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Magnuson v. Newman

United States District Court, S.D. New York

July 31, 2014

TINA MAGNUSON et al., for themselves and on behalf of those similarly situated, Plaintiffs,
ALLEN NEWMAN et al., Defendants.


JESSE M. FURMAN, District Judge.

Plaintiffs in this suit to recover unpaid wages under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. ("FLSA"), now move, after settlement on the merits, to recover attorney's fees and costs. (Docket No. 199). The facts and procedural history of the case - which are considerably more tortuous and contentious than the subject matter would seem to warrant - were set out at length in this Court's Opinion denying in part and granting in part the parties' motions for summary judgment, see Magnuson v. Newman, No. 10-CV-6211 (JMF), 2013 WL 5380387 (S.D.N.Y. Sept. 25, 2013), familiarity with which is assumed. For the reasons discussed below, Plaintiffs' motion for fees and costs is GRANTED in substantial part.


Under the FLSA, prevailing parties are entitled to an award of reasonable attorney's fees and costs. See 29 U.S.C. § 216(b). "Adequate compensation for attorneys who protect wage and hour rights furthers the remedial purposes of the FLSA...." Prasker v. Asia Five Eight LLC, No. 08-CV-5811 (MGC), 2010 WL 476009, at *6 (S.D.N.Y. Jan. 6, 2010). The size of such an award is governed by the "presumptively reasonable fee" approach announced by Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). Specifically, a court must consider twelve factors: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. See id. at 186-87 n.3.

The chief aim of the Arbor Hill factors is to determine "the rate a paying client would be willing to pay, " mindful of the fact that "a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively." Id. at 190. The hourly rate is most readily determined by looking to the "prevailing [hourly rate] in the [relevant] community, '" id. (first alteration in original) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)), and the relevant community for cases before this Court is the Southern District of New York, see Polk v. N.Y. State Dep't of Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983). Once the hourly rate is determined, it is multiplied by the appropriate number of hours of time reasonably expended to yield the "presumptively reasonable fee, " which before Arbor Hill was known as the lodestar. That figure, as it its name suggests, is not final. Instead, adjustments to the presumptively reasonable fee may be appropriate given the facts of a particular case. See Hardaway v. Ridgewood Corp., 706 F.Supp.2d 436, 439 (S.D.N.Y. 2010) (concluding that "district courts should calculate the appropriate presumptively reasonable fee' and then consider whether to adjust the fee award for the degree of success the Plaintiff achieved"). "[T]he most critical factor' in a district court's determination of what constitutes reasonable attorney's fees in a given case is the degree of success obtained' by the plaintiff." Barfield v. N.Y.C. Health & Hosps. Corp., 537 F.3d 132, 152 (2d Cir. 2008) (quoting Farrar v. Hobby, 506 U.S. 103, 114 (1992)).


Plaintiffs seek a total of $296, 265.95 plus interest, a sum that represents $290, 088.00 in attorney's fees and $6, 177.95 in costs and disbursements. (Decl. Kerry E. Connolly, Esq. Supp. Pls.' Mot. Costs and Fees This Action (Docket No. 204) ("Connolly Decl.") ¶ 54). Defendants oppose this request on four primary grounds: (1) that they made settlement offers that would have "provided complete FLSA relief" (Defs.' Mem. Law Opp'n Pls.' Mot. Att'y's Fees & Costs (Docket No. 205) ("Defs.' Mem.") 5); (2) that Plaintiffs' counsel's representation of all Plaintiffs represented a conflict of interest, which caused them to reject settlement offers that did not encompass all of the Plaintiffs ( id. at 6); (3) that the billing records submitted in connection with Plaintiffs' motion are duplicative and vague ( id. at 6-8); and (4) that Plaintiffs' counsel's requested hourly rates are unreasonable ( id. at 8-9).[1] The Court reviews each argument in turn.

A. Settlement Offers

First, Defendants argue that in March 2011, they offered $75, 000 to settle the litigation, and that such offer "exceeded the total unpaid minimum wages, overtime wages and liquidated damages under the FLSA." (Defs.' Mem. 5). Defendants also claim that they made offers in April and May 2013 pursuant to Rule 68 of the Federal Rules of Civil Procedure. ( Id. ). According to Defendants, those offers either render Plaintiffs non-prevailing parties or temporally limit Plaintiffs' right to attorney's fees to the date of the first offer of judgment. ( Id. ). But, as noted by Plaintiffs' counsel, the evidence Defendants submit to support their argument is insufficient to establish that they made any actual "offer of judgment." ( See Aff. Opp'n Pls.' Mot Att'y's Fees & Costs (Docket No. 206) ("Hershenson Aff."), Ex. 1; see also Reply Decl. Kerry E. Connolly, Esq. Further Supp. This Action (Docket No. 207) ("Connolly Reply Decl.") ¶¶ 10-18). Indeed, Defendants' "offer" was for an unspecified amount, and it was explicitly conditioned on acceptance by all Plaintiffs with FLSA claims. ( Id. ¶¶ 11-12, 15). That evidence alone is insufficient to temporally limit Plaintiff's right to attorney's fees, let alone render them non-prevailing parties for FLSA purposes. Defendants' purported authority is not to the contrary. See McCauley v. Trans Union, LLC, 402 F.3d 340, 341-42 (2d Cir. 2005) (declining to hold that a case was mooted when a conditional Rule 68 offer was rejected). As for the purported April and May 2013 Rule 68 offers of judgment, this Court has already rejected the argument that such offers mooted Plaintiffs' FLSA claims in an oral ruling on the record at a hearing on October 4, 2013. ( See Minute Entry, Oct. 4, 2013). In any event, the argument remains one without merit, largely for the reasons stated by Plaintiffs' counsel. (Connolly Reply Decl. ¶¶ 27-34).

B. Conflicts of Interest

Defendants' second argument is that, by representing all Plaintiffs in this action, their counsel was subject to conflicts of interest. (Defs.' Mem. 6). Those conflicts of interest standing alone, Defendants argue, "merits a downward adjustment to... attorneys' fees." ( Id. ). Defendants' argument is elliptical, but apparently derives from the premise that "Plaintiffs' counsel indicated that no settlement would be had unless it was global." ( Id. ). Defendants cite no authority for the proposition that that position poses a conflict, let alone that it would be a proper basis to reduce Plaintiffs' fee request. Moreover, for the reasons explained above, Defendants' purported settlement offers were for less than Plaintiffs' full claims in a number of respects; it was thus understandable that, after counsel duly relayed such offers individually to Plaintiffs, that they separately but unanimously rejected them. (Connolly Reply Decl. ¶¶ 17-18; id., Ex. 1). Thus, Defendants' second argument is wholly without merit.

C. Hours Billed

Next, Defendants argue that the billing records supporting Plaintiffs' application are "vague and incomplete." (Defs.' Mem. 6). In particular, Defendants identify four alleged types of deficiencies with the hourly logs: (1) vagueness, including the use of disfavored catch-all terms; (2) irrelevance to the causes of action upon which Plaintiffs prevailed; (3) excessiveness given the complexity of the task listed; and (4) improper billing for travel time. (Defs.' Mem. 7-8). Accordingly, Defendants seek both an across-the-board percentage reduction of hours and the disallowance of certain time entries. ( Id. ).

Defendants' arguments are largely unpersuasive. First, to the extent Defendants challenge Plaintiffs' billing as "block billing" - that is, for time entries that "stat[e] the total daily time spent on a case, rather than separating out the time into individual entries describing specific activities, " Adusumelli v. Steiner, Nos. 08-CV-6932 (JMF), 09-CV-4902 (JMF), 10-CV-4549 (JMF), 2013 WL 1285260, at *4 (S.D.N.Y. Mar. 28, 2013) (internal quotation marks omitted) - their argument fails. Even in cases of block billing, a practice both vaguer and more difficult to verify than the billing records Defendants challenge, across-the-board reductions are "disfavored" unless the billings are "independently unreasonable or that the block-billing was mixing together tasks that were not all compensable, or not all compensable at the same rate." Hnot v. Willis Grp. Holdings Ltd., No. 01-CV-6558 (GEL), 2008 WL 1166309, at *6 (S.D.N.Y. Apr. 7, 2008). ...

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