Aguayo v. Bassam Odeh, Inc., CIVIL ACTION NO. 3:13-CV-2951-B

• Decision Date: 08 December 2016
• Docket Number: CIVIL ACTION NO. 3:13-CV-2951-B
• Parties: BRENDA AGUAYO, et al., Plaintiffs, v. BASSAM ODEH, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

BRENDA AGUAYO, et al., Plaintiffs,
v.
BASSAM ODEH, INC., et al., Defendants.

CIVIL ACTION NO. 3:13-CV-2951-B

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

December 8, 2016

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiffs' Motion for Legal Fees and Costs. Doc. 123.¹ The Court GRANTS in part Plaintiffs' Motion, finding that Plaintiffs are entitled to attorneys' fees and costs under 29 U.S.C. § 216(b) and 42 U.S.C. § 1988(b), but not in the amounts requested. The Court therefore reduces the fees awarded in accordance with the lodestar standards of reasonableness.

I. BACKGROUND

This is a class action employment discrimination case for alleged discrimination on the basis of race, ancestry, and ethnic characteristics. Plaintiffs brought claims under: (1) the federal Fair Labor Standards Act (FLSA); and (2) 42 U.S.C. § 1981 (Section 1981). Doc. 123, Pls.' Br. Supp. Mot. for Att'y Fees & Costs 1-2 [hereinafter Pls.' Br.]; Doc. 67, Am. Compl. ¶ 2.

In short, a number of individuals employed at Defendant Bassam Mohammed Odeh's Jack in the Box restaurants worked under fake names for overtime hours without being paid an overtime

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premium Doc. 123, Pls.' Br. 1; Doc. 134, Defs.' Resp. to Pls.' Mot. for Att'y Fees & Costs 3 [hereinafter Defs.' Resp.]. The two sides disagree, however, about whether Plaintiffs did so: (1) as part of some sort of nefarious scheme enacted by Odeh, facilitated by senior management, and designed to reduce labor costs; or (2) on their own initiative for their own financial benefit. Compare Doc. 123, Pls.' Br. 1, with Doc. 134, Defs.' Resp. 6-7.

But that point is largely moot because this two-and-a-half-year lawsuit has come to a close. Defendants tendered, and Plaintiffs accepted, a Second Amended Offer of Judgment under Federal Rule of Civil Procedure 68 for $704,945.68. Doc. 134, Defs.' Resp. 9 (citing Doc. 118, Pls.' Notice of Acceptance of Defs.' Rule 68 Offer of J.); Doc. 135, Defs.' Resp. App. 627-30. All that remains now is the issue of attorneys' fees and costs.

Plaintiffs moved for attorneys' fees and costs in December 2015. See Doc. 123, Pls.' Mot. for Att'y Fees & Costs. Defendants responded and Plaintiffs replied. Doc. 134, Defs.' Resp.; Doc. 138, Pls.' Reply to Defs.' Resp. [hereinafter Pls.' Reply]. Defendants, with leave of court, then filed their Sur-Reply in August 2016. See Doc. 143, Order (granting leave to file sur-reply); Doc. 141, Defs.' Sur-Reply to Pls.' Reply [hereinafter Defs.' Sur-Reply]. The Motion is now ripe for review.

II. LEGAL STANDARD

Rule 54(d) of the Federal Rules of Civil Procedure governs costs and attorneys' fees. Rule 54(d)(1) allows courts to award costs² other than attorneys' fees to prevailing parties. Under the American Rule, however, prevailing parties generally cannot recover attorneys' fees without a statutory or contractual basis. Summit Valley Indus., Inc. v. United Bhd. of Carpenters & Joiners, 456

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U.S. 717, 721 (1982). Rule 54(d)(2) provides the procedure for the prevailing party, by motion, to specify the statute, rule, or other grounds entitling them to the award. Here, Plaintiffs moved for costs and fees under the FLSA and Section 1981. Both provide for an award of fees and costs to the prevailing party.

The FLSA authorizes prevailing plaintiffs to collect reasonable attorneys' fees and costs associated with the prosecution of their FLSA claims. See 29 U.S.C. § 216(b); Saizan v. Delta Concrete Prods. Co., 448 F.3d 795, 799 & n.7 (5th Cir. 2006). "[A]nd the award of attorneys' fees in such a proceeding is mandatory." Bell v. Able Sec. & Investigations, Inc., No. 3:10-cv-1945-L, 2011 WL 2550846, at *3 (N.D. Tex. June 28, 2011).

Prevailing plaintiffs can similarly recover under Section 1981 by virtue of 42 U.S.C. § 1988(b), which carves out another exception to the American Rule. Dearmore v. City of Garland, 519 F.3d 517, 520-21 (5th Cir. 2008). In particular, it "provides that 'the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorneys' fee as part of the costs." Id. (quoting 42 U.S.C. § 1988(b)).

III. ANALYSIS

Attorneys' fees and costs are, as should be clear by this juncture, related issues—and the only issues left for the Court to decide in this case. Yet each demands a different analysis. With that in mind, the Court will address each in turn and then consider Plaintiffs' request for post-judgment interest.

A. Attorneys' Fees

Courts in the Fifth Circuit "apply a two-step method for determining a reasonable attorneys'

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fee award." Combs v. City of Huntington, 829 F.3d 388, 391 (5th Cir. 2016) (citing Jimenez v. Wood Cty., 621 F.3d 372, 379 (5th Cir. 2010), on reh'g en banc, 660 F.3d 841 (5th Cir. 2011)). Courts first calculate the lodestar, "'which is equal to the number of hours reasonably expended multiplied by the prevailing hourly rate in the community for similar work.' In calculating the lodestar, '[courts] should exclude all time that is excessive, duplicative, or inadequately documented.'" Id. (quoting Jimenez, 621 F.3d at 379-80).

"There is a strong presumption of the reasonableness of the lodestar amount." Black v. SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013) (citing Perdue v. Kenny A., 559 U.S. 542, 552 (2010); Saizan, 448 F.3d at 799). But after calculating the lodestar, courts move to the second step and evaluate the resulting value in relation to "the twelve factors set forth in Johnson v. Georgia Highway Express, Inc." Jimenez, 621 F.3d at 380 (citing 488 F.2d 714, 717-19 (5th Cir. 1974), overruled on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 90 (1989)). Those factors are addressed more in depth below in Section III.A.2.

Under certain circumstances, "a district court may enhance or decrease the amount of attorneys' fees based on 'the relative weights of the twelve'" Johnson factors. Black, 732 F.3d at 502 (quoting Saizan, 448 F.3d at 800). Lodestar enhancements, however, are permitted only in rare and exceptional circumstances. Perdue, 559 U.S. at 554. And "the lodestar may not be adjusted due to a Johnson factor that was already taken into account during the initial calculation of the lodestar." Black, 732 F.3d at 502.

The Court therefore begins by calculating the lodestar of the attorneys' fees requested and addressing any relevant arguments raised by Defendants. Then the Court examines the proposed award in light of the Johnson factors.

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1. The Lodestar

Plaintiffs initially requested $2,145,954.45 in attorneys' fees under Federal Rules of Civil Procedure 54(d) and 58, the FLSA, and Section 1981. Doc. 123, Pls.' Br. 2. This was predicated on a base lodestar of $2,174,942.60,³ which Plaintiffs then reduced on their own initiative by: (1) 10% for all lawyer fees, based on billing judgment; (2) 10% for all lawyer and staff fees, based on the fact that seven out of the 38 initial plaintiffs did not participate in discovery and were dismissed; (3) 25% for lead and bilingual paralegal fees to account for clerical, rather than legal, work; and (4) 50% for legal assistant fees to account for clerical work. Id. at 3. Those reductions resulted in an adjusted lodestar of $1,650,734.19. Id.

Defendants urged the Court to reduce this figure, deny Plaintiffs any enhancement under Johnson, and ultimately award them no more than $550,000 in attorneys' fees. Doc. 134, Defs.' Resp. 12-44, 47. Their arguments fall into three broad categories: (1) Plaintiffs' time entries showed tasks that were excessive, duplicative, questionable, unbelievable, unnecessary, vague or insufficiently documented, unrecoverable, or subject to partial reduction; (2) Plaintiffs' counsel's rates are unreasonable; and (3) Plaintiffs were not as successful as they indicate in litigating this case. See Doc. 134, Defs.' Resp. -i- to -ii-.

In their Reply, Plaintiffs acknowledged and corrected a handful of billing errors then agreed to write off a portion of the time that the Wyatt Law Firm spent reviewing "unproduced" documents. Doc. 138, Pls.' Reply 10-16. For that reason, Plaintiffs submitted an amended Master Lodestar

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Spreadsheet that provides the following values⁴:

Firm	Professional	Position	Rate	Hours	Lodestar
Baron & Budd	Russell Budd	Attorney	$700	18.306	$12,814.20
Baron & Budd	Allen Vaught	Attorney	$450	718.146	$323,165.70
Baron & Budd	Sangeeta Kuruppillai	Attorney	$350	83.673	$29,285.55
Baron & Budd	Ryan Burton	Attorney	$310	637.308	$197,565.48
Baron & Budd	Melinda Arbuckle	Attorney	$295	312.984	$92,330.28
Baron & Budd	Rob Hudock	Attorney	$250	28.107	$9,837.45
Baron & Budd	Celia Rivera	Paralegal	$210	469.5795	$98,611.70
Baron & Budd	Stephanie Perkins	Paralegal	$126	52.4475	$6,608.39
Baron & Budd	Paul Thornton	Assistant	$50	40.725	$2,036.25
Baron & Budd	Nick Smith	Assistant	$50	6.975	$348.75
Wyatt Law Firm	Paula Wyatt	Attorney	$500	898.7112	$449,355.60
Wyatt Law Firm	James Perrin	Attorney	$350	9.72	$3,402.00
Wyatt Law Firm	Ryan Toomey	Attorney	$285	200.0012	$57,000.33
Wyatt Law Firm	Toni Ramirez	Paralegal	$210	858.5136	$180,287.86
Wyatt Law Firm	Nora Lopez	Paralegal	$126	110.9479	$13,979.44
Wyatt Law Firm	Aundria Martinez	Paralegal	$126	71.7073	$9,035.12
Total				4,517.8522	$1,485,664.10

Defendants then—with leave of court—filed a sur-reply, reiterating the arguments in their Response, and contending that: (1) Plaintiffs' hours should be reduced by at least 50% to correct for

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"[e]xcessive and [i]mproper [e]ntries"; (2) the lodestar should be reduced by at least 18% "to [a]ccount for Plaintiffs' [l]ack of [s]uccess"; and (3) Plaintiffs' counsel's proposed rates should be reduced. See Doc. 144, Defs.' Sur-Reply 2-9.

Having sketched out the parties' arguments in broad terms, the...