Opinion
CV 22-01180 PHX SMM CDB
05-11-2023
Osiris Valenzuela, Plaintiff, v. Samantha Esser, Formula Wellness Scottsdale LLC, Kevin Kimball, Defendants.
REPORT AND RECOMMENDATION
CAMILLE D. BIBLES, UNITED STATES MAGISTRATE JUDGE.
Plaintiff has consented to the exercise of magistrate judge jurisdiction over this matter. (ECF No. 6). Service on Defendants Esser and Kimball was returned as executed on October 9, 2022. (ECF Nos. 8 & 9). Defendants' responses to the Complaint were due October 31, 2022. Plaintiff applied for the entry of default against Defendants Esser and Kimball on November 5, 2022 (ECF No. 11). The Clerk of the Court entered Defendants' defaults on November 7, 2022. (ECF No. 12, as amended at ECF No. 18 (December 6, 2022)).
In the Report and Recommendation at ECF No. 20 it was noted that it was arguable whether the LLC was properly served, and that Plaintiff did not seek the entry of default against the corporate Defendant and did not seek judgment by default against the corporate Defendant.
In a Report and Recommendation filed March 14, 2023, the Magistrate Judge recommended judgment by default be entered against Defendants Esser and Kimball on Count One of the Complaint, in which Plaintiff alleged Defendants were liable for violations of the Fair Labor Standards Act (“FLSA”), and also recommended Plaintiff be awarded damages in the amount of $3900. (ECF No. 20). The Magistrate Judge also recommended Plaintiff be given leave to file a renewed motion for the entry of judgment by default regarding Count Two of the Complaint, which alleged violations of Arizona state statutes, within twenty-one (21) days of the date an order was issued adopting or rejecting the Report and Recommendation. (Id.). No objections to the Report and Recommendation were filed, and it was adopted April 6, 2023. (ECF No. 21). Judgment by default was entered against Defendants Esser and Kimball on Count One of the Complaint, and Plaintiff was awarded FLSA damages in the amount of $3900 against these Defendants. (ECF No. 22).
On April 16, 2023, Plaintiff's counsel filed a motion for attorney's fees and costs. (ECF No. 23). In the motion at ECF No. 23 counsel avers “Plaintiff has elected to solely accept judgment against the individual Defendants on the basis of her FLSA claim and forego any other state law wage claim.” (ECF No. 23 at 2). In the pending motion Plaintiff's counsel asks the Court to award Plaintiff her attorney's fees as the prevailing party in an FLSA action. Counsel seeks an award of $10,191.00, for 25.8 hours at the agreed-upon amount of $395 per hour. (ECF No. 23 at 4). Counsel's affidavit states: “I expended a total of 25.8 hours on Plaintiff's case, and costs incurred totaled $718.00. The grand total for both fees and costs totaled $10,909.00.” (ECF No. 23-1 at 4). In an affidavit attached to the motion counsel avers:
This case involved drafting and filing a complaint, amending preparing applications for default, the preparation of a Joint Case Management Report, drafting and sending response to MIDP, and drafting and briefing this motion for award of attorneys' fees. . . .
Plaintiff's counsel obtained excellent results for Plaintiff. The Court's Order and Default Judgment awarded 100 percent of Plaintiff's unpaid wages, plus an additional equal amount as liquidated damages. See Doc. 21. Plaintiff's counsel has filed a motion to amend judgment to reflect that amount, which is currently pending. . . .(ECF No. 23 at 5) (emphasis added).
As Defendants never appeared nor answered, no order was issued setting a scheduling conference or requiring a joint case management report. Additionally, this case was not assigned as a MIDP case, and no MIDP responses were required nor docketed. No motion to amend judgment was filed after judgment was entered and no such motion is “currently pending.”
Counsel's billing statement includes 3.6 hours for “Draft lawsuit, meet w CL to review it, strategize about serving; CL signed verification; filed lawsuit;” 1.5 hours for “Researched whereabouts of Samantha Esser & spouse; business research showed its not in operation anymore; meeting w process server to discuss serving defendants;” .4 hours for “Process server informed that its difficult to find Defendants;” 1.4 hours for “Continued looking for addresses of Ds; meet w CL;” .3 hours for “Review order to show cause re: service; explained to CL;” 1 hour for “Draft/File motion-entry of default against S. Esser;” 1 hour for “Draft/file motion amend complaint to add name Kevin Kimball, the spouse of Esser;” 3.9 hours for “Draft/file Motion Default judgment + other required filings;” 3.9 hours for “Review Magistrate recommend.; meet w CL to discuss; after considering, CL agrees to solely seek FLSA claim;” and 3.8 hours to “Draft & file motion for Atty fees/Costs.” (ECF No. 23-1 at 7).
The motion for default judgment is nine pages in length, and contains double spacing between paragraphs. (ECF No. 19)
The process of “block billing” is not useful to an assessment of the proper fee award.
... entries reflecting block billing, i.e, the practice of “'lump[ing] together multiple tasks, making it impossible to evaluate their reasonableness[.]'” Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) []. Where a fee applicant engages in block billing, it is “reasonable for the district court to conclude that [the applicant] failed to carry [his] burden [of documenting the appropriate hours expended], because block billing makes it more difficult to determine how much time was spent on particular activities.” Welch, 480 F.3d at 948 (citations omitted). [Counsel's] time records include block billing for “[p]repar[ing] and fil[ing]” documents with the Court. (Doc. 44-4). Because filing documents is clerical in nature, the hours for which fees are requested will be reduced by the amount of time it took to file the documents. See Jenkins, 491 U.S. at 288; Davis, 976 F.2d at 1543.Derr v. Colvin, 2015 WL 9268455, at *6 (D. Ariz. Dec. 21, 2015). The motion seeking attorney's fees and costs is five pages in length, plus a signature page, and includes several errors. (ECF No. 23).
The Complaint in this matter does not include a signed verification. (ECF No. 1). Plaintiff's counsel failed to timely docket a return of service as executed on Defendants within the time specified by the Federal Rules of Civil Procedure, thus necessitating the issuance of an Order to Show Cause. (ECF No. 7). The docket in this matter also includes both a motion to amend/correct the Complaint, and a second motion to amend/correct the Complaint indicating the first such motion was incorrectly filed. (ECF Nos. 13 & 14).
Furthermore, the Report and Recommendation labored to understand whether Plaintiff was stating a cause of action pursuant to the Arizona Wage Act or the Arizona Minimum Wage Act in Count Two, and noted Plaintiff's motion for judgment by default did not seek judgment against the Defendant corporation, explaining:
Accordingly, if Plaintiff does not seek judgment by default regarding her second claim for relief (which she states in the motion for judgment by default is pursuant to the AWA) against the corporate Defendant, and judgment may not be taken against the individual Defendants for an AWA violation, then Plaintiff is not entitled to judgment by default with regard to her second claim for relief because she does not seek judgment against a Defendant amenable to a judgment under the AWA. And the AWA appears to be the correct statute to apply to Plaintiff's claim because she was not paid at all, rather than not paid in an amount in compliance with the state's statutory minimum wage, and the AWA and the AMWA statutes are distinct causes of action intended to provide a remedy in distinct situations, as evidenced by their enactment at separate times by separate acts of the Legislature, their separate and different statutory definitions of defendants amenable to suit, and different statutory provisions for the applicable remedy.
***
Plaintiff's motion for default, construed alongside the Complaint, is unclear about the state statute under which she is proceeding, and Plaintiff presents no published legal opinion to support either the award of damages under the AWA against an individual defendant, nor does she cite support for an award of damages for unpaid wages, rather than the payment of less than minimum wage, under the AMWA. As Plaintiff's motion for judgment by default seeks judgment and damages on a claim pursuant to the AWA, which does not allow for damages against individual defendants, and Plaintiff does not seek judgment by default against the corporate Defendant, Plaintiff is not entitled to judgment by default on her state law claim.(ECF No. 20 at 8, 10). Because of confusion in Plaintiff's pleadings, significant judicial resources were expended to compile a reasoned recommendation regarding the entry of judgment in this matter.
An award of attorney fees to the prevailing party in an FLSA suit is mandatory. 29 U.S.C. § 216(b). Section 216(b) provides that an award of attorneys' fees “shall” be made to the successful plaintiff. However, although “[t]he award of an attorney's fee is mandatory,” “the amount of the award is within the discretion of the court.” Houser v. Matson, 447 F.2d 860, 863 (9th Cir. 1971) (citation omitted). To determine a reasonable attorneys' fee under FLSA, the Court uses the lodestar method. See Gary v. Carbon Cycle Ariz. LLC, 398 F.Supp.3d 468, 479-80 (D. Ariz. 2019); Tallman v. CPS Sec. (USA), Inc., 23 F.Supp.3d 1249, 1256 (D. Nev. 2014), ail'd, 655 Fed.Appx. 602 (9th Cir. 2016). “The ‘lodestar' is calculated by multiplying the number of hours the prevailing party reasonably expended on the litigation by a reasonable hourly rate.” Morales v. City of San Rafael, 96 F.3d 359, 363 (9th Cir. 1996), citing McGrath v. County of Nev., 67 F.3d 248, 252 (9th Cir. 1995)).
The Ninth Circuit Court of Appeals has applied the factors stated in Hensley v. Eckerhart, 461 U.S. 424 (1983) in an FLSA case. See Newhouse v. Robert's Ilima Tours, Inc., 708 F.2d 436, 440-41 (9th Cir. 1983). The Hensley Court suggested the Court should consider (1) “the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate;” (2) the results obtained; and (3) “the relationship between the extent of success and the amount of the fee award.” Id., 461 U.S. at 433-38. Other factors may be considered in the Court's exercise of its discretion in determining the amount of fees to be awarded. See Hensley, 461 U.S. at 434 n.9. The Court may adjust the lodestar amount to account for the “ Kerr” factors. See, e.g., Gary, 398 F.Supp.3d at 485. Those factors include:
(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.Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), cited in Finton v. Cleveland Indians Baseball Co. LLC, 2022 WL 2665927, at *2 (D. Ariz. July 11, 2022). See also LRCiv 54.2(c)(3).
A party seeking attorney's fees bears the burden of “submitting evidence of the hours worked and the rate paid,” as well as proving those rates are “in line with the prevailing market rate of the relevant community.” Carson v. Billings Police Dep't, 470 F.3d 889, 891 (9th Cir. 2006), cited in Gary, 398 F.Supp.3d at 479-80. Generally, “the relevant community is the forum in which the district court sits.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008), citing Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997). Typically, “affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases ... are satisfactory evidence of the prevailing market rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990) (discussing the lodestar method in a case pursuant to 48 U.S.C. § 1988).
Plaintiff's counsel's affidavit provides an attestation regarding the prevailing market rate for litigation of an FLSA claim in the District of Arizona. (ECF No. 23-1 at 4). The prevailing party is generally “entitled to recover a reasonable attorneys' fee for every item of service which, at the time rendered, would have been undertaken by a reasonable and prudent lawyer to advance or protect his client's interest.” Twin City Sportservice v. Charles O. Finley & Co., 676 F.2d 1291, 1313 (9th Cir. 1982). However, in this matter it appears counsel has charged for services which a reasonable and prudent lawyer would have been able to perform in a more efficient manner in less time, such as spending 3.9 hours to prepare a five-page motion reciting the procedural history of the case, which includes at least two glaring errors, and asking for fees and costs. The motion for judgment by default included an incorrect and inflated calculation of Plaintiff's damages, as noted in the Report and Recommendation (ECF No. 20 at 11-12). Furthermore, counsel in effect forfeited Plaintiff's state-law based claim, under which she would have been entitled to treble damages, by not seeking judgment by default against an amenable defendant under the correct, specific state statute.
Accordingly, it would be within the Court's discretion to delete the amount billed by counsel for the .4 hours for “Process server informed that its difficult to find Defendants,” as this somewhat-clerical event does not appear to require 24 minutes of attorney time. It would also be within the Court's discretion to reduce the 1 hour for “Draft/file motion amend complaint to add name Kevin Kimball, the spouse of Esser” to .5 hours, to reduce the 3.9 hours for “Draft/file Motion Default judgment + other required filings” to 2 hours; and to reduce the 3.8 hours to “Draft & file motion for Atty fees/Costs” to 1 hour. Decreasing counsel's hours by 5.6 hours to a total of 20.2 hours would result in a fee award of $7979, a little more than twice the amount counsel succeeded in achieving as an award of damages to Plaintiff.
IT IS THEREFORE RECOMMENDED that Plaintiff be awarded $7979 in attorney's fees and $718 in costs, a total of $8697, from Defendants.
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.
Pursuant to Rule 72(b)(2), Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. Thereafter, the parties have fourteen (14) days within which to file a response to the objections. Pursuant to Rule 7.2(e)(3), Local Rules of Civil Procedure for the United States District Court for the District of Arizona, objections to the Report and Recommendation may not exceed ten (10) pages in length.
Failure to timely file objections to any factual or legal determinations of the Magistrate Judge will be considered a waiver of a party's right to de novo appellate consideration of the issues. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure to timely file objections to any factual or legal determinations of the Magistrate Judge will constitute a waiver of a party's right to appellate review of the findings of fact and conclusions of law in an order or judgment entered pursuant to the recommendation of the Magistrate Judge.