REPORT AND RECOMMENDATION:
ELIZABETH A. JENKINS, Magistrate Judge.
Before the Court is Defendant Scott Cochrane, Inc.,
In 2012, the Department of Labor determined Plaintiff was entitled to $1,225.62 for violation of the Fair Labor Standards Act of 1938 ("FLSA"). (Dkt. 26 Ex. 1 at 1) Defendants paid Plaintiff the full amount by check in October 2012. (Dkt. 26 Ex. 1 at 2) Yet, Plaintiff filed suit in April 2014 seeking unpaid overtime wages. The Complaint contained two counts, one for Plaintiff individually and one collective action count. In June 2014, Defendants filed a motion to dismiss. (Dkt. 10) In July 2014, Plaintiff filed a notice of voluntary dismissal. (Dkt. 11) The case was dismissed without prejudice according to Rule 41(a), Fed. R. Civ. P., and Plaintiff's notice of voluntary dismissal. (Dkt. 12)
On August 12, 2014, Defendants filed Defendants' Amended Motion for Reasonable Attorney's Fees Against Plaintiff and Plaintiff's Counsel and Incorporated Memorandum of Law (Dkt. 13), seeking attorneys' fees and costs. A hearing was set and continued. On February 9, 2015, the parties filed a joint motion to continue the scheduled hearing, stating that Defendants were withdrawing the motion as to Plaintiff's Attorney, Todd Shulby, Esq., and that the parties were in the process of drafting settlement documents to further their discussions and hopefully resolve the matter. (Dkt. 22) Based on the parties' representation that they were in the process of negotiating settlement, the Court denied without prejudice Defendants' Amended Motion for Reasonable Attorney's Fees (Dkts. 13, 24), allowing Defendants until March 10, 2015 to refile the motion in the event a full settlement was not reached.
On March 10, 2015, Defendants filed the instant Motion for Reasonable Attorney's Fees Against Plaintiff and Incorporated Memorandum of Law. (Dkt. 26) Defendants assert Plaintiff brought the lawsuit in bad faith and argue that the Eleventh Circuit permits an award of fees to prevailing defendants in FLSA cases where the plaintiff conducted the litigation in bad faith. Defendants also assert authority for fees as a sanction pursuant to the Court's inherent power to sanction.
An evidentiary hearing was set for May 13, 2015. (Dkt. 30) On April 24, 2015, Attorney Shulby filed a motion to withdraw (Dkt. 31), which was also set for hearing on May 13, 2015 (Dkt. 34). Although Plaintiff was advised by Attorney Shulby of his requirement to attend, Plaintiff did not attend the May 13, 2015, hearing. The Court issued a show cause order requiring Plaintiff to appear in person at an evidentiary hearing scheduled for June 17, 2015, to show cause as to Plaintiff Anthony Grigoli "why he should not be sanctioned as requested in Defendants' Motion for Reasonable Attorney's Fees Against Plaintiff (Dkt. 26) and for his failure to appear at the evidentiary hearing on the motion on May 13, 2015." (Dkt. 37) The Court additionally granted Attorney Shulby's Motion to Withdraw, but directed Attorney Shulby to personally appear at the June 17, 2015 hearing. (Dkt. 38) Plaintiff, appearing
At the hearing, Defendants presented both documentary evidence and testimony from Defendant Scott Cochrane ("Cochrane"). Plaintiff also testified on his own behalf.
Cochrane, owner of Defendant Scott Cochrane, Inc. ("Cochrane, Inc."), testified that Plaintiff's employment by Cochrane, Inc., began in May 2011 and ended in November 2011 when Plaintiff violated his probation and was sent to jail. After Plaintiff's employment ended, Plaintiff attempted to obtain unemployment benefits but was denied. Cochrane testified that Cochrane, Inc., was subsequently investigated by the United States Department of Labor in 2012. Although Plaintiff testified that he did not initiatethe investigation, but merely joined in with another who did so, Cochrane testified that he learned from Plaintiff himself that Plaintiff initiated the investigation.
The Department of Labor determined that Cochrane, Inc., owed Plaintiff $1,225.62. Although Defendants objected to the finding made by the Department of Labor, Defendants submitted evidence that Cochrane, Inc., nevertheless paid Plaintiff $1,225.62 in October 2012 and that Plaintiff cashed the check on October 31, 2012.
Plaintiff did not dispute depositing the check, but testified that he disagreed with the amount of the payment determined by the Department of Labor. Plaintiff stated that he thought the payment was only a partial payment and that he would be paid more in the future. He also testified that the Department of Labor did not tell him that the check he deposited was the only compensation he would receive. Plaintiff did not remember the details surrounding his eventual retainer of Attorney Shulby.
Cochrane did not hear from Plaintiff after the check was deposited. However, even though Cochrane paid to Plaintiff the amount determined by the Department of Labor, he received a certified letter, dated March 3, 2014, from Attorney Shulby regarding Plaintiff's overtime wage claims. After receiving the letter, Cochrane called the Department of Labor to obtain the details related to the previous investigation, including the case number and the date Plaintiff cashed the check. He then called Attorney Shulby's office and spoke to an assistant, who indicated she would inform Attorney Shulby. Cochrane also sent a letter to Attorney Shulby with the case number and the date the check was cashed. However, Plaintiff filed the instant lawsuit on April 10, 2014. (Dkt. 1) Plaintiff's verified Complaint (Dkt. 1) asserts, among other things, that Plaintiff worked overtime hours for which he was not paid by Defendants. Plaintiff's verification further states that the allegations within the complaint were true and correct to the best of Plaintiff's knowledge. (Dkt. 1 at 4)
Regarding Plaintiff's ability to pay, Plaintiff testified that, although he is looking for a job in Pasco County in the restaurant industry, he is currently unemployed and was last employed two (2) years ago. Plaintiff has six (6) children. He has no car or investments and has no bank accounts. Plaintiff is currently living with family and has no bills except for his child support payments, which he testified he cannot afford and last paid two (2) years ago.
A. Entitlement to Attorney's Fees
The FLSA provides for an award of attorney's fees to prevailing plaintiffs, 29 U.S.C. § 216(b),
Here, Plaintiff litigated in bad faith by representing that he was not paid overtime wages when he had already accepted payment from Defendants.
In response to Defendants' initial motion for attorneys' fees (Dkt. 13) Plaintiff asserted that Defendants' motion failed to satisfy the procedural requirements of Rule 54, Fed. R. Civ. P., and Local Rule 4.18, M.D. Fla.
Where an award of attorneys' fees is permitted, Rule 54, Fed. R. Civ. P., provides:
Fed. R. Civ. P. 54(d)(2)(B). Local Rule 4.18(a) provides, "[i]n accordance with Fed. R. Civ. P. 54, all claims for costs or attorney's fees preserved by appropriate pleading or pretrial stipulation shall be asserted by separate motion or petition filed not later than fourteen (14) days following the entry of judgment."
Although Defendants may seek fees under Rule 54(d) as the Court's order dismissing the case is considered a final judgment for purposes of appeal,
Defendants assert that their motion for attorney's fees is exempt from the fourteen (14) day deadline as a result of Rule 54(d)(2)(E), which exempts from the fourteen (14) day deadline claims for fees and expenses sought as sanctions for violating the Federal Rules of Civil Procedure. Fed. R. Civ. P. 54(d)(2)(E). While a party's frivolous or bad faith filing of a complaint may be sanctionable under Rule 11, Fed. R Civ. P., Defendants have not shown that they have satisfied the safe harbor provision of Rule 11.
Although attorney's fees are not proper under the FLSA and Rule 54, the Court, in its discretion, may award fees pursuant to its inherent power to sanction. Although the issue of the Court's inherent authority was not brought up in Defendants' original motion (Dkt. 13), the parties were on notice about the possibility of sanctions pursuant to the Court's inherent authority as of the time the Court initially set the motion for evidentiary hearing. (Dkt. 18)
"A primary aspect of [the Court's discretion] is the ability to fashion an appropriate sanction for conduct which abuses the judicial process."
Plaintiff acted in bad faith by filing a complaint seeking unpaid overtime wages when he had already received the compensation due to him for his FLSA claim. His testimony that he thought he had not received full payment or could receive additional payments is not credible. Additionally, his demeanor and testimony indicated that he held a grudge against Defendants. Given the circumstances presented and the understanding that a court's inherent power "ought to be exercised with great caution" as well as "with restraint and discretion,"
Defendants request $17,516.00 in fees (attorney's fees in the amount of $15,310.00 for work performed by one (1) managing partner and two (2) associate attorneys, Law Clerk fees in the amount of $1,450.00, and paralegal fees in the amount of $396.00), pursuant to 29 U.S.C. § 216(b).
Attorneys' fees are calculated, in the Eleventh Circuit, according to a "lodestar" formula which requires multiplication of "the number of hours reasonably expended by a reasonable hourly rate."
"Ultimately, the computation of a fee award is necessarily an exercise of judgment, because `[t]here is no precise rule or formula for making these determinations.'"
i. Reasonable Hourly Rate
"A reasonable hourly rate is the prevailing market rate in the relevant legal community for similar services by lawyers of reasonably comparable skills, experience, and reputation."
Attorney Robert Eckard ("Attorney Eckard") testified to his qualifications and experience, as well as to that of the other attorneys, law clerk, and paralegal who performed work for Defendants in this case. The time records admitted without objection at the evidentiary hearing show the following hourly rates: Attorney Robert Eckard, $350.00 per hour; Attorney Joelle Schultz, $300.00 per hour; Attorney Timothy Goodwin, $200.00 per hour; Law Clerk Nicholas Costantino, $100.00 per hour; and Paralegal Meagan Russak, $60.00 per hour.
Attorney Eckard testified that he is a managing partner at the Law Office of Robert D. Eckard & Associates, P.A. Attorney Eckard received his law degree in 1998 from Stetson University, where he graduated with honors, and has an LL.M. in International Law and Business. Attorney Eckard has participated in over forty (40) jury trials and is board certified in business litigation. The Declaration of Attorney Robert Eckard (Dkt. 41 Ex. 1) further details that Attorney Eckard is admitted to practice in the United States District Court for the Middle District of Florida, the United States Bankruptcy Court for the Middle District of Florida, the United States Supreme Court, and the United States Court of International Trade. He is also admitted
As to the experience and qualifications of Attorney Joelle Schultz ("Attorney Schultz"), Attorney Eckard testified that Attorney Schultz has been practicing law for approximately seven (7) years and has been employed by the Law Office of Robert D. Eckard & Associates, P.A., for between four (4) and five (5) years. She is licensed to practice law in Florida and Michigan and is admitted to practice in the United States District Courts for the Northern, Middle, and Southern Districts of Florida, the United States Bankruptcy Court for the Middle District of Florida, the Eleventh Circuit Court of Appeals, and the United States Tax Court. Attorney Schultz has experience in multi-district complex litigation and is currently preparing to qualify for board certification. Therefore, Attorney Schultz' rate of $300.00 per hour is reasonable.
Regarding Attorney Timothy Goodwin ("Attorney Goodwin"), Attorney Eckard testified that Attorney Goodwin is a 2011 or 2012 graduate of the University of Connecticut. He has been employed by the Law Office of Robert D. Eckard & Associates, P.A., for approximately two (2) years. At the time of his performance of work related to the instant case, Attorney Goodwin had been an attorney for approximately one (1) to one and one half (1.5) years. Given Attorney Goodwin's limited experience at the time he performed work for Defendants, the rate of $200.00 per hour is not reasonable and the Court reduces his rate to $150.00 per hour.
Attorney Eckard also testified that Law Clerk Nicholas Costantino ("Law Clerk Costantino") was between a second and third year law student at Stetson College of Law at the time he performed work on the instant case. As a law clerk with no bar admission and limited legal experience, the Court finds Law Clerk Costantino's rate of $100.00 per hour reasonable.
Finally, Attorney Eckard explained that although Paralegal Meagan Russak ("Paralegal Russak") is not yet certified, she is in her fourth year of a paralegal studies program. The Court finds the rate of $60.00 per hour for Paralegal Russak's services reasonable.
ii. Hours Reasonably Expended
Unnecessary, redundant, or excessive hours should be excluded from the reasonable number of hours expended.
In this case, a reduction in fees is warranted for block billing, which refers to the practice of including multiple tasks in a single time entry.
Rather than including a separate time entry for each task, many entries in Defendants' billing records contain block billing. For example, on July 15, 2014, Attorney Eckard billed 1.1 hours for reading an email from opposing counsel, researching issue of attorney's fees, calling the client, and emailing opposing counsel. As another example, on February 4, 2015, Attorney Schultz billed 4.1 hours for a conference call with Attorney Shulby, a conference call with Attorney Eckard, reviewing identified case law, drafting direct examination questions, and reviewing Defendants' amended declaration.
Because block billing precludes an accurate review of the individual time entries, a reduction of the total amount billed is appropriate.
iii. Clerical/Secretarial Work
For "work that is clerical or secretarial in nature," attorneys' fees are not recoverable.
Much of the work performed by Paralegal Russak involves clerical activities, such as formatting notices and motions, updating the pleading binder, scheduling conferences, and preparing exhibits and hearing binders. Accordingly, a reduction of total amount billed is also warranted for clerical work billed by Paralegal Russak.
iv. Modified Attorneys' Fees
Therefore, under the Eleventh Circuit's lodestar calculation, the Court recommends a thirty (30) percent reduction due to block billing and clerical entries, as described above.
Defendants sought an award of $17,516.00 in attorneys' fees as follows: $4,410.00 for 12.6 hours of work performed by Attorney Eckard at an hourly rate of $350.00, $6,720.00 for 22.4 hours of work performed by Attorney Schultz at an hourly rate of $300.00, $4,540.00 for 22.7 hours of work performed by Attorney Goodwin at an hourly rate of $200.00, $1,450.00 for work performed by Law Clerk Costantino at an hourly rate of $100.00, and $396.00 for 6.6 hours of work performed by Paralegal Russak at an hourly rate of $60.00.
Reducing Attorney Goodwin's rate to $150.00 per hour (22.7 hours of work at an hourly rate of $150.00 equals $3,405.00), the adjusted total becomes $16,381.00. Reducing this number by thirty (30) percent brings the total award of attorney's fees to $11,466.70.
C. Pla intiff's Ability to Pay
Notwithstanding the above determinations regarding reasonable hourly rates and reasonable hours expended, the Court is also required to consider Plaintiff's financial circumstances and ability to pay.
Here, Plaintiff testified that he is currently unemployed and has been unemployed for the last two years, that he has no bank accounts or investments, that he has six (6) children for whom he is financially unable to pay child support, and that he has not paid child support in approximately two (2) years. Given these circumstances, the Court recommends that an additional reduction of twenty (20) percent of the adjusted total is appropriate due to Plaintiff's financial condition, bringing the total reductions to fifty (50) percent, and the total fee award to $8,190.50 (the adjusted total of $16,381.00 divided by two equals $8,190.50).
Defendants motion for attorney's fees also seeks an award of the costs incurred by Defendants associated with this case. In his declaration, Attorney Eckard states that the total amount of costs sought is $193.25. (Dkt. 41 Ex. 1 at 4) At the hearing, Attorney Eckard confirmed that Defendants seek approximately $193.00 in costs, although the total amount of costs incurred was higher than that amount.
In FLSA cases, costs are limited to those allowed under 28 U.S.C. § 1920.
Accordingly, and upon consideration, it is
It is hereby
NOTICE TO PARTIES
Failure to file written objections to the proposed findings and recommendations contained in this report within fourteen (14) days from the date of this service shall bar an aggrieved party from attacking the factual findings on appeal.