Spegon v. Catholic Bishop of Chicago

• Decision Date: 27 April 1999
• Docket Number: No. 98-1240,98-1240
• Citation: 175 F.3d 544
• Parties: 137 Lab.Cas. P 33,866, 5 Wage & Hour Cas.2d (BNA) 457 Kenneth SPEGON, Plaintiff-Appellant, v. The CATHOLIC BISHOP OF CHICAGO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 544

175 F.3d 544

137 Lab.Cas. P 33,866, 5 Wage & Hour Cas.2d

(BNA) 457

Kenneth SPEGON, Plaintiff-Appellant, v. The CATHOLIC BISHOP OF CHICAGO, Defendant-Appellee.

No. 98-1240.

United States Court of Appeals Seventh Circuit.

Argued Nov. 2, 1998.

Decided April 27, 1999.

Ernest T. Rossiello (argued), Rossiello & Associates, Chicago, IL, for Plaintiff-Appellant.

Maureen A. Murphy (argued), Legal Services of Archdiocese of Chicago, Chicago, IL, for Defendant-Appellee.

Before CUMMINGS ^*, BAUER, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

Following the termination of his employment at St. Agnes Church in Chicago Heights, Illinois ("the Parish"), Kenneth Spegon filed suit against the Catholic Bishop of Chicago ("the Diocese") under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., the Illinois Minimum Wage Law, 820 ILCS 105 et seq., and the Illinois Wage Payment and Collection Act, 820 ILCS 115 et seq., seeking back overtime pay, liquidated damages, compensatory damages, punitive damages, and injunctive relief. After accepting an offer of judgment from the Diocese in the amount of $1100.00, Spegon petitioned the district court for $7280.70 in attorneys' fees and costs. The court granted Spegon's fee petition in part, awarding Spegon's counsel $752.70. Spegon now appeals, challenging the amount of fees and costs awarded.

I. HISTORY

In January 1996, the Parish hired Kenneth Spegon as its maintenance person. Spegon was employed by the Parish in that capacity until January 1997, when the Parish terminated his employment for poor performance. In February 1997, Spegon brought suit against the Diocese alleging that, during the time he was employed at the Parish, he had been insufficiently compensated for his overtime hours. Spegon claimed that the Parish had paid him only his regular hourly rate, rather than the statutorily required time-and-a-half rate, for those hours he worked in excess of forty hours a week in violation of the FLSA and the Illinois wage and hour laws. Spegon also alleged that he had been discriminatorily discharged from his employment for expressing his opposition to his employer's practice of not paying him a proper overtime wage.

From the outset of this case, the Diocese acknowledged that it had paid Spegon only straight time for any overtime hours he may have worked. At the first hearing before the district court, the counsel for the Diocese stated:

We are not disputing the overtime, that $350. We checked the time sheets. And as soon as we were served with the lawsuit, I called [Spegon's counsel] and asked why nobody called us before filing. The parish business manager did not realize that she had to pay time and a half. She paid him straight time for the overtime hours, did not realize it. So it's easy to rectify the problem.

Instead, the parties disputed the amount of back overtime pay the Diocese owed Spegon. Based on its review of Spegon's time sheets, the Diocese calculated that Spegon was due as little as $48.60 but no more than $426.75 in overtime compensation. Spegon believed he was owed $1781.25 of unpaid overtime. Based on this calculation, Spegon made a $6600 settlement demand, which included more than $3600 in attorneys' fees.

When the parties next appeared before the district court, the Diocese once again protested that neither Spegon, nor his attorneys, contacted the Diocese to notify it of its failure to pay the appropriate overtime rate prior to the filing of this lawsuit. The Diocese proffered that it was unreasonable now to ask the Parish to pay $6600, including the $3600 in attorneys' fees, for an inadvertent several hundred dollar mistake. Acknowledging the Diocese's dilemma, the district court suggested that the Diocese make an offer of judgment and dispute the attorneys' fees with Spegon's lawyers at a later date.

In light of the court's suggestion, the Diocese made an offer of judgment in the amount of "$1,100 plus court costs and a reasonable attorney's fee to be determined by the court." Spegon accepted the Diocese's offer and subsequently filed his motion for attorneys' fees. Spegon requested an award of $7280.70 in fees and costs, including more than $2000 for fees and costs associated with the filing of the fee petition itself. Specifically, Spegon sought fees for twenty hours of lead attorney Ernest Rossiello's time at $320 per hour, 0.6 hours of associate Elena Dimopoulos's time at $220 per hour, and 5.1 hours of a paralegal's time at $102.50 per hour along with costs in the amount of $236.20. In support of his fee request, Spegon submitted affidavits from Rossiello and Dimopoulos both of whom attested that the requested hourly rates were the appropriate market rates for their respective services and that all of the time and costs incurred were necessarily and reasonably expended in connection with the prosecution of Spegon's claim. Spegon also submitted billing statements indicating the date on which legal services were rendered, a very short explanation of the tasks performed, and the amount of time spent on each task or combination of tasks.

The Diocese raised numerous objections to Spegon's fee request arguing that the request was unreasonable both in terms of the rates and hours asserted and in light of the limited success that Spegon achieved in the case. The Diocese also argued that the $150 filing fee for the complaint in this case should be disallowed because it was not necessary for the lawsuit to have been filed in order to resolve the issues giving rise to the lawsuit.

Based largely on the objections the Diocese raised to the requested fees and costs, the district court disallowed all but 4.6 hours of Rossiello's time and 0.5 hours of the paralegal's time as unreasonable and unnecessary. The court also reduced the requested hourly rates to $280 per hour for Rossiello and $90 per hour for the paralegal to arrive at an initial fee award amount of $1333. ¹ The court then reduced this amount by fifty percent to reflect Spegon's limited success in the case. The district court also disallowed the $150 filing fee but otherwise awarded Spegon all requested costs ($86.20), resulting in the total fee award of $752.70, approximately ten percent of the amount requested by Spegon. Spegon now appeals, challenging the amount of fees and costs awarded.

II. STANDARD OF REVIEW

District courts have wide discretion in determining the appropriate amount of attorneys' fees and costs; therefore, our review of such determinations is limited to a highly deferential abuse of discretion standard. See Bankston v. Illinois, 60 F.3d 1249, 1255 (7th Cir.1995); Estate of Borst v. O'Brien, 979 F.2d 511, 514 (7th Cir.1992). This deferential standard of review "is appropriate in view of the district court's superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters." Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). "Not only is the trial court in a much better position than the appellate court to make this determination, but neither the stakes nor the interest in uniform determination are so great as to justify microscopic appellate scrutiny." Ustrak v. Fairman, 851 F.2d 983, 987 (7th Cir.1988).

III. ANALYSIS

The FLSA directs courts to award reasonable attorneys' fees and costs to prevailing plaintiffs. See 29 U.S.C. § 216(b) ("The 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."). Spegon is a prevailing plaintiff by virtue of the judgment entered in his favor in this case. Thus, the primary issue before this Court is whether the district court abused its considerable discretion in determining what constitutes a "reasonable" attorneys' fee for this case.

Our review of the reasonableness of a district court's fee determination is guided by the Supreme Court's decision in Hensley. See Bankston, 60 F.3d at 1255-56 (applying the Hensley framework to fee award determinations under the FLSA). Under Hensley, "[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." 461 U.S. at 433, 103 S.Ct. 1933; see also Bankston, 60 F.3d at 1255. This product is commonly referred to as the "lodestar." The party seeking the fee award bears the burden of proving the reasonableness of the hours worked and the hourly rates claimed. See Hensley, 461 U.S. at 433, 103 S.Ct. 1933. Furthermore, the district court has an obligation to "exclude from this initial fee calculation hours that were not 'reasonably expended' " on the litigation. Id. at 434, 103 S.Ct. 1933. The district court may then increase or reduce the modified lodestar amount by considering a variety of factors, see id. at 434-35, 103 S.Ct. 1933, the most important of which is the "degree of success obtained," id. at 436, 103 S.Ct. 1933; see also Bankston, 60 F.3d at 1255-56. With these principles in mind, we turn to whether the district court abused its discretion in determining the fee award in this case.

A. Whether the District Court Abused Its Discretion In Determining the Number Of Hours Reasonably Expended On the Litigation

1. Hours Expended on the Merits of Spegon's Claim

In assessing Spegon's challenge to the district court's reduction in hours, we emphasize that the views of the district court are given great deference. See Ustrak, 851 F.2d at 987. "By virtue of its familiarity with the litigation, the district court certainly is in a much better position than we to determine the number of hours reasonably expended." McNabola v. Chicago Transit Auth., 10 F.3d 501, 519 (7th Cir.1993). When reducing the number of hours requested, the district court should provide "a concise but clear explanation of his reasons." Tomazzoli v. Sheedy, 804...