Jessica Dellarussiani v. Ed Donnelly Enterprises Inc. ( 2012 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0208n.06
Nos. 10-3836/10-3901
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
JESSICA DELLARUSSIANI, et al., ) Feb 22, 2012
) LEONARD GREEN, Clerk
Plaintiffs-Appellants, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
ED DONNELLY ENTERPRISES, INC., et al., ) SOUTHERN DISTRICT OF OHIO
)
Defendants-Appellees. )
) OPINION
Before: MOORE, SUTTON, and DONALD, Circuit Judges.
Bernice B. Donald, Circuit Judge. This action, which is before this court for the second
time, arises from the employment of Appellants Jessica Dellarussiani, Derrick Kinchen, Chad
Larson, Jill Puff, Debbie Brunke and Nathan Buscher (collectively, “Appellants”) by Appellees Ed
Donnelly and Ed Donnelly Enterprises, Inc. (collectively, “EDE”). Appellants brought suit under
the Fair Labor Standards Act (“FLSA”) and the equivalent Ohio statute alleging that EDE failed to
pay wages to which Appellants were entitled. The district court entered judgment in favor of
Appellants pursuant to EDE’s Rule 68 Offer of Judgment on Counts One and Two of the complaint.1
Subsequently, the parties were unable to agree on the reasonable attorneys’ fees to which Appellants
were entitled. In their first Application for an Award of Attorneys’ Fees and Costs, Appellants’
counsel sought $155,171.50 in attorneys fees and $8,012.70 in costs. On January 18, 2008, the
1
The district court also granted summary judgment in favor of EDE on Count Three, a ruling
upheld by this court in an earlier appeal.
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district court entered an order awarding Appellants $5,614.50 in attorneys’ fees and $410.44 in costs.
On appeal of that order, we remanded with additional instructions to the district court regarding the
proper calculation of Appellants’ attorneys’ fees. See O’Brien v. Ed Donnelly Enterprises, Inc., 575
F.3d 567 (6th Cir. 2009). On remand, the district court found that Appellants were entitled to an
additional $15,844.73 in attorneys’ fees and costs, for a total award of $20,691.63. Appellants
timely appealed the district court’s ruling, and EDE cross-appealed.
For the following reasons, we AFFIRM.
I. BACKGROUND
Appellants are former employees of two McDonald’s franchises in Bellefontaine, Ohio. EDE
owned and operated the restaurants at issue. Appellants alleged that EDE failed to pay all of the
regular and overtime wages to which they were entitled under the FLSA and Ohio law. Appellants
originally opted in as plaintiffs in O’Brien v. Ed Donnelly, Inc., Case No. C2-04-085 (“O’Brien”),
a related action still pending in the United States District Court for the Southern District of Ohio.
That action was brought by the same law firm, Ferron & Associates (hereinafter, “Ferron”), who
represent Appellants in the present matter.
On November 8, 2004, the district court conditionally certified O’Brien as a collective action
under § 216(b) of the FLSA.2 After extensive discovery, however, the court found that the O’Brien
plaintiffs had failed to establish that they were similarly situated and decertified the class.
2
When O’Brien began, Ferron sent notices to hundreds of former EDE employees. Only
thirty-six opted into the action. Thus, O’Brien initially involved a total of thirty-eight plaintiffs.
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Thereafter, on March 22, 2007, Ferron filed the instant lawsuit on behalf of six former opt-in
plaintiffs from O’Brien .
On May 24, 2007, EDE served on Ferron a Rule 68 Offer of Judgment (hereinafter, “Offer”)
that provided:
Pursuant to Rule 68 of the Federal Rules of Civil Procedure, defendants
[EDE] hereby offer judgment to be taken against them on Counts One and Two of
the plaintiffs’ complaint in this action in the following amounts as to each plaintiff,
plus costs accrued to date and reasonable attorneys’ fees:
Brunke $146.04
Buscher $71.32
Kinchen $148.64
Larson $1953.54
Wagner $196.36
West $3,626.30
This Offer of Judgment may be accepted by any one or more of the plaintiffs
and is not conditioned upon agreement of all plaintiffs. If this offer is accepted by
one or more plaintiffs, the Court would at the appropriate time determine the
appropriate amount of attorneys’ fees, if any, to be awarded to plaintiffs’ counsel.
This Offer of Judgment is made for the purposes specified in Rule 68 and is not to
be construed either as an admission that defendants are liable in this action or that
plaintiffs have suffered any recoverable damages.
EDE based the dollar amounts in their Offer on the sworn affidavits filed by each of the plaintiffs
in O’Brien and also on the “damage calculations” prepared by Ferron in O’Brien.
The district court ultimately entered judgment in favor of Appellants on Counts One and Two
in accordance with the terms of EDE’s Offer. The court also found that Appellants could not prevail
on Count Three as a matter of law and granted summary judgment in favor of EDE.3 As to the issue
3
Count Three was a claim for liquidated damages under Ohio’s Prompt Pay Act, Ohio Rev.
Code § 4113.15(B). The Act provides that “[w]here wages remain unpaid for thirty days beyond the
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of attorneys’ fees, the court directed Ferron to file a motion “setting forth the amount claimed, and
detailing the basis for such calculation.”
In its first application for an award of attorneys’ fees, Ferron sought an award of $155,171.50
in fees and $8,012.70 in costs incurred through May 24, 2007. Ferron argued that because “most of
the legal services necessary to prosecute [Appellants’] claims . . . were rendered in connection with
the O’Brien matter,” it was entitled to recover all of the costs and fees incurred in O’Brien. In
opposition to the motion, EDE argued that Ferron should not be awarded any fees incurred in
O’Brien because “[n]ot only were [Appellants] unsuccessful in O’Brien, only a small fraction of the
fees claimed by [Ferron] bear any relationship to the claims upon which [Appellants] in this action
can be considered to have prevailed.”4
The district court granted in part and denied in part Ferron’s application for fees. It found
that Ferron’s invoice was “rife with examples of entries that are not even arguably related to the
FLSA claims for these six Plaintiffs.” The court also found that
regularly scheduled payday . . . and no contest[,] court order[,] or dispute of any wage claim . . .
exists accounting for nonpayment, the employer . . . is liable [in liquidated damages] to the
employee. . . .” Id. (emphasis added). The district court found that, because EDE disputed whether
Appellants were owed any wages, Appellants could not recover under the Act and EDE was entitled
to summary judgment.
4
In particular, EDE argued that many of the fees incurred in O’Brien were generated by
Ferron’s “unsuccessful and unwarranted attempts to cobble together a collective action where none
properly existed.” EDE also pointed out that the parties spent time in O’Brien litigating the merits
of the state-law fraud claim, which is still pending with respect to the two remaining O’Brien
plaintiffs, but which is not a claim that Ferron pursued on behalf of Appellants. Finally, EDE argued
that significant time was spent in O’Brien litigating issues related to the thirty-two plaintiffs who are
not parties to the instant matter.
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contrary to [Ferron’s] averments, no meaningful review, no deletion of inappropriate
charges, and no billing judgment was exercised in the preparation of the fee
application. In addition, [Ferron has] failed to meet [its] burden of presenting this
Court with time records of sufficient detail to afford the Court a reasonable manner
for determining how much time was spent on tasks in the O’Brien matter that
contributed to the success of the six Plaintiffs in this action. Instead, the vast
majority of the entries contain descriptions that aggregate tasks—often tasks relating
to different plaintiffs who are not plaintiffs in this action—in one entry. Though the
names of the six Plaintiffs in this action do sporadically appear in the O’Brien
Invoice, there is not a single entry in which it is clear that all the time associated with
that entry was spent in furtherance of claims of one or more of the Plaintiffs in this
case.
Due to [Ferron’s] lack of billing judgment and inadequate documentation of hours,
it is difficult for this Court to determine how much time was spent on tasks in the
O’Brien matter that were necessary, not redundant, and contributory to the success
of the six Plaintiffs in this action. . . . Thus, the Court concludes that the proper
award is the amount invoiced in this case by [Ferron] for [Appellants’] FLSA claims.
Having determined that the fees incurred in O’Brien were not recoverable, the court awarded Ferron
only the fees and expenses incurred in the instant matter, for a total award of $6,024.94.
On appeal of that order, we found that Ferron was not barred under the FLSA from
recovering a portion of the fees incurred in O’Brien. O’Brien v. Ed Donnelly Enterprises, Inc., 575
F.3d 567, 576 (6th Cir. 2009). Responding to EDE’s argument that the FLSA authorizes an award
of fees only in “the action” where a plaintiff prevails, we stated that “[s]uch a wooden reading of the
statute is unnecessary.” Id. We acknowledged that discovery in the instant case took place when
Appellants were still parties to O’Brien, and thus, we remanded to the district court for a
determination of an appropriate fee award. Id. We did so “notwithstanding the inadequacy and
perhaps even the impropriety in the billing records that [Ferron] had originally presented to the
district court.” Id. In light of our reading of the FLSA, we directed the district court to give Ferron
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“one more opportunity to present records that reflect fees incurred in pursuit of and which benefitted
the Dellarussiani plaintiffs’ claims on which they prevailed” pursuant to the Offer. Id. We
cautioned, however, that “absent a specific showing of benefit to the Dellarussiani plaintiffs, fees
[could not] be recovered for expenses incurred for the claims of O’Brien plaintiffs who did not file
suit in Dellarussiani, nor for the claims of the lead plaintiffs in O’Brien who remained after the
collective action was decertified.” Id. at 577.
In its second application for attorneys’ fees, Ferron sought a total of $110,705.83, which was
comprised of three distinct components: (1) $92,181.73 in fees and expenses incurred in O’Brien,
which it argued directly benefitted Appellants in the instant case; (2) $11,430.18 in fees and costs
incurred in appealing the district court’s initial order; and (3) $7,093.97 in fees and costs incurred
in proceeding on remand, which included preparation of the second application for attorneys’ fees.
The district court awarded Ferron an additional $13,371.04 in attorneys’ fees and $1,178.04 in costs
incurred in O’Brien, and $1,095.65 in costs for the first appeal.5 Both sides appealed.
II. LAW & ANALYSIS
A district court’s award of attorneys’ fees and the determination of the amount of fees are
reviewed for abuse of discretion. See, e.g., Scotts Co. v. Central Garden & Pet Co., 403 F.3d 781,
788 (6th Cir. 2005); Johnson v. Jones, 149 F.3d 494, 503 (6th Cir. 1998); Hadix v. Johnson, 65 F.3d
532, 534 (6th Cir. 1995). We will reverse only if we are firmly convinced that the trial court made
5
When added to the previous award of $6,024.94, the court awarded Ferron a total of
$20,691.63 in fees and expenses.
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a mistake, for instance, by relying on clearly erroneous findings of fact, by improperly applying the
law, or by using an erroneous legal standard. Tucker v. City of Fairfield, 398 F.3d 457, 461 (6th Cir.
2005). We examine in turn each of the three categories of fees for which Ferron sought recovery.
A. Fees Incurred in O’Brien
In its attempt to comply with our directive to provide adequately detailed billing records on
remand, Ferron submitted to the district court the same invoice that accompanied its initial
application for fees. The district court noted that Ferron had
not amended the actual Invoice to include only those time entries that directly benefit
[Appellants]. Rather, [Ferron] has created a 124-page Index that is derived from the
original Invoice. It essentially cuts a few lines from the Invoice and randomly
discounts a few entries, but still includes numerous entries that do not even remotely
benefit [Appellants]. . . . The Index does not further clarify [the inadequacies
previously identified in the Invoice], but rather is just derivative of what appears on
the Invoice. The Court is therefore unable to determine the exact amount of
attorneys’ fees that benefitted [Appellants] as instructed by the Sixth Circuit. . .
The Court finds that [Ferron’s] Invoice lacks sufficient detail to review the
reasonableness of the hours expended that benefit [Appellants]. Further, the
intermingling of the time entries, in combination with the lack of detail, make it
impossible to distinguish the tasks within each entry that benefit [Appellants].
The district court acknowledged that Ferron had “deleted a few entries as not benefitting the
Dellarussiani Plaintiffs,” but found that it had “not nearly excluded enough.” For instance, Ferron
sought to recover time spent on unsuccessful motions in O’Brien and on motions that pertained only
to the claims of O’Brien plaintiffs who were not parties to the instant case. Additionally, the court
rejected as inadequate Ferron’s “generic statement[s] that the work performed benefits the
Dellarussiani Plaintiffs,” as these statements failed to describe the work that Ferron actually
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performed. The court concluded that the non-specific nature of Ferron’s billing entries made it
impossible to simply “subtract the number of hours that did not benefit the Dellarussiani Plaintiffs.”
Thus, the court fashioned what it determined to be an appropriate formula for calculating the
fees Ferron could recover for work performed in O’Brien. The court started with the assumption
“that the general descriptions on the Invoice were for all 38 original O’Brien plaintiffs.” Considering
that Appellants constituted six of the thirty-eight O’Brien plaintiffs, the court ordered a proportional
award—sixteen percent, or roughly six thirty-eighths—of the O’Brien fees sought.
Having reviewed the invoice and the Index, we agree with the district court’s characterization
of Ferron’s submissions. Each billing entry on the thirty-one page O’Brien invoice is supplemented
by a corresponding “explanation” in the Index. We note, initially, that the Index does not provide
additional evidence, as we requested, to support the fees Ferron sought in the O’Brien matter.
Rather, as EDE pointed out to the district court, the Index contains Ferron’s arguments, which
attempt to characterize various billing entries in ways that show at least a tangential relationship to
the claims of Appellants in the instant case. The generic descriptions in the Index, however, shed
little or no light on the particular work that each billing entry represents. We agree with the district
court, therefore, that it is impossible to determine if or how the work represented by those billing
entries furthered the claims of Appellants, or even if the amount of time billed for each entry is
reasonable. Moreover, given that there is no supporting documentation to substantiate Ferron’s
attempt to supplement vague descriptions of work performed as much as five years ago, we are
skeptical about the reliability of the explanations in the Index.
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Despite these deficiencies, and consonant with our conclusion that the FLSA was not an
absolute bar to the recovery of some portion of the fees generated in O’Brien, the district court
endeavored to award Ferron what it determined to be a reasonable proportion of those fees. If Ferron
believed it was entitled to recover a greater fee award, it was incumbent upon the firm to produce
adequate proof that the fees sought specifically benefitted Appellants. Ferron’s failure to do so was
to its detriment. The district court concluded that the evidence Ferron presented was inadequate to
justify the fees sought. The court considered the evidence before it and articulated a logical rationale
for its calculation of fees. This was not an abuse of discretion.
We likewise reject EDE’s argument that the district court erred in awarding any fees for
Ferron’s work in O’Brien. EDE contends that the district court “was required to award fees only
where there was a specific showing of benefit to [Appellants],” and points out that the district court’s
order repeatedly noted that Ferron’s Index did not make such a showing. Therefore, EDE argues,
“upon the district court’s clear conclusion that it was unable to determine the amount of attorneys’
fees that related to [Appellants], it should have denied [Ferron’s] application in its entirety, and its
award of fees contrary to this Court’s directive was an abuse of discretion.” We disagree.
When determining a reasonable attorneys’ fee, courts consider a myriad of factors “in light
of the congressional policy underlying the substantive portions of the statute providing for the award
of fees.” United Slate, Tile & Composition Roofers, Damp and Waterproof Workers Ass’n, Local
307 v. G & M Roofing and Sheet Metal Co., 732 F.2d 495, 501 (6th Cir. 1984). The FLSA was
enacted to “eliminate labor conditions detrimental to the maintenance of the minimum standard [of]
living for workers.” Id. (internal quotations omitted). The availability of attorneys’ fees under the
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FLSA reflects the congressional intent that these policies be vindicated and that workers have
effective access to the judicial process. Id. at 502.
It is true that we cautioned Ferron that it could not recover O’Brien fees absent a specific
showing of benefit to Appellants. However, we also acknowledged “[t]he reality . . . that discovery
concerning the Dellarussiani plaintiffs’ claims took place in O’Brien,” and it goes without saying
that Ferron expended time and resources and incurred fees throughout the discovery process.
Inasmuch as these efforts ultimately contributed to the judgment in Appellants’ favor—albeit,
pursuant to EDE’s Offer—there undeniably was some benefit to Appellants. To preclude Ferron
from recovering any of its discovery-related fees and expenses in the instant matter would not further
the congressional policy underlying the FLSA and its provision for attorneys’ fees for prevailing
plaintiffs. In light of these considerations, the district court’s award of a reasonable proportion of
O’Brien fees was not an abuse of discretion.
B. Fees Incurred on Appeal of the District Court’s First Order
Ferron also argues that the district court erred in declining to award it fees “in prosecuting
the Plaintiffs’ successful appeal” of the district court’s first order. In the appeal to which Ferron
refers, Appellants challenged the district court’s entry of judgment on Counts One and Two of the
complaint, the grant of summary judgment in favor of EDE on Count Three, and the amount of the
attorneys’ fee award.6 On appeal, we upheld the district court’s disposition of Counts One and Two
6
In the same appeal, counsel also challenged several of the district court’s rulings in
O’Brien. However, to the extent that any of those challenges were successful, they do not bear on
our analysis of the present issue. For the purposes of the instant case, we consider only whether
Appellants were successful in their appeal of the district court’s rulings in Dellarussiani.
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in accordance with the Offer of Judgment. We also upheld the district court’s summary disposition
of Count Three in favor of EDE. In light of our reading of the FLSA, however, we remanded the
issue of attorneys’ fees to the district court, admonishing Ferron to present billing records sufficiently
detailed to allow the court to calculate an appropriate award.
Because we affirmed its disposition of the substantive portions of Appellants’ claims, the
district court concluded that Appellants were not “prevailing parties” on appeal—at least, not as that
phrase is commonly understood. Ferron was only successful in securing a second chance to submit
adequate billing records so the court could determine an appropriate fee award. The district court
determined that this was not an outcome that justified an award of attorneys’ fees for a “successful
appeal” within the meaning of the FLSA. However, acknowledging that Ferron was at least partially
successful on the issue of attorneys’ fees, the district court awarded Ferron its costs incurred on
appeal. We find this resolution reasonable, and not an abuse of discretion.
C. Fees Incurred on Remand
Finally, Ferron argues that it was entitled to recover fees and costs incurred in “prosecuting
Appellants’ claims on remand.” On remand, however, Ferron was no longer prosecuting the claims
of the Dellarussiani plaintiffs. The only task with which Ferron was charged on remand was the
preparation and submission of adequate billing records to reflect the time billed in O’Brien that
specifically benefitted the Dellarussiani plaintiffs. The district court properly concluded that Ferron
was not entitled to collect fees incurred as a result of its own inadequate billing practices. As the
court noted, these fees could have been avoided entirely had the original application been sufficiently
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detailed. Thus, Ferron is not entitled to a statutory award of fees for this additional expenditure of
time and effort.
III. CONCLUSION
For the foregoing reasons, the district court’s award of attorneys’ fees is AFFIRMED.
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