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Rafael Febus, On Behalf of Himself, and All Others Similarly Situated v. Guardian First Funding Group

June 22, 2012

RAFAEL FEBUS, ON BEHALF OF HIMSELF, AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
GUARDIAN FIRST FUNDING GROUP, LLC, AND JASON LEVY, AND MARK FIDEL, INDIVIDUALLY, DEFENDANTS.



The opinion of the court was delivered by: Sidney H. Stein, U.S. District Judge.

OPINION & ORDER

Earlier in this litigation, the Court conditionally certified the Fair Labor Standards Act ("FLSA") collective action (Dkt. No. 77), certified the New York Labor Law ("NYLL") Rule 23 class (Dkt. No. 77), and approved the parties' settlement (Dkt. No. 136). The only outstanding issue is the motion by plaintiffs' counsel, the Minneapolis firm of Nichols Kaster, PLLP, for attorneys' fees, litigation costs, and service awards*fn1 for certain class members. (See Dkt. No. 133.) Having determined that the total fees that counsel seeks are reasonable pursuant to Goldberger v. Integrated Resources, Inc., 209

F.3d 43 (2d Cir. 2000), the Court now approves a fee award of $283,333-one-third of the $850,000 common fund resulting from the settlement. The Court finds the requested reimbursements for out-of-pocket costs reasonable except for the in-house photocopies. Counsel has not justified a rate of 25 cents per page. Thus, the Court awards Nichols Kaster $46,064.28 in costs. Finally, the Court finds the service awards reasonable in all respects.

I.Analysis of Fees Pursuant to Goldberger v. Integrated Resources, Inc. In wage-and-hour class actions, courts employ either a "percentage of the fund" or lodestar approach to determining appropriate fees, but "[t]he trend in this Circuit is to use the percentage of the fund method to compensate attorneys in common fund cases like this one." Matheson v. T-Bone Rest., LLC, No. 09 Civ. 4214 (DAB), 2011 WL 6268216, at *4 (S.D.N.Y. Dec. 13, 2011) (citing McDaniel v. Cnty. of Schenectady, 595 F.3d 411, 417 (2d Cir. 2010)). Moreover, courts in this Circuit have "routinely granted" requests for one-third of the fund in cases in which the settlement funds were substantially larger than $850,000. See Johnson v. Brennan, No. 10 Civ. 4712 (CM), 2011 WL 4357376, at *19 (S.D.N.Y. Sept. 16, 2011) (collecting cases with funds in excess of $6 million). Nonetheless, the Court still considers all the "Goldberger factors" to confirm the reasonableness of this award. Those factors are the following:

(1) the time and labor expended by counsel;

(2) the magnitude and complexities of the litigation;

(3) the risk of the litigation . . . ;

(4) the quality of representation;

(5) the requested fee in relation to the settlement; and

(6) public policy considerations.

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121-22 (2d Cir. 2005) (quoting Goldberger, 209 F.3d at 50).

Analyzing the first factor-time and labor expended by counsel-is effectively the equivalent of using the lodestar calculation "[a]s a 'cross-check' to a percentage award." Wal-Mart Stores, 396 F.3d at 123; see, e.g., Johnson, 2011 WL 4357376, at *16. Notwithstanding counsel's explanations at the May 14, 2012 hearing and counsel's supplemental affidavit in support of its motion (see Aff. of Reena I. Desai dated May 22, 2012 ("Desai Aff.") ¶¶ 8-11; Dkt. No. 137), the Court remains skeptical that the hourly rates set forth by counsel, especially for administrative work at $175 per hour, are reasonable. Nor is the Court persuaded that, as a rule, it should use the billing rates of the forum, rather than those where the attorneys actually practice, or some figure in between. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182, 191 (2d Cir. 2008) (finding that, depending on what a "reasonable, paying client" would be willing to pay, "a district court may use an out-of-district hourly rate-or some rate in between the out-of-district rate sought and the rates charged by local attorneys"). The question is what a reasonable, paying client would pay, and the Court doubts such a client would pay a Minnesota firm the higher legal rates that prevail in New York City-which reflect higher overhead and staff costs in New York- and pay in addition counsel's travel to New York for the conduct of this litigation, as well as counsel's lodging and meals here.

However, even assuming that all proposed rates and hours were halved-a greater adjustment than necessary here-the resulting lodestar figure of approximately $127,000 would not be so disproportionate to the fees requested as to render the percentage-based fees unreasonable. For fees of $283,333 and a lodestar of $127,000, the resulting "lodestar multiplier" of 2.2 is well within the range of acceptable. See In re Lloyd's Am. Trust Fund Litig., No. 96 Civ. 1262 (RWS), 2002 WL 31663577, at *27 (S.D.N.Y. Nov. 26, 2002) (noting that a "multiplier of 2.09 is at the lower end of the range of multipliers awarded by courts within the Second Circuit"). Thus, the Court need not precisely determine the most appropriate rates here to find that the first Goldberger factor squints in favor of the requested fee award.

The other factors require considerably less discussion. The second factor is the complexity of the case. Although this case is not on the scale of complexity of many class actions, courts have recognized that FLSA cases are complex and that "[a]mong FLSA cases, the most complex type is the 'hybrid' action brought here, where state wage and hour violations are brought as an 'opt out' class action pursuant to [Rule] 23 in the same ...


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