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Supreme Court, New York,



Decided: April 12, 2018

GLEASON, DUNN, WALSH & O'SHEA, Attorneys for Plaintiff, Lisa F. Joslin, Esq., Of Counsel, 40 Beaver Street, Albany, New York 12207 OXMAN LAW GROUP, PLLC, Attorneys for Defendant, Julie Plitt, Esq., Of Counsel, 120 Bloomingdale Road, Suite 100, White Plains, New York 10605

This matter comes before the Court to decide plaintiff's motion for an award of attorney's fees, costs and interest following a four-day trial without jury that resulted in a verdict in favor of plaintiff Bryan Orser (“plaintiff”) awarding money damages for claims arising from his employment with defendant Wholesale Fuel Distributors-CT, LLC (“defendant”). The Court assumes the parties' familiarity with the prior decisions of the Court. As relevant here, defendant was found liable to plaintiff for damages arising from defendant's breach of an employment contract and from defendant's statutory violations. This Court held plaintiff was entitled to aggregate damages of $55,347, including $16,128 in damages arising from defendant's violation of Labor Law Article 6. Specifically, in violation of Article 6, defendant failed to pay (1) a proportionate share of the nondiscretionary “bonus” to which plaintiff was entitled, (2) costs for use of a personal vehicle and internet service and (3) plaintiff's final, earned weekly salary check; the final paycheck was not delivered until shortly until after this action was commenced. Pursuant to Labor Law § 198 (1-a), a prevailing plaintiff is entitled to recover the full amount of any underpayment, all reasonable attorney's fees, prejudgment interest and certain litigation costs. Accordingly, following the Court's decision after trial awarding these damages, plaintiff now moves for attorney's fees of $260,707.50, costs/disbursements of $10,201.03, pre-judgment interest in the amount of $18,109.84 and post-judgment interest pursuant to statute. Defendant opposes plaintiff's motion, arguing that plaintiff is not entitled to attorney's fees or alternatively that any award of fees should be calculated in a different manner and amount than claimed by plaintiff. The parties expressly declined a hearing to address any factual issues and requested that the Court decide this motion based exclusively upon their submissions and the oral argument conducted on the record on January 25, 2018.

As a preliminary matter, the Court rejects defendant's contention that plaintiff is foreclosed from recovering attorney's fees under Article 6 because the Court's award of damages (like the parties' contract) characterized wrongfully withheld monies as a “bonus.” Plaintiff's “bonus” was supposed to be paid in a lump sum at the end of the year in which it was earned, such that it constituted a form of “balloon” payment. However, the “bonus” was earned, and its payment was guaranteed and nondiscretionary as a term and condition of employment, such that it constituted “wages” within the meaning of Labor Law § 190 (1), and defendant's wrongful failure to pay the bonus triggers plaintiff's claim for attorney's fees under the statute. See, Ryan v. Kellogg Partners Institutional Services, 19 N.Y.3d 1, 945 N.Y.S.2d 593, 968 N.E.2d 947 (2012) citing Pachter v. Bernard Hodes Group, Inc., 10 N.Y.3d 609, 861 N.Y.S.2d 246, 891 N.E.2d 279 (2008).

When an employee prevails in a covered wage claim action, “the court shall allow such employee to recover the full amount of any underpayment, all reasonable attorney's fees, prejudgment interest as required under the civil practice law and rules” and, in some circumstances, an additional amount for liquidated damages. Labor Law § 198 (1-a). This fee-shifting statute is analogous to its federal counterpart under the FLSA. See, Allende v. Unitech Design, Inc., 783 F.Supp.2d 509 (S.D.N.Y. 2011). Where state or local remedial statutes, such as civil rights statutes, are substantively and textually similar to federal counterparts, New York courts generally interpret them consistent with the federal statutes. Albunio v. City of New York, 23 N.Y.3d 65, 989 N.Y.S.2d 1, 11 N.E.3d 1104 (2014) citing McGrath v. Toys R Us, Inc., 3 N.Y.3d 421, 788 N.Y.S.2d 281, 821 N.E.2d 519 (2004).

In determining a fee award, “the typical starting point is the so-called lodestar amount, that is ‘the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.’ ” Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007) citing Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984).1 “In determining the number of hours reasonably expended for purposes of calculating the lodestar, the (trial) court should exclude excessive, redundant or otherwise unnecessary hours, as well as hours dedicated to severable unsuccessful claims.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999) quoting Hensley v. Eckerhart, 461 U.S. at 433-35, 103 S.Ct. 1933. Attorney's fees may be awarded for unsuccessful or “uncovered” claims where they are “inextricably intertwined” with claims arising under the fee-shifting statute or where statutory and unrelated common law claims “involve a common core of facts or are based on related legal theories.” Quaratino v. Tiffany & Co., 166 F.3d at 425 (citations omitted). The lodestar may be adjusted based on several factors, including the “results obtained” especially where the “prevailing” plaintiff succeeded on only some of his claims for relief; where a plaintiff has achieved only partial success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount ․ even where the plaintiff's claims were interrelated, nonfrivolous, and raised in good faith.” Hensley v. Eckerhart, 461 U.S. at 434-436, 103 S.Ct. 1933. “[T]he lodestar method produces an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010). “A request for attorney's fees should not result in a second major litigation․ Where settlement is not possible, the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. at 437, 103 S.Ct. 1933.

“The product of reasonable hours times a reasonable rate does not end the inquiry. There remain other considerations that may lead the ․ court to adjust the fee upward or downward.” Id. at 434, 103 S.Ct. 1933. Counsel for the prevailing employee should exclude from the fee application hours that are excessive, redundant or otherwise unnecessary, as “[h]ours that are not properly billed to one's client are also not properly billed to one's adversary pursuant to statutory authority.” Id. “Although the lodestar methodology results in a ‘presumptively reasonable fee,’ it is not conclusive in all circumstances ․ (but) a court may not adjust the lodestar based upon factors already included in the lodestar calculation itself because doing so effectively double-counts these factors.” Millea, 658 F.3d at 166-76. Thus, the Court must determine the prevailing hourly rates for the attorneys who represented plaintiff and the number of hours reasonable expended by them.

Courts generally apply the “forum rule” under which the prevailing hourly rate in the community is used to calculate the lodestar. Arbor Hill Concerned Citizens, supra at 190. “A reasonable attorney's fee is one that is adequate to attract competent counsel, but that does not produce windfalls to attorneys.” Blum v. Stenson, 465 U.S. 886, 897, 104 S.Ct. 1541 (citing legislative history). The Court will compare the hourly rate claimed by counsel for the prevailing party to the rate that is customarily charged for similar services by counsel with like experience and skill to assess the reasonableness of the claimed hourly rate. See, Matter of Quill v. Cathedral Corp., 241 A.D.2d 593, 659 N.Y.S.2d 919 (3d Dep't 1997); Miele v. New York State Teamsters Conf. Pension & Ret. Fund, 831 F.2d 407 (2d Cir. 1987). The Court must determine “whether the requested hourly rate is ‘presumptively reasonable’ given the nature of the case and the work performed, the status, experience, and/or expertise of the individuals performing the work, and the prevailing rates of similarly-situated attorneys and the relevant legal community.” R.M. Railcars LLC v. Marcellus Energy Services, LLC, 2015 WL 4508451 (N.D.N.Y. 2015). Thus, the Court may consider the rates awarded in other cases in the relevant jurisdiction (here the Northern District of New York), the rates usually charged by the firm that represented plaintiff here and the Court's own familiarity with the rates prevailing in the locale. Lisa Joslin, Esq., the firm partner who acted as trial counsel and who either conducted or supervised most litigation tasks, seeks compensation at $325 per hour. She averred that she charges private, paying clients between $215 to $350 per hour, depending upon the type of the client and the nature and frequency of the work. The other partners who performed discrete tasks also seek compensation at $325 per hour. Plaintiff's counsel seeks compensation for associate attorney Daniel Jacobs, Esq. at the hourly rate of $200 based upon his admission to practice in 2008 and his focus on employment litigation since 2010. Plaintiff also seeks compensation for former associate attorney Peter Sinclair, Esq. at $200 per hour based upon his 2010 admission to practice. Defendant objects to the rates claimed by plaintiff and submits that the rates for firm partners should be set at $210 per hour (rather than $325 per hour) and associates' rates set at $150 per hour (rather than $200 per hour).

The parties cite various recent cases to support their respective arguments concerning the prevailing rates in the Northern District. However, defendant's reliance on cases involving consumer debt collection litigation is misplaced, as such cases are distinct from litigation of wage cases under Labor Law Article 6 in terms of complexity, availability of qualified counsel, the time and labor required, the preclusion of counsel from working on other cases, the actual rates charged to private clients, and the awards in similar cases. Plaintiff's counsel has submitted evidence that the partners who worked on this matter are among the most experienced and skilled employee-side employment litigators in the district, that the case involved much labor (though the legal issues were not novel), the time required for discovery and trial necessarily limited the availability of one partner to work on other matters, and that the firm undertook to represent plaintiff on a contingency-fee basis. Based upon consideration of the cases cited by the parties within the Northern District of New York, the Court finds that compensation of Ms. Joslin and other firm partners at $275 per hour and associates at $190 per hour is commensurate with the hourly rates that have been approved recently by other courts in the jurisdiction involving analogous litigation. See R.M. Railcars, LLC. v. Marcellus Energy Services, LLC, 2015 WL 4508451, *6 (N.D.N.Y. 2015); Curves International Inc. v. Nash, 2013 WL 3872832, *5 (N.D.N.Y. 2013). In deciding upon these rates, the Court notes that while plaintiff submitted affidavits from respected disinterested counsel attesting to current market rates, the record is bereft of any evidence that other courts in the Northern District (or the Third Department) have specifically approved the higher rates sought by plaintiff's firm in similar labor law litigation. Additionally, other than providing the range of hourly rates charged to the firm's paying clients, the record does not detail the rates charged to clients for employment law matters specifically, such that the Court cannot ascertain whether the instant litigation is more like the legal work for which clients willingly pay $350 or more analogous to the lower $210 rate billed to paying clients.

Next, the Court must determine the number of reasonably expended hours, mindful that a paying client would seek efficient prosecution of his case and that fees that would be rejected as exorbitant by a paying client may not be passed along to one's adversary under a fee-shifting statute. The attorneys applying for fees under the statute must document the application with contemporaneous time records detailing for each lawyer the date, the hours expended, and the nature of the legal task. New York State Assoc. for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983). In assessing the reasonableness of the hours spent by counsel, the issue “is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in the same time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992) (citation omitted). Plaintiffs should receive attorney's fees under the FLSA and New York Labor Law only for hours that were reasonably expended, and courts should exclude fees billed for time that is excessive, redundant or otherwise unnecessary. Kahlil v. Original Old Homestead Restaurant, Inc., 657 F.Supp.2d 470 (S.D.N.Y. 2009) citing Quaratino v. Tiffany & Co., 166 F.3d at 425. Time spent by attorneys on administrative tasks cannot be recovered, vague billing entries may prompt a reduced fee award and a reduction may be warranted where the “hours billed are disproportionate to the quantity or quality of the attorneys' work.” Sevilla v. Nekasa Inc., 2017 WL 1185572 at *7 (S.D.N.Y. 2017) (citations omitted). Plaintiff's motion is supported with a copy of the contemporaneous attorney time records that detail the time spent by each particular attorney on specific dates, together with a brief narrative description of the legal task.

Plaintiff submits that the attorneys devoted the following hours to this litigation:

Lisa Joslin—466.70 hours

Ronald G. Dunn—.75 hours

Mark T. Walsh—.25 hours

Richard C. Reilly—5 hours

Daniel A. Jacobs—440 hours

Peter N. Sinclair—65.40 hours

Additionally, plaintiff's counsel states that 92 hours were deducted or “written off” in an exercise of billing judgment, particularly time entries for reviewing legal documents related to other legal proceedings involving the parties and related entities.

Defendant objects to the requested fee on the grounds that some hours were excessive, redundant or unnecessary and that fees should not be awarded for work on issues unsuccessfully litigated, such as hours devoted to a dispositive motion and a pre-trial motion in limine addressed to evidentiary issues. However, defendant does not otherwise particularize its contention concerning excessive or redundant fees, except to claim that the work of Mr. Walsh and Mr. Reilly was duplicative of Ms. Joslin's work. Defendant also contends, without citation to any precedent, that plaintiff's application for attorney's fees of approximately $260,000, given the total award of $55,347, is “unfounded.” In essence, defendant argues that the result obtained, i.e. a modest damages award compared to a substantial claimed fee, militates in favor of a reduced fee. As set forth below, resolution of this objection turns not on whether the fee is disproportionate to the recovery but rather whether the fee can be adjusted downward due to a disappointing result, a distinction which other courts insist is not merely semantic.

“[C]alculating attorneys' fees as a proportion of damages runs directly contrary to the purpose of fee-shifting statutes ․ [t]he whole purpose of fee-shifting statutes is to generate attorneys' fees that are disproportionate to the plaintiff's recovery.” Millea v. Metro-North R. Co., 658 F.3d 154, 169 (2d Cir. 2011); see Kassim v. City of Schenectady, 415 F.3d 246 (2d Cir. 2005) (while the degree of success obtained is the most critical factor in awarding fees, a fee may not be reduced “merely because the fee would be disproportionate to the financial interest at stake in the litigation”). In cases “involving a common core of facts, litigated on a single theory or closely related theories - in which a plaintiff may have achieved a disappointing degree of success, but recovered more than merely nominal damages,” the Court may reduce the fee awarded to a prevailing plaintiff below the lodestar based upon “partial or limited success.” Kassim, 415 F.3d at 255-56. In Kassim, the prevailing plaintiff in a civil rights action commenced in the Northern District received a verdict of $2,500; the district court declined to award the full claimed lodestar-based fee of $65,400, premised upon 477.5 hours of attorney time. The Court instead allowed a total of 90 hours, resulting in a fee of $12,000, implying in its decision that regardless of the result achieved by litigation, the claimed time was excessive and unreasonable. The Second Circuit remanded for clarification, explaining that reducing the fee due to the disproportion between the $2,500 verdict and the $65,400 fee would constitute legal error, whereas a reduction of the fee below reasonable lodestar due to the disappointing degree of success in the final result would be permissible. 415 F.3d at 255.

Here, the recovery was less than the amount sought, but it was not de minimis or merely technical. Compare, Farrar v. Hobby, 506 U.S. 103, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). The amount recovered was less than the amount sought in part due to plaintiff's mitigation of damages through other employment and in part due to failure of proof that plaintiff performed duties as marketing manager during part of the duration of the employment agreement. The facts surrounding the wage claim were inextricably linked to the breach of contract claims, such that defendant has not demonstrated that any part of the legal services provided to plaintiff is not recoverable as a matter of law under the fee-shifting jurisprudence. Indeed, plaintiff's recovery on the statutory claim required plaintiff to first prove an enforceable agreement from which the right to wages and reimbursable expenses arose, such that counsel was required to both affirmatively prove contract formation and terms and disprove defendant's contention that the agreement itself was the product of fraud. The conflicting arguments concerning contract formation were asserted in good faith by both parties, but consumed substantial time and resources and resulted, at least in part, in the dispositive and in limine motions. Plaintiff persuasively argues that his counsel was required to devote substantial efforts to rebut defendant's theory that no bona fide contract existed between the parties, and that defendant's litigation tactics prompted plaintiff to respond in ways that increased the costs of litigation, including counsel fees. Defendant conceded at oral argument that plaintiff's representation at trial by both Ms. Joslin and Mr. Jacobs was appropriate, and the Court notes that defendant was similarly represented at trial by two attorneys. The Court is persuaded, though, that some of the efforts of plaintiff's counsel were duplicative or excessive in relation to the importance of the legal issue or the result obtained through the specific legal services, and that a paying client would not contemporaneously agree to authorize the amount of time devoted to some tasks. For example, according to the billing records (which occasionally combine tasks in block entries), 47.7 hours were devoted to briefing and arguing plaintiff's motion in limine, while approximately 62.3 hours were devoted to opposing defendant's motion in limine. The evidentiary issues were neither complex nor novel, yet counsel spent considerable time on these issues and in some instances, counsel simply included work on these motions with other tasks that consumed a whole work day (according to some block entries). Block entries are disfavored when applying for approval of legal fees because they make it difficult for the Court to ascertain whether the work is duplicative or unnecessary. See Klimbach v. Spherion Corp., 467 F.Supp.2d 323 (W.D.N.Y. 2006) (block entries described as “work on motion for summary judgment” were impermissibly vague and justified reduction). A Court can exclude excessive and unreasonable fees from its award by making an across-the-board reduction in the number of compensable hours rather than conducting a line by line, detailed review. See, Luciano v. Olsten Corp., 109 F.3d 111 (2d Cir. 1997); Lunday v. City of Albany, 42 F.3d 131 (2d Cir. 1994). A reduction also may be applied based upon limited success obtained, as well. Hensley, 461 U.S. at 437, 103 S.Ct. 1933.

Even after counsel's self-imposed reduction in claimed hours in an exercise in billing judgment, further reduction of the lodestar is required. Based upon the result obtained here (i.e. a meaningful but incomplete victory), and mindful that counsel for the prevailing party must exercise billing judgment by acting as she would under market restraints that limit a private sector attorney's behavior in charging her own client, the Court reduces the total number of compensable hours by 25%. This reduction is also intended to account for a minimal reduction in hours based upon several block entries and those instances cited above in which plaintiff's counsel expended excessive or redundant hours for motion practice. The law firm partners (Joslin, Dunn, Walsh, and Reilly) claim 472.7 hours, which shall be multiplied by the approved hourly rate of $275, resulting in “partner billings” of $129,993. The law firm associates (Jacobs and Sinclair) devoted 505.4 hours to the matter, which shall be multiplied by the approved hourly rate of $190, resulting in “associate billings” of $96,026. Adding the partner billings and associate billings results in a presumptive lodestar of $226,019. After applying a 25% across-the-board reduction to the presumptive amount ($226,019 x .75), the Court approves the sum of $169,514 as reasonable attorney's fees. In making this award, the Court has considered among other variables the uncertain outcome confronted by plaintiff's counsel, who agreed to accept representation of plaintiff on a contingency basis, thereby accepting the risk of an unpredictable result in order to vindicate labor rights that are sufficiently important, to this particular employee and to the public, to justify a substantial fee, even after reduction of the lodestar amount. Finally, the Court notes that there is neither any allegation nor proof that plaintiff rejected any reasonable settlement offer, such that there is no basis for any reduction based upon any claim that plaintiff could have obtained a similar result through compromise rather than trial to bench verdict.

Next, plaintiff seeks costs and expenses in the amount of $10,201.03. Defendant generally objects to this amount but limits its specific objection to the amount claimed for travel expenses; plaintiff's counsel seeks $561.45 for travel expenses, i.e. mileage for automobile transportation to court conferences, depositions and trial at the reimbursement rate allowed by the IRS. In this type of labor law litigation, “attorney's fees include those reasonable out-of-pocket expenses incurred by attorneys and ordinarily charged to their clients.” Tlacoapa v. Carregal, 386 F.Supp.2d 362 (S.D.N.Y. 2005) quoting LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998). Out-of-pocket disbursements for items like photocopying, travel and telephone costs are generally recoverable and are not considered part of counsel's overhead expenses.2 Accordingly, plaintiff is entitled to recover costs and disbursements in the amount of $10,201.03.

Finally, plaintiff seeks pre-judgment interest on (1) the full award at 9% from the reasonable intermediate date of March 1, 2014 (previously established by this Court) through October 18, 2017 pursuant to CPLR 5004 and (2) from October 18, 2017 through the date of entry of judgment on the full award plus pre-decision interest accrued under CPLR 5002. By plaintiff's calculations, he is entitled to $18,109.84 ($55,347 x [.09 annual interest/365 days] x 1,327 days between 3/1/2014 through 10/18/2017) through the date of decision. He claims entitlement to $18.11 interest per day ([$55,347 + 18,109.84] x .09 annual interest/365 days) from October 18, 2017 through entry of the judgment. Defendant argues that plaintiff is not entitled to any interest because plaintiff mitigated some damages, that plaintiff waived timely payment of his bonus and that the contract provided for a remedy if defendant fired plaintiff thereby precluding an award of interest. Defendant does not cite any contract language by which the parties agreed to waive the statutory interest provisions or to otherwise devise an “exclusive remedy” foreclosing an award of interest on any sum wrongfully withheld. Thus, the Court awards plaintiff interest in the amounts sought by plaintiff.

Accordingly, plaintiff's motion for attorney's fees, costs and interest is GRANTED to the extent that the Court approves: (1) attorney's fees in the amount of $169,514; (2) expenses, costs and disbursements of $10,201.03; (3) pre-judgment interest of $18,109.84 and (4) post-judgment interest calculated at the daily rate of $18.11 for the period October 14, 2017 through the date of entry of judgment. Pursuant to Labor Law § 198(4), if any amount of the judgment issued in conjunction with this decision and order remains unpaid upon the expiration of ninety days following issuance of the judgment, or ninety days after expiration of the time to appeal and no appeal is then pending, the total amount of judgment shall automatically increase by fifteen percent. Plaintiff shall submit proposed judgment consistent with the foregoing on notice to defendant.

The Court has considered the parties' remaining contentions and found them lacking in merit or alternatively rendered academic by the foregoing.



1.   The U.S. Court of Appeals, Second Circuit has “abandoned” use of the term “lodestar” because “its value as a metaphor has deteriorated to the point of unhelpfulness” though that court recognized that the term is so entrenched that it cannot be discarded easily. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). The Second Circuit instructed that courts should consider all of the case-specific variables identified by the Second Circuit as relevant to setting the reasonable hourly rate including the factors cited in Johnson v. Georgia Highway Exp., Inc., 488 F.2d 714 (5th Cir. 1974) and that a reasonable paying client wishes to spend the minimum amount necessary to effectively litigate the case. Id. The “Johnson factors” are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 493 F.3d 110, 114 n.3 (2d Cir. 2007) citing Johnson, 488 F.2d at 717-19.

2.   Computerized research expenses are generally recoverable as part of attorney's fees, rather than costs, though defendant has not objected to plaintiff's application for reimbursement of Westlaw charges as a cost rather than a component of fees. See, U.S. ex rel. Evergreen Pipeline Construction Co. v. Merritt Meridian Construction Corp., 95 F.3d 153, 173 (2d Cir. 1996).

L. Michael Mackey, J.

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