Methods for Maximizing the Recovery of Attorney s Fees in Employment Cases

Transcription

1 Methods for Maximizing the Recovery of Attorney s Fees in Employment Cases MWELA JUNE 2014 BROWN BAG Panelists Joel Bennett, Law Offices of Joel P. Bennett, P.C. Leizer Goldsmith, The Goldsmith Law Firm, LLC Moderator Omar Melehy, Melehy & Associates LLC Thursday, June 19, :00 to 2:00pm The Employment Law Group th Street, NW, Suite 900 Washington, DC OUTLINE OF PRESENTATION AND CITATIONS -Leizer s Topics: Introductory note on use of Maryland law in this program 1. Private Attorneys General As the U.S. Supreme Court recently stated in Fox v. Vice, 131 S. Ct. 2205, 2213 (U.S. 2011), [f]ee shifting in such a situation both reimburses a plaintiff for what it cos[t] [the plaintiff] to vindicate [civil] rights, and holds to account a violator of federal law. -Civil Rights = Private Attorneys General, such as in City of Riverside v. Rivera, 477 U.S. 561 (1986). Contrast the concept in: Monmouth Meadows Homeowners Association v. Hamilton, 416 Md. 325, 338, 7A.3d1,8 (2010). The Monmouth Court explicitly distinguished that case from Friolo, as a case not grounded in a remedial employment statute, stating: 1

2 There is a significant reason for choosing Rule 1.5 unlike the lodestar method, Rule 1.5 does not carry with it the notion that the importance of the right vindicated will justify an expenditure of attorney time that is hugely disproportionate to the dollar amount at issue in the case. But make sure you avert the problem of Buckhannon Bd. & Care Home v. W. Va. Dep t of Health & Human Res., 532 U.S. 598, 622 (U.S. 2001). Thus, a defendant who appears likely to lose imminently may elect to provide the relief sought through the suit voluntarily. Thus, when possible, make this difficult for the defendant by thinking creatively about your remedies from the beginning. 2. Public Benefit Hensley v. Eckerhart, 461 U.S. 424, 435 (1983) ( establishment of significant new law may justify an enhanced fee); Achieving a non-monetary result that has the effect of clarifying public policy can represent complete success. Rum Coal Sales v. Caperton, 31F.3d169, 175 (4th Cir.1994). See Friolo v. Frankel, 373 Md. 501, 530 (2003) (Friolo I); Friolo v. Frankel, 403 Md. 443, , 942 A.2d 1242, 1253 (2008) (Friolo III); Friolo v. Frankel, 2014 Md. Lexis 354 (Md. Ct. of Appeals) ( Friolo V ) 3. Abuse of Discretion Standard - persuade your trial judge Friolo v. Frankel, 2014 Md. Lexis 354 ( Friolo V ) is an extreme example of how this can be applied to even nonsensical results. Research shows many, many cases in various courts, in which award is reduced to 75% or 67%, despite essentially complete success. Make your best showing to trial court 2

3 4. Case Selection- -Balancing public policy (noble notion that $ value is not primary) and practical reality (your audience may have no feel for favored suitor litigation and fees) -Inferential discrimination cases- will you take them? -Most cases settle- have your client prepared from the beginning regardless of fee arrangement. 5. Fee Agreements/Ethical Issues in Fees -Non-Contingent Hourly Agreements Skin in the game theory; Suspending disbelief on client s ability to pay. Consider using monthly deposit (though that might be indicia of quasi-contingency (see below)). -Contingent Hourly Agreements Realism, but at a cost... see 6 below. These agreements are, most likely, permissible. See when put to the test as a matter of legal ethics, these agreements seem to pass Rule 1.5 muster. Seehttp:// hics-advisory-opinion aspx -Contingent Percentage Agreements Scott Ross, Bad Briefs, Bad Law, Bad Markets: Documenting the Poor Quality of Plaintiffs' Briefs, its Impact on the law, and the Market Failure it Reflects. Consider use of Laffey/Appendix B rates in your fee agreement. 6. ACAB/Bar Counsel Implications Don t break the rules. Assuming you don t: ACAB will not provide an explanation of its award, and the award may not be satisfactory. 3

4 Your panel is unlikely to be sympathetic. -Have a settlement funds split agreement. -The hourly agreement is probably the gold standard at ACAB. -Contingent hourly agreement More favorable to the client as negotiated, and perhaps more favorable in the ACAB situation lawyer s acknowledgment of contingency may lead to reduced fee despite the contractually-agreed hourly fee. No good deed goes unpunished. 7. Some More Friolo Topics -Fees on fees the Holding of Friolo v. Frankel, 403 Md. 443, , 942 A.2d 1242, 1253 (2008) (Friolo III) -Rule 68 Offers of Judgment Under Marek v. Chesny, 473 U.S. 1, 9 (1985),a civil rights defendant ceases to be liable for fees incurred after a pretrial offer of judgment, where the judgment ultimately recovered by the plaintiff, including fees, is less than the offer. -Application of Settlement Negotiations (non-rule 68) in Fee Determinations Settlement negotiations are not per se off limits. However, they can be an adverse factor for the plaintiff only where a plaintiff unreasonably rejected settlements that would have provided superior relief to what she ultimately obtained through continued litigation. Friolo v. Frankel, 2014 Md. Lexis 354 ( Friolo V ), reversing Friolo v. Frankel et. al, 201 Md. App. 79; 28 A.3d 752(Md. Ct. of Special Appeals 2011) ( Friolo IV ). See, e.g., Lohman v. Duryea Borough, 574 F.3d 163, 165, 167 (3d Cir. 2009) (rejection of $75, before award of just $12, resulted in fee award of $30,000.00); Ingram v. Oroudjian, 647 F.3d 925, 927 (9th Cir. Cal. 2011) (after demand for $425,000, plaintiff settled for $32,000, after rejecting that amount one month 4

5 Earlier, so the Court reduced the $88, fee request to $30,485.00); Needham v. Innerpac, Inc., 2008 U.S. Dist. LEXIS , (N.D. Ind. Dec. 24, 2008) (no reduction at all even though offer was for twice the amount of the judgment). Joel s Topics 1. Pitfalls to Avoid re: Hourly Rates and Time; Costs 2. Significant Recent Decisions A. Adjusted Laffey Rate Salazar v. District of Columbia, 123 F. Supp. 2d 8, 15 (D.D.C. 2011) and Ricks v. Barnes, 2007 U.S. Dist. LEXIS at *16 (D.D.C. Mar. 28, 2007)(using adjusted Laffey Matrix which is based upon the legal services CPI instead of the entire CPI and yields a higher hourly rate). B. Prevailing Party What is critical is whether the injunction ordered the opposing party to change its behavior in a way that directly benefited the plaintiff, in this case removing the threat of sanctions for protests. Obtaining a preliminary injunction and settlement may also qualify as a prevailing party if the judicial finding is based on a likelihood of success on the merits and the plaintiff obtains relief sufficiently enduring to satisfy the material alteration of the parties legal relationship requirement. Lefemine v. Wideman, 568 U.S., 133 S. Ct. 9, 184 L.Ed. 2d 213 (2012). C. Relevant market for hourly rate Gonzalez v. City of Maywood, 729 F. 3d 1196 (9 th Cir. 2013) (generally the relevant market is where the court sits, not where the attorney is located). D. Current or Historical Rates When compensation has been delayed, it should be compensated by using current hourly rates or awarding interest on the historic hourly rates by year. See West v. Potter, 717 F. 3d

6 (D.C. Cir. 2013). E. Costs-Electronically Stored Information A recent area of litigation on costs is electronically stored evidence ( ESI ). ESI includes s and parties often produce such voluminous responses in discovery that the parties retain vendors to store and assist in the collection, processing and production of ESI. Charges by the vendors can run well into six figures for each side. The issue is whether such charges are recoverable by the prevailing party under 28 U.S.C. 1920(4) as copies necessarily obtained for use in the case. Courts have varied in their rulings on this issue. See Race Tires America v. Hoosier Racing Tire Corp., 674 F. 3d 158 (3d Cir. 2012).Third Circuit: Race Tires America v. Hoosier Racing Tire Corp., 674 F. 3d 158 (3d Cir. 2012)(only scanning and file format conversion can be considered as making copies);in re Aspartame Antitrust Litigation, 817 F. Supp. 2d 608, 615 (E.D. Pa. 2011)(awarding costs for creation of litigation database, storage of data, imaging hard drives, keyword searches, duplication, date extraction and processing). Fourth Circuit: The Country Vintner of North Carolina, LLC v. E. & J. Gallo Winery, Inc., 718 F. 3d 249 (4 th Cir. 2013)(district court decision taxing only the costs of converting electronic files to non-editable formats and transferring files to CDs affirmed); Mann v. Heckler & Koch Defense, Inc., 2011 WL at *9 (E.D. Va. Apr. 28, 2011)(searching and reduping and creation of native file format database do not qualify as copying); Fells v. Virginia Dept. of Transportation, 605 F. Supp. 2d 740, (E.D. Va. 2009)(refusing to tax costs of processing records, extracting data and converting files). Sixth Circuit: BDT Prods. v. Lexmark Int l., Inc., 405 F. 3d 415, 429 (6 th Cir. 2005) (electronic scanning and imaging recoverable as exemplification and copies of papers). 6

7 Seventh Circuit: Hecker v. Deere & Co., 556 F. 3d 575, 591 (7 th Cir. 2009) (costs of converting computer data into a readable format for discovery response recoverable); Rawal v. United Air Lines, Inc., 2012 WL at *2-4 (N.D. Ill. Feb. 22, 2012) (refusing to award electronic processing costs as taxable). Ninth Circuit: Tibble v. Edison Int l, 2011 WL (C.D. Cal. Aug. 22, 2011) (more than $500,000 in electronic discovery costs necessarily incurred to respond to plaintiff s discovery requests were taxable costs). Federal Circuit: CBT Flint Partners, LLC v. Return Path, Inc., no (Fed. Cir. Dec. 13, 2013). F. Offers of Judgment Barbour v. City of White Plains, 700 F. 3d 631 (2d Cir. 2012)(offer of judgment on all claims but not specifically including attorney s fees and costs not effective under Federal Rule of Civil Procedure 68). G. MSPB While the MSPB has authority to award attorney s fees to employees of the Federal Aviation Administration under the Back Pay Act, the U.S. Court of Appeals for the Federal Circuit does not due to the language of 5 U.S.C (g)(3) as amended in See Gallo v. Department of Transportation, F. 3d (Fed. Cir. 2013). 3. Pitfalls to Avoid When Representing Federal Employees on Attorney s Fees A. The Age Discrimination in Employment Act note no attorney s fees available at the administrative level under this statute but may be available under the Equal Access to Justice Act. See Boehms v. Crowell, 139 F. 3d 452 (5 th Cir. 1998); Muth v. Marsh, 525 F. Supp. 678 (D.D.C. 1981). 7

8 B. The Equal Pay Act note no attorney s fees available at the administrative level (see EEOC MD 110, ch. 11 at 1) 4. Costs Do not over-reach. See Salazar v. District of Columbia, no (GK) (D.D.C. Jan. 30, 2014) (15 cents per page for photocopying and faxes; attorneys requested 50 cents per page; charge for copies also too high). 5. Eastern District of Virginia: see Taylor v. Republic Services, Inc., GBL-IDD (Jan.9, 2014) re prevailing party, hourly rate, reduction for partial success and recoverable costs. Total award=$620,