United States District Court, S.D. New York
MEMORANDUM OPINION AND ORDER
GREGORY H. WOODS, District Judge.
Following her acceptance of an offer of judgment made pursuant to Federal Rule of Civil Procedure Rule 68, plaintiff Courtney Black moved to recover attorney's fees under the Fair Labor Standards Act ("FLSA"), 18 U.S.C. § 216(b), and the New York Labor Law ("NYLL"), N.Y. Lab. Law § 198. For the reasons outlined below, the Court finds that Ms. Black is entitled to recover attorney's fees in the amount of $41, 941.50.
On April 19, 2010, Ms. Black started work as a Quantitative Client Consultant with Nunwood, Inc., a London-based consulting firm. See Amended Complaint, Dkt. No. 7, ¶¶ 7, 11. She claims that she regularly worked over 40 hours per week, but was never paid for her overtime hours, despite repeatedly inquiring with Nunwood Human Resources about her wages. Id. at ¶¶ 12-15. After defendants terminated her on April 5, 2012, Ms. Black retained the law firms of Slater Slater Schulman LLP and Katz Melinger PLLC. Id. at ¶ 18; Plaintiff's Memorandum of Law ("Plaintiff's Memo"), Dkt. No. 22, at 1.
Ms. Black commenced this action on October 11, 2013. On February 20, 2014, she amended her complaint to assert four claims against her former employer: (1) violation of overtime wage rules under the FLSA; (2) retaliation under the FLSA; (3) violation of overtime wage rules under the NYLL; and (4) unpaid wages under the NYLL. Amended Complaint, at ¶¶ 20-60. In her amended complaint, Ms. Black sought damages of no less than $166, 239.70, not including costs, fees, and interest. See id. at 7-8. In a June 6, 2014 letter filed with the Court, plaintiff estimated that her damages totaled $119, 269.69, not including costs, fees, interest, or some liquidated damages. See Joint Letter, Dkt. No. 13, at 5-6.
The parties participated in mediation, but settlement negotiations between the parties failed to resolve the dispute. See Plaintiff's Memo, at 2. Ms. Black notes in her motion that during settlement talks on August 11, 2014, she refused to accept Nunwood's offer of $30, 000, at which point the parties reached a stalemate. See id.
On September 5, 2014, defendants served Ms. Black with an offer of judgment pursuant to Rule 68. Id. The offer provided for judgment against defendants in the sum of $30, 000 and stated that this sum "shall include any and all recoverable costs." See Notice of Plaintiff's Acceptance, Dkt. No. 18, at 4-5. Ms. Black accepted the offer on September 18, 2014. See id. at 1.
Three weeks later, on September 26, 2014, Ms. Black filed-virtually simultaneously-both her notice of acceptance and a motion for attorney's fees, requesting at least $37, 980 in fees. See id.; Plaintiff's Motion for Attorney's Fees, Dkt. No. 20. Since then, Ms. Black has requested additional payment for fees in the amount of $18, 917 for work conducted in litigating this motion and in seeking to enforce the judgment. See Katz Declaration, Dkt. No. 33, at ¶ 33. Thus, plaintiff seeks a total of $56, 897 in attorney's fees.
II. PLAINTIFF'S ENTITLEMENT TO FEES
A. Legal Standards
1. Prevailing Party
In order for Ms. Black to be eligible to recover attorney's fees, she must be the prevailing party in this litigation. It is undisputed that she is. "Plaintiffs are the prevailing party for the purposes of the FLSA and NYLL if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'" Kahlil v. Original Old Homestead Restaurant, Inc., 657 F.Supp.2d 470, 474 (S.D.N.Y. 2009) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The offer of judgment in this case establishes that Ms. Black is the prevailing party under the FLSA and the NYLL. Id.; see also Delta Air Lines v. August, 450 U.S. 346, 363 (1981) (Powell, J., concurring) ("A Rule 68 offer of judgment is a proposal of settlement that, by definition, stipulates that the plaintiff shall be treated as the prevailing party."). Therefore, Ms. Black is entitled to pursue attorney's fees. The question is whether those fees were satisfied by the offer of judgement that she accepted.
2. Recovering Fees Under Rule 68 Offers of Judgment
Under Rule 68, "a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued." Fed.R.Civ.P. 68(a). In the event that such an offer is made, but is not accepted, "[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made." Fed.R.Civ.P. 68(d). This cost-shifting rule "encourage[s] settlements without the burdens of additional litigation." Reiter v. MTA New York City Transit Authority, 457 F.3d 224, 229 (2d Cir. 2006). The rule itself is silent as to whether its reference to "costs" includes attorney's fees.
In Marek v. Chesney, the Supreme Court addressed the question whether the term "costs" in Rule 68 included attorney's fees. 473 U.S. 1, 7-8 (1985). The Court found that "the term costs' in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority." Id. at 8. "Thus, absent congressional expressions to the contrary, where the underlying statute defines costs' to include attorney's fees, we are satisfied that such fees are to be included as costs for purposes of Rule 68." Id.
Courts have applied this framework to determine whether attorney's fees are included as "costs" in an offer of judgment using that term. See, e.g., Wilson v. Nomura, 361 F.3d 86 (2d Cir. 2004). Where the underlying statute clearly defines "costs" to include attorney's fees, attorney's fees are considered to be included in an offer of judgement that includes "costs" but is silent as to the treatment of attorney's fees. Id. at 89. On the other hand, when the underlying statute treats costs and attorney's fees separately, an offer of judgment providing for the payment of "costs" alone does not include attorney's fees. ...