RUTTI v. LOJACK CORPORATION, INC. Case No. SACV 06-350 DOC (JCx).
MIKE RUTTI, v. LOJACK CORPORATION, INC.
United States District Court, C.D. California.
July 31, 2012.
Lojack Corporation Inc, Defendant, represented by
Christopher C Scheithauer, McDermott Will and Emery LLP, Dan Chammas, McDermott Will and Emery LLP, Peter D Holbrook, BUCHALTER NEMER, Ryan C Hess, Paul Hastings LLP, Jeffrey D Wohl, Paul Hastings LLP, Michele A Freedenthal, Paul Hastings LLP & Noam Glick, Paul Plevin Supplivan & Connaughton.
CIVIL MINUTES — GENERAL
DAVID O. CARTER, District Judge.
Before the Court is a Motion for Attorneys' Fees filed by Plaintiffs in the above-captioned case (Docket 248). The Court finds the matter appropriate for decision without oral argument. Fed R. Civ. P. 78; Local R. 7-15. After considering the moving, opposing, and replying papers, the Court hereby GRANTS IN PART AND DENIES IN PART Plaintiffs' Motion for Attorneys' Fees.
Accordingly, the hearing currently scheduled for August 6, 2012 at 8:30 a.m. is hereby removed from the calendar.
Plaintiffs filed the above-captioned case on April 5, 2006, alleging that the labor practices of Defendant Lojack Corporation, Inc. ("Defendant") violated both the Fair Labor Standards Act, 29 U.S.C. § 216(b), (the "FLSA") and California law. Plaintiff alleged that Defendant failed to pay for "off-the-clock" work and sought lost wages, including liquidated damages and injunctive relief, as well as reasonable attorneys' fees and costs.
This case has a fairly extensive procedural history. On August 16, 2007, this Court granted Defendant's Motion for Partial Summary Judgment, granting summary judgment on all of Plaintiffs' federal claims (Docket 130). The Court later dismissed Plaintiffs' state law claims for lack of subject matter jurisdiction (Docket 139). Plaintiffs appealed the Court's summary judgment decision to the Ninth Circuit Court of Appeals. On May 7, 2010, the Ninth Circuit issued an order affirming the majority of the Court's grant of summary judgment but vacating the grant of summary judgment as to Plaintiffs' claim that Defendant violated the FLSA by failing to compensate technicians for time spent on personal data transmissions ("PDT") allegedly performed at the end of each work day. See Rutti v. LoJack Corp., Inc.,
Prevailing plaintiffs are entitled to attorneys' fees under the FLSA. See 29 U.S.C. § 216(b) (2006); Newhouse v. Robert's llimaRE Tours, Inc.,
Plaintiffs' fees are calculated using the "lodestar" method, which is obtained by multiplying the number of hours reasonably expended on litigation by a reasonable hourly rate. See Perdue v. Kenny A. ex rel. Winn, ___ U.S. ___,
Plaintiffs seek a total of $1,100,000 in attorneys' fees and costs, which is the maximum available under the parties' confidential settlement agreement.
The Court will separately analyze Counsel's hours and fees to determine if any departure from the already-reduced figure of $1,100,000 is necessary.
Courts "should defer to the winning lawyer's professional judgment as to how much time he was required to spend on the case." Moreno v. City of Sacramento,
The presumption that attorneys' claimed hours are reasonable is essential because "the purposes of the [fee-shifting] statutes will not be met" unless plaintiffs' attorneys are "reasonably compensated for all their time." Id. Courts must award appropriate compensation to ensure that competent counsel will take on cases that seek to protect an important public right but may not be financially lucrative. See City of Burlington v. Dague,
Plaintiffs establish the reasonableness of Counsel's hours through their moving papers and declarations. See Motion for Summary Judgment, 12-14; Righetti Decl. 1-7, 18-20. Counsel also exercised billing judgment by reducing the total lodestar amount and costs by half. See id. Importantly, Counsel has been litigating the present case for over six years, including a multitude of motions, significant discovery, and a trip to the Ninth Circuit and back. Even if Counsel recovered the entire requested adjusted lodestar figure of $1,100,000, it would amount to fees and costs of slightly over $183,000 per year, which is not a substantial sum, particularly for two partners and two associates. Additionally, because the FLSA is a remedial statute, it "must not be interpreted or applied in a narrow grudging manner." Tennessee Coal, Iron & R.R. Co. v. Muscoda Local No. 123,
Because Plaintiffs established the reasonableness of Counsel's hours, the burden shifts to Defendant to rebut that finding with evidence challenging the accuracy and reasonableness of the hours. See Gates v. Deukmejian,
Defendant first argues that Counsel is not entitled to fees for the non-PDT claims initially pursued by Plaintiff because they were both unsuccessful and unrelated to Plaintiffs' successful PDT claim. Pursuant to the Supreme Court's decision in Hensley v. Eckerhart,
Banta v. City of Merrill, Or., CIV. 06-3003-CL, 2007 WL 3543445, at *3 (D. Or. Nov. 14, 2007) (citing Thorne v. City of El Secundo,
Defendant challenges the inclusion of hours Counsel spent on "abandoned" state law claims that are now proceeding in a separate state court action. See Opposition, 6. Defendant, however, ignores the fact that Counsel has already taken that split into account and reduced the lodestar accordingly. See Glugoski Decl., ¶ 13 ("[T]he lodestar request was capped at $1,100,000.00 to address any potential claim that the work relates more to the state law case than the federal case."). This Court has no reason not to take Counsel at its word that time spent on state court claims is not included in the adjusted lodestar amount, particularly given that there is no basis for asserting that the state law claims would have consumed more time than the federal claims.
Defendant also argues that Plaintiffs' unsuccessful federal claims are unrelated to the successful PDT claim. As discussed in more depth above, in determining whether the claims are related,
Schwarz v. Sec'y of Health & Human Servs.,
Here, Plaintiffs' federal claims all alleged violations of the same statute as the PDT claim: 29 U.S.C. § 216(b). Plaintiffs' federal claims all related to Defendant requiring its employees to perform work "off-the-clock"; the only difference between each claim was the specific practice at issue. These federal claims could logically have been labeled as one cause of action alleging a violation of the FLSA based on Defendant's policy to require unpaid work. As such, all of Plaintiffs' federal claims utilized the same line of legal research and analysis. These claims each challenge the same general policy of an employer as being a violation of the same law; they clearly "involve a common core of facts" and are "based on related legal theories." Banta, 2007 WL 3543445, at *3 (quoting Hensley, 461 U.S. at 434-35, 437 n. 12). Further, the relief sought on the unsuccessful claims — a prohibition on off-the-clock work — was "intended to remedy a course of conduct that gave rise to the injury on which the relief granted is premised.'" Thorne, 802 F.3d at 1141. Both the unsuccessful federal claims and the successful PDT claim alleged injury based on off-the-clock work and sought appropriate compensation for the time spent on that work.
This case closely mirrors Head v. Glacier Northwest, Inc., where the court found that claims for failure to accommodate, retaliation based on a request for reasonable accommodation, and wrongful discharge based on disability discrimination were related, despite the fact that each of the claims had different elements. No. CV 02-373 RE, 2006 WL 1222650, at *6 (D. Or. Mar. 24, 2006). The court held that "plaintiff's evidence was in large part intended to prove a course of conduct that was related to all those claims, i.e. defendant's hostility at the imposition caused by plaintiff's request for a reasonable accommodation," such that "there was a common core of facts based on related legal theories." Id. Similarly, here, Plaintiffs attempted to prove that Defendant engaged in a course of conduct designed to force its employees to engage in off-the-clock work. Plaintiffs' claims in the present case were not only based on related legal theories but upon the exact same law, the FLSA. This case is thus distinguishable from cases in which different claims were based on violations of different regulations. See, e.g. Sanford v. GMRI, Inc., No. CVS 04-1535 DFL CMK, 2005 WL 4782697, at *2 (E.D. Cal. Nov. 14, 2005) (reducing fees where unsuccessful claims required the application of different sections of the ADA Accessibility Guidelines); Levine v. City of Alameda, No. C 04-01780 CRB, 2006 WL 1867522, at *5 (N.D. Cal. Jul. 5, 2006) (age discrimination claim not related to procedural due process claim). Plaintiffs' unsuccessful federal claims are related to the successful PDT claim because they were intended to remedy the same course of conduct and are based upon the same legal theory.
Reasonableness of hours, given the level of success achieved
Given that the claims are related, the Court must now evaluate the "significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." Thorne, 802 F.2d at 1142. Defendant challenges the reasonableness of Counsel's hours based on: (1) lack of success; (2) inadequate documentation; and (3) inflated hours. None of these arguments are persuasive to the Court.
Level of success
Number of opt-ins
Defendant first argues that Counsel's recovery should be reduced because they only yielded 22 viable opt-in class members out of a potential class of 289.
As an initial matter, the FLSA opt-in structure excludes apathetic or inertia-bound potential class members who are overcome by the effort required to opt-in but necessarily expressing an opinion on the merits of the case. Additionally, as in the present case, counsel can encounter serious difficulty in locating all of the members of the potential class. See Reply, 16-17. And, even if potential class members received the notice, there is a significant possibility that at least some potential class members did not understand the import of the notice and so took no action. In a Rule 23(b)(3) class, apathetic, uninformed, or missing class members would be included; under the FLSA, they are excluded. See Guzman v. VLM, Inc., No. 07-CV-1126 (JG) (RER), 2008 WL 597186, at *9 (E.D.N.Y. Mar. 2, 2008) ("the opt-out nature of a class action is a valuable feature lacking in an FLSA collective action"); Craig Becker & Paul Strauss, Representing Low-Wage Workers in the Absence of a Class: The Peculiar Case of Section 16 of the Fair Labor Standards Act and the Underenforcement of Minimum Labor Standards, 92 Minn. L. Rev. 1317, 1325-29 (2008) (listing reasons for low participation in FLSA lawsuits, including undeliverable notices and unfamiliarity with English and legal terms).
Finally, and most troublingly, courts have consistently recognized that the "fear of economic retaliation" will force workers "quietly to accept substandard conditions," dissuading employees from participating in lawsuits against their employers. Kasten v. Saint-Gobain Performance Plastics Corp.,
A retaliation suit can only be filed after an adverse employment act takes place; many workers are unwilling or financially unable to take the risk of inducing that adverse employment action. These fears are far from irrational, given the fact that case law is replete with examples of FLSA retaliation cases. See, e.g., Recinos-Recinos v. Express Forestry, Inc., No. 05-1355, 2006 U.S. Dist. LEXIS 2510 (E.D. La. Jan. 27, 2006) (entering protective order prohibiting defendants from contacting potential opt-in plaintiffs in FLSA collective action after defendants' agents engaged in a campaign designed to threaten, intimidate, and coerce plaintiffs to withdraw their claims); Contreras v. Corinthian Vigor Ins. Brokerage, Inc.,
Given the myriad reasons employees have not to opt-in to FLSA collective actions, this Court does not agree that a low participation rate is any reflection on Counsel's competence or success and, as such, should not affect the amount of fees due Counsel. Cf. Lowery v. Cash's Cabanas, Inc., No. 3:08cv186/MCR/MD, 2011 U.S. Dist. LEXIS 15720, at *18-19 (N.D. Fla. Jan. 4, 2011) (reciting the many reasons for non-participation by potential class members but still concluding that low turnout warranted a negative inference against counsel seeking attorneys' fees); Tarlecki v. Bebe Stores, Inc., No. C 05-1777 MHP, 2009 U.S. Dist. LEXIS 102531, at *12 (N.D. Cal. Nov. 3, 2009) (finding that a low participation rate weighed in favor of downward departure from the benchmark percentage). This Court declines to follow these unpublished cases, as they fail to adequately account for the reality of employees who face a "Hobson's choice" between risking employer retaliation and "quietly . . . accept[ing] substandard conditions." See Mitchell v. Robert DeMario Jewelry, Inc.,
Defendant also argues that because Plaintiffs only prevailed on one of their FLSA claims — the PDT claim — their attorneys' fees must be reduced accordingly. Yet, the Supreme Court has clearly rejected "a mathematical approach comparing the total number of issues in the case with those actually prevailed upon," reasoning that "[s]uch a ratio provides little aid in determining what is a reasonable fee in light of all the relevant factors." Hensley, 461 U.S. at 435 n. 11, 103 S.Ct. at 1940 n. 11. See also City of Riverside v. Rivera,
Because the parties' settlement in this case is confidential, the Court will not discuss its specific terms in the present Order, which will be publicly filed. This Court has, however, closely reviewed the settlement and finds that Plaintiffs' requested attorneys' fees are commensurate with their success in this lawsuit. Although Plaintiffs' theories of recovery were reduced by this Court's summary judgment order, Plaintiffs recovered an amount for their clients that was not insubstantial and also made a positive contribution to the case law for similarly situated workers by way of the Ninth Circuit's order upholding Plaintiffs' PDT claim. See Heder, 93 Fed. Appx. at 83 (weighting the creation of valuable precedent when considering a request for attorneys' fees); Head, 2006 WL 1222650, at *6 (although plaintiff did not recover all the damages he sought, he obtained "a reasonable sum for wage loss," as well as emotional distress damages, which the court considered success). Further, Counsel has already, of their own accord, reduced their requested lodestar by half. That reduction more than covers any consideration of partial success, as well as any time spent on state law claims that are now proceeding in a separate action. "It must be remembered that an award of attorneys' fees is not a gift. It is just compensation for expenses actually incurred in vindicating a public right." Blackwell v. Foley,
Because this Court finds that Plaintiffs' success is commensurate with Counsel's requested attorneys' fees, it will now move on to analyze Defendant's other challenges to the reasonableness of Counsel's hours.
One factor that may be used to reduce the number of hours entered into the lodestar calculation is inadequate documentation. Hensley, 461 U.S. at 433, 103 S.Ct. at 1939. Defendant challenges Plaintiffs' documentation by arguing that (1) there is no evidence that associates Michael Righetti and Erin Breznikar-Winters and the paralegals worked the hours claimed; and (2) the time entries lack sufficient detail.
Associate and Paralegal Hours
Defendant first challenges the hours of associates Michael Righetti and Erin Breznikar-Winters and unnamed paralegals because they have not submitted any declarations attesting to the hours they spent on this case. Opposition, 14. Curiously, Plaintiffs do not respond to this contention in any way in their Reply. This Court is not willing to award attorneys' fees when those attorneys have not even declared under penalty of perjury that the stated hours are accurate. The hours of Michael Righetti and Erin Breznikar-Winters and any paralegals are accordingly DENIED.
"[C]ounsel bears the burden of submitting detailed time records justifying the hours claimed to have been expended." Chalmers v. City of Los Angeles,
Here, Plaintiffs have provided eighty-three pages of billing records, which detail the attorney, the task, and the time spent on each task. The fact that they are organized by week and not by day is of no import, contrary to Defendant's contention. The Court is able to analyze which attorney worked on which task and for how long. That is certainly sufficient to meet Plaintiffs' burden with respect to their documentation of hours. See, e.g., C.B. v. Sonora School Dist., No. 1:09-cv-00285-OWW-SMS, 2011 WL 4590775, at *2 (E.D. Cal. Sept. 30, 2011) (level of detail in billing records was deemed adequate because there was "a delineation of services performed and hours expended for each service described."); Sanchez v. Bank of America, No. 09-5574 S.C. 2010 WL 2889033, at *4 (N.D. Cal. July 22, 2010) (billing records considered "detailed" and "helpful" because they contained each discrete action taken, the amount of time spent on each action, and the billing rate for each person who performed that action).
Unreasonably high hours
Defendant also asserts that Counsel's lodestar figure should be decreased because Counsel spent unreasonably excessive hours on this litigation.
Amount of time spent on tasks
Defendant first argues that Counsel, highly experienced wage and hour practitioners, spent too many hours on "simple tasks." Opposition, 15-16. For example, Defendant challenges the fact that Counsel spent 12.2 hours preparing and reviewing a "boilerplate" complaint, 5.3 hours preparing a declaration, and 6.8 hours summarizing a deposition. Id. at 16. While Defendant is correct that a court may credit a party with fewer hours if the time claimed is "excessive, redundant, or otherwise unnecessary," Hensley, 461 U.S. at 434, 103 S.Ct. at 1939, the Court does not find any of these highlighted hours per se unreasonable. See Charlebois v. Angels Baseball LP, No. SACV 10-0853 DOC (ANx), 2012 WL 2449849, at *11 (C.D. Cal. May 30, 2012) ("[T]he Court suspects that several of the complaints it dismisses every week fail to state a claim because attorneys spend too little time researching the grounds for their case; the Court sees no reason why it should punish the attorney that researches the law and facts before putting paper to pen."). This Court does not wish to encourage shoddy worksmanship by strictly limiting the amount of time counsel are permitted to spend on discrete legal tasks. "Defendants would have the Court penalize [Counsel] for litigating the case in a manner that afforded [P]laintiff[s] quality representation, and the Court will not do so." Blackwell, 724 F. Supp. 2d at 1079. Litigation is not a contest that prioritizes speed, and attorneys pursuing FLSA collective action claims already have significant financial incentive to be efficient. See Moreno, 534 F.3d at 1112 ("lawyers are not likely to spend unnecessary time on contingency fee cases in the hope of inflating their fees. The payoff is too uncertain, as to both the result and the amount of the fee."). This Court does not wish to engage in armchair quarterbacking, nor will it encourage attorneys to litigate in a way that may jeopardize the quality of their representation. This Court does not find that Plaintiffs have claimed any hours that were "excessive, redundant or otherwise unnecessary." Hensley, 461 U.S. at 434, 103 S.Ct. at 1939.
The overstaffing of a case may justify a gap between the hours actually spent and the number of hours deemed reasonable. Hensley, 461 U.S. at 434, 103 S.Ct. at 1939; Chalmers, 796 F.2d at 1212. Defendant argues that the claimed hours are duplicative, both in terms of work performed by lower-billing timekeepers and by the two primary partners. Opposition, 16-17.
First, given that this Court has already rejected the hours of the two associates and paralegals, Defendant's concern about partners' overlap with lower-billing timekeepers has already been addressed.
Second, this Court does not agree that Counsel's fees should be reduced simply because both partners spent time on the same task. Defendant, for example, points to the fact that both Righetti and Glugoski spent large amounts of time preparing for oral argument at the Ninth Circuit as evidence of duplicative time. Given that Plaintiffs ultimately prevailed at the Ninth Circuit on one of their primary claims, this time appears to have been well-spent. The fact that only one attorney argued the case does not preclude another attorney from assisting with the preparation for oral argument. In Charlebois, for example, the defendants argued that the hours billed by one attorney for reviewing another attorney's work should have been excluded from the lodestar figure. 2012 WL 2449849, at *12. This Court rejected that argument and "decline[d] to reduce the hours simply because Class Counsel kept each other informed about the case and double-checked each other's work; indeed, many motions this Court denies would have benefitted from a second read and more strategizing by the attorneys involved." Id. See also Davis, 976 F.2d at 1544 (upholding the district court's determination that it was reasonable for multiple attorneys to spend time on the case because "broad-based class litigation often requires the participation of multiple attorneys"); Chabner v. United of Omaha Life Ins. Co., C-95-0447 MHP, 1999 WL 33227443, at *4 (N.D. Cal. Oct. 12, 1999) ("Common sense dictates that . . . a number of people might contribute to one end product."); Nat'l Federation of the Blind v. Target Corp., No. C 06-01802 MHP, 2009 WL 2390261, at *5 (N.D. Cal. Aug. 3, 2009) ("[I]t is often more efficient for lawyers with complementary skill sets to cooperate in performing a task. The use of two attorneys for such a task is hardly extravagant."). This Court finds that there is no duplication of work that would require any further reduction in fees, given the Court has already precluded the hours of the associates and paralegals.
The United States Supreme Court has held that fee awards to public interest attorneys who do not charge their clients—such as Counsel—are "calculated according to the prevailing market rates in the relevant community, regardless of whether plaintiff is represented by private or nonprofit counsel." Blum, 465 U.S. at 895. "The proper reference point in determining an appropriate fee award is the rates charged by private attorneys in the same legal market as prevailing counsel." Trevinu v. Gates,
Plaintiffs have established the reasonableness of Righetti and Glugoski's fee rates through the declarations by Counsel and two other attorneys who litigate class action cases in California, as well as prior cases that have approved the requested fee rates. See Righetti Decl.; Righetti Decl., Exh. 5, 6. See also United Steelworkers of Am. v. Phelps Dodge Co.,
Because Plaintiff established reasonableness of Counsel's fee rates, the burden shifts to Defendants to rebut with evidence challenging the accuracy and reasonableness of the rates. See Deukmejian, 987 F.2d at 1397-98. Defendant argues that Counsel's fee rates are unreasonable because in the cases cited by Plaintiffs, their fee rates were not challenged by opposing counsel. Opposition, 22. The Court does not find this distinction determinative, as courts are required to evaluate the reasonableness of counsel's fees, regardless of a challenge by opposing counsel. Defendant also points to the fact that another court assigned lower rates to Righetti and Glugoski. Opposition, 22. That case, however, utilized 2007-08 fee rates, and it is well-established that counsel is entitled to current, not historic, hourly rates. See Missouri v. Jenkins,
Defendant also argues that Counsel's rates should be reduced for the time that the partners spent on "associate and paralegal work." Opposition, 23. The Ninth Circuit, however, has held upheld attorneys' fees awards where district courts applied a uniform legal rate to all tasks. Davis, 976 F.2d at 1548 ("Private practitioners do not generally charge varying rates for the different lawyerly tasks they undertakes on a given case, and we have squarely held that the district courts can act accordingly in their calculation of fee awards."). See also Blackwell, 724 F. Supp. 2d at 1080; Gates v. Rowland,
The Court finds that Righetti's rate of $750/hour is reasonable, as is Glugoski's rate of $650/hour.
C. Kerr Factors
Defendant has not attempted to challenge Plaintiffs' attorneys' fees request based on any Kerr factors not already subsumed in the lodestar inquiry. As the Ninth Circuit explained,
Cunningham, 879 F.2d at 488 (internal citations omitted). As such, there are no other asserted grounds under which Defendant argues Counsel's fees should be reduced.
Reasonable litigation expenses are ordinarily included in an award of attorneys' fees pursuant to the FLSA. Wales v. Jack M. Berry, Inc.,
For the aforementioned reasons, this Court finds Plaintiffs' adjusted lodestar amount of $1,100,000 reasonable, except to the extent it seeks hours for associates and paralegals that have not submitted declarations and costs for which it has provided no supporting documentation. The adjusted lodestar amount will thus be reduced by $199,482, which is the amount of fees claimed by the associates
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