United States District Court, D. Arizona
ORDER
Honorable Steven P. Logan United States District Judge
Before
the Court is Plaintiff Michael Innes and Larry
Berisfords' (the “Plaintiffs”) Re-Filed
Motion for Reasonable Attorneys' Fees and Costs (Doc.
59), Defendants' Response and their Motion for Sanctions
(Doc. 60), and Plaintiffs' Reply to their Motion for
Attorneys' Fees and Costs and their Response to
Defendant's Motion for Sanctions (Doc. 61). Defendants
did not file a reply.
I.
Background
On
November 20, 2017, opt-in Plaintiffs Innes and Berisford
filed a notice of acceptance of Defendants' offer of
judgment pursuant to Rule 68 of the Federal Rules of Civil
Procedure. (Doc. 41.) On June 15, 2018, the Court ordered
this case to be dismissed on July 13, 2018 if no stipulation
to dismiss was filed prior to the dismissal date. (Doc. 53.)
The Court's Order also advised Plaintiffs that they may
re-file their Motion for Attorneys' Fees and Costs (Doc.
52) upon the entry of final judgment in this case. (Doc. 53.)
On July 18, 2018, the Court dismissed this matter with
prejudice. (Doc. 54.) That same day, Plaintiffs moved
for partial judgment pursuant to Federal Rules of Civil
Procedure 54(b) and for an order allowing them to re-file
their Motion for Attorneys' Fees and Costs. (Doc. 55.)
The Court granted that motion and issued an Order allowing
Plaintiffs to re-file their attorneys' fees motion. (Doc.
58.)
II.
Plaintiffs' Motion for Attorneys' Fees and
Costs
A.
Whether Attorneys' Fees and Costs are
Recoverable
Plaintiffs
argue that they are entitled to attorneys' fees and costs
because Defendants' Rule 68 offers of judgment were
“silent regarding attorneys' fees.” (Doc.
59-1 at 5.) Plaintiffs argue, therefore, that pursuant to 29
U.S.C. section 216(b) and Ninth Circuit law, Defendants must
still pay reasonable attorneys' fees and costs to them.
(Doc. 59-1 at 6.) Defendants respond that their Rule 68
offers of judgment to Plaintiffs covered “all claims
asserted in this action” and, therefore, included
attorneys' fees and costs because the Complaint sought
attorneys' fees and costs. (Doc. 60-1 at 7.) They argue
that Plaintiffs are now asserting, in bad faith, that
Plaintiffs are entitled to more compensation despite the
parties' alleged understanding that the Rule 68 offers of
judgment included compensation for attorneys' fees and
costs. (Doc. 60-1 at 9-10.)
The
Ninth Circuit has stated that a Rule 68 offer of judgment
“must be clear and unambiguous” in waiving or
limiting attorneys' fees (and costs). Nusom v. Comh
Woodburn, Inc., 122 F.3d 830, 833 (9th Cir. 1997);
Erdman v. Cochise County, Ariz., 926 F.2d 877, 880
(9th Cir. 1991); see also Marek v. Chesny, 473 U.S.
1, 6 (1985). More specifically, “[W]here the underlying
statute does not make attorney fees part of costs, [like in
the situation here], it is incumbent on the defendant making
a Rule 68 offer to state clearly that attorney fees
are included as part of the total sum for which judgment may
be entered if the defendant wishes to avoid exposure to
attorney fees in addition to the sum offered plus
costs.” Id. at 834 (emphasis added); see
F. v. Blue Shield of California, No. 09-CV-2037-PJH,
2016 WL 1059459, at *14 (N.D. Cal. Mar. 17, 2016) (clarifying
that, according to Nusom, “[A] Rule 68 offer
may include the amount for attorney's fees (if this
inclusion is expressly stated) or may contemplate that the
court will entertain requests for attorney's fees after
acceptance.”). Therefore, “[A] Rule 68 offer for
judgment in a specific sum together with costs, which is
silent as to attorney fees, does not preclude the plaintiff
from seeking fees when the underlying statute does not make
attorney fees a part of costs.” Nusom, 122
F.3d at 835. Moreover, “[A]mbiguities in a Rule 68
offer are typically construed against the offeror, ”
with defendants bearing the brunt of uncertainty.
Beauchamp v. Anaheim Union High Sch. Dist., 816 F.3d
1216, 1223 (9th Cir. 2016) (citing Nusom, 122 F.3d
at 834).
Here,
of importance, Defendants' Rule 68 offer of judgment to
Plaintiff Berisford reads: “Defendants hereby offer to
allow judgment be entered in Plaintiff Larry Berisford's
favor and against Defendants in the amount of $1,
559.98, as resolution for Plaintiff Larry
Berisford's claims asserted in this action.” (Doc.
60-1 at 24.) Likewise, Defendants' Rule 68 offer of
judgment to Plaintiff Innes reads: “Defendants hereby
offer to allow judgment be entered in Plaintiff Michael
Innes's favor and against Defendants in the amount of
$1, 282.11, as resolution for Plaintiff
Michael Innes's claims asserted in this action.”
(Doc. 60-1 at 20.) Thus, on their faces, these Rule 68 offers
of judgment do not address whether attorneys' fees or
costs are included in Defendants' offers. Accordingly,
Defendants' argument that their offers of judgment
unambiguously and clearly waive or limit the seeking of
attorneys' fees and costs is unpersuasive. See
Gutierrez v. Good Savior, LLC, No. CV 14-4595 (AJW),
2016 WL 5661869, at *4 (C.D. Cal. Sept. 28, 2016);
Williams v. Pinnacle Servs., Inc., No.
3-16-CV-00597-HDM-WGC, 2017 WL 470892, at *1-2 (D. Nev. Feb.
3, 2017).[1] The claims in this case are for unlawful
compensation violations, which, admittedly, do allow for a
recovery of attorneys' fees. The “claim” for
attorneys' fees and costs, however, as cited in
Plaintiffs' Complaint, is “collateral to the main
cause of action.” Lima v. Newark Police
Dep't, 658 F.3d 324, 332 (3d Cir. 2011). Further,
attorneys' fees cannot “fairly be characterized as
an element of ‘relief' indistinguishable from other
elements.” White v. New Hampshire Dep't of
Employment Sec., 455 U.S. 445, 452 (1982).
Moreover,
Defendants' reliance on Radecki v. Amoco Oil
Co., 858 F.2d 397 (8th Cir. 1988), an old out-of-circuit
case, is unpersuasive, as a cursory review of the more
current case law in this circuit (and elsewhere) reveals the
approach the Ninth Circuit takes on this issue. See
Gutierrez, 2016 WL 5661869, at *6 (finding that
“[T]he Eighth Circuit's application [in
Radecki] of Rule 68 is markedly more lenient toward
defendants than are Ninth Circuit precedents.”);
Barbour v. City of White Plains, 700 F.3d 631,
633-34 (2d Cir. 2012) (affirming district court's grant
of attorneys' fees and costs where defendants' offer
of judgment “for the settlement of all claims pending
against the defendants in this action” was clearly
silent as to attorneys' fees and costs); Lima,
658 F.3d at 331-32 (rejecting argument that reference to
“all of Plaintiff's claims for relief” in a
Rule 68 offer explicitly covered attorneys' fees and
costs); Bosley v. Mineral Cty. Comm'n, 650 F.3d
408, 411-13 (4th Cir. 2011) (rejecting argument that
defendants' offer of judgment for “full and
complete satisfaction of [plaintiff's] claim against ...
Defendants” included attorneys' fees and costs).
However,
the Ninth Circuit has indicated that extrinsic evidence may
sometimes be considered in resolving Rule 68 contract
disputes. See Nusom, 122 F.3d at 834-35. But, even
assuming the Court should or could look at extrinsic evidence
here, the evidence presented would not change the fact that
Defendants are ultimately the maker of their own offers and
did not explicitly state, in their written offers, that
attorneys' fees or costs were included. Defendants
apparently clarified with Plaintiff over the phone that their
forthcoming Rule 68 offers of judgment were to include
attorneys' fees. (See Doc. 60-1 at 28.) However,
as the Gutierrez court points out, Plaintiffs should
be able to rely on the actual offer given to them, which,
here, does not explicitly state that attorneys' fees or
costs were included in their offers. 2016 WL 5661869, at
*5-7. Indeed, the Ninth Circuit has suggested defense
counsels take care to draft their offers to explicitly
address fees and costs to “avoid exposure to attorney
fees in addition to the sum offered plus costs.”
Nusom, 122 F.3d at 834. Additionally, as Defendants
point out, “[T]he amounts contained in the offers of
judgment for [Plaintiffs] exactly match the amounts contained
in the second set of checks for Plaintiffs ….”
(Doc. 60-1 at 4.) Thus, the Court cannot say that Plaintiffs
could not have interpreted Defendants' offers to
not incorporate otherwise mandatory costs
and fees in their offers given the amounts. Lastly, the Court
notes that the case law it found while researching this issue
was available to Defendants at the time they were drafting
their Rule 68 offers of judgment. Thus, the Court is
unpersuaded that Defendants should not be held to the actual
offer they presented to Plaintiffs.
Accordingly,
the Court finds that Defendants' Rule 68 offers of
judgment did not state that attorneys' fees or costs were
included and that, therefore, Plaintiffs are entitled to an
award of fees pursuant to 29 U.S.C. section 216(b) and to
costs pursuant to Federal Rule of Civil Procedure 68. See
Marek v. Chesny, 473 U.S. 1, 6 (1985); Nusom,
122 F.3d at 833-34.
B.
Calculation of Reasonable Attorneys' Fees and
Costs
Plaintiffs
seek attorneys' fees in the amount of $35, 682.67 and
costs in the amount of $1040.75. Defendants argue that
Plaintiffs' fees are unreasonable because they are
“requesting over $36, 000.00 for fees and costs on two
offers of judgment that, combined, equal less than
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