Opinion
CV-22-01420-PHX-SMM (JZB)
04-05-2024
Flor Rodriguez, Plaintiff, v. D'Auto Boys LLC, et al., Defendants.
REPORT AND RECOMMENDATION
Honorable John Z. Boyle United States Magistrate Judge
TO THE HONORABLE STEPHEN M. MCNAMEE, UNITED STATES DISTRICT JUDGE:
Pending before the Court is Plaintiff's Motion for Attorneys' Fees and Costs pursuant to the Fair Labor Standards Act (“FLSA”) and the Arizona Minimum Wage Act (“AMWA”). (Doc. 18.) The Court recommends granting Plaintiff's motion, in part, and awarding attorneys' fees and costs in the amount of $8,131.00.
I. Background.
On August 22, 2022, Plaintiff filed her Verified Complaint. (Doc. 1.) She alleged Defendants employed her as a receptionist between June 13, 2022, and July 23, 2022, but that she was not paid time-and-one-half for overtime work during that period as required by the FLSA. (Id., ¶¶ 44-46.) Plaintiff further alleged Defendants withheld her final paycheck, covering a two-week period. (Id., ¶¶ 48-50.) Plaintiff alleged these acts and omissions constituted violations of the FLSA and AMWA. (Id. at ¶¶ 71-83.)
Plaintiff also filed claims pursuant to the Arizona Wage Act or “AWA.” (Id., ¶¶ 79-83.)
All Defendants were served (docs. 6-8), but none appeared to answer the complaint or otherwise challenge Plaintiff's allegations. On September 27, 2023, this Court issued a Report and Recommendation calling for Plaintiff's Motion for Entry of Default Judgment to be granted. (Doc. 15.) U.S. District Court Judge Stephen M. McNamee adopted the Report and Recommendation. (Doc. 16.) Plaintiff later filed this Motion for Attorneys' Fees and Costs pursuant to the FLSA and AMWA, seeking attorneys' fees in the amount of $ 6,586.00, and costs in the amount of $2,601.00. (Doc. 18.)
II. Legal Standard.
An employer who violates the FLSA or AMWA is liable to the employee for attorneys' fees and costs. 29 U.S.C. § 216(b); A.R.S. § 23-364(G). Under the FLSA, attorneys' fees for prevailing plaintiffs are mandatory, but the amount awarded is within the discretion of the Court. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 415 n.5 (1978) (referencing § 216(b), among others, as a statute that “make[s] fee awards mandatory for prevailing plaintiffs”); Houser v. Matson, 447 F.2d 860, 863 (9th Cir. 1971) (citations omitted). Attorneys' fees are not premised solely on the fee agreement between the client and the attorney, but instead are determined “ by the rate prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation.” Schwarz v. Sec y of Health & Human Servs., 73 F.3d 895, 908 (9th Cir. 1995). Under Local Rule 54.2, a party seeking fees must show (1) eligibility based upon a judgment and “applicable statutory or contractual authority”; (2) entitlement to the award based upon a discussion of relevant factors the Court must consider in awarding fees; and (3) reasonableness of the fee amount based upon a discussion of relevant factors, such as the time and labor involved, the difficulty of the legal issues, the customary fee, awards in similar actions, and the experience of counsel. LRCiv 54.2(c)(1)-(3).
The Court will ultimately recommend an award of fees based upon its calculation of the “lodestar,” which is the “number of hours reasonably expended on the litigation” multiplied by “a reasonable hourly rate.” Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). “A ‘strong presumption' exists that the lodestar figure represents a ‘reasonable fee,' and therefore, it should only be enhanced or reduced in ‘rare and exceptional cases.'” Id. at 1119 n. 4. (citing Pa. v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986)). “[T]he court must decide whether to enhance or reduce the lodestar figure based on an evaluation of the Kerr factors that are not already subsumed in the initial lodestar calculation.” Id. at 1119 (citing Morales v. City of San Rafael, 96 F.3d 359, 363-64 (9th Cir. 1996), opinion amended on denial of reh 'g, 108 F.3d 981 (9th Cir. 1997)). “The party seeking an award of fees must submit evidence supporting the hours worked and the rates claimed.” Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) (citations omitted).
The Kerr factors are substantively identical to the “reasonableness” factors enumerated in LRCiv. 54.2(c)(3).
III. Analysis.
A. Eligibility and Entitlement.
Plaintiff has shown she is the prevailing party based upon the default judgment award, and that fees are mandatory under statute. (Doc. 18 at 3, citing 29 U.S.C. §216(b) and A.R.S. § 23-364(G).) The Court finds Plaintiff is eligible and entitled to receive an award for fees. See LRCiv 54.2(c)(1)-(2).
B. Lodestar Calculation.
Turning to the lodestar calculation, Plaintiff's attorneys were hired on a contingency basis with a 40% contingency fee agreement. (Doc. 18-1 at 3.) A flat rate agreement did not exist between the parties. (Id.) Plaintiff's counsel requests $445 per hour. (Doc. 18 at 4-7.)
In Ekstrand v. Tru Realty LLC, Plaintiff's attorneys were awarded a flat rate of $445 per hour. (Doc. 18-10 at 4, citing No. CV-23-014016, (D. Ariz. October 20, 2023)). As noted in Ramos v. Probuilds LLC, however, Plaintiff's counsel's hourly rate in this district has routinely been awarded at a rate between $350 per hour and $395 per hour. No. CV-23-01111-PHX-SMM-DMF, 2024 WL 1078078, at *6 (D. Ariz. Feb. 26, 2024) (collecting cases), report and recommendation adopted, No. CV-23-01111-PHX-SMM, 2024 WL 1071204 (D. Ariz. Mar. 12, 2024). The Court will reduce Plaintiff's counsel's requested hourly rate-consistent with the weight of authority in this district -to $395 per hour. See id.; see also, Xalamihua v. GGC Legacy Janitorial Servs. LLC, No. CV-23-00009-TUC-BGM, 2024 WL 942101, at *2 (D. Ariz. Mar. 5, 2024) (noting in an FLSA case, that “[w]hile Plaintiff is the prevailing party in this action and is entitled to reasonable attorney fees and costs, the Court finds that an attorney fee of $395 per hour is more in line with the prevailing market rate in this community . . . .”); Robinson v. Beyond Food LLC, No. CV-23-00443-PHX-CDB, 2024 WL 407377, at *2 (D. Ariz. Jan. 17, 2024) (collecting cases), report and recommendation adopted, No. CV-23-00443-PHX-SMM-CDB, 2024 WL 405134 (D. Ariz. Feb. 2, 2024).
Regarding compensable time, counsel provides an itemized statement of fees and costs and a declaration in support. (Docs. 18-9, 18-10.) The Court will reduce counsel's requested hours to account for non-compensable, clerical tasks. See, e.g., Missouri v. Jenkins, 491 U.S. 274, 288 n. 10 (1989); Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009). The Court finds the following line items to be clerical and non-compensable: 8/17/22: Send representation agreement -.1 hours.
8/18/22: Receive representation agreement, set up file -.1 hours
8/22/22: Send complaint to client for review -.1 hours
8/22/22: Finalize, file complaint -.2 hours
8/23/22: Send documents to process server -.2 hours
8/24/22: File service executed -.1 hours(Doc. 18-9 at 2.)
The reduction amounts to .8 hours, bringing counsel's total to 14 hours of work. After review of the itemized invoice, the Court finds this amount of time reasonable. (Doc. 18-9 at 2); see Xalamihua, 2024 WL 942101 at *3 (“Plaintiff's attorney reasonably expended 14.7 hours on Plaintiff's behalf at a reasonable hourly rate of $395.”); Coe v. Hirsch, No. CV-21-00478-PHX-SMM-MTM, 2022 WL 508841, at *1 (D. Ariz. Jan. 21, 2022) (finding 14.6 hours “reasonably expended” for representation in an FLSA case concluding in default judgment). Multiplied by the hourly rate of $395, the total lodestar amounts to $5,530.00. (Doc. 20, Ex. 1 at 5.)
C. The Kerr Factors.
The Court now considers the Kerr factors not already subsumed in the lodestar determination. Fischer, 214 F.3d at 1119. The Kerr factors are:
(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the “undesirability” of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.Morales, 96 F.3d at 364 n. 8. “Factors that cannot serve as independent bases for adjusting fee awards are: (1) the novelty and complexity of the issues, (2) the special skill and experience of counsel, (3) the quality of representation, and (4) the results obtained.” Miller v. Los Angeles Cnty. Bd. of Educ., 827 F.2d 617, 620 n. 4 (9th Cir. 1987). “Factors (1) through (4) and (6) are taken into account in either the reasonable hours component or the reasonable rate component of the lodestar calculation.” Graves v. Arpaio, 633 F.Supp.2d 834, 842 (D. Ariz. 2009) (citations omitted), aff'd, 623 F.3d 1043 (9th Cir. 2010). “Factors (5) and (7) through (12) are considered in determining whether to adjust the presumably reasonable lodestar figure.” Id. (citations omitted); see also Kelly v. Wengler, 7 F.Supp.3d 1069, 1081 (D. Idaho 2014), aff'd, 822 F.3d 1085 (9th Cir. 2016). The Court now turns to these factors.
1. Customary Fee.
The customary fee for the representation has been discussed at length above. A reasonable fee is one commensurate with “the prevailing market rate of the relevant community.” Gary v. Carbon Cycle Arizona LLC, 398 F.Supp.3d 468, 485 (D. Ariz. 2019). The prevailing market rate, in accordance with recent precedent, is within $350 and $395 per hour. Ramos, 2024 WL 1078078, at *6 (collecting cases).
2. Time Limitations.
Regarding time limitations, counsel avers that “[t]here was no time limitation imposed by either the client or the circumstances.” (Doc. 18 at 11.) This does not justify an adjustment to the lodestar.
3. The Amount Involved and Results Obtained.
As to the amount involved and results obtained, while the Court recognizes the default judgment award amount of $5,890.80 is relatively low, the amount of the damages award should not necessarily limit the amount of fees. Quesada v. Thomason, 850 F.2d 537, 540 (9th Cir. 1988) (“The district court should not have reduced the attorney's fees simply because the damage award was small.”) Plaintiff was successful in this litigation, and counsel is entitled to fees earned on time reasonably spent achieving that result.
4. The Attorneys' Experience.
The Court further recognizes counsel's practices in FLSA, AWA, and AMWA litigation, but notes the appropriate fee is commensurate with the fact he is knowledgeable and experienced in this practice area. (Doc. 18 at 12.) His experience does not warrant adjustment to the lodestar.
5. Desirability of the Claim.
The Court recognizes that the low amount of damages at stake could result in Plaintiff's claim seeming undesirable to some practitioners. Assuming the nature of Plaintiff's claim and the money at stake would have disincentivized representation, at the very least, in this case, it was not an exorbitant time commitment in the hands of experienced counsel.
6. Nature and Length of Professional Relationship.
Regarding the nature and length of counsel's professional relationship with the Plaintiff, counsel avers they have no prior professional relationship (id. at 13), and the Court finds this does not necessitate adjustment of the lodestar.
7. Awards in Similar Cases.
Finally, the fee awards in similar cases are in line with this Court's recommended judgment. E.g., Peralta v. Custom Image Pros LLC, No. CV-23-00358-PHX-JAT, 2024 WL 620901, at *5 (D. Ariz. Feb. 14, 2024) (in an FLSA action concluding in default judgment, awarding $4,305.50 in fees for 10.9 hours of work at a rate of $395 per hour); Million v. Pindernation Holdings LLC, No. CV-23-00072-PHX-MTL, 2023 WL 3585237 at *1 (D. Ariz. May 22, 2023) (in an FLSA action concluding in default judgment, awarding $4,898 in fees for 12.4 hours of work at $395 per hour).
The Court finds the Kerr factors not subsumed in the lodestar determination do not warrant adjusting the lodestar. Fischer, 214 F.3d at 1119.
D. Costs.
Successful FLSA and AMWA Plaintiffs are also entitled to reasonable costs. 29 U.S.C. § 216(b); A.R.S. § 23-364(G), and counsels' $601 in costs are supported by the record. (Docs. 18-9, 18-10.) The Court also finds $2,000 in anticipated collection costs are reasonable, and counsel provides support for this request. E.g., Aguirre v. Custom Image Pros LLC, No. CV-23-00334-PHX-MTL, 2023 WL 5932805, at *4 (D. Ariz. Sept. 12, 2023); Vazquez v. Johnson, No. CV-22-01720-PHX-MTL, 2023 WL 4205126, at *4 (D. Ariz. June 27, 2023); but see Ramos, 2024 WL 1078078, at *9 (finding such costs speculative where counsel did not adequately explain why they are reasonable or recoverable). Adding Plaintiff's compensable costs ($2,601) to the lodestar ($5,530) results in an overall award of $8,131.
Accordingly, IT IS RECOMMENDED that the Court GRANT Plaintiff's Motion for Award of Attorneys' Fees pursuant to the FLSA and AMWA (doc. 18), in part, by awarding $5,530 for attorney fees and $2,601 in costs.
IT IS FURTHER RECOMMENDED the Court find Defendants jointly and severally liable for payment of attorneys' fees and costs.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment. The parties shall have 14 days from the date of service of a copy of this Report and Recommendation within which to file specific written objections with the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(b) and 72. Thereafter, the parties have 14 days within which to file a response to the objections. Failure to timely file objections to the Magistrate Judge's Report and Recommendation may result in the acceptance of the Report and Recommendation by the district court without further review. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure to timely file objections to any factual determinations of the Magistrate Judge will be considered a waiver of a party's right to appellate review of the findings of fact in an order of judgment entered pursuant to the Magistrate Judge's Report and Recommendation. See Fed. R. Civ. P. 72.