Owner-Opr. Indep. Driv. Ass'n v. Mayflower Trans.

• Court: U.S. District Court — Southern District of Indiana
• Writing for the Court: Sarah Evans Barker
• Citation: Owner-Opr. Indep. Driv. Ass'n v. Mayflower Trans., 659 F.Supp.2d 1016 (S.D. Ind. 2009)
• Decision Date: 15 September 2009
• Docket Number: No. 1:98-cv-00457-SEB-JMS.,1:98-cv-00457-SEB-JMS.
• Parties: OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al., Plaintiffs, v. MAYFLOWER TRANSIT, INC., Defendant.

659 F.Supp.2d 1016

OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC., et al., Plaintiffs, v. MAYFLOWER TRANSIT, INC., Defendant.

No. 1:98-cv-00457-SEB-JMS.

United States District Court, S.D. Indiana, Indianapolis Division.

September 15, 2009.

David J. Carr, Ryan Christopher Metzing, Ice Miller LLP, Indianapolis, IN, David Aaron Cohen, Joseph Albert Black, Paul Damien Cullen, Sr., The Cullen Law Firm PLLC, Washington, DC, for Plaintiffs.

David C. Campbell, James M. Hinshaw, Martha S. Hollingsworth, Bingham McHale LLP, Indianapolis, IN, David Wells, Michael J. Morris, Roman P. Wuller, Thompson Coburn LLP, St. Louis, MO, James Albert Calderwood, Zuckert Scoutt & Rasenberger, Washington, DC, for Defendant.

ORDER

SARAH EVANS BARKER, District Judge.

Presently before the Court is Plaintiffs' Motion for the Award of Attorneys' Fees and Costs (the "Motion"). [Dkt. 147.]

A REMINDER ABOUT CIVILITY

For the past eleven years, the parties and their counsel have been engaged in hard-fought litigation of this class action, which they have now resolved by agreement, except as to the issue of attorneys' fees. That was no small feat. Thus, at the fairness hearing, we commended the parties' counsel for the "exceptionally fine lawyering" that was required to accomplish it. [Dkt. 142 at 14.]

Here at the last, however, we must express some disappointment. Lawyers can—and should—zealously advocate for their clients. Yet at all times counsel must keep in mind that they must conduct themselves as professionals. Consequently, their advocacy must never stoop to "disparaging personal remarks [n]or acrimony toward other counsel, parties, or witnesses." Standards for Prof. Cond. Within the Seventh Fed. Jud. Cir., Lawyers' Duties to Other Counsel, Standard 2.¹ Likewise they must never lodge "unfounded accusations of impropriety" against their opponent. Id., Standard 4. Unfortunately, the parties' briefs on the present Motion, at times, did both. Accusations of "extraordinarily misleading—and plainly wrong" claims [Dkt. 153 at 41], of "shameless" conduct [id. at 48], of failures of candor [Dkt. 160 at 27], and of "false[] assert[ions]" [Dkt. 161 at 1] litter the briefs. Such accusations are serious. See Fed. R. Civ. Pro. 11; Ind. R. Prof. Cond. 3.3. They must not be bandied about cavalierly, as in our view counsel did here.

In this district, the practice of law is to be civil—thereby serving the best interests of counsel, their clients, and the Court. Though this litigation has now drawn to a close, counsel are admonished to so conduct themselves in the future that their behavior comports fully with the standards of civility espoused and maintained by the Court. A failure to do so may elicit more than just disappointment from the Court in the future.

BACKGROUND²

At its core, the dispute between the parties centered on the proper timing for Defendant Mayflower Transit, Inc. ("Mayflower") to refund to the drivers the excess fuel taxes that it collected from them as independent truck owner-operators hauling goods nationwide for Mayflower. As often happens in litigation, however, this case took on a shape different at the end than it had at the beginning.

Originally, Plaintiffs advanced three causes of action: violations of federal "Truth-in-Leasing" laws, 49 U.S.C. § 14701 et seq. and 49 C.F.R. Part 376; a violation of Indiana's criminal conversion statute, Ind.Code § 35-43-4-3 (for which Ind.Code § 34-24-3-1 authorizes a civil action to recover treble damages and attorney's fees); and common-law breach of contract. The scope of the case expanded when we permitted Mayflower to counterclaim against the Plaintiffs, seeking to set-off (and possibly eliminate) any damage award to each class member by the amount of any debt outstanding to Mayflower (as might be, for example, owing under the member's lease with Mayflower). Owner-Operators Indep. Drivers Ass'n v. Mayflower Transit, Inc., 2006 WL 1794751, *12-13, 2006 U.S. Dist. LEXIS 44550, *49 (S.D. Ind. June 27, 2006).

The case contracted in significant ways too. We de-certified all of Plaintiffs' state-law causes of action and determined that a two-year, as opposed to a four-year, statute of limitations applied to Plaintiffs' federal claims. See Owner-Operators Indep. Drivers Ass'n, Inc. v. Mayflower Transit, Inc., 2006 WL 1547084, *1, 2006 U.S. Dist. LEXIS 39827, **3-4 (S.D. Ind. June 1, 2006).

By 2008, the case began drawing to a close when only 236 individuals as members of the class returned claim forms that had been mailed to approximately 3,200 potential claimants. [Dkt. 153 at 39.] Those claim forms indicated that Mayflower would be entitled to assert "defensive set-offs" against the claimant, up to and including the full value of the asserted claim, for any unpaid debts the claimant owed Mayflower. [Dkt. 107 at 3.] After the claim forms arrived, Mayflower made an offer of judgment for the full value of those 236 claims, without asserting any set-offs. Plaintiffs accepted Mayflower's offer, and we approved the settlement and entered judgment in Plaintiffs' favor for $194,220.98. [Dkt. 140.]

ANALYSIS

The parties agree that Mayflower is obligated to pay Plaintiffs' reasonable attorneys' fees and costs. Mayflower made, and Plaintiffs accepted, an offer of judgment under Federal Rule of Civil Procedure 68 for violations of the federal Truth-in-Leasing laws, which made Plaintiffs prevailing parties in this litigation. Although not a settled proposition, see Owner-Operator Indep. Drivers Ass'n v. New Prime, Inc., 398 F.3d 1067, 1069 (8th Cir. 2005) (noting that the statute does not explicitly apply to prevailing plaintiffs but inferring from the applicable legislative history that it does), Plaintiffs contend— and Mayflower does not dispute—that a prevailing plaintiff under that statutory scheme is entitled to collect as part of its costs a "reasonable attorney's fee," 49 U.S.C. § 14704(e), plus the court costs normally awarded to any prevailing party, see Fed. R. Civ. Pro. 54(d)(1) (creating a default rule for the imposition of costs). Further, Mayflower's offer of judgment expressly contemplated that Mayflower would pay "reasonable attorneys' fees and costs as determined by the Court." [Dkt. 126-2 at 2.] The present Motion seeks a judicial determination of reasonable fees and costs, which Plaintiffs assert should be $1,450,867.00. [Dkt. 148 at 41.]

In contrast to the usual practice regarding claims for attorneys' fees, Mayflower has offered no objections to specific line items set out in the fee request. For example, Mayflower does not contend that Plaintiffs' counsel overstaffed the case, seeks an excessive hourly fee, or went off on any strategic wild goose chases. Mayflower explicitly waived all such objections. [Dkt. 153 at 10 n. 7.] Instead, Mayflower argues only two issues that it claims require "significant across-the-board reductions" in any fee award: what it deems Plaintiffs' unreasonable rejections of several settlement offers greater than their ultimate recovery and their "ultimate lack of success." [Id.] According to Mayflower, applying those reductions will result in an award of (at most) $500,000. [Id. at 50.]

A. General Points About Fee Awards

Before turning to the issues Mayflower has identified, four general points about fee awards deserve to be mentioned.³ The first point relates to Mayflower's continued juxtaposition the $194,220.98 recovery received by Plaintiffs with their $1,450,867.00 fee and cost request.⁴ When a lawyer expects the client to foot the bill for the lawyer's services, the lawyer is strongly incented to exercise appropriate billing judgment—that is, to ensure that the time expended (or at least charged) for the matter is reasonable, given the client's objectives. For example, suppose Plaintiff A has a breach-of-contract claim of $10,000 against B. The lawyer for A will normally ensure that the fee charged does not exceed the value of A's claim:

[I]t would be both extraordinary and unjustifiable, in the absence of any special arrangement, for the attorney to put in 200 hours on the case and send the client a bill for $25,000. Such a bill would be `unreasonable,' regardless of whether A obtained a judgment against B for $10,000 or obtained a take-nothing judgment.

Riverside v. Rivera, 477 U.S. 561, 593, 106 S.Ct. 2686, 91 L.Ed.2d 466 (1986) (Rehnquist, J., dissenting). Indeed, in this example, even charging a $5,000 bill could be unreasonable, depending on the lawyer's professional estimate of the likelihood that the client would recover the full $10,000 claim. Cf. Cole v. Wodziak, 169 F.3d 486, 488 (7th Cir.1999) (explaining that a reasonable "tort lawyer who believes that the victim is sure to recover either $900,000 or $100,000 (with equal likelihood) would invest up to $200,000 in pursuit of the claim (the $500,000 actuarial value of the case, times a 40% contingency fee)").

The second point to be made here is equally important. Continuing with the previous example, where, as here, a fee-shifting statute applies to Plaintiff A's claim, "Congress has already determined that the claim was worth bringing. The court must then assume the absolute necessity of achieving that particular result and limit itself to determining whether the hours spent were a reasonable means to that necessary end." Anderson v. AB Painting & Sandblasting, Inc., 578 F.3d 542, 546 (7th Cir.2009) (footnote omitted). Thus, in contrast to the typical case where no fee-shifting statute applies, "it is absolutely permissible to spend $100,000 litigating what is known to be a $10,000 claim if that is a reasonable method of achieving the result." Id. at 546.

The next point grows out of the first two. In cases where a plaintiff knows that its attorneys' fees will ultimately be borne by the defendant, the plaintiff has "little incentive" to rein in counsel. Kirchoff v. Flynn, 786 F.2d 320, 324 (7th Cir.1986). Accordingly, that task ultimately falls to the Court. But...