Douglas Walker v. Iron Sushi LLC

• Court: Court of Appeals for the Eleventh Circuit
• Decided: November 2, 2018
• Docket: 18-10617
• Status: Unpublished

Opinion

Case: 18-10617 Date Filed: 11/02/2018 Page: 1 of 13

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 18-10617 Non-Argument Calendar ________________________

D.C. Docket No. 0:17-cv-61472-EGT

DOUGLAS WALKER, on behalf of themselves and all others similarly situated, EZEKIEL PROCTOR, on behalf of themselves and all others similarly situated,

Plaintiffs - Appellants,

WAYNE WISDOM,

Interested Party - Appellant,

versus

IRON SUSHI LLC, d.b.a. Iron Sushi, IRON MAMI, INC, d.b.a. Iron Sushi, MASA INTERNATIONAL LLC, d.b.a Iron Sushi, IRON GROUP LLC, d.b.a. Iron Sushi, BUZZ LLC, d.b.a. Iron Sushi, et al.,

Defendants - Appellees. Case: 18-10617 Date Filed: 11/02/2018 Page: 2 of 13

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

(November 2, 2018)

Before MARCUS, JILL PRYOR, and JULIE CARNES, Circuit Judges.

PER CURIAM:

This case is about an award of attorney fees under the Fair Labor Standards

Act (“FLSA”), 29 U.S.C. § 201 et seq. In the underlying FLSA case, the parties

reached a settlement less than three months after suit was filed, before any formal

discovery or motions practice occurred. In this appeal, the appellants claim that

the district court legally erred in determining that a reasonable fee award was

substantially less than what they had sought. After thorough review, we affirm.

I.

The relevant facts are these. Appellants Ezekiel Proctor, Wayne Wisdom,

and Douglas Walker worked as delivery drivers for Iron Sushi, a chain of franchise

restaurants in South Florida. On July 25, 2017, they sued their former employers,

alleging violations of both federal minimum wage provisions under the FLSA and

state minimum wage laws. They were represented by three different attorneys

from three different law firms. A month later, the defendants made a settlement

offer in the following amounts: $833.52 to Proctor; $548.14 to Wisdom; and

2 Case: 18-10617 Date Filed: 11/02/2018 Page: 3 of 13

$2,878.50 to Walker. Appellants rejected this and a similar offer. On October 25,

2017, the parties appeared before a magistrate judge to engage in settlement

negotiations. At the conference, the FLSA claims were settled as follows:

$1,000.22 to Proctor; $657.76 to Wisdom; and $3,453.44 to Walker. Thus, the

total settlement was for $5,111.42. The settlement agreement also provided that

the appellants were entitled to reasonable attorney fees and costs. The parties

further agreed that the same magistrate judge who facilitated the settlement

negotiations would determine the fees owed. The case did not involve any formal

discovery or motions practice, and settled exactly three months after suit was filed.

Subsequently, appellants filed a motion seeking a total of $27,627 in

attorney fees. The requested fee award broke down among the three firms as

follows: $10,680 to the Law Offices of Joshua A. Millican; $5,440 to Greenfield

Millican; and $11,507 to the Fair Law Firm. In a fourteen-page order, the district

court granted in part and denied in part the motion, ultimately awarding attorney

fees in the amount of $7,640. The court reached this figure by significantly

reducing the number of hours it deemed to have been reasonably expended in

achieving the final settlement. In making this reduction the court excluded hours

that were redundant or duplicative of each other, time spent on clerical work, time

spent doing basic research into FLSA issues that counsel should have already been

familiar with, and other time entries that the court determined would not have been

3 Case: 18-10617 Date Filed: 11/02/2018 Page: 4 of 13

billable to the attorneys’ clients. In addition, the court took into consideration how

the final settlement stacked up against earlier settlement offers, and the fact that the

case was not especially complex.

Having calculated the lodestar as being substantially lower than what the

appellants requested, the district court declined to make further reductions to the

award. It noted that additional reductions might have been justified since, in the

statement of claim, appellants had initially sought $51,505.64 in damages, far in

excess of what was actually obtained in settlement, and since the lawyers’

requested fee award was far greater than the results they achieved for their clients.

Despite this, the court decided against reducing the lodestar on the grounds that it

had already engaged in a very thorough review of the lawyers’ billable hours.

This timely appeal ensued.

II.

“We review the award of attorneys’ fees for abuse of discretion, reviewing

questions of law de novo and reviewing findings of fact for clear error.” Bivins v.

Wrap It Up, Inc., 548 F.3d 1348, 1351 (11th Cir. 2008). An award of attorney fees

is not to be set aside absent a clear abuse of discretion. N.A.A.C.P. v. City of

Evergreen, Ala., 812 F.2d 1332, 1334 (11th Cir. 1987).

Prevailing parties in FLSA suits are entitled to attorney’s fees. The statute

provides that “[t]he court in such action shall, in addition to any judgment awarded

4 Case: 18-10617 Date Filed: 11/02/2018 Page: 5 of 13

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). As this provision makes

clear, the key metric by which a motion for attorney fees is evaluated is

“reasonableness.” See City of Burlington v. Dague, 505 U.S. 557, 562 (1992). A

“reasonable” fee award is arrived at by first calculating the “lodestar.” Id. The

lodestar is the product of “the number of hours reasonably expended on the

litigation times a reasonable hourly rate.” Pennsylvania v. Delaware Valley

Citizens’ Council for Clean Air, 478 U.S. 546, 564 (1986) (quotation omitted).

This figure is presumed to represent a reasonable fee, but can be adjusted upward

or downward based on other considerations, including the results obtained by the

attorneys for their client. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Here,

the district court declined to deviate from the lodestar, so applicants mainly

challenge on appeal the court’s calculation of the lodestar.

First, we are unpersuaded by appellants’ claim that the district court’s order

did not adequately detail his analysis of what constituted a reasonable fee. It is

true, as appellants note, that “the district court must articulate the decisions it

made, give principled reasons for those decisions, and show its calculation.”

Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1304 (11th Cir.

1988). “If the court disallows hours, it must explain which hours are disallowed

and show why an award of these hours would be improper.” Id. What’s more, if

5 Case: 18-10617 Date Filed: 11/02/2018 Page: 6 of 13

the district court fails to adequately explain its reasoning, we will reverse

and remand the case for reconsideration or further explanation. Perkins v. Mobile

Hous. Bd., 847 F.2d 735, 738 (11th Cir. 1988). But the district court’s duty to

provide an adequate explanation does not mean that it must exhaustively detail,

hour-by-hour, what fees it excluded. The rule is more practical. See Loranger v.

Stierheim, 10 F.3d 776, 783 (11th Cir. 1994). The district court’s order simply

must include sufficient detail to allow us to conduct a meaningful review of the

award. Thompson v. Pharmacy Corp. of Am., 334 F.3d 1242, 1244 (11th Cir.

2003) (“The explanation for the district court’s fee determination must be

sufficiently stated so that meaningful appellate review is possible.”).

That standard has been met in the order before us, in which the district court

explained, in some detail, its reasons for partially denying the motion for attorney

fees. First, it identified specific examples of time entries it deemed excessive or

unreasonable. It singled out the hours billed for text messaging between one of the

lawyers and the plaintiffs, which made up a majority of the time entries for that

lawyer, and which it concluded were not the sort of activities for which a lawyer

would bill a client. The court also reduced the number of hours in its lodestar

calculation on the ground that the three lawyers had performed redundant work.

The court explained that, while duplicative efforts might be billable in a complex

case, it is significantly less justified where the case (like this one) lasts only a few

6 Case: 18-10617 Date Filed: 11/02/2018 Page: 7 of 13

months and does not involve any discovery or motions practice. The court noted

that “duplication inevitably occurs when lawyers hold conferences, call each other

on the phone, write each other letters and memoranda, or when several lawyers bill

for reading the same document received from the defendants or the court.” The

district court also removed from its calculation: (1) time spent researching basic

FLSA issues that should have been familiar to any “experienced FLSA counsel”;

and (2) time spent hiring and retaining local counsel. Finally, the court explained

that it also excluded some entries that represented clerical work.

The court decided that high attorney fees were further unjustified based on

the overall nature of the case and the outcome achieved, as compared with what

accepting an earlier settlement offer might have achieved. The court added that the

case was not complex or protracted, and involved no formal discovery.

As this record makes clear, the district court gave multiple and detailed

reasons for the reductions it made to the number of hours claimed by appellants’

lawyers, and included specific examples in its analysis. This is not a case where

the district court’s order contains only a bare, conclusory assertion that the claimed

number of hours is unreasonable. See Steele v. Offshore Shipbuilding, Inc., 867

F.2d 1311, 1318 (11th Cir. 1989) (reversing and remanding the district court’s two-

sentence determination that the hours were unreasonably high). Because we are

7 Case: 18-10617 Date Filed: 11/02/2018 Page: 8 of 13

able to ascertain the sound reasons given for reducing the fee award, and, in turn,

to conduct a meaningful review, the district court’s order is more than sufficient.

Next, we find no merit to appellants’ argument that the district court erred in

considering a rejected settlement offer in reducing the total number of hours on

which it based its award. Although their argument is not especially clear,

appellants essentially seem to argue that, because, unlike under other statutes,

prevailing parties are always entitled to a reasonable fee award under the FLSA

regardless of whether they rejected an earlier settlement offer, any consideration of

a settlement offer is improper in this context, and out of step with the statute’s

policies. It is true that attorney fees under the FLSA are mandatory. See

Christiansburg Garment Co. v. Equal Emp’t Opportunity Comm’n, 434 U.S. 412,

415 & n.5 (1978); Dionne v. Floormasters Enters., Inc., 667 F.3d 1199, 1205 (11th

Cir. 2012); Kreager v. Solomon & Flanagan, P.A., 775 F.2d 1541, 1542 (11th Cir.

1985). This means that a prevailing plaintiff is “automatically entitled” to a fee

award. See Dale v. Comcast Corp., 498 F.3d 1216, 1223 n.12 (11th Cir. 2007).

It is also true that the FLSA fee provision is different from the one in 42

U.S.C. § 1983, where a prevailing party might be completely denied attorney fees

if the ultimate judgment or settlement obtained is less than an earlier settlement

offer that the party rejected. See Marek v. Chesny, 473 U.S. 1, 11 (1985) (“In a

case where a rejected settlement offer exceeds the ultimate recovery, the plaintiff --

8 Case: 18-10617 Date Filed: 11/02/2018 Page: 9 of 13

although technically the prevailing party -- has not received any monetary benefits

from the postoffer services of his attorney.”). This is because the attorney-fee

provision applicable to § 1983 claims provides that “[i]n any action or proceeding

to enforce a provision of [§] . . . 1983 . . . . , the court, in its discretion, may allow

the prevailing party, other than the United States, a reasonable attorney’s fee as

part of the costs.” 42 U.S.C. § 1988(b). Because § 1983 attorney fees are

described as “costs,” they are subject to Fed. R. Civ. P. 68’s rule on paying “costs”

after an unaccepted offer: “If the judgment that the offeree finally obtains is not

more favorable than the unaccepted offer, the offeree must pay the costs incurred

after the offer was made.” Fed. R. Civ. P. 68(d). Thus, in Marek, the Supreme

Court held that Rule 68 applies in the context of a § 1983 action, and that a

plaintiff who received a judgment less than the defendant’s Rule 68 settlement

offer could not recover his own post-offer attorney fees. 473 U.S. at 11. The

FLSA, on the other hand, does not views attorney fees and costs as two separate

things. It says that the court is to “allow a reasonable attorney’s fee to be paid by

the defendant, and costs of the action.” 29 U.S.C. § 216(b). As a result, the

reasoning of Marek doesn’t apply to the FLSA. See Arencibia v. Miami Shoes,

Inc., 113 F.3d 1212, 1214 (11th Cir. 1997).

Nevertheless, we disagree with appellants’ claim that the district court

improperly considered the settlement offer when ruling on the attorney fee request.

9 Case: 18-10617 Date Filed: 11/02/2018 Page: 10 of 13

For one thing, it is clear that a rejected settlement offer is an appropriate factor to

consider in assessing the reasonableness of a request for attorney fees, even in

contexts beyond statutes that define attorney fees as “costs.” See Earl v. Beaulieu,

620 F.2d 101, 103 n.3 (5th Cir. 1980) (consumer protection action).1 What’s more,

we’ve previously held that many, if not all of the same factors considered in

awarding fees under other statutes like § 1983 -- including the final results

obtained -- are at least relevant in the FLSA context. See Kreager, 775 F.2d at

1544; Hensley, 461 U.S. at 433 n.7 (“The standards set forth in this opinion are

generally applicable in all cases in which Congress has authorized an award of fees

to a ‘prevailing party.’”). And, as we’ve noted, courts consider settlement offers

under § 1983. Further, while a prevailing party is always entitled to fees under the

FLSA, the statute still limits the award to “reasonable” fees. The reasonableness of

an award can of course depend on many factors, and we see no reason why a

rejected settlement offer, and its relationship to the final result obtained, should not

be a permissible consideration for the district court to take into account.

In short, we conclude that although a rejected settlement offer can never be

dispositive in awarding attorney fees under the FLSA in the way that it is under

other statutes, it is still a relevant factor that the district court has discretion to

consider. Other courts have reached the same conclusion. See Haworth v. State of

1 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), we adopted as binding precedent all Fifth Circuit decisions issued before October 1, 1981. 10 Case: 18-10617 Date Filed: 11/02/2018 Page: 11 of 13

Nev., 56 F.3d 1048, 1050 (9th Cir. 1995) (“We vacate the award of attorney fees,

not because the Rule 68 offer precluded any award for attorney fees incurred after

the offer was made, but because the district court should have taken into

consideration the reasonableness of the plaintiffs proceeding to trial and recovering

approximately $240,000 less than what they could have had by accepting the

settlement offer.”); see also Klein v. Floranada Warehouse & Storage, Inc., 2016

WL 8671074, at 4 (S.D. Fla. 2016), report and recommendation adopted, 2016 WL

8670501 (S.D. Fla. 2016). But see Fegley v. Higgins, 19 F.3d 1126, 1135 (6th Cir.

1994) (“[A] Rule 68 offer does not affect the trial court’s award of attorney fees

under § 216(b).”). The district court thus did not err in taking the rejected

settlement offer into consideration when rendering its award.

Appellants also take issue with, among other things, the district court’s

reasoning that, because they ultimately settled for a much lower figure than they

initially sought, as is evident from their statement of claim, they were not

especially successful, and therefore their attorneys are not entitled to a big payout.

Appellants invoke two cases -- Calderon v. Baker Concrete Const., Inc., 771 F.3d

807 (11th Cir. 2014) and Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680

(1946) -- to dispute the district court’s reliance on the statement of claim. Once

more, we disagree. Quite simply, neither of these cases addresses the district

court’s consideration of a statement of claim in calculating a fee award. Anderson

11 Case: 18-10617 Date Filed: 11/02/2018 Page: 12 of 13

establishes a reduced evidentiary burden for plaintiffs in FLSA cases where the

employer has failed to produce proper and accurate records that would aid in more

precisely showing how much compensation the plaintiff is entitled to. See

Anderson, 328 U.S. at 686-88. Calderon holds that, because a statement of a claim

“does not have the status of a pleading,” it cannot operate to amend a complaint so

as to strip a district court of subject matter jurisdiction. Calderon, 771 F.3d at 811.

Both cases are thus largely irrelevant to whether and how the district court

considers a statement of claim in calculating a fee award. What’s more, because

the final results achieved, as compared to what was originally sought, are certainly

a relevant factor in the district court’s reasonableness analysis, the district court’s

decision to consider the statement of claim is perfectly consistent with § 216. See

Popham v. City of Kennesaw, 820 F.2d 1570, 1581 (11th Cir. 1987) (civil rights

action). In any event, the district court does not appear to have even considered the

statement of claim in the part of its order calculating the lodestar.

Finally, appellants claim that the district court improperly took into account

the total recovery and compared it to the size of the requested attorney fee award.

But as we’ve already said, it is entirely proper for the court to take into account the

results achieved in setting the award. See Kreager, 775 F.2d at 1544 (applying the

Johnson factors to FLSA claim). We can discern no error in the court assessing the

size of the claimed fee in relation to the amount that was ultimately recovered.

12 Case: 18-10617 Date Filed: 11/02/2018 Page: 13 of 13

Moreover, considering the requested award in comparison to both the amount

recovered and the amount originally sought in the statement of claim is not an

impermissible “double reduction.” Compare Bivins v. Wrap It Up, Inc., 548 F.3d

1348, 1351 (11th Cir. 2008) (describing “double-counting” as when the court

applies the Johnson factors to determine the lodestar figure, and then reconsiders

them to make either an upward or downward adjustment to the lodestar).

Moreover, here again, the court’s comparison of the final settlement amount with

the requested fee award does not appear to have formed a meaningful part of its

lodestar calculus.

For these reasons, we affirm the district court’s order.

AFFIRMED.