The FLSA requires an employer who violates the statute to pay attorney’s fees.”); Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 406 (7th Cir.1999) (“While the award of fees [under the FLSA] is mandatory, the district court has ‘wide latitude’ in determining the amount of the fee.”) (citation omitted); Fegley v. Higgins, 19 F.3d 1126, 1134 (6th Cir.1994) (“An award of attorney fees to a prevailing plaintiff under § 16(b) of the FLSA is mandatory, but the amount of the award is within the discretion of the judge.”) (citation omitted); Shelton v. Ervin, 830 F.2d 182, 184 (11th Cir.1987) (“Section 216 provides for an award of attorney’s fees, as opposed to granting the court discretion in awarding such fees, to the prevailing plaintiff in FLSA cases.”) (emphasis added); Kreager v. Solomon & Flanagan, P.A., 775 F.2d 1541, 1542 (11th Cir.1985) (“Section 216(b) of the Act makes fee awards mandatory for prevailing plaintiffs.”); Burnley v. Short, 730 F.2d 136, 141 (4th Cir.1984) (“The payment of attorney’s fees to employees prevailing in FLSA cases is mandatory. The amount of the attorney’s fees, however, is within the sound discretion of the trial court.”) (internal citation omitted); Graham v. Henegar, 640 F.2d 732, 736 n.8 (5th Cir. Unit A Mar. 1981) (“[A]n award of attorney’s fees to a prevailing plaintiff in an FLSA suit is mandatory.”); Wright v. Carrigg, 275 F.2d 448, 449 (4th Cir.1960) (“With respect to the counsel fee [pursuant to § 216(b) ], the court had no discretion to deny it; the law’s requirement of an award is mandatory and unconditional.”); Murray v. Playmaker Servs., LLC, 548 F.Supp.2d 1378, 1381 (S.D.Fla.2008) (Ryskamp, J.) (providing that the FLSA “directs district courts to award reasonable attorney’s fees and costs to a plaintiff, in addition to any judgment received”) (emphasis added).

In a perfect world, a lawyer who files a lawsuit against another lawyer would first attempt to resolve the matter outside the courthouse. Such a practice is both sensible and efficient. However, a procedural rule that in effect mandates pre-suit notice is invalid if it conflicts with a statutory provision. The Court’s opinion in effect reads a requirement of pre-suit notice into § 216(b) of the FLSA, at least where a law firm or lawyer is a defendant, thereby “confer[ring] on [itself] discretionary power to disregard the considered limitations of the law it is charged with enforcing.” Arn, 474 U.S. at 148 (quoting Payner, 447 U.S. at 737). Although a legislature can make pre-suit notice mandatory when it chooses, that circumstance does not apply here. See, e.g.,Fla. Stat. § 766.106(2)(a) (providing that “prior to filing a complaint for medical negligence, a claimant shall notify each prospective defendant”). While it is desirable to encourage lawyer collegiality and to discourage unnecessary litigation, I do not believe that we can rewrite a statute to conform with certain policy preferences. See Reeves v. Astrue, 526 F.3d 732, 738 (11th Cir.2008) (“The Supreme Court has advised that whatever merits … policy arguments may have, it is not the province of this Court to rewrite the statute to accommodate them.”) (quotation marks, alteration, and citation omitted). The Sahyers opinion provides binding precedent for a district court to ignore a clear Congressional mandate from a federal statute based on its “inherent powers.” Such precedent oversteps the boundaries of our proper duty as neutral arbiters and obviates the role of Congress. My discussion could end here, as the plaintiff was the prevailing party, and the FLSA’s plain language is controlling.

Moreover, I also disagree with the Court’s statement that “a lawyer’s duties as a member of the bar-an officer of the court-are generally greater than a lawyer’s duties to the client.” Sahyers, 560 F.3d at 1245 n.7. It bears repeating that the Sahyers opinion failed to cite any statute, rule, local rule, or case from this Circuit, the Middle District of Florida, or elsewhere that even arguably imposes a duty on an attorney to contact prospective opposing counsel where that counsel represents a law firm or a lawyer. I can find no rule of professional responsibility that would place Sahyers’ lawyer on notice that it is a breach of professional or ethical responsibility to file a lawsuit against a fellow lawyer without the courtesy of advance notice. Honorable though it may be, providing a lawyer-defendant with pre-suit notice in FLSA cases is neither a requirement, nor a breach of a lawyer’s ethical responsibility.

I recognize that the appropriate balance between duty to a client and duty of candor to the court is certainly a difficult one to strike. In certain circumstances, a lawyer’s duty to the court is “greater” than his or her duty to a client. However, while counsel owes a duty to the court, context matters. The plaintiff did not instruct her counsel to commit a crime, to perpetrate a fraud upon the court, or to file a frivolous lawsuit. Rather, the plaintiff merely instructed her counsel to file a lawsuit, which-considering the fact that defendants filed an answer as opposed to a motion to dismiss and ultimately offered judgment-appeared to have, at least, some merit. In fact, the Model Code of Professional Responsibility appears to require exactly what the plaintiff’s counsel did-follow his client’s instructions: “[T]he lawyer should always remember that the decision whether to forego legally available objectives or methods because of non-legal factors is ultimately for the client and not for himself.” Model Code of Prof’l Responsibility EC 7-8 (1983); see also id. at EC 7-7 (providing that, except in areas of legal representation not affecting the merits of the cause or substantially prejudicing the rights of a client, “the authority to make decisions is exclusively that of the client and, if made within the framework of the law, such decisions are binding on his lawyer”) (emphasis added). Hence, not only is there no rule requiring plaintiff’s counsel to give pre-suit notice to his fellow lawyers, plaintiff’s counsel had an ethical duty to follow his client’s instructions. In applying the Sahyers opinion’s reasoning, however, a plaintiff’s lawyer must ignore a client’s explicit instruction to file an arguably meritorious lawsuit and must first give “word” by way of a phone call, e-mail, or letter before “su[ing] his fellow lawyers.” This rule should not be the law.

The Sahyers opinion equated the conduct of the plaintiff’s counsel to bad faith: “the conscious indifference to lawyer-to-lawyer collegiality and civility exhibited by Plaintiff’s lawyer (per his client’s request) amounted to harassing Defendants’ lawyers by causing them unnecessary trouble and expense and satisfied the bad-faith standard.” 560 F.3d at 1246 n.9. It relies on Litton Systems, Inc. v. American Telephone & Telegraph Co., 700 F.2d 785 (2d Cir.1983), stating that “[a] court … may deny an award of litigation expenses to which a client is otherwise entitled.” Sahyers, 560 F.3d at 1245. As a threshold matter, Litton Systems, a Second Circuit opinion, is not binding precedent in this Circuit; it is merely persuasive authority. Additionally, Litton Systems does not stand for that broad proposition, and, even if it did, the facts of Litton Systems are so far removed from Sahyers that the former sheds no light on the latter. The Litton court merely affirmed a sanction pursuant to Federal Rule of Civil Procedure 37 finding “gross negligence” and “willful misconduct.” Here, the district court did not impose any sanction and did not invoke Rule 37. Instead, it carved out a “special circumstances” exception to the FLSA. See District Court Order at 3. The only reason relied upon by the district court to award Sahyers “nothing” as an attorney’s fee was the failure to extend the professional courtesy of pre-suit notice to a law firm. This conduct does not amount to bad faith.

Finally, I am troubled by the implication that lawyers are entitled to exclusive treatment under the FLSA. Although the Sahyers opinion states that it does not intend to create a new rule of pre-suit notice in FLSA cases where the defendant is a law firm or a lawyer, such language will surely fall on deaf ears in this Circuit (as it should) in light of the fact that Sahyers is a published opinion, which makes it binding precedent in this Circuit. See I.O.P. 2 to Fed. R.App. P. 36 (“Under the law of this circuit, published opinions are binding precedent.”). Section 216(b) pays no attention to the occupation of the defendants. Neither should we. The Sahyers opinion has unintentionally created a new rule that a plaintiff’s failure to give pre-suit notice to a lawyer-defendant in an FLSA case may forfeit the plaintiff’s otherwise statutory right to attorneys’ fees and costs. Courts within this Circuit will rely on Sahyers and will interpret it as creating a discretionary exception to a mandatory fee statute. In point of fact, courts both within this Circuit and outside of this Circuit have already followed suit, recognizing, but not yet applying, the proposition that no fee can be a reasonable fee under the FLSA when a plaintiff fails to give pre-suit notice to a lawyer-defendant. See Roldan v. Pure Air Solutions, Inc., S.D. Fla.2010.

Moreover, there is no indication in the record that plaintiff’s counsel filed this lawsuit in an attempt to “shake down” the defendants for attorneys’ fees and costs. The case settled after discovery ended, and the defendants made an offer of judgment only after they had the opportunity to look at the evidence. Any determination that the case would have settled if plaintiff’s counsel sent a pre-suit notice to the defendants (based on the record as it appears before us) is pure speculation. In other words, pre-suit notice may not have made a difference. Moreover, at the motion hearing before the district court, Sahyers’ counsel asserted that (1) Sahyers herself made a demand on the law firm prior to litigation, and (2) he lacked the records necessary to make a pre-suit demand before filing the lawsuit. Tr. of Jan. 24, 2008 Mot. Hr’g at 21:19-23 (arguing that had the defendants deposed Sahyers, “she would have testified that she did ask for her money”); id. at 22:12-18 (arguing that “[plaintiff's counsel] did not have access to [Sahyers'] time records”).

While counsel’s arguments are not evidence, an evidentiary hearing would prove or disprove these assertions. The district court made no specific factual findings based on any evidence regarding, for example, bad faith on behalf of the plaintiff or the necessity of the litigation. The Sahyers opinion relied solely on plaintiff’s counsel’s failure to give pre-suit notice. Since we have held that “an inquiry into a party’s bad faith is best conducted by the district court,” Turlington v. Atlanta Gas Light Co., 135 F.3d 1428, 1438 (11th Cir.1998), I would at least have remanded this case back to the district court for an evidentiary hearing with instructions to engage in the lodestar analysis.

A district court retains the discretion to determine or to set a reasonable attorney’s fee under the FLSA, but the district courts, in my view, lack the discretion to deny all fees and costs by way of a “special circumstances” exception to promote collegiality. I agree completely with the efforts of the distinguished district judge to seek to promote professionalism and civility in the practice of law. It is an important component of judicial administration. I also agree that this Court was well-intentioned in deferring to the district court’s discretion; however, I fear that we went too far. My primary concern is with the precedent this case now creates: It is now within the discretion of district courts in our Circuit to deny attorney’s fees to lawyers who fail to extend professional courtesies to lawyer-defendants in FLSA and (presumably other) civil rights cases. This new law will undoubtedly discourage public interest lawyers from taking these cases. Although the plaintiff prevailed in her FLSA claim, her lawyer was unable to recover any fees or his client’s costs as mandated by Congress. I would prefer that the full Court consider this appeal before creating this new precedent.”

Many legal scholars have already voiced their opinion that this case is likely headed to the United States Supreme Court for ultimate decision.  Stay tuned, because this one is likely not done yet.

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January 31, 2010 · 4:39 pm

W.D.Mich.: FLSA Permits Successful Plaintiff To Recover Costs Which Are ‘Normally Charged To A Fee-paying Client’ In Addition To Those Enumerated In § 1920

Carlson v. Leprino Foods Co.

This case was before the Court on both parties’ objections to the Report and Recommendation (R&R) issued by the Magistrate Judge regarding an award of fees and costs following the settlement of a collective action.  Of note, the Plaintiffs objected to the R&R issued by the Magistrate Judge, because the Magistrate cut over $2,000 in miscellaneous costs Plaintiffs  requested.  The Court extensively discussed the award of the attorneys fees to the prevailing Plaintiffs and, as discussed here, reinstated the miscellaneous costs, opining that a prevailing Plaintiff in an FLSA case is entitled to recover those types of costs ‘normally charged to a fee-paying client,’ in addition to those enumerated in § 1920.

Specifically, discussing the award of costs, the Court reasoned:

“Finally, Plaintiffs object that the Magistrate Judge should not have deducted $2,343.45 in miscellaneous expenses from the total award of costs. (Pls.’ Objections to Report and Recommendation of Magistrate Judge, docket # 221, at 8.) The Court agrees. The Report and Recommendation states that Plaintiffs failed to describe these miscellaneous expenses with particularity and that the expenses therefore are not recoverable. (Report and Recommendation, docket # 219, at 12.) However, Plaintiffs described the expenses with particularity in Exhibit 2 of their original fee petition. (Br. in Support of Mot. for Attorneys’ Fees and Costs, docket # 196, Ex. 2.) The miscellaneous expenses identified include, without limitation, costs for travel, supplies, web maintenance, translations, and telephone service. (Id.) These are the sort of costs which are “normally charged to a fee-paying client.” See, e.g., Renfro v. Indiana Mich. Power Co., 2007 WL 710138 at *1 (W.D.Mich., Mar.6, 2007) (overruled on other grounds, 497 F.3d 573 (6th Cir.2007) (citations omitted)); Communities for Equity v. Mich. High School Athletic Ass’n, 2008 WL 906031 at *22-23 (W.D.Mich., Mar.31, 2008). The total award for costs to Plaintiffs should include the $2,343.45 for miscellaneous expenses.”

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