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O'Neal v. Americas Best Tire LLC

United States District Court, D. Arizona

April 5, 2017

Deoncea O'Neal, et al., Plaintiffs,
America's Best Tire LLC, et al., Defendants.


          David G. Campbell United States District Judge.

         Plaintiffs Deoncea O'Neal and Ryan White, individually and on behalf of the 12 opt-In Plaintiffs, obtained a $30, 000 settlement from Defendants in this FLSA case. They now ask the Court to award them more than $147, 000 in attorneys' fees and costs. Doc. 74. The motion is opposed and fully briefed. Docs. 75, 76, 77. No party requests oral argument. For the reasons set forth below, the Court will grant the motion in part and deny it in part.

         I. Background.

         Plaintiffs claimed in this case that Defendants, a group of tire stores and their individual owners, violated the Fair Labor Standards Act ("FLSA") by failing to pay their tire porters, crew members, and tire technicians the statutory premium for overtime work. Defendants are approximately 25 limited liability companies, at least some of which own and operate tire stores under the name America's Best Tires (the "ABT companies" or "ABT"); Andrew Dees, an individual who owned all of the ABT companies until September 2013 and continued to own 10 companies until April 2016; and Travis M. Dees, Andrew's cousin, who purchased 14 ABT companies from Andrew in September 2013 and has owned them since. See Doc. 1, ¶¶ 18"45; Doc. 28-1, ¶¶2"3; Doc. 29-1, ¶¶1, 10- Andrew, his wife, and his companies[1] (the "AD Defendants") are represented by different counsel than Travis and his companies[2] (the "TD Defendants").

         Plaintiff Deoncea O'Neal worked for ABT from approximately May 2012 to December 2014. Doc. 1, ¶ 8. Plaintiff Ryan White worked for ABT from approximately April 2012 to February 2014.

         Plaintiffs filed this action in January 2016. Doc. 1. In March 2016, the TD Defendants moved for summary judgment, admitting that they violated the FLSA by failing to pay Plaintiffs a premium for overtime hours and that they were liable for unpaid overtime compensation and liquidated damages, but arguing that the case against them was moot because they tendered back wages and liquidated damages to the named Plaintiffs. Doc. 19. Plaintiffs argued in response that they never accepted the payment offered by the TD Defendants. Doc. 26 at 4 n.2. The Court determined that summary judgment was inappropriate because Plaintiffs had not accepted the checks tendered by the TD Defendants, and the parties remained adverse. Doc. 36 (citing Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663, 670-71 (2016)).

         Following the denial of summary judgment, Defendants asked the Court to require Plaintiffs to post a bond to ensure payment of costs in the event Defendants prevailed. Doc. 44. The Court denied the motion, stating that "Defendants have not shown that Plaintiffs are unlikely to succeed on the merits. They argue that the named Plaintiffs are unlikely to obtain damages beyond those included in the offer of judgment, but they ignore entirely the prospect that Plaintiffs might succeed on the merits by proving their collective action claims." Doc. 51 at 3.

         Thereafter, the Parties reached a settlement and filed a joint motion requesting the Court's approval, which the Court granted. Docs. 72, 73. Under the settlement, the AD Defendants paid $6, 000 and the TD Defendants paid $24, 000. The settlement permits Plaintiffs to seek attorneys' fees and costs.

         II. Analysis.

         A. Prevailing Party.

         Where the filing of an action causes a defendant to pay unpaid wages to an FLSA plaintiff, that plaintiff becomes a prevailing party entitled to attorneys' fees. See Orozco v. Borenstein, No. CV-11-02305-PHX-FJM, 2013 WL 4543836, at *2 (D. Ariz. Aug. 28, 2013). By virtue of the settlement, Plaintiffs and the opt-In Plaintiffs received both liquidated damages and back wages. See Doc. 72-1.

         Defendants contend that Plaintiffs are not the prevailing party. They note that the TD Defendants admitted at the outset of litigation that there were unpaid overtime wages owed to Plaintiffs and attempted to pay the named Plaintiffs the unpaid wages and liquidated damages as early as March 2016. Plaintiffs refused the offer and continued the lawsuit seeking damages for time worked off the clock. Doc. 76 at 5 ("The key reason that the litigation moved forward from Plaintiffs' perspective was because Plaintiffs worked time off the clock and were not paid for it."); see also Doc. 75 at 8. In the end, Defendants note, Plaintiffs recovered nothing for time worked off the clock. Doc. 76 at 5.

         Defendants' initial offers, however, were not equivalent to, or in excess of, the final settlement amount. Defendants admit that the TD Defendants' initial offer included unpaid wages and liquidated damages only for the named Plaintiffs, with nothing for the opt-in Plaintiffs. Doc. 75 at 6-7. Defendants further admit that "[i]n order to get the matter resolved without further litigation, " Defendants agreed to pay amounts not included in the original offer, including approximately $3, 100 to each named Plaintiff as a class representative incentive payment and about $7, 500 in collective liquidated damages to the opt-in Plaintiffs. Id. at 9. These amounts would not have been recovered without Plaintiffs' rejection of the initial settlement offer.

         The fact that Plaintiffs recovered nothing for time worked off the clock does not change the analysis. The joint motion asking the Court to approve the settlement agreement states that "each Plaintiff and Opt-in Plaintiff in this matter will have received 100 percent or more of their unpaid overtime wages, plus equal amounts in liquidated damages, according to Defendants' own time and compensation records.'" Doc. 72 at 3 (emphasis added). This is not an admission that no off-the-clock hours were worked, but a concession that Plaintiffs would give up those claims in exchange for avoiding prolonged litigation. See Id. at 4 ("[A]dditional discovery and motion practice would be extremely costly and time-consuming in light of the potential additional recoverable damages, " and "the risk and expense of pursuing discovery regarding the alleged off-the-clock hours worked . . . would not have been justified, given the low amounts at stake and the likelihood of delayed payment to the class.").

         Defendants also argue that Plaintiffs are not the prevailing party because they refused a $10, 000 settlement offer from the AD Defendants in October 2016 and received a total of $6, 000 from the AD Defendants in the final settlement. Doc. 75 at 8; Doc. 76 at 6. The Court disagrees. The AD Defendants' Offer of Judgment proposed a payment of $10, 000 in exchange for dismissal of claims against the AD Defendants and resolution of "attorneys' fees, taxable costs, expert witness fees and interest incurred by Plaintiffs." Doc. 76-5 at 3-4. The final settlement offer resolved only the issue of damages, not attorneys' fees and other costs. Plaintiffs are the prevailing party in this matter.

         B. Reasonableness.

         Prevailing plaintiffs are entitled to attorneys' fees and costs under the FLSA. See 29 U.S.C. § 216(b); Haworth v. State of Nev., 56 F.3d 1048, 1051 (9th Cir. 1995). The trial court has discretion in determining the amount of an award for attorneys' fees. To determine the reasonableness of requested fees, federal courts generally use the "lodestar" method. See Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); United States v. $186, 416.00 in U.S. Currency, 642 F.3d 753, 755 (9th Cir. 2011). Under this method, the Court must first determine the initial lodestar figure by taking a reasonable hourly rate and multiplying it by the number of hours reasonably expended on the litigation. Hensley, 461 U.S. at 433.

         1. Hourly Rate.

         The "reasonable hourly rate" is not determined by the rates actually charged, but by the rate prevailing in the community for "similar work performed by attorneys of comparable skill, experience, and reputation." Schwarz v. Sec'y of Health & Human Servs., 73 F.3d 895, 908 (9th Cir. 1995). The relevant community is generally the forum in which the court sits. Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997). The party seeking an award of fees should submit evidence - in addition to the attorneys' own affidavits - supporting the rates claimed. Hensley, 461 U.S. at 433; Blum, 465 U.S. at 895 n.ll. "Affidavits of the plaintiffs' attorney[s] and other attorneys regarding prevailing fees in the community, and rate determinations in other cases ... are satisfactory evidence of the prevailing market rate." United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990). Once the party seeking attorneys' fees presents such evidence, the opposing party "has a burden of rebuttal that requires submission of evidence . . . challenging the accuracy and reasonableness of the . . . facts asserted by the prevailing party in its submitted affidavits." Chaudhry v. City of L.A., 751 F.3d 1096, 1111 (9th Cir. 2014) (quoting Camancho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008)) (internal quotation marks omitted).

         Plaintiffs' counsel submit a declaration regarding their experience, expertise, and fee rates, which counsel attests to be the average market rate. Doc. 74-1 at 2-11. Supervising attorney Michael Zoldan has been practicing employment law since November 2010 and requests an hourly rate of $300. Id. at 4-7, ¶¶ 6, 17. Attorney Clifford Bendau was brought in as co-counsel because of his expertise in litigating FLSA actions. Id. at 5, ¶ 8. Mr. Bendau has litigated over 80 wage and hour cases and also requests an hourly rate of $300. Id. Attorney Jason Barrat is a partner at Zoldan Law Group, PLLC, has been licensed for 5 years, and has a practice that is "almost entirely focused on wage and hour claims on behalf of plaintiffs." Id., ¶ 9. "[B]ecause Mr. Barrat's primary assistance in this case related to client communications and discovery matters, counsel have decided to reduce his hourly rate to $250 per hour solely for the purpose of this fee application." Id. Plaintiffs' counsel also submit the declaration of Amy Liberman, an attorney licensed to practice law in Arizona since 1984. Id. at 13-16. Ms. Liberman avers that she is familiar with the hourly billing rates of attorneys in the State of Arizona, and that the typical billing rates for a practitioner of Plaintiffs' counsel's caliber and experience ranges from $250 to $500 per hour. Id. at 16, ¶¶ 8-9.

         Defendants present no evidence that the rates charged by Plaintiffs' counsel are unreasonable for lawyers with similar qualifications in Phoenix, Arizona. Nor have Defendants' counsel offered their own billing rates as a comparison. Courts in this District have found the requested amount to be reasonable for FLSA cases in the Phoenix area. See Riendeau v. Apache Carson Partners, LP, 2013 WL 6728141, at *1 (D. Ariz. Dec. 19, 2013) (finding $300.00 a reasonable hourly rate for a lead counsel in an FLSA case); Orozco, 2013 WL 4543826 at *3 (reducing plaintiffs counsel's hourly rate from $400 to $300 because "$400 an hour is in excess in comparison to an average hourly rate of $300 in the Phoenix market."). Accordingly, the Court finds that the hourly billing rates for Mr. Zoldan and Mr. Bendau are reasonable.

         Similarly, the proposed hourly rate of $250 for Mr. Barrat is not excessive. Plaintiffs concede that Mr. Barrat's "assistance in this case primarily related to client communications and discovery matters" (Doc. 74 at 13), but his contributions were not so few as to be characterized as "paralegal and administrative type tasks" (Doc. 76 at 15). The records show that Mr. Barrat drafted discovery disclosures and responses, aided in calculating damages, and engaged in extensive client communication. See Doc. 74-3 at 2-19. Plaintiffs' proposed billing rate is at the low end of Ms. Liberman's stated range of reasonable rates. See Doc. 74-1 at 16, ¶ 9. The Court finds this rate reasonable.

         2. Hours Billed.

         Defendants next challenge the number of hours billed by Plaintiffs' counsel. Doc. 76 at 8-15; Doc. 75 at 11-13. Specifically, Defendants argue that much of Plaintiffs' counsels' work product should have taken little time because "this litigation is a replica of previous litigation filed by the Zoldan Law Group PLLC against the Travis Dees Defendants in 2015, " and "the only new issue raised in the current litigation was the collective action request." Doc. 76 at 8. Defendants present a list of billed tasks they believe to be "prima facie unreasonable, " including:

• 63.5 hours billed in total for the complaint (Doc. 76, Ex. F (26.3 hours of meetings and communication; 15.6 hours of research; and 22.4 hours spent drafting and reviewing the complaint)).
• 40.4 hours billed for the motion for conditional certification, including 10.8 hours of interoffice ...

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