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Radtke v. Caschetta

United States District Court, District of Columbia

June 7, 2017

KATHY RADTKE, and CARMEN CUNNINGHAM, Plaintiffs,
v.
MARIA CASCHETTA, Defendants.

          MEMORANDUM OPINION

          Royce C. Lamberth United States District Judge.

         I. INTRODUCTION

         This case comes before the court on plaintiffs' renewed motion for attorneys' fees, ECF No. 208. Over ten years ago, plaintiffs filed claims for failure to pay overtime wages in violation of the Fair Labor Standards Act and Maryland state law. In 2014, a jury returned a verdict in favor of plaintiffs, finding that their employers were not exempt from the requirement to pay overtime under either the administrative or professional exemptions of the FLSA. Ms. Radtke was awarded $5, 114.62 in damages and Ms. Cunningham was awarded $729.67 in damages. Defendants appealed the jury verdict, arguing that they were entitled to judgment as a matter of law and for a new trial, but the Court of Appeals affirmed the verdict. Plaintiffs filed a motion for attorneys' fees and costs and were awarded $56, 500, a 75% reduction in fees due to the court's conclusion that plaintiffs failed to provide a meaningful demand for the actual damages suffered until the eve of trial. This decision was reversed by the Court of Appeals, and the case was remanded for a de novo determination of fees.

         Plaintiffs now bring this renewed motion for attorneys' fees totaling approximately $429, 300, [1] and costs totaling $2, 559.28. Defendants argue that an award in this amount is improper and should be reduced for the following reasons: 1) plaintiffs' lack of success; 2) the denial, dismissal, or dropping of several claims, and plaintiffs should not be permitted to recover for time billed related to these unsuccessful claims; 3) plaintiffs have submitted excessive, redundant, and unnecessary charges; and 4) plaintiffs have acted in bad faith. In addition, the parties dispute whether current or historic Laffey rates should be used in calculating plaintiffs' award.

         For the reasons stated below, the Court finds that current Laffey rates apply, but that a 40% reduction to the fees expended on pre-appellate work is warranted based on lack of success. No reduction is warranted for appellate work. The Court will award $307, 980 in fees and $2, 559.28 in costs, totaling $310, 539.28.

         II. BACKGROUND AND PROCEDURAL HISTORY

         Plaintiffs Kathy Radtke and Carmen Cunningham were medical records coders working for defendant Advanta Medical Solutions (Maryland) and Lifecare Management Partners (D.C.), respectively. In 2006, plaintiffs brought an action for failure to pay overtime wages in violation of the FLSA (as neither the administrative nor the professional exemptions to the FLSA applied) and Maryland state law. Ms. Radtke, who worked for Advanta, claimed that she was entitled to unpaid overtime wages from November 30, 2003 through January 6, 2006, pursuant to the Maryland three year statute of limitations applicable to Maryland wage and hour claims. Ms. Cunningham, who worked for Lifecare, claimed that she was entitled to unpaid overtime wages from November 30, 2003 through March 31, 2005 pursuant to the Maryland three year statute of limitations.[2] Ms. Cunningham argued that Lifecare was an employer subject to Maryland law. Lifecare argued that it was not subject to Maryland law-it is a District of Columbia general partnership and Ms. Cunningham performed work for Lifecare exclusively in D.C. Ms. Cunningham also argued that Advanta and Lifecare were joint employers jointly liable for damages, and therefore that Lifecare was liable under Maryland law based on the actions of Advanta. Finally, Ms. Cunningham, argued that she was employed by Lifecare while working as an independent contractor for Advanta. Independent contractors are not entitled to overtime pay, so Ms. Cunningham sought to establish she was an “employee” at this time.

         Plaintiffs also argued that they were entitled to liquidated damages. Plaintiffs may obtain double damages under the FLSA, and treble damages under Maryland law, if they can show that their employer did not act in good faith. See 29 U.S.C. § 260; Md. Code Ann., Lab. & Empl. § 3-507.2(b). In sum, Ms. Radtke sought damages totaling $34, 749.99. Ms. Cunningham sought damages totaling $52, 633.23.[3]

         Apart from their overtime claims, plaintiffs claimed in their Complaint that 1) that they were required as a common practice to work holidays; 2) that they were not paid overtime or holiday pay for services they were required to perform on holidays; 3) that they were not paid minimum wages; 4) that they were paid in an untimely manner; and 5) that defendants failed to provide an accurate and timely accounting of the method of computation of their pay. These claims were withdrawn prior to trial. Plaintiffs also brought a claim for breach of contract, arguing that such a breach was malicious.

         In 2014, a jury returned a verdict for the plaintiffs, finding that defendants failed to establish that the plaintiffs were exempt from overtime requirements under either the administrative exception or the professional exception. After the second phase of the trial, the jury found 1) that the time Radtke spent traveling was part of her job (and therefore was compensable); 2) that defendant Maria Caschetta was not an employer (and therefore was not liable); 3) that none of the defendants were joint employers; 4) that plaintiffs failed to establish that the overtime dispute was not bona fide (i.e., that defendants had acted in bad faith); 5) that defendants had not acted willfully; and 6) that Ms. Cunningham was working as an independent contractor, not an employee, for defendant Advanta.

         After trial, Judge Facciola found that plaintiffs failed to offer evidence in support of their breach of contract claim-noting that “plaintiffs' counsel admitted that he ‘did not know' why he included a breach of contract claim, only that it would be ‘malpractice' not to include it”-and dismissed the breach of contract count. He also found that Maryland's three year statute of limitations did not apply to Ms. Cunningham's work for Lifecare because Lifecare was not a Maryland employer and Lifecare and Advanta (which was a Maryland employer) were not joint employers jointly liable. In addition, because the jury found that the defendants did not act willfully, the FLSA's two year statute of limitations applied to Ms. Cunningham's claims. Judge Facciola further rejected Ms. Cunningham's arguments that she was not an independent contractor and that Advanta and Lifecare were joint employers. Finally, Judge Facciola found that liquidated damages were not appropriate because defendants had shown that they acted in good faith. Judge Facciola concluded that defendant Advanta was liable to Ms. Radtke for $3, 245.66 ($5, 114.62 with interest) and that defendant Lifecare was liable to Ms. Cunningham for $445.34 ($729.67 with interest).

         Plaintiffs subsequently sought attorneys' fees totaling $255, 898.80. Judge Facciola awarded fees in the amount of $56, 464.70, significantly reducing the fee award after finding that the plaintiffs failed to provide a timely demand for their actual damages. See Radtke v. Caschetta, No. CV 06-2031 (JMF), 2014 WL 11802595, at *5 (D.D.C. Dec. 30, 2014). Both parties appealed; plaintiffs challenged the fee award as too low, and defendants challenged it as too high. The Court of Appeals determined that plaintiffs timely filed their fee petition and were entitled to fees, and that the lower court's error was “quite clear.” Radtke v. Caschetta (Radtke II), 822 F.3d 571, 575 (D.C. Cir. 2016). It found that plaintiffs “were not negligent or dilatory in providing a damages estimate; they did so time and again, including before they filed suit, ” and that “[t]hey even offered an early settlement, but the Employers never responded.” Id. The Courts of Appeals thus vacated Judge Facciola's decision and remanded for a new determination of fees. Judge Facciola having retired, this case was randomly assigned to the undersigned judge.

         In addition, defendants appealed the jury decision against them, arguing for judgment as a matter of law, for a new trial, or to alter or amend the judgment. The Court of Appeals rejected the defendants' arguments, finding that the issue of whether plaintiffs' were exempt from overtime requirements was a question for the jury, and that defendants' failed to show that the evidence presented to the jury was “so one-sided that reasonable men and women could not have reached a verdict in plaintiff's favor.” Radtke v. Lifecare Mgmt. Partners (Radtke I), 795 F.3d 159, 165 (D.C. Cir. 2015). Defendants also argued for a new trial because 1) Ms. Radtke “blurted out” an answer even after the court had sustained the defendants' objection to the question; 2) Ms. Cunningham contradicted herself and the jury was not given a perjury instruction; 3) plaintiffs' counsel stated that defendants needed to prove Ms. Radtke and Ms. Cunningham were exempt by clear and convincing evidence, even though the standard is preponderance of the evidence. See Id. at 166- 68. The Court of Appeals rejected all three arguments. See id.

         Plaintiffs state that they are seeking $435, 000 in the substance of their motion. The Court will rely, however, on the figures used in plaintiffs' fee petition, attached to their motion as Exhibit 1-A, and which details the number of hours billed, the rates used (current Laffey), and the time entry value for each entry. According to the fee petition, plaintiffs' counsel billed approximately 1, 240 hours on this case, totaling approximately $477, 000.[4] Of those 1, 240 hours, approximately 954 hours were billed for work prior to the two appeals described above, totaling approximately $337, 000, and approximately 286 hours were billed on appellate work, totaling approximately $140, 000. After the voluntary ten percent reduction, these values change to $303, 300 and $126, 000, respectively, totaling $429, 300. Plaintiffs also seek an award of $2, 559.28 in unreimbursed costs.

         III. LEGAL STANDARDS FOR DETERMINING A FEE AWARD

         Prevailing parties in FLSA actions are entitled to attorneys' fees. The FLSA provides that “[t]he 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). The award of such fees is therefore mandatory. Bradshaw v. Jefferson Grill, Inc., No. CIV.A. 11-1558 ABJ, 2012 WL 2803401, at *1 (D.D.C. July 10, 2012). In fee-shifting cases, such as those brought under the FLSA, courts apply the “lodestar” method of determining fee awards, as it is “presumptively sufficient to achieve [the] objective [of inducing a capable attorney to undertake the representation of a meritorious civil rights case].” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010); see Driscoll v. George Washington Univ., 55 F.Supp.3d 106, 113-14 (D.D.C. 2014).

         Under this method, the “number of hours reasonably expended on the litigation [are] multiplied by a reasonable hourly rate, ” with “excessive, redundant, or otherwise unnecessary” hours excluded. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Courts may also adjust the fee award upward or downward based on the results obtained. Id. at 534. “If . . . a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.” Id. at 436. However, “the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.” Id. at 435.

         IV. FEE AWARD REDUCTIONS

         After calculating the number of hours spent on this litigation multiplied by current Laffey rates, [5] plaintiffs now seek to recover approximately $429, 300 in fees, after a voluntary 10% reduction. Defendants argue that an award in this amount is improper and should be reduced for the following reasons: 1) plaintiffs' lack of success; 2) the denial, dismissal, or dropping of several claims, and plaintiffs should not be permitted to recover for time billed related to these unsuccessful claims; 3) plaintiffs have submitted excessive, redundant, and unnecessary charges; and 4) plaintiffs have acted in bad faith.

         A. Reductions for Lack of Success

         Defendants argue that plaintiffs' fee award should be reduced due to lack of success. Based on the relatively low amount of damages awarded by the jury, defendants argue that the fees sought are grossly disproportionate to the amount of damages recovered and that the fee request should be reduced because the amount of damages awarded was far below the amount originally sought by the plaintiffs. For the reasons stated below, although a purely proportionate reduction is inappropriate, the Court concludes that a 40% reduction to the fees spent on pre-appellate work is warranted based on lack of success as reflected by the low damages award and due to fact that the plaintiffs were ultimately unsuccessful on many of their claims. No reduction is warranted for the time spent on appellate work as plaintiffs fully succeeded on every point.

         1. Proportionate Reduction

         Defendants argue that the fee award should be reduced so as to be proportionate to the amount of damages actually recovered by plaintiffs. While the amount of damages recovered may be relevant to the proper fee award, fees awarded need not necessarily be proportionate to the amount recovered by the prevailing party, and should not be reduced solely to achieve proportionality. See City of Riverside v. Rivera, 477 U.S. 561, 574 (1986), Williams v. First Gov't Mortg. & Inv'rs Corp., 225 F.3d 738, 747 (D.C. Cir. 2000) (declining to “read a ‘rule of proportionality' into [the Consumer Protection Procedures Act]” and rejecting the defendant's argument that the fee award should be reduced to 10-15% of the fees requested because the damages awarded amounted to only 10-15% of the plaintiff's litigation objectives”); Nelson v. D.C., 967 F.Supp.2d 360, 363 (D.D.C. 2013) (declining to reduce fees where the plaintiff sought $2.5 million, but was awarded $12, 500 by the jury, because “Supreme Court and D.C. Circuit precedent make it clear that proportionality is not required”); In re InPhonic, Inc., 674 F.Supp.2d 273, 281 (D.D.C. 2009) (“A fee award may therefore be reasonable in relation to the success achieved even though the plaintiff's fee award may be ‘disproportionate to the damages he recovered.'”). Furthermore, simply because a fee award is greater than-even much greater-the damages ultimately awarded does not automatically make that fee excessive. See Thomas v. Nat'l Football League Players Ass'n, 273 F.3d 1124, 1129 (D.C. Cir. 2001) (“That the fees awarded are, as the district court acknowledged, ‘nearly five times the amount of plaintiff's recovery, ' does not make them excessive.). In short, [t]here is, of course, no mathematical rule requiring proportionality between compensatory damages and attorney's fees awards, and courts have awarded attorney's fees where plaintiffs recovered only nominal or minimal damages.” Thompson v. Int'l Ass'n of Machinists & Aerospace Workers, 664 F.Supp. 578, 581 (D.D.C. 1987).

         As acknowledged by another member of this court, “the use of the lodestar approach will, at times, necessitate fee awards that exceed the aggregate recovery to their clients.” Driscoll, 55 F.Supp.3d at 113-14. This is no reason to reduce fee awards given the policy objectives of fee-shifting statutes. In 1986, the Supreme Court, considering 42 U.S.C. § 1988, which allows for the recovery of attorneys' fees in civil rights cases, found that

[a] rule of proportionality would make it difficult, if not impossible, for individuals with meritorious civil rights claims but relatively small potential damages to obtain redress from the courts. This is totally inconsistent with Congress' purpose in enacting § 1988. Congress recognized that private-sector fee arrangements were inadequate to ensure sufficiently vigorous enforcement of civil rights. In order to ensure that lawyers would be willing to represent persons with legitimate civil rights grievances, Congress determined that it would be necessary to compensate lawyers for all time reasonably expended on a case.

City of Riverside v. Rivera, 477 U.S. 561, 578 (1986). Similarly, the FLSA contains a fee-shifting provision in order to “provide an adequate economic incentive for private attorneys to take employment discrimination cases, and thereby to ensure that plaintiffs would be able to obtain competent legal representation for the prosecution of legitimate claims.” Laffey v. Nw. Airlines, Inc., 746 F.2d 4, 11 (D.C. Cir. 1984) overruled on other grounds by Save Our Cumberland Mountains, Inc. v. Hodel, 857 F.2d 1516 (D.C. Cir. 1988); see also Fegley v. Higgins, 19 F.3d 1126, 1134-35 (6th Cir. 1994) (finding that Congress sought to “‘insure effective access to the judicial process by providing attorney fees for prevailing plaintiffs with wage and hour grievances, ' . . . [and that] [c]ourts should not place an undue emphasis on the amount of the plaintiff's recovery because an award of attorney fees here ‘encourage[s] the vindication of congressionally identified policies and rights'”). Thus, a rule of strict proportionality is inconsistent with the policy objectives of the fee-shifting provision of the FLSA.

         In conclusion, to the extent that defendants are arguing that the fee award should be reduced because the requested fees are grossly disproportionate to the amount of damages recovered, the Court rejects that argument and will not reduce the fee award on this ground. The Court will now turn to whether the fee ...


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