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Ford v. Karpathoes, Inc.

United States District Court, D. Maryland

February 19, 2015

EVAN G. FORD, et al., Plaintiffs,
v.
KARPATHOES, INC., et al., Defendants.

MEMORANDUM

ELLEN LIPTON HOLLANDER, District Judge.

Plaintiff Rafael Coppola, [1] along with five others, filed suit against Karpathoes, Inc., George Sakellis, and Roula Sakellis, defendants, under, inter alia, the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). See ECF 1. This Memorandum addresses plaintiff Coppola's Motion for Attorney's Fees (ECF 26, "Motion"). The Motion is filed pursuant to a Judgment in favor of plaintiff under Fed.R.Civ.P. 68 (ECF 19-1, Order), [2] and pursuant to the FLSA, 29 U.S.C. § 216(b). The FLSA entitles a prevailing plaintiff to recover reasonable attorney's fees and costs. Although the Offer of Judgment, ECF 13-1, expressly stated that defendants would pay plaintiff's "reasonable attorneys' fees and costs, ... in accordance with Federal principles, " ECF 13-1 at 2, the parties have been unable to agree on a reasonable amount.

In support of his Motion, plaintiff submitted affidavits from his two attorneys, Howard B. Hoffman, Esq., and Bradford W. Warbasse, Esq. See ECF 26-2, "Hoffman Aff."; ECF 26-3, "Warbasse Aff." Plaintiff also submitted detailed tables summarizing the hours each attorney expended on work they attribute to plaintiff's claims. See ECF 26-1 at 1-4 (Warbasse); ECF 26-1 at 7-9 (Hoffman) (collectively, the "Tables"). Defendants have opposed the Motion. ECF 31, "Opposition." They submitted eleven exhibits, ECF 31-1 through ECF 31-11, mostly consisting of emails, and all pertaining to the parties' fee negotiations. Plaintiff has replied. ECF 35, "Reply." In support of his Reply, plaintiff has submitted six exhibits, ECF 35-1 through ECF 35-6, including, inter alia, emails pertaining to fee negotiations and affidavits from other attorneys practicing in the Baltimore-Washington metropolitan region.

The Motion has been fully briefed, and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons that follow, I will award plaintiff reasonable attorney's fees in the amount of $4, 504.00 and costs in the amount of $540.00.

Factual Background

1. Procedural History

On March 18, 2014, Coppola and two other plaintiffs, Dylan Clark and Evan G. Ford, filed suit against their alleged former employers, defendants Karpathoes, Inc., George Sakellis, and Roula Sakellis. ECF 1 ("Complaint"). Plaintiffs alleged violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., and related State-law claims under Maryland's Wage and Hour Law ("MWHL"), Md. Code (2008 Repl. Vol.), § 3-401 et seq. of the Labor and Employment Article ("L.E."). Id. Coppola also alleged violations of the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code (2008 Repl. Vol.), L.E. § 3-501 et seq. Id.

On May 1, 2014, defendants filed a Motion to Dismiss under Fed.R.Civ.P. 12(b)(6). ECF 8. They argued that plaintiffs had not stated sufficient facts from which the Court could plausibly find that George and Roula Sakellis (the "Sakellis") were individually liable under federal or state wage laws as "employers." ECF 8-1 at 5-13. Defendants also argued that plaintiffs' FLSA and MWHL claims, and Coppola's MWPCL claims, should be dismissed as implausible under Fed.R.Civ.P. 12(b)(6). Id. at 13-20. And, "in the alternative, " defendants argued that Coppola's FLSA and MWHL claims should be dismissed because Coppola was exempt, as an "employee employed in a bona fide executive... capacity.'" Id. at 23 (quoting 29 U.S.C. § 213(a)(1)).

In their Opposition, defendants assert that they presented Coppola and Ford with Rule 68 Offers of Judgment on May 12, 2014. ECF 31 at 2-3, 3 n.6. They note that plaintiff Clark had, by that time, already "expressed his desire to no longer be involved in the suit." Id. at 3 n.6. Plaintiff does not dispute the date of defendants' offer. Reply, ECF 35 at 5. Defendants explain that their offer of $5, 600 to Coppola "was calculated based upon the claim for unpaid wages" in Coppola's MWPCL claim, see ECF 1 ¶ 15, and was equal to the full amount of wages demanded therein, i.e., unpaid wages of $800 per week for seven weeks. ECF 31 at 2-3.

One week later, on May 19, 2014, Coppola, along with Clark and Ford, and three newly added plaintiffs, Troy M. Greensfelder, Maggie Desmond, and Zac Trautman, filed an Amended Complaint. See ECF 9 at 1. In addition to adding the three new plaintiffs, the Amended Complaint added allegations pertaining to the Sakellis' liability as "employers." See generally ECF 9-1 (redlined version of Amended Complaint). The Amended Complaint also minimally changed the allegations supporting wage claims of plaintiffs other than Coppola; except to renumber paragraph references, it did not change Coppola's MWPCL claim. Id. The same day, plaintiffs also moved for an extension of time in which to file a response to the Motion to Dismiss, ECF 10, which this Court granted. ECF 11 (Order).

On May 23, 2014, plaintiffs filed a thirteen-page Opposition to defendants' Motion to Dismiss. ECF 12. They argued, inter alia, that defendants' Motion to Dismiss should be denied as moot, in light of plaintiffs' Amended Complaint. ECF 12 at 2.

Also on May 23, 2014, Coppola submitted a "Notice of Acceptance of Fed.R.Civ.P. Rule 68 Offer, " ECF 13, along with a copy of the offer. ECF 13-1 ("Offer"). On June 3, 2014, Coppola submitted a draft "Order of Judgment, " based on the Offer. ECF 17. In light of the Court's duty to supervise waiver or settlement of FLSA claims, I directed the parties to "submit a joint letter explaining the basis for the proposed settlement and why it should be approved as fair and reasonable." ECF 18 (Order) (citing, e.g., Taylor v. Progress Energy, Inc., 494 F.3d 454, 460 (4th Cir. 2007)).

On June 13, 2014, the parties field a "Joint Motion for Judicial Approval of Defendants' Rule 68 Offer of Judgment to Plaintiff Raphael Coppola and Stipulation to Extension of Time for Filing of Defendants' Motion to Dismiss." ECF 19. I granted the parties' motion on July 1, 2014. ECF 20 (Order). Judgment was entered in favor of Coppola on July 8, 2014. ECF 24 (Order of Judgment). The same day, with consent of the Court, the remaining plaintiffs filed a Second Amended Complaint (ECF 23), which, among other things, removed Coppola as a party.

2. Fee Negotiations and the Motion

As noted, both sides have submitted emails pertaining to fee negotiations. Neither side has challenged the authenticity of the documents submitted.

On June 9, 2014, Warbasse emailed one of defendants' attorneys, Judd Millman, Esq., to say that plaintiff would accept a "fee of $2, 240.00 in connection with Coppola's claims, " and that "this payment would be shown as a credit when the last fee petition i[s] filed for all of the Plaintiffs' attorneys' fees in this case." ECF 31-2 (email). Warbasse also attached what he called the "loadstar [sic] statement." Id. The short statement indicated that Warbasse had spent 20.5 hours on the case as a whole, and that Hoffman devoted 3.9 hours to it. It also listed their rates as $400/hour and $325/hour, respectively. ECF 31-3 (letter attachment).

On June 10, 2014, Millman emailed Warbasse to clarify plaintiff's fee offer. ECF 31-4 at 2. Millman stated that he had previously requested (at some earlier time unknown to the Court) "a statement as to the specific fees and costs incurred with regard to Mr. Coppola." Id. Millman also indicated that Warbasse had previously stated he would not provide such information to Millman in advance of any possible fee petition. Id. Millman concluded: "As such, you are providing an alternative where Defendants either agree to pay the above $2, 240 (which is unrelated to hours worked) or face a mystery fee that will only be presented in a future petition filed with the Court...." Id.

The next day, June 11, 2014, Warbasse responded: "As we discussed, we have offered you the option of resolving the fee issue for $2, 240.00 or allowing the Court to determine a reasonable fee. If we need to file a fee petition we will be seeking more than $2, 240, including the time spent resolving the fee petition. However, we have not yet determined what that amount would be." ECF 31-5 at 2.

That same day, Millman reiterated his request for "a statement as to the fees" and offered to pay $1, 350 in attorney's fees, which defendants "calculated based upon [their] understanding of the legal work that was performed..., a reasonable amount of time that was necessary for doing such work, and a reasonable hourly rate for the performance of this preliminary work." ECF 31-6 at 2.

Warbasse rejected the offer the next day, June 12, 2014, again asserting that plaintiff did "not yet know what amount of $$ [he] would be seeking in a fee position [sic], " because plaintiff's attorneys had "not yet drafted the petition and the time for preparing the fee petition will be included." ECF 31-7 at 2. Warbasse also reminded Millman that the Court had not yet approved the Offer. Id. Millman renewed his request for a more detailed statement of hours worked and fees requested. ECF 31-9 at 2 (email). Warbasse replied that he and Hoffman were "unwilling to provide detailed time records in a case in which 4 Plaintiffs are still pursuing active claims." Id.

On July 9, 2014, after this Court entered judgment in favor of Coppola, Millman emailed Warbasse to renew his request for a statement of fees and to reopen fee negotiations. ECF 35-2 (email). In response, Warbasse stated his belief that the parties "were already at an impasse" and that he had already begun drafting a fee petition. ECF 31-11 at 2. He indicated plaintiff would accept an offer "significantly higher" than $2, 240. Id.

The next day, July 10, 2014, Warbasse sent another email to Millman with "an up-dated loadstar statement" attached, and asserted that the "total value" of plaintiff's attorneys' time was "$14, 672.50, as of 7/9/2014." See ECF 35-1 at 1 (email); ECF 35-1 at 2-7 (statement). The "loadstar statement" included detailed tables indicating, in tenths-of-an-hour, work performed by each attorney, broken down by date and with descriptions of the work. Id. at 3-7. Plaintiff offered to accept $7, 000 in attorney's fees and costs. Id. at 1.

It is unclear to the Court how, or whether, defendants responded to Warbasse's email of July 10, 2014, and the "loadstar statement" he provided. See, e.g., Opposition, ECF 31 at 8. In any event, Coppola filed the pending Motion twelve days later, on July 22, 2014. See ECF 26.

Additional facts are included in the Discussion.

Discussion

As a preliminary matter, defendants urge the Court to consider plaintiff's Motion under the standards applicable to the MWPCL, rather than under the FLSA. ECF 31 at 9. They argue that, because defendants' offer to Coppola was "100% of that which he requested" pursuant to the MWPCL, the offer "was made exclusively pursuant to the MWPCL." Id. This argument is puzzling, as both sides have previously represented to this Court that the Offer of Judgment constituted a settlement of Coppola's FLSA claims. See, e.g., ECF 19 ¶ 6 ("Defendants' payment to Plaintiff of the full amount of claimed unpaid wages ensures that Plaintiff's individual interests and the broader public interest in the integrity of the FLSA and corresponding state laws are all being satisfied.") (emphasis added). Pursuant to the standards applicable to the MWPCL, defendants ask the Court to deny plaintiff any award of fees or costs. ECF 31 at 2.

As defendants recognize, ECF 31 at 9, the FLSA entitles successful plaintiffs to reasonable attorney's fees and costs. 29 U.S.C. § 216(b). "A plaintiff is a prevailing party for the purpose of attorney's fees if the plaintiff succeeds on any significant issue in litigation which achieves some of the benefit... sought in bringing suit.'" Almendarez v. J.T.T. Enterprise Corp., 2010 WL 3385362, at *1 (D. Md. Aug. 25, 2010) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Defendants do not argue that Coppola did not prevail on his FLSA claim. See generally ECF 31; see also ECF 19 ¶¶ 4, 6. Thus, it appears that plaintiff is entitled to reasonable attorney's fees and costs. 29 U.S.C. § 216(b).

In any event, the Offer of Judgment itself expressly provided that 1) defendants would pay reasonable attorney's fees and costs and 2) fees would be assessed pursuant to "Federal standards." Offer, ECF 13-1 at 1. It states: "Defendants offer to pay Plaintiff's reasonable attorneys' fees and costs, to be determined by the Court in accordance with Federal principles governing payment of attorneys' fees and costs." Accordingly, I will consider plaintiff's Motion pursuant to federal standards. See also ECF 24 (Order of Judgment) ¶ 2.

Under federal law, the amount of attorney's fees to be awarded in any case is left to the sound discretion of the district court. E.g., McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013), as amended (Jan. 23, 2014); Burnley v. Short, 730 F.2d 136, 141 (4th Cir. 1984) (FLSA requires award of fees and costs, but amount is discretionary). But, the award must be "reasonable." E.g., McAfee, 738 F.3d at 88. "A reasonable' fee is a fee that is sufficient to induce a capable attorney to undertake the representation of a meritorious... case." Perdue v. Kenny, 559 U.S. 542, 552 (2010).

"The Supreme Court has indulged a strong presumption'" that the "lodestar" amount, as defined by the Court in Hensley, 461 U.S. at 434, "represents a reasonable attorney's fee." McAfee, 738 F.3d at 88-89; see also Perdue, 559 U.S. at 552. The lodestar amount is equal to counsel's "reasonable hourly rate multiplied by hours reasonably expended." Grissom v. The Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). Because the lodestar calculation relies on "objective, " third-party standards- i.e., "the prevailing market rates in the relevant community, " and what the attorney would have received from "a paying client who was billed by the hour in a comparable case"-the standard "cabins the discretion of trial judges, permits meaningful judicial review, and produces reasonably predictable results." Perdue, 559 U.S. at 551-52.

The movant "bears the burden of documenting the appropriate hours expended and hourly rates." Hensley, 461 U.S. at 437. Notably, counsel "should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission." Id. at 434. "Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority.'" Id. (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en banc) (emphasis in Copeland )). The movant also bears the burden to show that any upward adjustment to the lodestar amount is necessary. E.g., Blum v. Stenson, 465 U.S. 886, 898 (1984).

In considering whether the lodestar amount is indeed reasonable-or whether it should be adjusted up or down-the Fourth Circuit has directed courts to rely on the twelve factors set out in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). E.g., McAfee, 738 F.3d at 89. "[T]he court considers the Johnson factors in conjunction with the lodestar methodology' and, to the extent that any of these factors already has been incorporated into the lodestar analysis, [it does] not consider that factor a second time.'" Dorsey v. TGT Consulting, LLC, 2014 WL 458999, at *2 (D. Md. Feb. 4, 2014) (quoting E. Assoc. Coal Corp. v. Dir., Office of Workers' Comp. Program, 724 F.3d 561, 570, 570 n.5 (4th Cir. 2013)); see also, e.g., Hensley, 461 U.S. at 434 n.9 ("[M]any of the [ Johnson ] factors usually are subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate.").

The twelve factors articulated in Johnson, 488 F.2d at 717-19, as quoted in Hensley, 461 U.S. at 430 n.3, are:

"(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to the acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases."

After consideration of the lodestar amount and any appropriate adjustments, the Court must "subtract fees for hours spent on unsuccessful claims unrelated to successful ones, " and "award some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff." McAfee, 738 F.3d at 88 (citations omitted); see also Grissom, 549 F.3d at 313 (same); Jackson v. Estelle's Place, LLC, 391 F.Appx. 239, 243 (4th Cir. 2010) (affirming application of same analysis to fees awarded under FLSA).

Accordingly, I will begin by calculating the lodestar amount, then consider whether any of the Johnson factors rebut the "strong presumption" that the lodestar amount "represents a reasonable attorney's fee, " McAfee, 738 F.3d at 88-89. I will then determine whether the resulting amount should be further reduced in proportion to the success or ...


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