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Shim v. Millennium Group

June 21, 2010

EMILY SHIM, JEFFREY SUH, SOO YOUNG CHOI, SEUNG RYUN CHOI, AND ALEX CHIN, PLAINTIFFS,
v.
MILLENNIUM GROUP, MILLENNIUM (USA) LLC, MILLENNIUM HEALTHCARE OF FLUSHING LLC, MILLENNIUM MEDICAL HEALTHCARE GROUP PLLC, MILLENNIUM HEALTHCARE USA LLC, DANNY VASWANI, JOHN MUNAFO, AND JOHNATHAN R. JOHNSON, DEFENDANTS.



The opinion of the court was delivered by: Pohorelsky, Magistrate Judge

REPORT AND RECOMMENDATION

The plaintiffs obtained a default judgment against all defendants in January 2010, and Judge Block has referred to me this motion for attorneys' fees. The plaintiffs brought this action in October 2008, asserting violations of the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201 et seq., related violations of the New York Labor Law (the "NYLL"), § 191 et seq.,and a breach of contract claim.*fn1 The background facts are described in Judge Block's January 2009 order determining liability. See Shim v. Millennium Group, No. 08-CV-4022, 2009 WL 211367, at *1-2 (E.D.N.Y. Jan. 28, 2009) (granting motion for default judgment). Familiarity with those facts and with the procedural developments is assumed. The plaintiffs now request $102,762 in attorneys' fees and $1,561.64 in costs. For the reasons below, I respectfully recommend that the plaintiffs be awarded $34,254 in attorneys' fees and $1,561.64 in costs.

I. DISCUSSION

A. The Presumptively Reasonable Fee

Establishing the amount of reasonable attorneys' fees has been the subject of extended discussion in the Second Circuit in recent years. See generally Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009); Simmons v. New York City Transit Authority, 575 F.3d 170 (2d Cir. 2009); Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 151 (2d Cir. 2008); Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182 (2d Cir. 2008), superseding 493 F.3d 110 (2d Cir. 2007). Reasonable attorneys' fees used to be calculated by what was known as the "lodestar" method, which entailed determining the "number of hours reasonably expended on the litigation [and] multipl[ying that figure] by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Whitney v. Jet Blue Airways Corp., No. 07-CV-1397, 2009 WL 4929274, at *2 (E.D.N.Y. Dec.21, 2009) (providing background and history). Courts would then adjust the lodestar figure by a multiplicative figure, if need be, to reflect the specific considerations of a particular case. See Arbor Hill, 522 F.2d at 186, 190. The reasonableness of hourly rates was guided by the market rate "[p]revailing in the community for similar services of lawyers of reasonably comparable skill, experience, and reputation," Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984); Hensley, 461 U.S. at 433, while the relevant community was generally the "district in which the court sits," Polk v. N.Y. State Dep't of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983).

More recently, however, the Second Circuit signaled a departure from the "lodestar" language, in favor of a modified approach that focuses on calculating a "presumptively reasonable fee." See Arbor Hill, 522 F.3d at 190; see also Simmons, 575 F.3d at 172; Barfield, 537 F.3d at 151. Notwithstanding the abandonment of the "lodestar" approach, the presumptively reasonable fee is still determined by reference to the number of hours reasonably expended on a matter and the reasonable fee to be charged for those hours. See generally Bliven, 579 F.3d at 213. Under this approach, the court considers a multitude of case-specific factors*fn2 in order to establish a reasonable hourly rate that a "reasonable, paying client would be willing to pay," and then multiplies that rate by the number of hours reasonably spent on the case. Arbor Hill, 522 F.3d at 184, 190. The product is known as the presumptively reasonable fee. See id. Thus, district courts must now "bear in mind all of the case-specific variables that [the Second Circuit] and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate." Arbor Hill, 522 F.3d at 190. (emphasis in original). This determination is undertaken consistent with the principle that a "reasonable paying client wishes to spend the minimum necessary to litigate the case effectively." Id. at 190.

The Second Circuit recently clarified the contours of its approach to attorneys' fees and the presumptively reasonable fee. See McDaniel v. County of Schenectady, 595 F.3d 411 (2d Cir. 2010). The Circuit reiterated that the presumptively reasonable fee represents an approximation of "what a competitive market would bear." Id. at 420. Whereas the traditional lodestar approach had multiplied the hourly rate by the number of hours worked and then used the Johnson factors to reflect case-specific considerations, the Arbor Hill approach essentially front-loads the Johnson factors.*fn3 See McDaniel, 595 F.3d at 420 (citing Arbor Hill and assessing case-specific considerations at the "outset, [and] factoring them into [the court's] determination of a reasonable hourly rate for the attorneys' work."); see also Saunders v. City of New York, No. 07-CV-830, 2009 WL 4729948, at *6 (S.D.N.Y. Dec. 9, 2009) (contrasting the lodestar and Arbor Hill methods and describing how the latter considers Johnson factors "earlier in the fee calculation process"). The court in McDaniel observed that

[f]rom a mathematical perspective, of course, it makes little difference whether a court, following Arbor Hill, considers case-specific factors to estimate a reasonable rate for an attorney's services, which is then multiplied by the number of hours worked, or whether the court takes the traditional approach and considers those same factors in calculating a multiplier to the lodestar. The benefit of Arbor Hill's [sic] methodology is that by considering case-specific factors at the outset, the district court's focus on mimicking a market is maintained. 595 F.3d at 422 (citing Arbor Hill, 522 F.3d at 192); see also Saunders, 2009 WL 4729948, at *6.

In April, the Supreme Court issued a seemingly strong endorsement of the more traditional lodestar approach and lodestar language. See Kenny A., 130 S.Ct. at 1672-74. The extent to which the Court's use of the lodestar in that case implicitly calls into question the Second Circuit's endorsement of a presumptively reasonable fee and rejection of both the lodestar approach and lodestar language, is less than clear. The Court recognized, however, that "the lodestar method produces an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case." Id. at 1672 (emphasis in original). That too is the primary focus of the Arbor Hill line of cases. The court also noted that relevant, case-specific factors such as the novelty or complexity of the case are already "subsumed" or "included" in the lodestar figure when determining a reasonable fee. See Kenny A., 130 S.Ct. at 1673 (citing authorities). Therefore, whether the calculation is referred to as the lodestar or as the presumptively reasonable fee, courts will take into account case-specific factors to help determine the reasonableness of the hourly rates and the number of hours expended.

1. Reasonable Hourly Rate

The plaintiffs in this case are represented by the large international law firm Dewey & LeBoeuf. Dewey has submitted a declaration concerning the personnel and the individual rates charged for the five associates, one staff attorney, one partner, two paralegals, and one summer associate who performed work on the matter. The hourly rates range from $80 for the paralegals, to $150 for the summer and junior associates, to $250 for the staff attorney and senior associate, to $350 for the partner. Little was submitted as to the experience, skill, training, or specializations of the attorneys involved, but the court is convinced that the rates requested are reasonable and well in line with prevailing market rates in this district. See Cho v. Koam Med. Servs., 524 F. Supp. 2d 202, 208 (E.D.N.Y. 2007).

As previously mentioned, the court establishes a reasonable hourly rate by looking to the prevailing market rates for comparable services in the district in which the case is filed. See Blum, 465 U.S. at 896 n.11; Polk, 722 F.2d at 25. Whitney invaluably collected recent cases on reasonable hourly rates for partners and associates in the Eastern District of New York. See Whitney, 2009 WL 4929274, at *7 (listing cases and approving an hourly rate of $350 for experienced attorney seeking a $450 hourly rate). As the court observed, the "rates applied in this district have ranged widely depending on the nature of the firm, the experience of the lawyer and the type of case." Whitney, 2009 WL 4929274, at *7. As Whitney was decided quite recently and sets forth a good catalogue on rates, it is worth surveying the cases it cited. See Gutman v. Klein, No. 03-CV-1570, 2009 WL 3296072, at *2-3 (E.D.N.Y. Oct. 13, 2009) (approving hourly rates between $300 and $400 for partners, $200 and $300 for senior associates, and $100 and $200 for junior associates); Melnick v. Press, No. 06-CV-6686, 2009 WL 2824586, at *9 (E.D.N.Y. Aug. 28, 2009) (noting market rates of between $200 and $375 for partners and between $100 and $295 for associates); Moran v. Sasso, No. 05-CV-4716, 2009 WL 1940785, at *4 (E.D.N.Y. July 2, 2009) (noting rates of $200 to $350 for partners and $200 to $250 for senior associates); Duverger v. C & C Duplicators, Inc., No. 08-CV-0721, 2009 WL 18132229, at *2 (E.D.N.Y. June 25, 2009) (listing market rates as between $200 and $350 for partners, and $200 and $250 for senior associates); Motorola, Inc. v. Abeckaser, No. 07-CV-3963, 2009 WL 2568529, at *4-5 (E.D.N.Y. Aug. 5, 2009); Trustees of the Local 813 I.B.T. Ins. Trust Fund v. Amanda Carting Corp., No. 07-CV-656, 2007 WL 4324019, at *6 (E.D.N.Y. Dec. 7, 2007) (providing market rates between $200 and $375 for partners, $200 to $250 for senior associates, $100 to $150 for junior associates); Baruch v. Healthcare Receivable Mgmt, Inc.,No. 05-CV-5393, 2007 WL 3232090, at *5 (E.D.N.Y. Oct. 30, 2007) (noting hourly rates of $200 to $375 for partners); Expeditors Int'l of Wash., Inc. v. Rubie's Costume Co., Inc., No. 03-CV-3333, 2007 WL 430096, at *2 (E.D.N.Y. Feb. 2, 2007) (noting partner rates between $200 and $375 per hour).

As the hourly rates requested here are well within the ranges provided by these cases, the court should adopt them when calculating the presumptively reasonable fee. There is little about the particular circumstances of this case that would warrant an hourly rate either higher than or ...


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