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Riva v. Houlihan Smith & Co., Inc.

United States District Court, Seventh Circuit

September 24, 2013

HECTOR DE LA RIVA and ROSS PERLMUTTER, Plaintiffs,
v.
HOULIHAN SMITH & COMPANY, INC., RICHARD HOULIHAN, ANDREW D. SMITH, and CHARLES BOTCHWAY, Defendants.

MEMORANDUM OPINION AND ORDER

GARY FEINERMAN, District Judge.

At one point, this wage-and-hour case had individual claims by six plaintiffs under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and claims on behalf of a putative class under the Illinois Minimum Wage Law ("IMWL"), 820 ILCS 105/1 et seq. Doc. 12. After four plaintiffs voluntarily dismissed their claims, the court remanded the IMWL claims to state court. Docs. 73-74, reported at 848 F.Supp.2d 887 (N.D. Ill. 2012). What remained of the case after the remand, and what remains to this date, are individual FLSA claims by two plaintiffs, Hector De La Riva and Ross Perlmutter ("Plaintiffs"). Plaintiffs and two of the individual defendants, Richard Houlihan and Charles Botchway ("Defendants"), have entered into, and the court has approved, a consent decree requiring Defendants to pay Plaintiffs $23, 333.42 in FLSA damages plus Defendants' pro rata share of Plaintiffs' reasonable attorney fees and costs. Doc. 143. When the parties could not reach an agreement as to fees and costs, Plaintiffs moved for $342, 375.34 in attorney fees under 29 U.S.C. § 216(b) and $8, 000 in costs under Federal Rule of Civil Procedure 54(d). Doc. 153. Defendants concede that Plaintiffs are the prevailing parties and do not oppose the requested $8, 000 cost award, Doc. 157 at 1 n.1, but they argue that Plaintiffs are entitled to only between $120, 000 and $150, 000 in fees. Id. at 17 ("In light of all of the foregoing the Defendants believe that a fee award between $120, 000 and $150, 000 will fully and adequately compensate counsel for work reasonably performed and the result achieved."). For the following reasons, Plaintiffs are awarded $8, 000 in costs and $129, 141 in attorney fees, for a total award of $137, 141.

Discussion

A district court must award reasonable attorney fees and costs to the prevailing plaintiff in a FLSA case, including a plaintiff who favorably settles his claims. See 29 U.S.C. § 216(b); Small v. Richard Wolf Med. Instruments Corp., 264 F.3d 702, 707 (7th Cir. 2001) ("Prevailing plaintiffs, which may include plaintiffs who favorably settle their cases, are entitled to reasonable attorney's fees under the FLSA."). To calculate an appropriate fee award, the court begins with "a calculation of the lodestar'-the hours reasonably expended multiplied by the reasonable hourly rate, " and then may make adjustments based on the factors set forth in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). Johnson v. GDF, Inc., 668 F.3d 927, 929 (7th Cir. 2012).

A. Calculating the Lodestar

1. Hours Reasonably Expended

The procedural history of this case bears greatly on the amount of attorney time for which Plaintiffs should be compensated. This suit was filed in state court and asserted individual claims under the FLSA and putative class claims under the IMWL. Doc. 1 at 6-20. The case was removed to federal court. Doc. 1. The removal was proper, with 28 U.S.C. § 1441 providing federal question jurisdiction over the FLSA claims and 28 U.S.C. § 1367(a) providing supplemental jurisdiction over the IMWL claims. See Ervin v. OS Rest. Servs., Inc., 632 F.3d 971, 979 (7th Cir. 2011). By February 9, 2012, all plaintiffs other than De La Riva and Perlmutter had voluntarily dismissed their claims, and De La Riva had relinquished his bid to be a class representative for the putative IMWL class, leaving Perlmutter as the sole putative class representative. Docs. 44, 55, 66. Because the size of the putative IMWL class (244) greatly exceeded the number of individual FLSA plaintiffs, because no FLSA collective action had been sought, and because there was an unresolved and difficult state law question regarding when individual defendants could be liable under the IMWL, the court ask the parties to brief whether the IMWL claims should be remanded to state court under 28 U.S.C. § 1367(c). Doc. 66. Although they filed this case in state court, Plaintiffs opposed remand of the IMWL claims, Doc. 67, while Botchway supported remand, Doc. 68. As noted above, the court remanded the IMWL claims to state court. A settlement then was reached and memorialized in a consent decree, under which De La Riva was awarded wages in the amount of $3, 591.25 and liquidated damages in the same amount, and Perlmutter was awarded wages in the amount of $8, 019.96 and liquidated damages in the same amount, for a total FLSA award of $23, 222.42. Doc. 143 at 3. The consent decree also provided that "[i]f the parties are unable to agree, they shall seek a determination of reasonable attorney fees and costs from the Court pursuant to FRCP, Rule 54 and the Local Rule 54.3 of the Northern District of Illinois." Id. at 4. After the parties engaged in the Local Rule 54.3 process and could not agree on a reasonable fee award, Plaintiffs filed the present motion.

The principal issue here is whether Plaintiffs should be compensated for the time their attorneys spent pursuing the IMWL claims in federal court. Plaintiffs argue that because "Defendants' removal of the complaint from state court required Plaintiffs to perform all of the work on the related claims in this Court, " Doc. 154 at 13, Plaintiffs should be entitled to compensation for most or all of the attorney time devoted to the IMWL claims in federal court. The court rejects this argument and, with limited exceptions noted below, will award fees only for the time expended on the FLSA claims.

Plaintiffs contend they are entitled to attorney fees for litigating the IMWL claims in federal court because those claims and the FLSA claims rest on a common factual core. See Moriarty v. Svec, 233 F.3d 955, 964 (7th Cir. 2000) ("where a party presents multiple claims for relief based on a common core of facts or related legal theories, no legal bar exists against awarding attorney's fees for time spent on rejected claims"). It is true that the IMWL and FLSA claims arise from the same core of facts. However, Plaintiffs' efforts in federal court on the IMWL claims were devoted largely to class certification issues, which were irrelevant to the FLSA claims given that Plaintiffs did not seek to certify a FLSA collective action. Cf. Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 772 (7th Cir. 2013) (while recognizing that there is a "difference between a collective action [under the FLSA] and a class action [under Rule 23]", holding that "there isn't a good reason to have different standards for the certification of the two different types of action, and the case law has largely merged the standards"). There is no basis in the record to conclude that Plaintiffs' counsel's work on IMWL class certification issues benefitted the FLSA individual claims.

Moreover, as far as the record indicates, the IMWL claims remain pending in state court. Doc. 154 at 13 ("Following remand of the IMWL claim to state court, the class action remains viable against HSC [Houlihan Smith & Company, Inc.]."), 18 n.4 ("As of [the filing of] this [fee] petition, the motion for class action is stayed in state court pending briefing on plaintiff's motion to amend the complaint following dismissal of the IMWL individual defendants."); Doc. 160 at 9 (noting that the "IMWL class action... continues in state court"). Thus, although this court might have the discretion to award fees for litigating the IMWL claims in federal court, it would be far more appropriate to allow the state court-the court that ultimately will resolve those claims on the merits-to determine whether Plaintiffs are entitled to such fees and, if so, how much. If Plaintiffs prevail on the IMWL claims in state court, nothing this court has said or done should prejudice any attempt to recover for all of the attorney time devoted to their IMWL claims, including time spent in federal court. See 820 ILCS 105/12(a) ("[i]f any employee is paid by his employer less than the wage to which he is entitled under the provisions of [the IMWL], the employee may recover in a civil action the amount of any such underpayments together with costs and such reasonable attorney's fees as may be allowed by the Court").

So, for purposes of the fee award in federal court, Plaintiffs will be deemed to have prevailed on the FLSA claims but not the IMWL claims. Where "a plaintiff prevails on only some of his interrelated claims, ... the district court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success.'" Sottoriva v. Claps, 617 F.3d 971, 975 (7th Cir. 2010) (quoting Hensley, 461 U.S. at 436-37).

Plaintiffs seek to recover for a total of 402.41 hours for lead attorney Jac Cotiguala, a total of 294.25 hours for attorney Cotiguala's associate, Brian Massatt, and a total of 144.5 hours for a paralegal. Doc. 154 at 11. There were essentially two phases to the federal litigation: the period before the remand of the IMWL claims, and the period after the remand. Plaintiffs' time sheets show that Cotiguala expended 315.83 hours, Massatt 144.75 hours, and the paralegal 43.25 hours before the remand, which took place on March 2, 2012. Doc. 154-1 at 56-65, 71-75, 80. Subtracting those hours from the total hours sought, this means that Plaintiffs are seeking recovery for 86.58 hours expended by Cotiguala after the remand, 149.5 hours expended by Massatt after the remand, and 101.25 hours expended by the paralegal after the remand.

Considering the pre-remand hours first, the court notes that Cotiguala billed 6 hours on February 28 and 29, 2012, and that Massatt billed 20.75 hours between February 13, 2012, and February 29, 2012, in connection with the briefing the court requested on whether the IMWL claims should be remanded to state court. Doc. 154-1 at 31-32, 65, 75. Plaintiffs will be given credit for those hours because the court requested the briefing.

With respect to the remaining pre-remand time-309.83 hours for Cotiguala, 124 hours for Massatt, and 43.25 hours for the paralegal-nearly all of the time entries related solely to IMWL class certification issues or the underlying IMWL claims or were "block-billed" or non-specific, making it impossible to tell how much of that time was spent on the IMWL claims and how much on the FLSA claims. The court would be within its discretion to strike these hours in their entirety. See Rexam Beverage Can Co. v. Bolger, 620 F.3d 718, 738-39 (7th Cir. 2010); Lahiri v. Universal Music & Video Distrib. Corp., 606 F.3d 1216, 1222-23 (9th Cir. 2010); Trs. of Chi. Reg'l Council of Carpenters Pension Fund v. R.C.I. Enters., Inc., 2011 WL 2893005, at *2 (N.D. Ill. July 20, 2011). However, because some time undoubtedly was spent on the FLSA claims, the court will reduce the hours on a percentage basis. See Harper v. City of Chicago Heights, 223 F.3d 593, 605 (7th Cir. 2000) ("when a fee ...


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