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Grayson v. Register Tapes Unlimited, Inc.

United States District Court, Fourth Circuit

May 9, 2013

TAJ GRAYSON, on behalf of himself and others similarly situated
v.
REGISTER TAPES UNLIMITED, INC. and REGISTER TAPES UNLIMITED, L.P

REPORT AND RECOMMENDATION

JILLYN K. SCHULZE, Magistrate Judge.

This collective action arises under the Fair Labor Standards Act (FLSA). The underlying lawsuit was resolved on October 18, 2012, when the 39 Plaintiffs accepted Defendants' Offer of Judgment in the amount of $50, 000. Presently pending is Plaintiffs' Motion for Attorneys' Fees and Costs. ECF No. 39. Plaintiffs request $101, 745.75 in attorneys' fees and $1, 768.15 in costs. ECF No. 39-2 at 1. Defendants do not dispute Plaintiffs' request for costs, but argue that Plaintiffs' attorneys' fees should not exceed $16, 863.00. ECF No. 42 at 1. The issues have been fully briefed and no hearing is necessary. See Local Rule 105.6.

Under the FLSA, successful plaintiffs are entitled to an award of reasonable attorneys' fees and costs. Lyle v. Food Lion, Inc., 954 F.2d 984, 988 (4th Cir.1992). The "most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The court may adjust this figure, known as the "lodestar" fee, based on certain factors used to assess whether the hours and rates are reasonable. Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 n.28 (4th Cir. 1978). These factors, originally set out in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), are as follows:[1]

(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.

Id. Appendix B of the Local Rules, entitled "Rules and Guidelines for Determining Attorneys' Fees in Certain Cases, " also provides guidance in this District.

A. Enhancement of Fees

Plaintiffs' counsel seek an enhancement from the presumptive fee range set out in Appendix B of the Local Rules.[2] Such enhancements "may be awarded in rare and exceptional circumstances." Perdue v. Kenny A., 130 S.Ct. 1662, 1672 (2010) (internal quotations omitted). A fee applicant bears the burden of proving that the enhancement is necessary and must do so with reference to "specific evidence that the lodestar fee would not have been adequate to attract competent counsel." Id. at 1674 (internal quotations omitted).

Defendants argue that an enhanced hourly rate for Plaintiffs' counsel is not justified because "[t]here was nothing exceptional or unique about Plaintiff's legal theory in this case." ECF No. 42 at 8. Plaintiffs insist that the requested rates, though higher than the presumptive rates in Appendix B, are reasonable because (1) Linda H. Thatcher, a local employment law attorney, attests that the requested rates are reasonable based on her experience; (2) the rates sought by Joseph, Greenwald & Laake are those actually charged to the firm's paying clients; and (3) counsel's declarations describe their extensive experience litigating employment matters in federal court. ECF No. 43 at 8.

The Supreme Court has emphasized that enhancements should be applied sparingly and in exceptional cases. Perdue, 130 S.Ct. at 1674-75. The legal theories underlying the present case are neither novel nor complex, nor is "the upper end of the lodestar range too low to attract competent counsel for cases such as these." Spencer, 2012 U.S. Dist. LEXIS 4927 at *10. Accordingly, Mr. Santillo's hourly rate should be reduced from $325 to $250, Mr. Markovitz's hourly rate should be reduced from $300-$350 to $300, the paralegal rate should be reduced from $130 to $115, and the law clerk rate should be reduced from $125 to $115. Accordingly, the initial lodestar figure proposed by Winebrake & Santillo should be reduced from $33, 282.50 to $26, 184.00 and the initial lodestar figure proposed by Joseph, Greenwald & Laake should be reduced from $68, 463.25 to $62, 974.25.

B. Level of Success

Defendants argue that the court should adjust the award based on the relative lack of success attained by Plaintiffs. The Fourth Circuit considers "the extent of the relief obtained by the plaintiff to be particularly important when calculating reasonable fees" and instructs district courts "to weigh the amount in controversy and the results obtained before deciding upon a reasonable fee." Nigh v. Koons Buick Pontiac GMC, Inc., 478 F.3d 183, 190 (4th Cir. 2007). This "requirement rests on the idea that a prevailing plaintiff is less worthy of a fee award when one or more of his claims lack merit-that is, when he cannot demonstrate that he deserves the compensation he demanded in his complaint." Id. Still, courts should "not reflexively reduce fee awards whenever damages fail to meet a plaintiff's expectations in proportion to the damages' shortfall." Id. (citations omitted).

Here, 166 notices were sent to potential class members, and 39 joined the case. These 39 Plaintiffs recovered a settlement award of $50, 000, settling for approximately 25% of counsel's estimated total unpaid wages of $206, 000. ECF No. 37-2. The recovery is not so low in relation to what they sought as to render their victory merely technical. However, after settlement discussions did not result in an agreement, Defendants made an offer of judgment which Plaintiffs accepted. It would be appropriate here to reduce the lodestar amount by 10% to account for the relative number of opt-in Plaintiffs as well as the level of success attained and the procedure by which the case was resolved. The lodestar figure for Winebrake & Santillo would then be $23, 565.60, and the lodestar figure for Joseph, Greenwald & Laake would be $56, 676.82.

C. Excessive, Redundant and Unnecessary Time Entries

Defendants argue that there are seven examples of excessive, redundant and otherwise unnecessary time entries that should be subtracted from the lodestar figure. Defendants first argue that Plaintiffs should not recover for two attorneys attending the pre-suit meeting with clients. ...


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