Summary
applying 90% across-the-board reduction
Summary of this case from Vega-Ruiz v. Northwell health Sys.Opinion
CV 16-6930 (GRB)
2021-05-25
Louis PICCOLO, et ano., Plaintiffs, v. TOP SHELF PRODUCTIONS, INC., et al., Defendants.
Saul D. Zabell, Ryan M. Eden, Zabell & Collotta, PC, Bohemia, NY, for Plaintiffs. Brett Walker Joseph, Milman Labuda Law Group PLLC, Lake Success, NY, Joseph M. Labuda, Milman Labuda Law Group, PLLC, New Hyde Park, NY, for Defendants Top Shelf Provisions Co. Inc., Rich Dahlem, Anthony Cicciari.
Saul D. Zabell, Ryan M. Eden, Zabell & Collotta, PC, Bohemia, NY, for Plaintiffs.
Brett Walker Joseph, Milman Labuda Law Group PLLC, Lake Success, NY, Joseph M. Labuda, Milman Labuda Law Group, PLLC, New Hyde Park, NY, for Defendants Top Shelf Provisions Co. Inc., Rich Dahlem, Anthony Cicciari.
ORDER
GARY R. BROWN, United States District Judge: In what one can only hope represents the last gasp of a dying behemoth, plaintiffs move for an award of attorneys’ fees under the New York Labor Law ("NYLL") in this action, an over-litigated and gratuitously belligerent odyssey. For their part, plaintiffs seek an award of nearly $300,000 in attorneys’ fees and costs in an application willfully oblivious to several factors, including the waste of litigative and court resources engendered by ad hominem litigation tactics that predominated throughout, as well as plaintiffs’ near-complete lack of success in this matter, having recovered only $20,000 on notice and wage statement violations in a case seeking more than $1 million in a purportedly extensive (though unproven) overtime scheme. Thus, with one notable exception, the Court has applied an unusual, if not unprecedented, ninety percent (90%) reduction to the amounts sought, a decision driven, in part, by the unique and, at times, unconscionable approaches taken by counsel in this case.
The undersigned handled and tried this case as a magistrate judge based upon the parties’ consent to jurisdiction under 28 U.S.C. § 636. Following appointment as a district judge, rather than have the matter assigned to another magistrate judge, the Court retained this matter. That decision was predicated upon two principles: first, judicial economy dictated retention, as this writer's familiarity and experience with this case made transfer highly inefficient. Second, the peculiar history of this case brings to mind an axiom concerning circumstances that one would not wish upon one's worst enemy.
The exception – relating to fees and costs associated with an appeal taken by defendants – demonstrates that plaintiffs’ counsel was not alone in adopting baseless and dilatory strategies in this matter. Following the verdict, defendants moved for relief under Rule 50(b) of the Federal Rules of Civil Procedure – a motion that was procedurally defective and substantively meritless. After that motion was denied, defendants appealed this motion to the Second Circuit without correcting the fatal procedural deficiencies. Thus, the Court awards counsel fees in an unreduced amount calculated to compensate for the frivolous Rule 50(b) motion and associated appellate practice.
Background
Conduct of the Litigation
This matter has been characterized by years of extraordinarily vicious and often pointless hostilities between the parties, reflected in an order issued on motions for sanctions:
Once again, in this FLSA action -- before the undersigned for all purposes on consent of the parties (DE 33) -- the Court is called upon to decide requests for sanctions. These motions, like their predecessors, grow out of the inability of or refusal by counsel for both parties to act with a modicum of courtesy toward each other despite repeated gentle reminders, verbal cautioning and, in one instance to date, the imposition of sanctions and costs.
Just a little over a year ago, after concerted effort by the Court to facilitate a settlement, the parties sought and the Court directed the preparation of a discovery schedule in this action. Electronic Order dated August 1, 2017. It did not take long, following the commencement
of discovery, for this matter to go off the rails. Without rehashing the seeming endless complaints and accusations, and what can only be characterized as a cavalcade of name-calling by counsel, it will suffice, for these purposes, to note that the Court entered orders on no less than eight occasions during the balance of 2017, reminding counsel of their obligations of professional courtesy and cooperation in the discovery process. See, e.g. Electronic Orders dated August 4, 2017 ("Counsel are reminded of their obligation of professional cooperation and courtesy and are directed to review Local Civil Rule 26.4 ‘Cooperation Among Counsel in Discovery’ "); August 10, 2018 ("Counsel for both parties are cautioned to carefully heed the cooperation requirements contained in the Local Rules. Failure to do so will result in remedial measures that will prove costly and inconvenient for all parties"); September 6, 2018 (directing counsel again to review Local Civil Rule 26.4, and reminding them of "the undersigned's caution to them in the Court's Order dated 8/10/17"); two Orders dated September 27, 2017 ("Counsel are reminded of their obligation of professional cooperation and courtesy in all phases of the discovery process"); 11/1/17 ("Counsel are reminded of their continued obligation of professional cooperation and courtesy in this case"); 11/13/17 (same). For avoidance of doubt, these precatory warnings were not pro forma verbiage by this Court; rather they were reflective of indicia that the discovery process had veered off course by the inappropriate conduct of both counsel.
In yet another indication that the process was failing, both counsel decided to open the Pandora's box of sanctions motions. DE 73 (Plaintiff's application for sanction based on a panoply of perceived discovery issues); DE 75 (defendants’ application for sanctions based on purported verbal abuse by Mr. Zabell); DE 76 (Plaintiff's application for sanctions predicated on failure to produce certain information). All of those applications were denied, but on December 14, 2017, the Court issued the following admonishment:
This Court has already had occasion -- in at least SIX instances in this case -- to remind counsel of their duties to cooperate with each other as prescribed by Local Civil Rule 26.4 Counsel is hereby cautioned that any further such allegations will result in an evidentiary hearing. Should any dilatory or inappropriate conduct be established at such a hearing, the result will be most unfortunate, as appropriate sanctions will be imposed.
Electronic Order dated December 14, 2017. That same day, the Court denied yet another motion for sanctions, noting that "[t]he parties should resolve such disputes, acting as professionals, without court intervention." Electronic Order denying Motion to Compel, dated December 14, 2017.
After a brief respite, problems began anew, leading the Court to again issue admonitions to counsel for their inappropriate and unprofessional conduct. See Electronic Order dated 4/13/18 ("Counsel are reminded of their continuing obligation of professional cooperation and courtesy, including in matters relating to scheduling of the deposition and completion of discovery"); 6/1/18 ("Such disputes make one wonder about the familiarity of all counsel with the meet and confer rule and their duty to cooperate during discovery, despite this Courts repeated admonitions in this regard"); 8/1/18 ("counsel for all the parties are reminded to heed their obligation of professional cooperation and courtesy contained
in the Local Rules. Failure to do so will result in remedial measures that will prove costly and inconvenient for all parties."); 8/2/18 (same).
Already floundering due to repeated instances of unprofessional conduct by both counsel, the case ran aground at a deposition of the defendant at which "Zabell had (1) terminated a deposition of Labuda's client though Labuda had requested to conduct some follow-up questions of his own client; (2) unilaterally dismissed the court reporter while Labuda was attempting to contact the undersigned for a ruling, and (3) summoned the police to his office to have Labuda and his client removed." Electronic Order dated 8/6/18. In considering this particular instance of unprofessional conduct, in years on the bench, and having supervised discovery in thousands of cases, this writer cannot recall its equal. As such, having no other alternative, the Court imposed sanctions against Mr. Zabell including the payment of fees and costs as well as a $1,000 charitable donation. Any hope that this would quell the ad hominem attacks between counsel would soon be dashed.
Piccolo v. Top Shelf Prods., Inc. , No. 16-6930, 2018 WL 4374914, at *1-2 (E.D.N.Y. Sept. 13, 2018) (the "Sanctions Order") (imposing sanctions on defendant while noting that "the unduly litigious environment created by both counsel has made it impossible for this matter to proceed in the ordinary course," id. at *3 ). The misbehavior of counsel so exceeded the bounds of zealous advocacy that it drew the attention of the legal media. See Mark Tabakman, "Civility In FLSA Litigation—Hard To Come By (Sometimes) ," Wage & Hour – Development & Highlights (Sept. 28, 2018), https://wagehourlaw.foxrothschild.com/2018/09/articles/general-wage-hour-law-news-updates/civility-in-flsa-litigation-hard-to-come-by-sometimes/; Joe Patrice, "That Awkward Feeling When Offensive Conduct In Sanctions Motion Is So Offensive You Have To Look It Up ," Above the Law (Aug. 7, 2018), https://abovethelaw.com/2018/08/that-awkward-feeling-when-offensive-conduct-in-sanctions-motion-is-so-offensive-you-have-to-look-it-up/.
Obviously, in determining whether fees and costs sought were reasonable and necessary, the extraordinary excesses undertaken by counsel must be considered. "If the parties have been prejudiced by delay and unnecessary litigation costs, the fault for that prejudice rests entirely with counsel in this matter, both of whom have handled this matter in a needlessly contentious fashion." Sanctions Order at *4.
Plaintiffs’ Partial Success
The complaint in this action, filed in 2016, sought damages in connection with an array of claims under the Fair Labor Standards Act ("FLSA") and the NYLL. The modest success achieved was summarized in this Court's Rule 50(b) determination:
In this action, plaintiffs Louis Piccolo and John Sudlow brought claims against their former employers, defendants Top Shelf Provisions Co. Inc., Rich Dahlem, and Anthony Ciccari, pursuant to the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL"), alleging that defendants failed to pay plaintiffs overtime pay and minimum wage and failed to furnish a hiring notice and regular wage statements. See generally Docket Entry No. ("DE") 1. The case was tried before a jury for approximately seven days and, following substantial deliberation, the jury reached an exacting, detailed verdict. See generally DE 145. The jury found in favor of plaintiffs only with respect to
the notice claims, finding that plaintiffs failed to meet their burden regarding the overtime and minimum wage claims. Id. at 2–3. The jury awarded each plaintiff $5,000 for failure to provide the hiring notice and awarded each plaintiff $5,000 for failure to provide regular wage statements. Id. at 5–6.
Piccolo v. Top Shelf Provisions Co. Inc. , No. 16-6930, 2019 WL 3712126, at *1 (E.D.N.Y. Aug. 7, 2019) (the " Rule 50(b) Order"). The narrow success obtained by plaintiffs helps inform the award of litigation expenses herein.
The Application
Counsel for plaintiffs seek $277,125 in counsel fees and $4,870 in costs. In response, defendants argue that plaintiffs’ attorneys’ fees award should be limited to 1/3 of the jury's award to plaintiff, or $6,666. Both positions are unsupported by the facts and the law.
Counsel has indicated that costs associated with the appeal have been submitted directly to the Second Circuit. DE 172 at 11.
Defendants’ Frivolous Rule 50(b) Motion and Appeal
Defendants filed a motion before the undersigned for relief from the jury's verdict under Fed. R. Civ. P. 50(b) based upon a purported lack of evidence, which was denied based upon, inter alia , a failure to provide the Court with a trial transcript or citations thereto. Rule 50(b) Order at *1. Beyond this procedural defect, the Court also explained that the motion "appear[ed] to be without factual or legal merit." Id. at *2. Undeterred, defendants filed an appeal to the Second Circuit, similarly failing to provide a trial transcript, which resulted in dismissal. Piccolo v. Top Shelf Provisions Co. Inc. , 811 F. App'x 60, 61 (2d Cir. 2020). In opting to exercise its discretion to dismiss the appeal based upon this failing, the Court of Appeals noted that "defendants were given adequate notice of the need to obtain a transcript, as the district court denied their posttrial motion for judgment as a matter of law in part because they ‘failed to obtain a copy of the trial transcript,’ ... but they nonetheless failed to remedy the deficiency." Id.
Discussion
Because plaintiffs prevailed only on NYLL notice requirements, NYLL § 198 constitutes the authority for recovering attorneys’ fees. NYLL § 198(1-b) & (1-d) provide that the court may award "costs and reasonable attorney's fees" to the prevailing litigant in connection with wage notice and statement violations. Id.
Defendants have cited one case suggesting that where, as here, a plaintiff prevails on a notice violation but fails to prove overtime claims, such party may not be considered a prevailing party under NYLL § 195 and is therefore disentitled to an attorneys’ fee award. O'Donnell v. Jef Golf Corp. , 173 A.D.3d 1528, 1532, 103 N.Y.S.3d 642 (2019). At least one federal court has rejected O'Donnell , and the Second Circuit has implicitly affirmed that determination. Sanchez v. First Class Home Improvement, LLC , 2019 WL 4593484, at *3 n.2 (E.D.N.Y. Sept. 23, 2019), aff'd in part, rev'd in part on other grounds sub nom. Sanchez v. Oceanside First Class Roofing, Inc. , 818 F. App'x 106 (2d Cir. 2020). Moreover, "[t]he question of attorneys’ fees, including fees with respect to unsuccessful claims, is an issue left to the discretion of the district court." Reed v. A.W. Lawrence & Co. , 95 F.3d 1170, 1183 (2d Cir. 1996).
In arguing that this Court should simply award all fees incurred in connection with this action irrespective of their limited success, plaintiffs rely on the Second Circuit's decision in Sanchez, a non-precedential, but extremely helpful, Second Circuit summary order. While plaintiff cites this decision for the proposition that "New York law requires an award of attorneys’ fees for litigants ... even if they are unsuccessful on the bulk of their claims," Docket Entry ("DE") 168 at 5, a careful reading of the case provides a more nuanced approach.
In Sanchez , the Court was confronted with very similar circumstances: the plaintiffs brought claims under the FLSA and state law for overtime violations, but prevailed only upon a NYLL § 195 wage statement claim, as the Court determined in a bench trial that plaintiffs’ testimony was "unworthy of belief." Sanchez , 2019 WL 4593484, at *1. A magistrate judge concluded that the overtime and wage statement claims were not "intertwined" for the purpose of an attorney's fee award and directed counsel to resubmit its fee application predicated only upon the work that related to the successful claim. Id. at *2. The district court rejected this analysis, finding that the successful and unsuccessful claims were sufficiently interrelated, but ultimately reduced the hours billed by 35% in some measure to reflect the disparity between the damages sought and those collected, but mainly due to the false evidence submitted by plaintiffs. Id. at *7.
On appeal, the Second Circuit rejected the argument – made here by defendants – that no award was appropriate under § 198(1-a), specifically holding that a "fee award was thus appropriate here." Sanchez , 818 F. App'x at 107. At the same time, the Circuit held that:
While a court may award attorneys’ fees for both unsuccessful and successful claims where the claims are intertwined, here there is little common ground between the claims. Claims are intertwined when they are based on a "common core of facts," "related legal theories," or "require essentially the same proof." Kerin v. U.S. Postal Serv. , 218 F.3d 185, 194 n.6 (2d Cir. 2000) (internal quotation marks and citations omitted). The district court found the claims intertwined because both the overtime claims and the notice claims required Plaintiffs to prove they were employees. Sanchez , 2019 WL 4593484, at *5. Here, the overtime claims required proof as to what hours Plaintiffs worked, while the notice claims required only a showing that notice was not given.
Id. at 108. This analysis led to the conclusion that overtime claims and notice violations are not intertwined for these purposes. Thus, in order to account for the time attributable to the severable, unsuccessful claims, the Circuit reduced the total reasonable fee found by the district court "by half to reflect Plaintiffs’ lack of success," and then applied the "district court's 35% reduction for false testimony." Id. In sum, the Court of Appeals reduced the total reasonable fee by a total of 67.5 percent, from $62,985 to $20,470, plus costs. Id. ; cf. Barfield v. New York City Health & Hosps. Corp. , 537 F.3d 132, 152–53 (2d Cir. 2008) (approving 50% reduction for lack of success).
In this case, as in Sanchez , plaintiffs achieved only a modicum of success – receiving an award amounting to statutory penalties for discrete technical violations of the law but failing to meet their burden regarding any failure to pay overtime wages on an allegedly massive scale. The claims here were not intertwined – the proof of the notice violations, which was brief and discreet, bore little resemblance to the mass of evidence adduced in an effort to prove the overtime claims. Thus, this case, like Sanchez , requires a fee award subject to significant reduction. Viewed another way, the vast bulk of the fees incurred relates to evidence wholly unrelated to the meritorious claims, and is, therefore, not reasonable. Hensley v. Eckerhart , 461 U.S. 424, 440, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) ("[W]here the plaintiff achieved only limited success, the district court should award only that amount of fees that is reasonable in relation to the results obtained."). And while this case was not marked by the same evidentiary problems found in Sanchez , it suffers from rampant and gross overlitigation that arguably has a bigger impact on the calculation of reasonable attorneys’ fees.
To be clear, eliminating the overtime claims would have dramatically streamlined the case: the tortured, multi-year litigation, extended discovery process, complex settlement negotiation and week-long jury trial would have been reduced to a straightforward dispute readily resolved through a simple motion. Having presided over the jury trial and the years of litigation that preceded it, however, it is equally true that plaintiffs’ requested fees are rendered even more inordinate by the consistently unreasonable approach taken by plaintiffs’ counsel at almost every turn. Thus, the combination of partial success and unreasonable litigation tactics – well documented in this opinion and the history of this case – requires a reduction of 80% of the fees sought by plaintiffs’ counsel.
Additionally, the application is replete with other problems: hourly rates that, in some instances, exceed established norms in this district, inscrutable block billing, inadequate billing descriptions and instances of lawyers performing paralegal work. See Hines v. City of Albany , 613 F. App'x 52, 55 (2d Cir. 2015) ("[W]e cannot conclude that the district court abused its discretion in basing its 30% reduction, in part, on the prevalence of block-billed time entries."). Because this case must, at some point, come to an end, rather than offer a line-by-line analysis, a reduction of an additional 10% will serve as a reasoned estimate of these inappropriate charges.
Excluding charges that are readily allocated to the appeal (discussed further below), plaintiffs’ counsel seeks total attorneys’ fees of $248,795. The Court finds that, reduced by 90% to account for the plaintiffs’ limited success, the unnecessary work engendered by the unreasonable tactics consistently employed during the life of the litigation, and various billing issues on this application, as detailed above, the net sum of $24,880 represents a reasonable fee for the work by counsel in this matter, excluding the post-trial work discussed below.
The Appeal
As noted above, the Rule 50(b) motion and, more importantly, the appeal that followed, represented completely unnecessary legal efforts engendered by defendants’ frivolous and facially defective efforts to attack the jury's well-considered verdict in this case. While counsel's billing records remain somewhat opaque, it appears that the requested fees associated with these procedures consist almost exclusively of tasks performed by Messrs. Zabell and Eden in 2019 and 2020. These are listed as follows:?
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Mr. Zabell seeks an appellate rate of $650 an hour and a regular trial rate of $500 per hour.
The number of hours expended are ultimately reasonable. However, the Court needs to consider the rates charged. As Judge Hurley observed, " ‘[p]revailing rates for experienced attorneys in the Eastern District of New York range from approximately $300 to $400 per hour,’ although some judges have recognized rates in this district of $300-$450 per hour for a partner." Sanchez , 2019 WL 4593484, at *5 (citation omitted). The Court finds that an hourly rate for Mr. Zabell of $400 per hour is sufficient for these purposes. Meanwhile, "[r]ates in this district for senior associates range from $200-$300," so the Court will award $300 per hour for Mr. Eden, whose work on the trial herein was exemplary.
To the extent certain small items should not be included (like, for example, Mr. Zabell's $220 charge on 1/2/20 for reviewing an administrative ECF bounce, DE 172-1), such amounts will serve to compensate plaintiffs’ counsel for time not captured by the Court's methodology. For avoidance of doubt, this calculation represents a rough, but fair, approximation. Perdue v. Kenny A. ex rel. Winn , 559 U.S. 542, 551, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010) (lodestar calculations result in "an award that roughly approximates the fee").
Thus, for the post-verdict work, the Court awards $6,080 for Zabell's work, and $15,840 for Mr. Eden's work. In addition to the foregoing, the Court awards $4,870 in costs, compensable both under the NYLL and Rule 54, which were sufficiently documented and reasonably related to the litigation.
Conclusion
Based on the foregoing, the Court grants the application for attorneys’ fees in the amount of $46,800, plus costs of $4,870.