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Chapman v. Jet Mall, LLC

United States District Court, E.D. Tennessee, Chattanooga

April 9, 2015

THOMAS CHAPMAN, Plaintiff,
v.
JET MALL, LLC, JACK DUBOSQUE, and ELWYN OWEN, Defendants.

REPORT AND RECOMMENDATION

SUSAN K. LEE, Magistrate Judge.

Before the Court is a motion seeking an award of a reasonable attorney's fee and costs [Doc. 26], which was filed with a memorandum in support [Doc. 27] by Plaintiff Thomas Chapman. None of the Defendants have filed a response to the motion. The motion was referred for disposition pursuant to 28 U.S.C. § 636(b)(3) [Doc. 28]. For the reasons explained below, I RECOMMEND that Plaintiff's motion [Doc. 26] be GRANTED IN PART AND DENIED IN PART, in that Plaintiff be awarded a reasonable attorney's fee in the amount of $6, 747.00 and costs in the amount of $552.83, for a total award of $7, 299.83 plus interest according to law.

I. BACKGROUND AND PROCEDURAL HISTORY

Plaintiff filed his complaint on September 8, 2014, alleging, inter alia, that Defendants had violated the Fair Labor Standards Act ("FLSA") and breached an employment agreement by failing to pay him for all hours worked, for overtime hours worked, and for unreimbursed business expenses [Doc. 1]. Plaintiff's complaint sought an award of an attorney's fees under both the employment agreement and the FLSA [ Id. at Page ID # 4-5]. After Defendants failed to appear, Plaintiff sought and obtained entry of default and a default judgment against each Defendant [Docs. 23, 24 & 25], awarding him the sum certain of $67, 444.79, plus costs and interest according to law ("Default Judgment"). On February 19, 2015, Plaintiff filed a motion seeking an award of a reasonable attorney's fees [Doc. 26].

Plaintiff seeks an attorney's fee and costs in the amounts of $26, 977.92 and $552.83, respectively, for a total of $27, 530.75 [ Id. at Page ID # 95]. These sums represent forty percent of the Default Judgment plus litigation expenses, sums he argues he is entitled to per the fee agreement[1] between him and Plaintiff's counsel [ Id. at Page ID # 93-94]. Plaintiff argues that "[a]s the collectability of the Default Judgments is as of yet undetermined, a contingency fee of forty [percent] (40%) is an appropriate and reasonable fee" as counsel "is bearing the risk that attorneys fee may not be recoverable at all against the Defendants." [Doc. 26 at Page ID # 94]. Alternatively, Plaintiff seeks an award of a reasonable attorney's fee in the amount of $6, 747.00 for 26.5 hours of legal work expended on the litigation as of February 19, 2015, the date the motion at issue was filed, plus $552.83 in litigation expenses [Doc. 26 at Page ID # 94-95].

II. ANALYSIS

The FLSA provides for an award of a reasonable attorney's fee to a successful plaintiff. See 29 U.S.C. § 216(b) ("The court in such actions shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant...."). The use of the word "shall" makes the award mandatory; however, the amount of fee awarded is at the court's discretion. See Farmer v. Ottawa Cnty., No. 98-2321, 2000 WL 420698, at *7 (6th Cir. Apr. 13, 2000); Fegley v. Higgins, 19 F.3d 1126, 1134 (6th Cir. 1994). The purpose of the FLSA provision is to "insure effective access to the judicial process by providing attorney fees for prevailing plaintiffs with wage and hour grievances" and, as such, a court should not focus excessively on the amount of the plaintiff's recovery when determining a reasonable fee. United Slate, Tile & Composition Roofers, Damp & Waterproof Workers Ass'n, Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495, 502 (6th Cir. 1984).

The FLSA does not address how to determine the reasonableness of a requested fee, but the United States Court of Appeals for the Sixth Circuit has approved the use of the "lodestar" method, by which the Court should multiply the number of hours reasonably spent on the case by a reasonable hourly rate. Garcia v. Conway, No. 3:10-cv-01069, 2011 WL 6778258, at *1 (M.D. Tenn. Dec. 23, 2011) (citing Moore v. Freeman, 355 F.3d 558, 565-66 (6th Cir. 2004)). The burden of establishing the reasonableness of the fee is on the fee applicant. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The district court may adjust the fee downward where the documentation of hours is inadequate and counsel includes hours that were not "reasonably expended" in the request, such as those that are "excessive, redundant, or otherwise unnecessary...." Id. at 433-34.[2]

Addressing the impact of a contingent-fee agreement and the application of the lodestar method in a civil rights action, the Supreme Court held:

The defendant is not, however, required to pay the amount called for in a contingent-fee contract if it is more than a reasonable fee calculated in the usual way.... And we have said repeatedly that "[t]he initial estimate of a reasonable attorney's fee is properly calculated by multiplying the number of hours reasonably expended on the litigation times a reasonable hourly rate." The courts may then adjust this lodestar calculation by other factors. We have never suggested that a different approach is to be followed in cases where the prevailing party and his (or her) attorney have executed a contingent-fee agreement. To the contrary, in Hensley and in subsequent cases, we have adopted the lodestar approach as the centerpiece of attorney's fee awards. The Johnson factors may be relevant in adjusting the lodestar amount, but no one factor is a substitute for multiplying reasonable billing rates by a reasonable estimation of the number of hours expended on the litigation.

Blanchard v. Bergeron, 489 U.S. 87, 93-94 (1989) (citations omitted).

Here, Plaintiff argues that the Court should determine the reasonableness of the attorney's fee on the basis of his contingent-fee agreement with his attorney or, alternatively, the billing rate and hours expended on the litigation. I FIND the lodestar calculation is the most appropriate method for the Court's assessment of a reasonable attorney's fee in this case. The existence of a contingent-fee agreement in the present case is only one of the factors this Court may consider if adjustment of the lodestar calculation is deemed proper. See Blanchard, 489 U.S. at 94. Furthermore, the contingent-fee agreement in this case entitles counsel to "forty percent (40%) of all monies recovered as a part of the lawsuit, " [Doc. 26-2 at Page ID # 103] and, while an award has been made, no recovery of monies has occurred yet.

While the Court sympathizes with Plaintiff's attorney's predicament and his desire to be awarded a fee based on the contingency aspect of the fee agreement, federal fee shifting statutes typically do not provide for enhancements of fees in order to compensate for the risk of nonpayment when an attorney takes a case on a contingency basis. City of Burlington v. Dague, 505 U.S. 557, 562-63 (1992) (federal fee shifting statutes which authorize a court to award reasonable attorney's fee to a prevailing or substantially prevailing party do not authorize fee enhancements for the purpose of compensating attorneys hired on a contingency basis for the risk of loss); see also Davis v. Mutual Life Ins. Co. of N.Y., 6 F.3d 367, 381 (6th Cir. 1993) (No fee enhancement due counsel for taking a case which impinges significantly on a small practice's ability to take other cases); Coulter v. Tennessee, 805 F.2d 146, 149 n.4 (6th Cir. 1986) ("In short, the lodestar figure includes most, if not all, of the relevant factors comprising a reasonable' attorney's fee, and it is unnecessary to enhance the fee for superior performance in order to serve the statutory purpose of enabling plaintiffs to secure legal assistance.") (citing Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 564 (1986)). Nor has Plaintiff provided any authority to support his position that the difficulties of collection are to be considered.

In addition, this report does not address any contractual obligations of Plaintiff to his attorney; it deals only with what the losing Defendants must pay the Plaintiff, whatever might be the substance of the contract between the Plaintiff and his attorney. The entitlement of a prevailing party to an award of an attorney's fee belongs to the prevailing party rather than his attorney and it is generally accepted that statutory awards can coexist with private fee arrangements. See, e.g., Venegas v. Mitchell, 495 U.S. 82, 82 (1990).

Plaintiff's counsel seeks an hourly rate of $250 for 14.3 hours expended on the litigation in - and an hourly rate of $260 for 12.2 hours expended in 2015, for a total of $6, 747 [Doc. 26-1 at Page ID # 98-100]. Considering the Chattanooga, Tennessee legal market, hourly rates this Court has approved in the past, the type of case handled by Plaintiff's counsel, and his extensive experience in the field of wage and hour cases, I FIND the $250 and $260 hourly rates to be entirely reasonable. Likewise, after thoroughly reviewing the time entries submitted by Plaintiff's counsel [Doc. 26-3 at Page ID # 106-108, 110-115], I FIND the expenditure of twenty-six and one-half hours on the litigation to date to be quite reasonable.

Lastly, Plaintiff's counsel seeks $552.83 in costs. This sum is comprised of $400 for the filing fee, $22.83 for postage, and $130 for service of process to Defendants [Doc. 26-3 at Page ID # 109]. These are ordinary litigation expenses, and I therefore FIND $552.83 in costs to be reasonable.

III. CONCLUSION

Having carefully reviewed Plaintiff's arguments and material submitted in support of the motion, I RECOMMEND that Plaintiff's motion be GRANTED IN PART AND DENIED IN PART, in that Plaintiff be awarded an attorney's fee in the amount of $6, 747.00 and costs in the amount of $552.83 for a total award of $7, 299.83 plus interest according to law.[3]


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