Attorney's fees are recoverable in suits for unpaid overtime under the Fair Labor Standards Act (FLSA), and "a district court abuses its discretion if it limits the fees awardable under hte FLSA to a percentage of the plaintiff's recovery" the Sixth Circuit has held in Rembert v. A Plus Home Health Care Agency.
The case is a pretty straightforward overtime case, remarkable mainly because (a) the plaintiffs got some good help from the Department of Labor; and, (b) defense counsel's general recalcitrance and failure to "act in accordance with his representations to the court or his obligations under the Rules." Eventually, the plaintiffs' counsel submitted a fee petition requesting an award for 119.9 hours, totaling $38,190 plus $575 in costs. The district court, after sitting on the petition for six months, "reduced counsel's total compensable hours from a total of 119.9 to 46.2 -- a 61% reduction in compensable hours, and almost twice the reduction that defense counsel had sought." To add insult to injury, the district court, Hon. James E. Graham of the Southern District of Ohio, "cut the fee award an additional $1,660 on the ground that judges in the Southern District of Ohio 'typically approved' fee awards of no more than 35% of the 'total settlement amount' (meaning the amount of the judgment plus the amount of fees and costs awarded)," which left a total of $13,790. Plaintiffs appealed.
After reciting the lodestar calculation method, the Sixth Circuit turned to the district court's capping of the awardable fees at 35% of the total settlement amount. Capping the fees at a percentage of the recovery is an abuse of discretion, as "neither the text nor the purpose of the FLSA supports imposing a proportionality limit on recoverable attorney's fees."
The Sixth Circuit also faulted the district court for failing to explain adequately why it had cut some of the hours submitted by the plaintiffs' counsel, especially in view of the fact that many "obtained 100% recovery due to them under the Act." First, the Sixth Circuit found it improper to exclude time devoted to gathering information from clients, since "attorneys may communicate directly with their clients" and "the law refers to an attorney-client privilege, not a paralegal-client one." Second, it was error to exclude as duplicative time devoted to communications between the plaintiffs' co-counsel, since "co-counsel may consult each other to avoid duplicative work and otherwise to maximize their efficiency and effectiveness." Third, the district court did not adequately consider to 100% recovery success rate "or that the actions and omissions of defense counsel indisputably prolonged this litigation and rendered it much less efficient than it could have been."
The Sixth Circuit then did something extraordinary. It reviewed "both the district court's docket in this case, document-by-document, and the billing records of [plaintiffs'] counsel, line-by-line" and concluded that the "district court abused its discretion when it did not grant in full the amounts requested in counsel's fee petition." The Sixth Circuit remanded the case with instructions that plaintiffs' counsel be awarded the full requested amount and noted they were "also entitled to a reasonable fee and costs for this appeal ... which for everyone's sake we hope is not the subject of another appeal."
Judge Raymond Kethledge authored the Sixth Circuit's opinion and was joined by Judges Eugene Siler and Julia Gibbons.
Robert L. Abell
www.RobertAbellLaw.com
