Diaz v. Jiten Hotel Management, Inc. , 741 F.3d 170 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 13-1444
CARMEN LLERENA DIAZ,
Plaintiff, Appellee,
v.
JITEN HOTEL MANAGEMENT, INC.,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Lynch, Chief Judge,
Thompson and Kayatta, Circuit Judges.
Edward S. Cheng, with whom Sherin and Lodgen, LLP, Ryan C.
Siden, and Siden & Associates, P.C., were on brief, for appellant.
Lynn A. Leonard for appellee.
December 18, 2013
KAYATTA, Circuit Judge. Before us now for the third
time, this case focuses our attention on whether the mandate we
issued last time the case was before us foreclosed an otherwise
unchallenged use of Federal Rule of Civil Procedure 60(a) to modify
the judgment on remand. We are also asked to determine whether an
award of $104,626.34 in attorney's fees and costs, for a suit
obtaining a damages award of $7,650, is so disproportionate as to
constitute an abuse of discretion. Answering yes to the first
question and no to the second, and otherwise rejecting appellant's
argument that the district court failed to comply with our mandate,
we affirm.
I. Facts
After losing her job as executive housekeeper at the
Holiday Inn Hotel in Dorchester, Massachusetts, Carmen Diaz brought
claims against the operator of the hotel, Jiten Hotel Management,
Inc., for (1) violating the Age Discrimination in Employment Act
("ADEA"), 29 U.S.C. §§ 621-34 ("Count I"); (2) violating the
Massachusetts antidiscrimination law, Mass. Gen. Laws ch. 151B, § 4
("Count II"); (3) violating the state civil rights act, Mass. Gen.
Laws ch. 12, §§ 11H-I ("Count III"); (4) wrongful termination
("Count IV"); (5) intentional infliction of emotional distress
("Count V"); and (6) defamation ("Count VI"). As the litigation
progressed, Diaz voluntarily dismissed Counts III, IV, and VI, and
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the court granted summary judgment in favor of Jiten on Count V.
Only the two discrimination claims went to trial.
Diaz obtained a jury verdict on the state claim in the
amount of $7,650. Judgment was entered in her favor and affirmed
on appeal. See Diaz v. Jiten Hotel Mgmt., Inc., 671 F.3d 78 (1st
Cir. 2012). She then proceeded to seek attorney's fees for all
hours reasonably spent on the entire case, plus costs.
In response, Jiten argued that Diaz should not receive
fees and costs attributable to her unsuccessful claims. The
district court agreed, deciding to reduce Diaz's fees to account
for the fact that much of counsel's time was devoted to pursuing
claims that were dropped or dismissed. Explained the court:
Based on this procedural history, this Court will reduce
Diaz's requested attorneys' fees by two-thirds,
reflecting the four of her six claims that she either
voluntarily dismissed after realizing that they were not
viable or acknowledged were barred by statute. Hours
spent working on such untenable claims "cannot be deemed
to have been 'expended in pursuit of the ultimate result
achieved.'" [Hensley v. Eckerhart, 461 U.S. 424, 435
(1983)] (quoting Davis v. County of Los Angeles, No.
73–63–WPG, 1974 WL 180, at *3 (C.D. Cal. June 5, 1974)).
Ideally, the Court would be able specifically to reduce
the request by the number of hours worked on the unviable
claims. The Invoices do not, however, provide a level of
detail to allow the Court to do so. The Court therefore
uses the two-thirds deduction as an approximation for the
number of hours spent working on the four claims that
were not viable.
Diaz v. Jiten Hotel Mgmt., Inc., 822 F. Supp. 2d 74, 80 (D. Mass.
2011).
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After arriving at a reduced lodestar1 of $44,766, the
district court then made a second, further reduction, lowering the
award to $25,000 because Diaz had rejected a settlement offer that
would have left Diaz's counsel with a $25,000 contingent fee and
Diaz with an amount in excess of what the jury awarded. Diaz filed
a motion for reconsideration, arguing that neither reduction was
appropriate. After the district court denied her motion, Diaz
appealed.
On appeal, Diaz challenged both reductions. She
contended, first, that the district court should not have concluded
that time spent on her unsuccessful claims could be severed from
time spent on her successful one. As a result, she argued, the
district court should not have reduced her fee request merely
because some counts fell on the way to her victory on the state law
discrimination claim. She contended further that the district
court had independently abused its discretion by adjusting the fees
downward to account for her rejection of the settlement offer. See
Diaz v. Jiten Hotel Management, Inc., 704 F.3d 150 (1st Cir. 2012).
Recognizing that the calculation of fee awards calls for
an exercise of discretion, we rejected Diaz's challenge to the
1
The "lodestar," ordinarily the starting point for
determining the amount of a fee award, is calculated by multiplying
the number of hours reasonably expended on the litigation by a
reasonable hourly rate. See, e.g., Hensley v. Eckerhart, 461 U.S.
424, 433 (1983); Joyce v. Town of Dennis, 720 F.3d 12, 26-27 (1st
Cir. 2013).
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decision to reduce the lodestar to account for the four dropped
claims. Simply put, the district court had ample discretion in
such matters, and it did not abuse that discretion by refusing to
make Jiten pay for attorney's fees incurred by Diaz in the pursuit
of unsuccessful and largely independent claims. Id. at 153-54.
Though we found no abuse of discretion in the exclusion
of unsuccessful claims, we held that the district court had erred
in further reducing the attorney's fees on account of Diaz's
rejection of the settlement offer. Id. at 154. In doing so, we
noted that the rules surrounding fee-shifting in civil rights cases
are "based on full compensation for the work performed." Id. Our
mandate, which issued on October 11, 2012, set aside the second
reduction, but also instructed the district court to "re-evaluate
the twelve Hensley factors and determine whether any further
reduction to the fee award is proper," id. (footnote omitted),2 to
re-examine its reduction of costs, as it had erroneously excluded
the costs of a number of depositions, id. at 154-55, and to
recalculate both the damages award (to reflect pre-judgment
interest) and the attorney's fee award (to include post-judgment
interest), id. at 155.
2
The Hensley factors, so called because of their enumeration
in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), represent
considerations that may support upward or downward adjustments from
a lodestar. See infra note 7.
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On remand, Diaz for the first time argued that in
deducting for time spent on unsuccessful claims, the district court
should have used a different, more refined methodology than simply
subtracting two-thirds of the total hours. Diaz's belated argument
came in the form of a Rule 60(a) motion,3 in support of which she
pointed out that her invoices, when viewed against the court's
docket entries, allowed the court to account for the fact that the
unsuccessful claims were not pursued at all stages of the case, but
instead dropped out along the way. In Diaz's words, "[c]learly,
the Court intended to reduce hours spent on unviable claims, but
its computation included a global two-thirds deduction for time
expended after the claims were dismissed." (emphasis in original).
Jiten responded, citing our opinion in Toscano v. Chandris, S.A.,
934 F.2d 383, 386 (1st Cir. 1991) (holding that "[m]atters
cognizable under Rule 60(a) are, generally, mechanical in nature"),
and arguing that the reduction was "an interpretation of law which,
even if erroneous, cannot be corrected under Rule 60(a)." After
the district court denied Diaz's motion, she requested the same
relief a second time. In response to her second motion, Jiten
added to its Rule 60(a) argument the contention that the district
3
See Fed. R. Civ. P. 60(a) ("The court may correct a
clerical mistake or a mistake arising from oversight or omission
whenever one is found in a judgment, order, or other part of the
record.").
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court could not provide Diaz the relief she requested without
exceeding the scope of our mandate.
After again demurring, the district court later accepted
Diaz's argument. Adhering to the principle that Diaz should not
receive fees incurred in pursuit of unsuccessful claims, the
district court reapportioned the hours devoted to the case more
accurately between successful and unsuccessful claims by
proportionately reducing Diaz's lodestar only to the extent that
fees were incurred when some or all of the unsuccessful claims
remained pending.4 The district court classified this alteration
of its prior calculation as a correction under Rule 60(a).
The district court found no reason to make any further
reductions. While the order made no express mention of the Hensley
factors, it stated that "[s]ilence on a matter reflects this
Court's conclusion that its earlier opinion accurately reflects the
law and the decision on this matter and requires no further
elaboration," and further noted that "[t]he Court sees no
significant reason to make any further adjustments up or down."
After the district court entered judgment for Diaz in the amount of
$93,945 in fees and $10,681.34 in costs, Jiten filed this appeal.
4
As the district court explained, it "reduced the hours
expended on any given Invoice line by the fraction of the claims
that were substantively unviable out of all of those procedurally
live [at the time of the invoice entry]. Then, the Court simply
summed all of the individual Invoice lines of compensable hours to
get the total number of compensable hours."
-7-
II. Analysis
Jiten raises three discrete challenges to the district
court's judgment. First, it argues that the mandate rule precluded
the district court from granting Diaz's Rule 60(a) motion. Second,
it argues that by declining to enumerate and individually analyze
each of the Hensley factors, the district court disobeyed the
remand order. Finally, it argues that the district court abused
its discretion by awarding fees disproportionate to the damages
that Diaz ultimately recovered.
We address these arguments in turn.
A. The Mandate Rule
District courts have discretion under Rule 60(a) in
deciding whether to correct oversights in their orders and
judgments. See Bowen Inv., Inc. v. Carneiro Donuts, Inc., 490 F.3d
27, 29 (1st Cir. 2007). Had there been no intervening appeal,
clearly the district court would have retained the full breadth of
that discretion. And Jiten does not press on appeal the argument
it made below that the alteration made in the formula used to
account for the two-thirds reduction went beyond the type of
correction that a court may ordinarily make under Rule 60(a). We
therefore assume, though we do not decide, that the district
court's use of Rule 60(a) would have been proper in the absence of
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an intervening appeal.5 There was, however, an intervening appeal,
and a mandate. And it was that mandate, Jiten argues, that
effectively precluded the district court from doing what it did.
Jiten is correct that an appellate mandate constrains the
scope of proceedings on remand. The mandate rule, which at base
requires a court to "scrupulously and fully" carry out a higher
court's order after remand, helps to maintain "proper working
relationships" between the various courts in our multi-tiered
federal judiciary. See, e.g., Doe v. Chao, 511 F.3d 461, 465 (4th
Cir. 2007) ("Few legal precepts are as firmly established as the
doctrine that the mandate of a higher court is controlling as to
matters within its compass." (internal quotation marks omitted));
United States v. Bell, 988 F.2d 247, 251 (1st Cir. 1993). Thus, as
we observed in Biggins v. Hazen Paper Co., 111 F.3d 205, 209 (1st
Cir. 1997), "the mandate of an appellate court forecloses the lower
court from reconsidering matters determined in the appellate
court." (internal quotation marks omitted); see also Elias v. Ford
Motor Co., 734 F.2d 463, 465 (1st Cir. 1984). This foreclosure of
efforts to reconsider what the appellate court has decided admits
of only the narrowest exceptions. Bell, 988 F.2d at 250-51; see
also United States v. Connell, 6 F.3d 27, 30 (1st Cir. 1993); Doe,
5
See, e.g., Dialysis Access Ctr., LLC v. RMS Lifeline, Inc.,
638 F.3d 367, 374 n.7 (1st Cir. 2011) (arguments not raised on
appeal are waived).
-9-
511 F.3d at 464-66 ("The mandate rule is a more powerful version of
the law of the case doctrine." (internal quotation marks omitted)).
Nothing in the mandate rule, however, divests the
district court altogether of its ability to correct "clerical
mistake[s]," "oversight[s]," or "omission[s]," see Fed. R. Civ. P.
60(a). Rather, "[s]o long as the court truly is correcting an
error which falls within the scope of [Rule 60(a)], and so 'long as
the appellate court has not expressly or implicitly ruled on the
issue,'" a district court is free to correct such mistakes.
Klingman v. Levinson, 877 F.2d 1357, 1363 (7th Cir. 1989) (quoting
Panama Processes, S.A. v. Cities Serv. Co., 789 F.2d 991, 994 (2d
Cir. 1986)). This conclusion comports with our recognition that
the mandate rule does not apply to "any issue not expressly or
impliedly disposed of on appeal." Biggins, 111 F.3d at 209
(internal citation omitted).6
The key question, therefore, is whether anything in our
prior opinions in this case, including our most recent mandate,
either expressly or impliedly divested the district court of its
otherwise continuing discretion to correct an oversight that caused
6
See generally In re Frigitemp Corp., 781 F.2d 324, 327 (2d
Cir. 1986) ("The rationale for the provision that a motion to
correct a clerical error may be made 'at any time' is that the
judgment simply has not accurately reflected the way in which the
rights and obligations of the parties have in fact been
adjudicated. In those circumstances, the goals of finality and
repose are outweighed by the equitable goal of allowing a party who
has in fact established his right to relief to receive that
relief.").
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the judgment to fail to reflect the trial court's previously stated
intentions (that is, that the reduction apply only to time spent on
unsuccessful claims). And since there is certainly no express
language in our mandate precluding in any way the relief ordered on
remand, Jiten must rely on a contention that our mandate implicitly
precluded any increase in the fee award other than what we
expressly ordered.
In support of such a contention, Jiten points out that
the prior appeal expressly addressed and affirmed the two-thirds
reduction. This is true, but our prior analysis and ruling did not
indicate that the court's method was the only possible way to
calculate the reduction. Rather, we simply sustained the district
court's discretion to make a deduction to account for the four
unsuccessful claims. We had no cause to address the propriety of
the specific method used for making that reduction, as no party
asked us to do so. The limited scope of our review in this regard
adhered to the rule that "when the balance struck by the trial
court falls within the broad realm of reasonableness, there is no
cause to place an appellate thumb on the decisional scales" of a
fee calculation. Foley v. City of Lowell, 948 F.2d 10, 19 (1st
Cir. 1991). Our opinion thus cannot plausibly be read to have
conclusively determined the correctness of the formula used to
calculate the proportional award, particularly when the propriety
of that formula was neither challenged nor briefed on appeal.
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Jiten also points out that our prior mandate, while
enumerating specific increases in the lodestar calculation, also
specified that the district court was to determine "whether any
further reduction to the fee award is proper." See Diaz, 704 F.3d
at 154. In Jiten's view, this specific command to consider further
reductions implicitly precluded the district court from considering
anything else. Our precedent is squarely to the contrary. Kashner
Davidson Sec. Corp. v. Mscisz, 601 F.3d 19, 24 (1st Cir. 2010)
("The district court was not constrained to perform only those
actions that we specifically listed in the mandate."). Moreover,
this is not a case in which the logic of our prior opinion implied
any judgment that the amount of the award exhausted the maximum
reach of the district court's discretion. Simply put, we did not
consider the matter.
Of course, a reason why we did not address the
mathematical accuracy of the method used to make the two-thirds
reduction was that Diaz herself never raised the issue on the prior
appeal, or in the district court prior to that appeal. Because she
easily could have raised the issue before the district court first
entered judgment on her fee request, she likely waived any right to
have either this court or the district court entertain it after
appeal and remand. If a district court is so inclined, however, it
may correct a judgment "on its own." Fed. R. Civ. P. 60(a). That
is, ultimately, just what the district court did here. In short,
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while the court likely had no obligation even to consider Diaz's
request to correct the judgment, nothing barred it from doing so.
In so concluding, we remain sympathetic to the notion
that litigation should move in the direction of a resolution. And
the law of the case doctrine serves, in part, to further the
interest in bringing litigation to a close. See, e.g., United
States v. U.S. Smelting, Ref., & Mining Co., 339 U.S. 186, 198-99
(1950). "Remand" is therefore not "reopen." See, e.g., Bell, 988
F.2d at 250-52. And the balance between stability and precision
should tilt more towards the former once a case has progressed
beyond final judgment and through an appeal. See Harlow v.
Children's Hosp., 432 F.3d 50, 55-56 (1st Cir. 2005). In our
experience, though, district courts generally adhere to this view,
perhaps even more firmly than do we. By simply affirming that the
district courts retain on remand their narrowly circumscribed
authority under Rule 60(a) unless we expressly or implicitly
specify otherwise, we neither cast doubt on that view nor make any
new law. See generally Standard Oil Co. of Cal. v. United States,
429 U.S. 17, 17-19 (1976) (discussing finality concerns relating to
Rule 60(b) motions filed after appeal); 11 Wright, Miller, &
Cooper, Federal Practice and Procedure § 2856 (3d ed. 2013) ("[T]he
correction of judgments for clerical mistakes may be permitted even
after an affirmance.").
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B. The Hensley Factors
Our most recent mandate in this case specified that on
remand, the district court was to "re-evaluate the twelve Hensley
factors and determine whether any further reduction to the fee
award is proper." Diaz, 704 F.3d at 154 (footnote omitted).7 The
district court did not do so explicitly. Rather, in the order in
which it recalculated the lodestar, the district court stated that
"[s]ilence on a matter reflects this Court's conclusion that its
earlier opinion accurately reflects the law and the decision in
this matter and requires no further elaboration." After
recalculating the lodestar and again excluding hours spent on
untenable claims, the district court expressly reiterated that it
saw "no significant reason to make any further adjustments up or
down." Jiten now argues that the district court's failure to make
explicit on remand its reconsideration of each Hensley factor
indicated a failure to consider the factors at all.
7
The factors, enumerated in Hensley v. Eckerhart, 461 U.S.
424, 430 n.3 (1983), include:
(1) the time and labor required; (2) the novelty and
difficulty of the questions; (3) the skill requisite to
perform the legal service properly; (4) the preclusion of
employment by the attorney due to acceptance of the case;
(5) the customary fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by the client or
the circumstances; (8) the amount involved 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.
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While the district court could have been both more
responsive and more helpful had it provided a more detailed
explanation as to how it was exercising its discretion on remand,
its failure to do so does not lead us to adopt Jiten's conclusion.
On remand, the district court explicitly noted that it "[took] its
earlier attorney's fees and costs determination . . . as its
starting point." Although it did not again incant the reasons
guiding the exercise of its discretion in declining to adjust the
award in light of the Hensley factors, it had previously enumerated
its reasons as to eight of them. We had then rejected its reasons
for adjusting downward on the basis of the remaining four. See
Diaz, 704 F.3d at 154 ("[W]e conclude the district court's fee
reduction improperly focused on Diaz's rejection of the settlement
offer."). The district court's statement makes clear that the
court declined on remand to adjust its prior analysis as to any of
the factors, not that it declined to consider the factors at all.
See Berman v. Linnane, 434 Mass. 301, 303 (2001) (holding that in
applying the factors under the Massachusetts fee-shifting statute
at issue here, "a factor-by-factor analysis, although helpful, is
not required"). We therefore reject Jiten's claim.
C. The Proportionality of the Fee Award
This brings us, finally, to Jiten's argument that the
district court committed reversible error by failing to calibrate
the amount of the fee award to the amount of the damages obtained.
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Jiten urges upon us the proposal that an award "needs to be"
proportional to the relief obtained, because "there is little
social benefit to encouraging attorneys to spend resources . . .
that are disproportionate to the results of the litigation."
Because the district court awarded over $100,000 in fees and costs
after the jury awarded only $7,650 in damages, "the disparity
between the fees requested and the result obtained for Diaz is self
evident," and the award must, Jiten says, be vacated.
Aware that a district court must undertake a number of
judgment calls in order to determine the extent of a fee award, we
review such awards only for mistake of law or abuse of the district
court's "extremely broad" discretion. Martinez-Vélez v. Rey-
Hernández, 506 F.3d 32, 47 (1st Cir. 2007). In this area, "we
normally prefer to defer to any thoughtful rationale and decision
developed by a trial court and to avoid extensive second guessing."
United States v. Metro. Dist. Comm'n, 847 F.2d 12, 16 (1st Cir.
1988) (internal quotation omitted). Given the standard of review
and the relevant statutory framework, Jiten's challenge fails.
The Massachusetts statute under which Diaz prevailed,
Mass. Gen. Laws ch. 151B,8 provides that "[i]f the court finds for
the petitioner it shall, in addition to any other relief and
irrespective of the amount in controversy, award the petitioner
8
Because Diaz prevailed only under Massachusetts law,
Massachusetts law governs our analysis. See Koster v. Trans World
Airlines, Inc., 181 F.3d 24, 37 (1st Cir. 1999).
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reasonable attorney's fees and costs unless special circumstances
would render such an award unjust." Id. § 9. And as we noted in
an earlier opinion in this very case, "the rules surrounding fee-
shifting in civil rights cases are designed to encourage attorneys
to take these types of cases and are based on full compensation for
the work performed." Diaz, 704 F.3d at 154. Recently, in
interpreting the very statute at issue here, we quoted the Supreme
Judicial Court's comment that fee-shifting provisions are designed
"to encourage suits that are not likely to pay for themselves, but
are nevertheless desirable because they vindicate important
rights." Joyce v. Town of Dennis, 720 F.3d 12, 31 (1st Cir. 2013)
(quoting Stratos v. Dep't of Public Welfare, 387 Mass. 312, 323
(1982)).
As the principle of full compensation suggests, Jiten's
emphasis on "proportionality" as determinative of reasonableness
runs directly counter to fundamental precepts of Massachusetts law.
See, e.g., Twin Fires Inv., LLC v. Morgan Stanley Dean Witter &
Co., 445 Mass. 411, 429-30 (2005). Under state law, "a judge must
examine a number of factors to determine whether an award of
attorney's fees and costs is reasonable." Id. "No one factor is
determinative." Berman, 434 Mass. at 303.
Relying on that principle, we recently held that a
district court had in fact abused its discretion when it "appeared
to treat the damages award as the only significant result obtained"
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under chapter 151B. Joyce, 720 F.3d at 31. We noted that "even if
[a lawsuit] achieve[s] nothing other than compensatory relief" for
the plaintiff, it is an error of law "for the district court to
link the amount of recoverable attorney's fees solely to the amount
of . . . damages." Id. We further noted that "[f]ee-shifting
provisions in general reflect a legislative judgment that 'the
public as a whole has an interest in the vindication of the rights
conferred by the statutes.'" Id. (quoting City of Riverside v.
Rivera, 477 U.S. 561, 574 (1986) (internal quotation marks
omitted)). Thus, while the "results obtained" in litigation are a
"preeminent consideration in the fee-adjustment process," such
results can consist of "a plaintiff's success claim by claim, or
[of] the relief actually achieved, or [of] the societal importance
of the right which has been vindicated, or [of] all of these
measures in combination." Joyce, 720 F.3d at 27. Jiten's narrow
focus on the jury award evinces a misinterpretation of
Massachusetts law.
This case produced a substantial order clarifying the
stray remarks doctrine, see 762 F. Supp. 2d 319 (D. Mass. 2011), as
well as a published First Circuit opinion holding that mixed-motive
analysis applies to Massachusetts age discrimination claims, see
671 F.3d 78 (1st Cir. 2012). The fee request has already been
adjusted downward so that it appropriates only time spent in
pursuit of the claim on which Diaz prevailed. See generally Gay
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Officers Action League v. Puerto Rico, 247 F.3d 288, 296 (1st Cir.
2001) (noting, in the context of a different fee-shifting statute,
that "proportionality is no longer an issue once the prevailing
party has separated the wheat from the chaff (i.e., isolated the
time spent on her successful claim or claims)"). Jiten does not
suggest that the hours expended were excessive or that the rate
charged was too much; it simply maintains that the amount awarded
is too large in proportion to the jury verdict. Because we see no
basis in Massachusetts law for concluding that disproportionality
alone supports vacatur of the district court's conscientious
exercise of its discretion, we decline to disturb the district
court's award of fees and costs.
III. Conclusion
For the reasons explained above, the judgment below is
affirmed. Each party shall bear its own costs and fees on this
third appeal, which would have been unnecessary had Plaintiff
timely proposed the correction that the district court ultimately
adopted.
So ordered.
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