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Mary Woods v. Von Maur

September 5, 2012

MARY WOODS PLAINTIFF,
v.
VON MAUR, INC. DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Mary Woods ("Woods" or "Plaintiff") filed a four‐count complaint against her former employer, Von Maur, Inc. ("Von Maur" or "Defendant"), a department store chain, alleging that Von Maur terminated her because of her race and because she complained about racial profiling of members of her family while they shopped at Von Maur, in violation of Title VII and 42 U.S.C. § 1981. The two § 1981 claims survived summary judgment. Following a jury trial, a jury found in favor of Von Maur on the racial discrimination claim, and found in favor of Woods on the retaliation claim. The jury awarded Woods $550 in compensatory damages, $20 in punitive damages, and back pay in the amount of $46,015, which the jury then reduced for failure to mitigate for an ultimate award of $10,108. Plaintiff now petitions for attorneys' fees and non‐taxable costs in the amount of $226,659.80, a proposed "compromise" award that is reduced by 25% from the actual amount billed by Plaintiff's counsel. Plaintiff's motion is granted in part and denied in part, and the parties are directed to submit an agreed order in accordance with the direction set forth herein.

Von Maur makes three general objections to Plaintiff's proposed fee award: that the fee requested is either wholly inappropriate in light of the nominal nature of Woods' retaliation victory, or at least grossly disproportionate to the minimal damages recovered; that the petition improperly seeks fees for work not properly recoverable ‐ namely, work to advance the unsuccessful claims and work in preparation of the fee petition; and that requested award does not account for Plaintiff's counsel's failure to reasonably assess the case's value in order to further settlement. For the reasons explained below, the Court rejects Plaintiff's proportionality and failure‐to‐settle objections. The Court sustains in part the objection regarding recovery for unsuccessful claim, and sustains the objection to recovering fees for filing the fee petition.

DISCUSSION

"In any action or proceeding to enforce a provision of [42 U.S.C. §1981] the court, in its discretion may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs. . ." 42 U.S.C. § 1988. A party "prevails" for purposes of § 1988 "if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit. Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.E.2d 40 (1983).

The Court begins by dispensing with Von Maur's passing argument that Woods cannot be said to have "prevailed" on her retaliation claim because the damages she received should be construed as "nominal." Von Maur focuses on the $500 compensatory damage and $20 punitive damages awarded Woods. These awards standing alone might justify applying case precedent for nominal victories, but Woods also received an award of more than $10,000 in back pay. This $10,000 award cannot be considered "nominal" such as to render the statutory award of attorney's fees pursuant to § 1988 inapplicable. See Alexander v. Gerhardt Enters., Inc., 40 F.3d 187, 194 (7th Cir. 1994) (holding that jury award of $10,000 in back pay for retaliatory discharge "clearly renders Alexander a prevailing party and entitles her to reasonable attorney's fees.") While the proportionality of the award relative to the fee request, or another factor specific to this case, might result in a discretionary reduction of the fee award (as discussed below), complete dismissal of her attorneys' fees in the face of a damages award of this size is not compatible with 42 U.S.C. § 1988 .

A fee analysis begins by with a "lodestar" calculation, calculated as "the number of hours reasonably expended on the litigation multiplied by a reasonably hourly rate." Estate of Enoch ex rel. Enoch v. Tienor, 570 F.3d 821, 823 (7th Cir. 2009) (quoting Hensley, 461 U.S. at 433); see also Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011). The party requesting the fee has the burden of proving reasonableness of both hourly rate and hours expended. See Hensley, 461 U.S. at 437. Von Maur does not challenge the reasonableness of Plaintiff's counsel's billing rate of $330/hour, but rather argues that the hours charged in this case are excessive and do not accurately reflect Woods' failure to prevail on one of her two claims.*fn1 Courts reduce the lodestar figure, when appropriate, in light of (i) the parties' settlement history; (ii) the proportionality of the fee award in relation to the damages sought and the damages awarded; and the extent of any excessive or unnecessary billing for those claims on which the plaintiff prevailed. See Moriarty v. Svec, 233 F.3d 955, 967 (7th Cir. 2000); Cole v. Wodziak, 169 F.3d 486, 487‐89 (7th Cir. 1999).*fn2

A. Settlement History

The court should consider any "substantial settlement offer" as one of the factors in awarding fees to the prevailing party, because fees incurred after rejection of a substantial settlement offer generate little benefit to the party, even if that party ultimately prevails. See Moriarty, 233 F.3d at 967. Offers that roughly equal the amount awarded to the plaintiff at trial are considered "substantial," but courts may evaluate a settlement offer in light of the circumstances and decline to adjust the lodestar calculation on that basis. See Moriarty, 233 F.3d at 967 (discussing settlement offers among factors to consider).

In this case, Plaintiff Woods ultimately received a jury damage award of $550 in compensatory damages, $20 in punitive damages, and $10,108 in back pay, for a total award of $10,678. Von Maur alleges that it made a settlement offer of $15,000 at the start of the case, and reiterated that offer two more times during the case, including once following partial denial of summary judgment, and once following the pretrial conference. (Resp. At 8). Woods alleges that she made a pre‐complaint offer of $45,000, which amount approximates the amount of back pay the jury awarded to Woods (prior to reducing the award by approximately $35,000 for failure to mitigate damages), which offer Von Maur rejected without counter‐proposal. Woods also alleges that Von Maur refused to come above $10,000 until after the rejection of summary judgment, at which point Von Maur refused to come above $15,000, and alleges that the agreed‐upon mediator of a 2010 mediation recommended settlement at $65,000 (Reply at 5‐6).

While the Court is troubled that the parties did not reach a settlement in this case given the limited disparity between the offers early in this case, the Court cannot find on the basis of the parties' disputed statements about who‐offered‐what‐when that Woods unreasonably rejected a settlement offer. At the time of the initial offer of $10,000, Woods had filed multiple claims for both discrimination and retaliation. After mediation, extensive discovery, and voluminous briefing, two of those claims survived summary judgment and proceeded to trial, at which point there existed at a genuine likelihood that the Plaintiff would prevail and receive attorneys' fees. Yet Von Maur continued to refuse to raise its offer in any substantial sense. See, e.g., Catalan v. Mortgage Co., 2009 WL 2986122 at *35 (N.D. Ill. Sept. 16, 2009) (Dow, J.) (commenting that "defendants did not return to the bargaining table in any meaningful sense at any point" between plaintiff's initial rejection and the trial, and concluding that "both sides must share in the responsibility for generating" the legal fees). The Court declines to conclude that refusal of $15,000 offer after the start of the case was unreasonable, and cannot conclude that Plaintiff should have wholly discounted fees already incurred in rejecting the same $15,000 offer on the eve of trial.

B. Proportionality

Second, Von Maur asserts that the $10,678 awarded by the jury to Woods for retaliation is grossly disproportionate to the size of Woods' requested fees. Fee requests that are greatly disproportionate to the amount of damages awarded can be a "red flag," merely measuring fees against damages does not determine whether the fees are reasonable. Anderson v. AB Painting and Sandblasting Inc., 578 F.3d 542, 546 (7th Cir. 2009) ("Reasonableness has nothing to do with whether th district court thinks a small claim was 'worth' pursuing at great cost. Fee‐shifting statutes remove this normative decision from the court. If a party prevails, and the damages are not nominal, then Congress has already determined that the claim was worth bringing.") A comparatively large fee request merely suggests that the Court look more closely toward the source of the large fees, as a small damage award might suggest a case of little complexity. See id. at 546. However, the Seventh Circuit has refused to adopt "any mechanical rules requiring that a reasonable attorney's fee be nor greater than some multiple of the damages claims or recovered," Moriarty, 233 F.3d at 968, and "it is absolutely permissible to spend $100,000 litigating what is known to be a $10,000 claim if that is a reasonable method of achieving the result." Anderson, 578 F.3d at 546.

In this case, the size of the fee request relative to the damage award ‐ more than 20 times greater than the damages awarded ‐ raises concerns for the Court. See, e.g., Cole, 169 F.3d at 488 (7th Cir. 1999) (finding an attorney's fee award of 19 times the amount awarded to be "off the map"). The trial lasted a mere three days, and involved testimony from the plaintiff and a few employees from Von Maur. The trial involved only two claims and did not involve expert testimony or extensive exhibit preparation. Witnesses were in‐state residents and did not require travel for deposition or trial. Yet Woods seeks an award for more than 1,000 hours of work. As Woods correctly notes, Von Maur spent more than 2,000 hours ...


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