After approving a settlement of $285,000 for the Plaintiffs’ wage claims, a federal court also awarded about 80 percent of their requested fees, noting that the Defendant fought every issue “to its last breath.”
This is a Fair Labor Standards Act collective action brought by Plaintiff Tammy McNeil and others similarly situated against their employer, Defendant Faneuil Inc., which operates call centers nationwide. The Plaintiffs alleged that Faneuil’s employees were not compensated for time worked at the margins of shifts and break periods. Discrepancies were allegedly due to time-keeping policies involving rounding and other problems.
After class certification and litigation through discovery, the parties settled the wage claims for $285,000, reserving the issue of reasonable attorneys’ fees requested by the Plaintiffs as the prevailing party under the FLSA’s fee-shifting provisions. The Plaintiffs presented a fee demand of $870,651.
The legal issues in this case were not particularly complicated, but managing an action with over 1,000 plaintiffs is a complex task requiring skill. However, the Plaintiffs offered only weak support for the reasonableness of their blended hourly rate of $341. Based on fees awarded in similar cases, a blended rate of $290 per hour is more reasonable. The Plaintiffs point out that the hourly rate of one of Faneuil’s attorneys was $450, but this figure is of little weight because it reflects an estimated general rate not associated with a particular market or type of work. The Plaintiffs also inappropriately billed many clerical tasks, too numerous for the court to address individually, and frequently used block billing so as to make it impossible for the court to determine the time spent on any one task. Therefore, a 10 percent reduction in hours billed is appropriate, yielding a lodestar adjustment to $717,257.
Further, as to the Plaintiffs’ degree of success, they prevailed on several motions and ultimately obtained a settlement amount of $285,000. However, comparing this figure to the $1,696,060 maximum award determined by the Plaintiffs’ experts, a fee reduction of another 10 percent is merited. Although the Plaintiffs contend that this figure, as initially set forth in their complaint, was just a preliminary estimate, they have not offered the court an alternative figure for comparison.
Faneuil also challenges this comparison, arguing that the settlement amount reflects recovery of only 2.1 minutes per Plaintiff per day, which is only about 10 percent of what they alleged in their complaint. But assessing the dollar figure the Plaintiffs initially claimed, which includes liquidated damages, against the settlement amount produces an apples-to-apples comparison appropriate for the degree-of-success analysis.
The court also notes that one of the primary reasons that the Plaintiffs’ attorneys’ fees are so high is that Faneuil fought, and forced the Plaintiffs to fight, every issue in this case. A defendant cannot fight the case to its last breath and then complain that the attorneys’ fees are disproportionate to the amount recovered. Additionally, Faneuil lost nearly every issue that it fought, supporting the finding that the Plaintiffs had a high overall degree of success.
The degree-of-success adjustment yields a total fee award of $645,531. The Plaintiffs are also entitled to $50,532 in costs.
McNeil v. Faneuil Inc., Case No. 4:15cv81, Mar. 21, 2018. EDVA at Newport News (Morgan). VLW No. 018-3-092, 13 pp.