This is an issue near and dear to my heart (having just successfully obtained denials of Rule 23 and FLSA Collective Action certification motions ). Successful plaintiffs in FLSA actions are entitled to reasonable attorney’s fees and costs. The amount, however, is within the trial court’s discretion. In deciding the amount, the court must calculate the lodestar, or the number of hours reasonably expended on the litigation times a reasonable hourly rate. Courts in the Fourth Circuit also consider the “Johnson factors.”
Maryland federal courts have been awarding increasingly high attorney’s fees awards in minimum wage and overtime violation collective actions and class actions for some time now. The February 4, 2014, Dorsey v. TGT Consulting, LLC, No. CCB-10-92 (D. Md. Feb 4, 2014) opinion is just the most recent example.
A former server at a Greene Turtle bar and restaurant brought a suit for minimum wage and overtime violations on behalf of himself and similarly situated individuals. The 52 plaintiffs settled for $240,000 (on average, $4,615 per plaintiff). Subsequent to the settlement, Judge Blake decided the plaintiffs’ motion for attorney’s fees and costs.
The plaintiffs requested attorney’s fees in the amount of $466,500 and $7,183.53 in costs, broken down as follows: $259,740.00; $141,840.00; $40,280.00; and $7,117.50 per attorney. They also requested compensation of $14,820.00 for a legal assistant, $2,472.50 for a law clerk, and $230.00 for a paralegal. An “enhancement” for the most involved attorney of $17,052.96 (based, in part, on a change in tax rates) and a supplemental payment of $18,165.803 for the preparation of the plaintiffs’ reply brief was also requested.
Here, the defendants consented to the plaintiffs’ counsel’s hourly rates: (1) $300.00 for the most involved attorney; (2) $400.00 for two attorneys; (3) $325.00 for a fourth attorney; (4) $115.00 for a law clerk; (6) $100 for a legal assistant; and (7) $100 for a paralegal. But, the defendants challenged the following categories of hours worked by the plaintiffs’ counsel as not reasonably expended: (1) written discovery responses as well as depositions; (2) fees incurred during a supposed 30-day stay of discovery; (3) bankruptcy proceedings of some of the Defendants; (4) the plaintiffs’ motion for attorney’s fees; (5) the reply brief; (6) unsuccessful motions; (7) “boilerplate” motions; (8) filing opt-in notices; and (9) settlement activities. The defendants also argued that, due to the plaintiffs’ “limited success” in the case, their attorney’s fees should be adjusted.
The court reduced a relatively modest amount of the disputed time and ordered $407,270 in attorney’s fees (i.e., only a $60,000 reduction) and costs in the amount of $6,101.68. It also awarded a supplemental payment of $10,410.00 for the preparation of the reply brief. Thus, in a case where 52 plaintiffs received collectively $240,000, the attorneys walked away with over $400,000.
Attorney’s fees awards like this one do not sit right with me. The only real “winners” here were the plaintiffs’ counsel. What’s the solution though? My colleague and I spent over an hour just yesterday debating this very issue, with no viable solution. Should a mandatory ratio be set, should judges be more reasonable, should the FLSA be altered altogether regarding attorney’s fees, should hourly rates be capped, etc.? The questions are endless, but what is certain is that the attorney’s fees awards have gotten out of control, and will continue until some legislation and/or judicial action is taken.