Torres v. Gristede's Operating Corp. , 519 F. App'x 1 ( 2013 )

12-3336-cv
Torres v. Gristede’s Operating Corp.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 22nd day of May, two thousand thirteen.
PRESENT: CHESTER J. STRAUB,
REENA RAGGI,
Circuit Judges,
BRIAN M. COGAN,
District Judge.*
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CARLOS TORRES, on behalf of himself and all others
similarly situated, LEWIS CHEWNING,
Plaintiffs–Counter-Defendants–Appellees,
BOBBY IRIZARRY, RUBEN MORA, JOSELITO
AROCHO, JOSEPH CREMA, ALFRED CROKER,
FRANK DELEON, MARIO DIPRETA, WILLIAM
HELWIG, ROBERT MISURACA, ROBERT PASTORINO,
VICTOR PHELPS, DANIEL SALEGNA, GILBERTO
SANTIAGO,
Plaintiffs–Appellees,
RAYMOND ALLEN, LLANOS BLAS, NABIL ELFIKY,
MOHAMMED DABASH, CARLOS MARTINEZ, LUIS
MORALES, STEVE GROSSMAN, FRANKLYN
*
Judge Brian M. Cogan, of the United States District Court for the Eastern District
of New York, sitting by designation.
COLLADO, DINO A. ZAINO, PATRICK LABELLA,
ROBERT MASTRONICOLA, ANTHONY BROOKS,
VICTOR BENNETT, CANDIDO MOREL, JOSE
MARTINEZ, WAYNE HENDRICKS, HAROLD HORN,
TROY MILLER, OUSMANE DIATTA, ELLIOT STONE,
TINA RODRIGUEZ, GABRIEL KARAMANIAN, BRIAN
HOMOLA, ANNA GARRETT, NELSON BETANCOURT,
JOSE DELACRUZ, YURI LAMARCHE, MICHAEL
GROSECLOSE, RODOLFO DELEMOS, PIO MOREL,
ABIGAIL CLAUDIO, MALICK DIOUF, DAVID OTTO,
ALEJANDRO MORALES, VICTOR DIAZ, PAUL
PETROSINO, EDUARDO GONZALEZ, JR., JOSE
BONILLA-REYES, VINCENT PEREZ, MARTIN
GONZALEZ, CALVIN ADAMS, WILLIAM FRITZ,
KATHERINE HALPERN, CHRISTIAN TEJADA,
EDWARD STOKES, PLINIO MEDINA, TOWANA
STARKS, LAWSON HOPKINS, RUBEN M. ALEMAN,
EUGENE RYBACKI, EARL CROSS, MANOLO
HIRALDO, ROBERT HAIRSTON,
Plaintiffs,
v. No. 12-3336-cv
GRISTEDE’S OPERATING CORP., NAMDOR, INC.,
GRISTEDE’S FOODS, INC., CITY PRODUCE
OPERATING CORP., GRISTEDE’S FOODS NY, INC.,
Defendants–Counter-Claimants–Appellants,
GALLO BALSECA, JOHN CATSIMATIDIS, JAMES
MONOS,
Defendants–Appellants.
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APPEARING FOR APPELLANTS: IRA N. GLAUBER (Gregory E. Galterio,
Bension D. De Funis, on the brief), Jaffe & Asher
LLP, New York, New York.
APPEARING FOR APPELLEES: JUSTIN M. SWARTZ (Adam T. Klein, Molly A.
Brooks, Outten & Golden LLP; Matthew D.
Brinckerhoff, Emery Celli Brinckerhoff & Abady
LLP, New York, New York, on the brief), Outten
& Golden LLP, New York, New York.
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Appeal from a judgment and order of the United States District Court for the Southern
District of New York (Paul A. Crotty, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment entered on December 21, 2010, and the fee award dated
August 6, 2012, are AFFIRMED.
Defendants Gristede’s Operating Corp. and certain related companies and individual
officers (collectively, “Gristede’s”) appeal from an award of $3,858,059.85—comprising
$3,415,450.00 in attorney’s fees and $442,609.85 in costs—in connection with a $3,530,000
settlement on the eve of trial of class action claims under the Fair Labor Standards Act
(“FLSA”), see 29 U.S.C. § 201 et seq., and New York state law, see N.Y. Lab. Law § 650et seq.; see also 29 U.S.C. § 216(b) (authorizing award of “reasonable attorney’s fee” and
costs to successful FLSA plaintiff); N.Y. Lab. Law § 663(1) (same for state law claims). We
review the challenged fee award only for abuse of discretion, which we will not identify
unless the award is predicated on an error of law, is based on clearly erroneous factfinding,
or cannot be located within the range of permissible decisions. See Millea v. Metro-N. R.R.
Co., 658 F.3d 154, 166 (2d Cir. 2011). Purporting to identify each type of error, Gristede’s
submits that the district court (1) failed adequately to examine plaintiffs’ counsel’s billing
records, which task, if performed, would have prompted a reduction greater than the 15%
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applied to the requested fees;1 (2) erroneously relied on Gristede’s “vigorous approach to
litigating this case” to justify the fee award, Torres v. Gristede’s Operating Corp., No. 04
Civ. 3316 (PAC), 2012 WL 3878144, at *4 (S.D.N.Y. Aug. 6, 2012); and (3) impermissibly
awarded fees and costs in a total sum that was disproportionate to the settlement and that
exceeded the customary one-third recovery in contingency fee cases. Gristede’s further
maintains that the district court should not have awarded costs related to expert witnesses.
We assume the parties’ familiarity with the facts and record of prior proceedings, which we
reference only as necessary to affirm the challenged award in all respects.
1. Failure To Analyze Billing Records
Gristede’s contends that, although the district court reduced the amount of attorney’s
fees sought, it abused its discretion both by not meaningfully analyzing the contemporaneous
billing records submitted by plaintiffs’ counsel and by failing expressly to consider the
factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974),
in arriving at the contested award. Neither argument is persuasive.
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To support the fee award’s reasonableness, plaintiffs cite to their own “voluntary
reductions” of the requested fees by 25% and costs by 6%, prior to the district court’s
discounting the revised amounts. Appellees’ Br. 2. These initial reductions corrected for,
among other things, “duplicative, vague, or erroneously billed entries,” Torres v. Gristede’s
Operating Corp., No. 04 Civ. 3316 (PAC), 2012 WL 3878144, at *4 (S.D.N.Y. Aug. 6,
2012), including billing at partner rates all time of certain associates who were promoted to
partner during the litigation, see id. at *2 n.3. Accordingly, we view plaintiffs’ revised
submission, inclusive of the 25% reduction, as the starting point for determining the
reasonableness of the challenged award.
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We begin by noting the Supreme Court’s recent instruction that “[t]he essential goal
in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection.”
Fox v. Vice, 131 S. Ct. 2205, 2216 (2011). Insofar as this goal required the district court to
assess counsel’s billing rates, we have directed consideration of “the case-specific variables
that we and other courts have identified as relevant to the reasonableness of attorney’s
fees”—including the Johnson factors—“in setting a reasonable hourly rate.” Arbor Hill
Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182, 190 (2d Cir.
2008); see also id. at 186 n.3 (enumerating Johnson factors).
Gristede’s does not challenge the reasonableness of the hourly rates assigned by the
district court here. Nor could it. After carefully examining rates awarded in prior cases, the
district court discounted by up to 25% the individual rates sought by plaintiffs’ counsel, thus
reducing the fee demand by $600,000. See Torres v. Gristede’s Operating Corp., 2012 WL
3878144, at *3–4. This approach comports with the recognized practice of “percentage cuts
as a practical means of trimming fat from a fee application.” New York State Ass’n for
Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1146 (2d Cir. 1983); accord Kirsch v. Fleet
St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998).
To the extent Gristede’s faults the district court—which presided over the litigation
for more than seven years and adjudicated nine major motions and most discovery disputes
during that time—for not parsing the billed hours further, we identify no abuse of discretion.
Trial courts evaluating fee requests “need not, and indeed should not, become
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green-eyeshade accountants.” Fox v. Vice, 131 S. Ct. at 2216 (noting that district courts
“may take into account their overall sense of a suit” in estimating compensable attorney time,
which determinations are owed “substantial deference”); see McDaniel v. County of
Schenectady, 595 F.3d 411, 416 (2d Cir. 2010) (reiterating that abuse-of-discretion standard
“takes on special significance when reviewing fee decisions” because district court, unlike
reviewing court, is “intimately familiar with” case (internal quotation marks omitted)).
Gristede’s’ contention that the district court abdicated its responsibility to review the
applications, see Lunday v. City of Albany, 42 F.3d 131, 134 (2d Cir. 1994) (vacating fee
award premised on undue deference to attorneys’ billing judgment), is meritless. The district
court summarized the pertinent billing records in charts appearing in its opinion and evinced
familiarity with those records and the case as a whole at oral argument on the fee motion.
When the court asked Gristede’s at oral argument to provide it with an appropriate total
number of compensable hours, Gristede’s responded that only a “one-third” recovery “on a
percentage basis” would be suitable. Hearing Tr. 12, J.A. 2945. We address—and
reject—that contention below.
Accordingly, the district court did not abuse its discretion by failing to examine
plaintiffs’ billing entries in detail or to consider the factors set forth in Johnson v. Georgia
Highway Express, Inc. before awarding fees and costs.
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2. Justification for Fee Award
Gristede’s argues that the district court clearly erred in concluding that plaintiffs’
proposed hours were reasonable in light of Gristede’s’ “vigorous approach to litigating th[e]
case.” Torres v. Gristede’s Operating Corp., 2012 WL 3878144, at *4 (attributing “much of
the work performed by Plaintiffs . . . to Defendants’ choice of litigation tactics”). As record
support for the district court’s conclusion, plaintiffs point to a range of purportedly
obstreperous behavior by Gristede’s that added to the cost of litigation. See Kassim v. City
of Schenectady, 415 F.3d 246, 252 (2d Cir. 2005) (observing that “hours required to litigate
even a simple matter can expand enormously” where “attorney is compelled to defend
against frivolous motions and to make motions to compel [discovery] compliance”).
We need not decide the precise extent to which these litigation tactics expanded
plaintiffs’ costs to conclude that the district court did not clearly err in determining that there
was such an effect, which explained why plaintiffs reasonably incurred such high fees.
Moreover, because the district court referenced Gristede’s’ litigation tactics only to explain
why plaintiffs incurred such high attorney’s fees and not to sanction Gristede’s for defending
the action as it did, there is no merit to the suggestion that the fee award penalized Gristede’s
for exercising its constitutional rights.
3. Proportionality of Fee Award to Settlement Amount
Arguing that the fee award is both disproportionate to plaintiffs’ success in the
litigation and out of line with awards in “common fund” cases, Gristede’s submits that the
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“fee award in this case should have been no more than one-third.” Appellants’ Br. 49. On
deferential abuse-of-discretion review, we disagree.
The proportionality of the $3.42 million fee award is not to be judged, as Gristedes
urges, against the dollar value of the $3.53 million settlement. See Kassim v. City of
Schenectady, 415 F.3d at 252 (dispelling “notion that a fee may be reduced merely because
the fee would be disproportionate to the financial interest at stake in the litigation”). Rather,
“‘the most critical factor’ in determining the reasonableness of a fee award ‘is the degree of
success obtained.’” Farrar v. Hobby, 506 U.S. 103, 114 (1992) (quoting Hensley v.
Eckerhart, 461 U.S. 424, 436 (1983)). Plaintiffs’ successes here included procuring summary
judgment on FLSA liability, see Torres v. Gristede’s Operating Corp., 628 F. Supp. 2d 447,
457–62 (S.D.N.Y. 2008), and achieving a significant monetary recovery (up to $38,000 per
class member) as well as injunctive and other non-monetary relief.
Moreover, even if this were a “common fund” case—which Gristede’s concedes it is
not—we would not identify error in the fee award. As Gristede’s previously acknowledged,
the district court would have remained “free to pick and choose” between the lodestar and
percentage methods in determining a reasonable attorney’s fee. Hearing Tr. 5, J.A. 2938; see
McDaniel v. County of Schenectady, 595 F.3d at 426. Calculated “on the basis of the total
funds made available,” Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 437 (2d
Cir. 2007)—i.e., as if it were a common settlement fund—the $3.86 million total award of
costs and fees here represents 52.2% of the entire $7.39 million recovered by plaintiffs. Such
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an “award does not constitute an abuse of discretion simply because it deviates materially
from the percentage usually awarded in similar cases.” McDaniel v. County of Schenectady,
595 F.3d at 426 (internal quotation marks and alterations omitted); see also Goldberger v.
Integrated Res., Inc., 209 F.3d 43, 50 (2d Cir. 2000) (encouraging use of hours billed as
“cross check” on percentage fee award). In short, although the district court was permitted
to cap the fee request at standard contingency-fee levels, it was not required to do so where,
as here, it concluded that higher fees were reasonably incurred.
Finally, Gristede’s submits that an award of costs and attorney’s fees that equals or
exceeds the pecuniary value of a significant cash settlement contravenes the goals of fee
shifting. This argument overlooks the fact that the $3.53 million settlement reduces on
average to $11,194 for each of the roughly 300 individual class members. While a rational
actor might not pay $10,843—the similarly prorated amount of attorney’s fees—to recover
but a few hundred dollars more, “[t]he whole purpose of fee-shifting statutes is to generate
attorneys’ fees that are disproportionate to the plaintiff’s recovery.” Millea v. Metro-N. R.R.
Co., 658 F.3d at 169 (emphasis in original) (holding that district court impermissibly limited
attorney’s fees to one-third of $612.50 recovery on Family Medical Leave Act claim).
Accordingly, the district court did not abuse its discretion by awarding attorney’s fees
in an amount exceeding one-third of the settlement’s pecuniary value.
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4. Expert Witness Costs
Gristede’s faults the district court for reimbursing plaintiffs $306,918.64 in expert
witness costs, arguing that such costs are not recoverable under the FLSA. Plaintiffs respond
that recovery of expert witness costs is allowed by the partial final judgment entered by the
district court, see Partial Final Judgment ¶ 3, Torres v. Gristede’s Operating Corp., No. 04
Civ. 3316 (S.D.N.Y. Oct, 6, 2011), ECF No. 421 (reciting that defendants remain liable for
“attorneys’ fees, costs, and expenses as determined by the Court”), as well as under New
York law in “extraordinary circumstances,” Alvarado v. Dillon, 67 A.D.3d 1214, 1216, 888
N.Y.S.2d 673, 676 (3d Dep’t 2009) (citing N.Y. C.P.L.R. § 8301)). We need not evaluate
these counterarguments, however, because Gristede’s forfeited its underlying argument
regarding the legal availability of expert witness costs by failing to raise it in the district
court. See Coon ex rel. Coon v. Willet Dairy, LP, 536 F.3d 171, 172 (2d Cir. 2008).
Moreover, the district court did not abuse its discretion in concluding that the invoices
submitted by plaintiffs were sufficient to support the requested expert witness costs.
The judgment of the district court is AFFIRMED.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
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