Anthony Vines v. Welspun Pipes Inc. ( 2021 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 20-2168
___________________________
Anthony Vines, on behalf of himself and all others similarly situated; Dominique
Lewis, on behalf of himself and all others similarly situated
lllllllllllllllllllllPlaintiffs - Appellants
v.
Welspun Pipes Inc.; Welspun Tubular LLC; Welspun USA, Inc.
lllllllllllllllllllllDefendants - Appellees
____________
Appeal from United States District Court
for the Eastern District of Arkansas - Central
____________
Submitted: April 15, 2021
Filed: August 18, 2021
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Before SMITH, Chief Judge, COLLOTON and ERICKSON, Circuit Judges.
____________
SMITH, Chief Judge.
Anthony Vines and Dominique Lewis brought a class action against the
defendant companies (collectively, “Welspun”) under the Fair Labor Standards Act
(FLSA) and the Arkansas Minimum Wage Act (AMWA). Vines and Lewis negotiated
a settlement agreement with Welspun for the wage claim and attorneys’ fees. The
district court did not approve the settlement because it determined that the claim and
fees were not separately negotiated. So the parties tried again, this time presenting the
district court with only the wage-claim portion of the settlement. The district court
approved the wage-claim settlement. Afterward, the parties did not settle on
attorneys’ fees. Vines and Lewis moved for an award of attorneys’ fees and costs. The
district court partially granted the motion, awarding $1.00 in fees. Alternatively, the
district court noted that it would award $25,000 in fees if $1.00 was improper. Vines
and Lewis appeal the district court’s determination that the amounts were not
separately negotiated and the district court’s fee award. We vacate the award and
remand.
I. Background
Vines and Lewis brought a class action against Welspun, alleging that Welspun
had underpaid its employees by improperly rounding the time employees worked in
the company’s favor. They made claims under federal law (FLSA) and state law
(AMWA).
The parties began negotiating a settlement. Eventually, they came to an
agreement for the plaintiffs’ wage claim, attorneys’ fees, and costs. Under the
agreement, Welspun would pay $211,666.36 to the first opt-in class and certain
amounts to each member of the second opt-in class, whose members had not yet been
determined. Welspun would also be required to pay the Sanford Law Firm, PLLC,
(SLF) $89,000 in attorneys’ fees and costs for the first opt-in class and additional
attorneys’ fees that were dependant on the number of people opting into the second
class. In September 2019, the parties filed a joint motion for approval of the
settlement agreement. The district court denied the joint motion because it could not
determine the reasonableness of the agreement without certain information, such as
the number of people in each opt-in class, SLF’s billing records, and an example of
SLF’s contingency-fee agreements with the opt-in classes.
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Following the denial of the joint motion, the parties went back to the drawing
board and reached a new agreement. They moved for its approval in March 2020. The
first opt-in class would receive the same amount—$211,666.36. But this time the
second opt-in class, whose members were now determined, was slated to get
$57,673.24. SLF’s attorneys’ fees and costs were also set at $96,000. And the parties
included with the motion a breakdown of the classes’ members, SLF’s billing records,
and examples of SLF’s contingency agreements. After reviewing these documents,
the district court again denied the parties’ joint motion. It determined that the parties
had not negotiated the plaintiffs’ wage claim separately from the attorneys’ fees, as
required by Barbee v. Big River Steel, LLC, 927 F.3d 1024, 1027 (8th Cir. 2019).
Finally, in May 2020, the parties submitted for approval a settlement agreement
that included amounts only for the wage claim. The amounts were the same as the
parties’ March 2020 agreement. This time, the district court approved the
settlement—finding it reasonable and negotiated separately from the attorneys’
fees—and dismissed the plaintiffs’ claims. The parties did not come to a new
agreement regarding attorneys’ fees and costs.
Then, the plaintiffs moved for attorneys’ fees. They requested that SLF be
awarded $96,000 because that was the amount the parties had previously negotiated.
Alternatively, the plaintiffs argued that $96,000 was a reasonable fee based on the
lodestar fee-calculation method. The district court granted the motion for attorneys’
fees but awarded only $1.00 because of certain of SLF’s billing practices. The district
court also noted that it would award $25,000 if the $1.00 award was vacated on
appeal.
II. Discussion
Vines and Lewis raise three issues on appeal. First, they assert that the district
court erred in denying the March 2020 motion for approval of settlement based on
Barbee. Second, they argue that the district court abused its discretion in awarding
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$1.00 or alternatively $25,000 as a reasonable attorneys’ fee. Finally, they ask that if
we remand, we reassign their case to a different judge.
A. Settlement Approval and Barbee
We have acknowledged a split among the circuits over whether judicial
approval is required for all FLSA settlements. Barbee, 927 F.3d at 1026. In Barbee,
we declined to take a side on the issue and instead provided a narrow holding about
the settlement of FLSA attorneys’ fees: “[A]ny authority for judicial approval of
FLSA settlements . . . does not extend to review of settled attorney fees.” Id. at 1027.
But, assuming that judicial approval was required for the FLSA claim, we left to
district courts “the authority to ensure [(1)] the attorney fees were in fact negotiated
separately and without regard to the plaintiff’s FLSA claim, and [(2)] there was no
conflict of interest between the attorney and his or her client.” Id. at 1027 n.1. We
reasoned that the FLSA’s text treats attorneys’ fees as distinct from the underlying
wage claim and thus judicial approval of attorneys’ fees would not “serve[] the
‘FLSA’s underlying purpose’ of protecting workers’ rights.” Id. at 1027 (quoting
Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015)). So long
as “the parties negotiate the reasonable fee amount separately and without regard to
the plaintiff’s FLSA claim, the amount the employer pays to the employees’ counsel
has no bearing on whether the employer has adequately paid its employees in a
settlement.” Id.Vines and Lewis argue that the district court overstepped its authority under
Barbee to ensure that their wage claim was separately negotiated from their attorneys’
fees.1 They urge that the district court erred by finding that the March 2020 agreement
1
Neither the plaintiffs nor the defendants has asked us to take a side in the
circuit split regarding judicial approval of FLSA settlements. They assume that
judicial approval is required and focus on what it means for the FLSA claim and
attorneys’ fees to be separately negotiated. Thus, we likewise focus our analysis on
that issue. We leave the question of whether judicial approval is required for all
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was not separately negotiated because it later found that the May 2020 agreement
regarding only the FLSA claim was reasonable and fair, although the payments for
the FLSA claim were equal amounts in both agreements.
We have not yet determined what standard applies to our review of a district
court’s determination that attorneys’ fees were not separately negotiated from the
underlying FLSA claim. The district court’s conclusion regarding the separateness
of the negotiations is a factual one. And “we review the district court’s factual
findings and credibility determinations for clear error.” Qwest Commc’ns Corp. v.
Free Conferencing Corp., 837 F.3d 889, 895 (8th Cir. 2016) (quoting Affordable
Cmtys. of Mo. v. Fed. Nat’l Mortg. Ass’n, 815 F.3d 1130, 1133 (8th Cir. 2016)); see
also Fed. R. Civ. P. 52(a)(6). We will thus proceed with a clear-error review. Clear
error exists “only when we are left with the definite and firm conviction that a
mistake has been committed.” United States v. Williams, 605 F.3d 556, 570 (8th Cir.
2010) (quotation omitted).
We conclude that there is sufficient evidence in the record for the district court
to have determined that the wage claim and the attorneys’ fees were not separately
negotiated. The district court considered three factors to support its decision.
First, the parties simultaneously negotiated the wage claim and the attorneys’
fees over e-mail. In some of those e-mails, the settlement was listed as a lump sum,
inclusive of the wage claim, attorneys’ fees, and costs. In other e-mails, the amounts
were listed separately. But in total, the district court determined that the negotiations
FLSA settlements for another day when the issue is squarely before us. See Melgar
v. OK Foods, 902 F.3d 775, 779 (8th Cir. 2018) (“Since neither party discusses
whether district court approval [for FLSA settlements] is required, we need not
address this issue. Instead, we will assume without deciding that the district court has
a duty to exercise some level of review of the Agreement and the attorneys’ fee
award.”).
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made clear “that an agreement on both liability damages and lawyers’ fees was
required before Plaintiffs’ lawyers would agree to finalize settlement of the liability
damages.” Vines v. Welspun Pipes, Inc., 453 F. Supp. 3d 1156, 1159 (E.D. Ark. 2020)
(emphasis omitted).
Second, the parties’ joint motion for approval of the settlement indicated that
the settled-on attorneys’ fees were not primarily based on SLF’s “total amount of
billing to date” but instead on “the likely total amount of billing should [the] case
. . . proceed through extensive discovery, pre-trial[,] and trial.” Second Renewed Joint
Mot. to Dismiss with Prejudice & Approval of Settlement Agreement at 7, Vines v.
Welspun Pipes, Inc., No. 4:18-cv-00509-BRW (E.D. Ark. 2020), ECF No. 81. The
district court reasoned that if the wage claim and attorneys’ fees “[h]ad . . . been
negotiated separately, [Welspun] would not have been worried about additional
lawyers’ fees exposure from discovery or trial, because they would have known there
was not going to be additional discovery or trial.” Vines, 453 F. Supp. 3d at 1160.
Third, the district court identified an e-mail from SLF to Welspun that
attempted to address Welspun’s concern about the size of the attorneys’ fees. SLF
“underst[oo]d the reticence on [Welspun’s] part regarding the attorneys’ fees” but
encouraged Welspun to “focus[] on the global offer,” which would be “a substantial
discount” from what Welspun could face without settlement. Id. (quoting Addendum
to Second Renewed Joint Mot. to Dismiss with Prejudice & Approval of Settlement
Agreement, Ex. A, at 7, Vines v. Welspun Pipes, Inc., No. 4:18-cv-00509-BRW (E.D.
Ark. 2020), ECF No. 82-1). According to the district court, SLF made this “threat of
additional fees ‘should this go to trial’ to pressure [Welspun] to pay lawyers’ fees
that” it otherwise would not have paid. Id. In other words, if the attorneys’ fees and
the wage claim had been negotiated separately, there would have been no threat of
trial because the wage claims would have been definitively settled, regardless of
bloated attorneys’ fees.
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We conclude that the district court did not clearly err when it denied the
parties’ joint motion for approval of the settlement based on its conclusion that the
FLSA claims and the attorneys’ fees were not separately negotiated. The record
before the district court supported that conclusion.
B. Attorneys’ Fees
We review an award of attorneys’ fees for an abuse of discretion. Phelps-Roper
v. Koster, 815 F.3d 393, 398 (8th Cir. 2016). Under the FLSA, district courts “shall
. . . allow a reasonable attorney’s fee to be paid by the defendant, and costs of the
action.” 29 U.S.C. § 216(b). To calculate reasonable attorneys’ fees, federal courts
begin by “employ[ing] the lodestar method, which multiplies the number of hours
worked by the prevailing hourly rate.” Childress v. Fox Assocs., LLC, 932 F.3d 1165,
1172 (8th Cir. 2019). The court “may rely on reconstructed time entries to calculate
the hours worked if those entries satisfactorily document the time,” but it “should
exclude hours that were not reasonably expended from its calculations.” Id. (cleaned
up). Then, it “may reduce [the lodestar] if a plaintiff does not obtain all the relief
. . . sought.” Id. When reducing the lodestar, “[t]he district court also may consider
other factors identified in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714,
717–719 [(5th Cir. 1974)].” Hensley v. Eckerhart, 461 U.S. 424, 434 n.9 (1983).
Here, the district court did not calculate the lodestar. Initially, it properly
determined the prevailing hourly rate for SLF’s attorneys. But its analysis did not
multiply the hourly rate by the reasonable number of hours worked. In fact, the
district court did not determine the number of hours SLF reasonably worked, nor did
it multiply the hourly rate by anything. Instead, the district court only broadly noted
SLF’s billing practices that the court believed warranted a reduction in reasonably
expended hours. Because the district court did not determine the number of hours
reasonably expended, it could not have multiplied that number by the hourly rate.
Consequently, it did not calculate the lodestar.
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The district court must calculate the lodestar. See Jones v. RK Enters. of
Blytheville, Inc., 632 F. App’x 306, 307 (8th Cir. 2016) (unpublished per curiam)
(“To determine a reasonable attorney’s fee [under the FLSA], the district court was
required to first calculate a lodestar, by multiplying the number of hours reasonably
expended on litigation by a reasonable hourly rate, and to then consider whether the
lodestar amount should be reduced, based on appropriate considerations.”). Although
the district court need not explicitly state which hours it finds reasonable, it must at
least calculate the hourly rate and the reasonable number of hours worked. See Fires
v. Heber Springs Sch. Dist., 565 F. App’x 573, 576 (8th Cir. 2014) (unpublished per
curiam) (“The district court’s explicit consideration of both of the inputs into the
lodestar is sufficient for us to conclude that the district court performed the lodestar
calculation.”). It may then reduce the lodestar calculation by considering the
appropriate factors, including unprofessional conduct. When district courts follow
this objective formula, it “permits meaningful judicial review.” Perdue v. Kenny A.
ex rel. Winn, 559 U.S. 542, 552 (2010).
Both the Supreme Court and this court have explained, outside the FLSA
context, that the lodestar calculation is usually necessary. Blanchard v. Bergerson,
489 U.S. 87, 94 (1989) (explaining that Hensley “directed lower courts to make an
initial estimate of reasonable attorney’s fees by [calculating the lodestar]” and calling
“the lodestar approach . . . the centerpiece of attorney’s fee awards”); H.J. Inc. v.
Flygt Corp., 925 F.2d 257, 259–60 (8th Cir. 1991) (“The approach followed by this
circuit requires the calculation of a lodestar figure . . . .”). As the dissent points out,
the Supreme Court recognized a carve out to this general rule in Farrar v. Hobby, 506
U.S. 103 (1992). The Farrar Court, however, applied that carve out to limited
circumstances: The district court may skip the lodestar calculation if it instead only
“considered the amount and nature of damages awarded”—that is, if it considered
“the amount of damages awarded as compared to the amount sought.” Id. at 114–15.
Skipping the lodestar calculation in these limited circumstances makes sense because
“the degree of success obtained” is “‘the most critical factor’ in determining the
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reasonableness of a fee award.” Id. at 114 (quoting Hensley, 461 U.S. at 436). Here,
the district court did not look only at the settlement award; therefore, Farrar’s carve
out does not apply.
The two Eleventh Circuit cases cited by the dissent that affirmed an award of
$0 in attorneys’ fees are distinguishable. Both of those cases had special
circumstances not present here. In Sahyers v. Prugh, Holliday & Karatinos, P.L., the
Eleventh Circuit issued an extremely limited ruling about a plaintiff’s lawyer who
“sued his fellow lawyers” without giving a pre-filing warning, which disregarded
“lawyer-to-lawyer collegiality and civility.” 560 F.3d 1241, 1245 (11th Cir. 2009).
The court “strongly caution[ed] against inferring too much from [the] decision” and
was careful to explain that it expressed no opinion about the decision’s application
to “cases in which lawyers are not parties.” Id. at 1246. Then, in Batista v. South
Florida Woman’s Health Assocs., Inc., an unpublished opinion, the Eleventh Circuit
extended the Sahyers rule to a new category of cases: nuisance litigation. 844 F.
App’x 146, 157–60 (11th Cir. 2021) (unpublished per curiam). “[N]uisance litigation
is characterized not only by the extortionate nature of the action . . . but also by the
frivolity and groundless nature of the claim.” Id. at 159. In Batista, the defendant had
mailed the relevant paycheck to the plaintiff before suit, but the paycheck never
reached the plaintiff. Id. at 157. Immediately after suit, the defendant wrote the
plaintiff a new check, but the plaintiff’s lawyer demanded more for attorney’s fees.
Id. at 157–58. The Eleventh Circuit explained that the lawsuit was groundless
because the case “involved a lost paycheck—nothing more”; either a call before filing
suit or accepting the rewritten check would have solved the plaintiff’s case. Id. at
157–58.
Neither the Sahyers scenario (where lawyers are parties and opposing counsel
acts uncivilly) nor the Batista scenario (where the lawsuit is frivolous or groundless)
are present here. Cf. Tyler v. Corner Constr. Corp., Inc., 167 F.3d 1202, 1206 (8th
Cir. 1999) (explaining when the plaintiff has received an award from a “nuisance
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settlement,” which is a settlement “despite the fact that the case against the defendant
is frivolous or groundless,” an award of attorney’s fees would be unjust). The
plaintiffs in this case chinned the bar; their claim was not frivolous or groundless, and
lawyers are not parties in this case.
Based on the record before us, it is unlikely that a $1.00 attorneys’ fee is
reasonable. The plaintiffs obtained an almost $270,000 settlement, and SLF likely
performed some reasonably expended hours. But without any reference to the lodestar
amount, the district court said it awarded $1.00 because it could not award any less.
Vines v. Welspun Pipes, Inc., No. 4:18-cv-00509-BRW, 2020 WL 3062384, at *10
(E.D. Ark. June 9, 2020) (“[I]f it weren’t for the FLSA’s use of the phrase ‘shall’
award a lawyers’ fee[,] I would be inclined to award nothing at all.”). Without a
supporting rationale based on the lodestar calculation and reduction, this was error.
Compare Houser v. Matson, 447 F.2d 860, 863 (9th Cir. 1971) (finding that $1.00 in
attorneys’ fees for an FLSA case “frustrated Congressional purpose by leaving the
onus of counsel fees entirely upon the successful [plaintiffs]”), with Rampersaud v.
Ackeridge Commc’ns, LLC, No. 6:06-cv-125-Orl-31KRS, 2006 WL 4835924, at *4,
5 (M.D. Fla. Aug. 22, 2006) (awarding $1.00 in attorneys’ fees in an FLSA case
because the billing documents that the plaintiff’s attorneys submitted “provided no
description of the work [the attorneys had] performed on the case” and thus gave the
court “no basis to assess a lodestar”).
The district court also noted that, if its $1.00 award was improper, it would
award $25,000 because that was “the amount unreasonably rejected by SLF in
[Welspun’s] August 2019 [offer].” Vines, 2020 WL 3062384, at *10. This amount
also lacks a basis in the lodestar calculation. It may be that $25,000 is a reasonable
amount of attorneys’ fees, but we cannot conduct a meaningful review of the district
court’s determination on this record.
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Because the record contains no lodestar calculation, we vacate the award of
attorneys’ fees. We note that “[i]t is well within the district court’s broad discretion
. . . to consider . . . the party’s unprofessional conduct in the case.” Wescott Agri-
Prods., Inc. v. Sterling State Bank, Inc., 682 F.3d 1091, 1095 (8th Cir. 2012). But this
consideration should come after the district court calculates the lodestar and has
moved on to reducing that number. Cf. Jaquette v. Black Hawk Cty., 710 F.2d 455,
459 (8th Cir. 1983) (affirming attorneys’ fees where the lodestar was reduced because
“the hours claimed were ‘excessive,’ spent on issues of ‘marginal merit,’ and . . . the
plaintiff’s attorneys were guilty of ‘misconduct’ in conducting the litigation”).
C. Reassignment
Finally, Vines and Lewis ask us to reassign this case on remand. They did not
move for recusal below. There is “[p]recedent . . . in this circuit for reviewing recusal
claims first raised on direct appeal. . . . However, when a recusal claim is not raised
below, we . . . review only for plain error.” Fletcher v. Conoco Pipe Line Co., 323
F.3d 661, 663 (8th Cir. 2003). Under plain-error review, our review “is narrow and
confined to the exceptional case where error has seriously affected the fairness,
integrity, or public reputation of the judicial proceedings. We will only reverse if the
error prejudiced the substantial rights of the [appellants] and would result in a
miscarriage of justice.” Id. at 663–64 (cleaned up).
Under 28 U.S.C. § 455(a), “disqualification is required if a reasonable person
who knew the circumstances would question the judge’s impartiality, even though no
actual bias or prejudice has been shown.” Id. at 664 (quoting United States v. Tucker,
78 F.3d 1313, 1324 (8th Cir. 1996)). Vines and Lewis must overcome a heavy burden
because “a judge is presumed to be impartial.” Id. (quoting Pope v. Fed. Express
Corp., 974 F.2d 982, 985 (8th Cir. 1992)). That burden is made heavier still under
plain-error review.
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Vines and Lewis point us to various judicial rulings by the district court that
they claim show that the district court is biased against them. But “‘[j]udicial rulings
alone almost never constitute a valid basis for a bias or partiality motion,’ and
‘judicial remarks . . . that are critical or disapproving of, or even hostile to’ a party
‘ordinarily do not support a bias or partiality challenge.’” United States v. Thomason,
991 F.3d 910, 916 (8th Cir. 2021) (second alteration in original) (quoting Liteky v.
United States, 510 U.S. 540, 555 (1994)). On this record, the plaintiffs have failed to
show under plain-error review that the district court would be unable to adequately
award attorneys’ fees on remand. In fact, the district court has shown that it is capable
of appropriately determining reasonable attorneys’ fees for SLF after a remand; it has
done it before. See Jones v. RK Enters. of Blytheville, Inc., 672 F. App’x 613 (8th Cir.
2016) (unpublished per curiam). We decline to reassign the case.
III. Conclusion
We vacate the district court’s award of attorneys’ fees and remand for
proceedings consistent with this opinion.
COLLOTON, Circuit Judge, dissenting.
I would affirm the order of the district court, and I commend to the interested
reader a series of orders entered by the district court in this drawn-out litigation over
attorney’s fees. See Vines v. Welspun Pipes, Inc., No. 4:18-CV-00509-BRW, 2020
WL 3062384 (E.D. Ark. June 9, 2020); R. Doc. 90; R. Doc. 88; R. Doc. 85; Vines v.
Welspun Pipes, Inc., 453 F. Supp. 3d 1156 (E.D. Ark. 2020); R. Doc. 60. These
filings describe, in Judge Wilson’s inimitable style, a course of attorney conduct in
cases under the Fair Labor Standards Act that is a stain on our system.
The basic problem is this: When a lawyer representing employees who sue for
unpaid wages simultaneously engages in settlement negotiations over the merits of
the claim and his own fee, “a significant conflict of interest between client and
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attorney is created.” Staton v. Boeing Co., 327 F.3d 939, 964 (9th Cir. 2003) (quoting
Court Awarded Attorney Fees, Report of the Third Circuit Task Force, 108 F.R.D.
237, 266 (1985)). In combined negotiations, plaintiffs’ counsel negotiates “a fee
ultimately destined for his pocket” when “all thoughts ought to be singlemindedly
focused on” the interests of his clients. Obin v. Dist. No. 9 of Int’l Ass’n of
Machinists & Aerospace Workers, 651 F.2d 574, 582 (8th Cir. 1981). The defendant
employer, for its part, is interested “only in disposing of the total claim,” and is
therefore indifferent to the allocation of a settlement between plaintiffs’ counsel and
the plaintiffs. Staton, 327 F.3d at 964 (internal quotation omitted). With no
resistance from the defendant, there is little to deter plaintiffs’ counsel from urging
“settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet
treatment on fees.” Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 524 (1st
Cir. 1991). The district court was thus well advised to scrutinize the settlement for
signs that such a conflict of interest infected the agreement.
In conducting its review, the district court uncovered not only that the law firm
representing the plaintiffs failed to negotiate the merits and attorney’s fees separately,
see Barbee v. Big River Steel, LLC, 927 F.3d 1024, 1027 n.1 (8th Cir. 2019), but that
the conflict of interest tainted the entire settlement agreement. During negotiations,
the law firm attempted to persuade the defendant, Welspun Pipes, to agree to an
exorbitant amount of attorney’s fees by emphasizing that the settlement was a
“substantial discount” on total liability and fees, and that Welspun Pipes was getting
a “pretty sweet deal” on some of the plaintiffs’ claims. R. Doc. 82-1, at 7. The
district court cried foul, reasoning that the law firm’s attorneys “knew the hand they
were dealt” with a solid case on the merits, and “used that to squeeze excessive fees.”
Vines, 453 F. Supp. 3d at 1160.
The district court concluded that such conduct deserves no reward, and
attempted to combat the abusive practices by minimizing the attorney’s fee under the
statute. See 29 U.S.C. 216(b). As other courts have recognized, under the Fair Labor
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Standards Act, “a reasonable fee may be no fee at all.” Batista v. S. Fla. Woman’s
Health Assocs., Inc., 844 F. App’x 146, 157 (11th Cir. 2021) (per curiam); see id. at
152-56 (collecting cases awarding no fees). Where attorney conduct stands “in stark
contrast to the behavior expected of an officer of the court,” an award of a bare
minimum fee is a proper exercise of discretion. Sahyers v. Prugh, Holliday &
Karatinos, P.L., 560 F.3d 1241, 1245 (11th Cir. 2009). This court has applied the
same reasoning in the context of a contractual fee award, saying that it is “well within
the district court’s broad discretion in reviewing a request for fees to consider not
only the amount of the fees, but also the party’s unprofessional conduct in the case.”
Wescott Agri-Prods., Inc. v. Sterling State Bank, Inc., 682 F.3d 1091, 1095 (8th Cir.
2012).2
The majority, however, is fixated on whether the district court calculated a
“lodestar amount” of attorney’s fees based on the number of hours worked and the
appropriate hourly rate. That concern is misplaced here: the whole point of the
district court’s order is that the lodestar amount of fees was immaterial on this record,
because counsel’s egregious conduct warranted an award of a de minimis fee, if any
at all.
A lodestar analysis is not invariably required. In appropriate circumstances,
a district court “may lawfully award low fees or no fees without . . . multiplying ‘the
number of hours reasonably expended . . . by a reasonable hourly rate.’” Farrar v.
Hobby, 506 U.S. 103, 115 (1992) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433
(1983)). “[E]ven before calculating a lodestar or wading through all the
reasonableness factors,” it may be clear that “the reasonable fee is no fee at all.” Id.
at 118 (O’Connor, J., concurring). Minimal success by a prevailing party is one
2
The district court here thought the word “shall” in the statute required an
award of at least one dollar, so we need not resolve whether an award of no fee at all
would be consistent with the direction to “allow a reasonable attorney’s fee.” 29
U.S.C. § 216(b) (emphasis added).
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circumstance in which the routine lodestar analysis is not required; unacceptable
attorney conduct should be another. Our own precedent in Wescott Agri-Products
upheld a decision to deny attorney’s fees based on unprofessional conduct where the
district court refused even to look at the prevailing party’s billing records. 682 F.3d
at 1092, 1094.
The majority declares it “unlikely” that the award of one dollar is reasonable,
but does not fully consider the district court’s reasons for the award. The district
court deemed it “unacceptable” that the law firm “was hanging over Defendant’s head
the threat of the fees that might be incurred if it did not pay the unreasonable (and
unearned) fee [the law firm] was demanding.” Vines, 2020 WL 3062384, at *8. The
court found that counsel’s conduct was “contrary to the purpose of fee-shifting
statutes, evidence of bad faith, and possibly in violation of the Rules of Professional
Ethics.” Id. at *9.
Concerned that lawyers have “chosen to hijack these statutes for their own
selfish ends,” the district court emphasized that “FLSA cases are not conduits for
funneling unearned fees into lawyers’ pockets.” Id. at *9 (internal quotation omitted).
The court awarded only one dollar in fees, not simply because of an everyday concern
about “billing practices,” ante, at 3, or merely because the court “could not award any
less.” Ante, at 10. Rather, the court cited the law firm’s “incorrigible practices, the
unreasonable $115,000 fee demand, [the law firm’s] attempts to drum up billable
hours by extending the case, the numerous billing record deficiencies, and the
attempted extortion of $96,000 in unearned fees by negotiating contrary to Barbee.”
Vines, 2020 WL 3062384, at *10.
The litigation did achieve a settlement for the employees, but it came in a
“relatively straightforward” FLSA case that involved “very little ‘legal’ work,” with
the employer doing the “heavy lifting” by generating the payroll summary. Id. at *8.
The case ordinarily would have justified a modestly greater fee award for lawyers
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who processed a simple resolution, but the court concluded that the law firm forfeited
its right to such a fee by engaging in exploitative conduct and exhibiting “singular
intransigence.” Id. at *10.
On this record, the district court did not abuse its discretion in making the
award of one dollar. The multiple orders specify the reasons for the decision, permit
meaningful appellate review, and provide appropriate grounds for minimizing the fee
award. The district court properly “refused to reward—and thereby to
encourage”—counsel’s litigation conduct. Sahyers, 560 F.3d at 1245. The majority’s
rationale, by contrast, portends a no-lose situation for cunning plaintiffs’ lawyers: try
to extract unearned fees from the defendant while combining a negotiation of merits
and fees, but if the district court recognizes the tactic, then settle for the standard
lodestar amount that would have been the proper fee award in the first place. One
hopes that the district court’s acknowledged authority to reduce the lodestar amount
based on unprofessional conduct may provide a modicum of deterrence, see ante, at
8, but the message coming from the majority’s decision seems quite different.
This court observed in Wescott Agri-Products that “bedrock principles”
concerning “civility, professionalism, integrity, efficiency, expediency, and
deterrence” supported a denial of attorney’s fees in that case. 682 F.3d at 1096. As
we said then, “[i]f our courts more often recognized and enforced these principles,
maybe some . . . litigation excesses afflicting the court system would decline.” Id.
Given the time and energy expended by the district court to rein in the offending
attorney conduct in this case, it seems to me that this court at least should
acknowledge the district court’s rationale for the fee award and address head-on
whether it is sufficient to justify the decision. In my view, the district court’s effort
and bottom-line conclusion deserve the support of this court, and I would affirm the
order.
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