Kathy Radtke v. Maria Caschetta ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 4, 2016 Decided May 3, 2016
No. 15-7003
KATHY RADTKE AND CARMEN CUNNINGHAM,
APPELLANTS
v.
MARIA CASCHETTA, ET AL.,
APPELLEES
Consolidated with 15-7008
Appeals from the United States District Court
for the District of Columbia
(No. 1:06-cv-02031)
S. Micah Salb argued the cause for appellants/cross-
appellees. With him on the briefs was Dennis Chong.
Richard Talbort Seymour argued the cause for amici
curiae Metropolitan Washington Employment Lawyers
Association, et al. With him on the brief was Keira McNett.
Susan L. Kruger argued the cause for appellees/cross-
appellants. With her on the briefs was Alan Lescht.
2
Before: GARLAND, * Chief Judge, and BROWN and
PILLARD, Circuit Judges.
Opinion for the Court filed by Circuit Judge BROWN.
BROWN, Circuit Judge: After eight years of litigation,
appellants Kathy Radtke and Carmen Cunningham received
less than $6,000 in damages for unpaid overtime wages. They
spent the next two years seeking $250,000 in attorney’s fees;
the district court ultimately awarded them just over $56,000.
But this decade-long litigation will not end here. Appellants
now challenge the fee award as too low while the employers
challenge it as too high, each alleging a multitude of errors.
We need discuss only two of these claims, however, as we
conclude the lower court’s clear factual error requires us to
vacate the judgment and remand for reassessment of
reasonable attorney’s fees.
I
This court laid out the full background of this dispute in
an earlier merits appeal, see Radtke v. Lifecare Mgmt.
Partners, 795 F.3d 159 (D.C. Cir. 2015), but for our current
purposes the following facts suffice. In 2006, Radtke and
Cunningham brought suit against Advanta Medical Solutions
and Lifecare Management Partners (“Employers”) for failure
to pay overtime in violation of the Fair Labor Standards Act
and Maryland state law. After years of back-and-forth, the
case proceeded to jury trial. Appellants prevailed but
received only $5,844.29 in damages out of a claim for over
$87,000—largely because the jury and court rejected their
claims for doubled and trebled damages.
*
Chief Judge Garland was a member of the panel at the time the
case was argued but did not participate in this opinion.
3
Because appellants successfully recovered unpaid wages,
the Fair Labor Standards Act entitled them to reasonable
attorney’s fees. See 29 U.S.C. § 216(b) (“The court . . . shall
. . . allow a reasonable attorney’s fee to be paid by the
defendant” to a prevailing plaintiff.). Appellants accordingly
petitioned for $255,898.80 in fees. 1 The district court
accepted this figure as the appropriate “lodestar”—i.e., the
“most useful starting point for determining the amount of a
reasonable fee,” Hensley v. Eckerhart, 461 U.S. 424, 433
(1983). While a “strong presumption” of reasonability
attaches to the lodestar, see Perdue v. Kenny A. ex rel. Winn,
559 U.S. 542, 554 (2010), the court nevertheless reduced this
amount by 75% in calculating the final fee award.
Most relevant for our purposes, the court explained it was
“plaintiffs’ counsel [sic] inability to provide a meaningful
demand for the actual damages suffered” that was “driving”
the substantial reduction. J.A. 40. According to the court,
“[i]t was not until the eve of trial, and several years into the
litigation, that counsel provided th[e] Court with any
calculation of plaintiff’s damages.” J.A. 41. This failure to
provide a damage demand, according to the court, caused
unnecessary delay and the resulting inflation of attorney’s
fees. See J.A. 41-42. It therefore concluded a fee of only
$56,474.70 was appropriate and reasonable.
Both plaintiffs and defendants appealed. Plaintiff-
appellants argue the lower court erred, for a variety of
reasons, in adjusting the lodestar downward. The Employers,
on the other hand, contend the fee petition should have been
1
Appellants estimated their true expenditures at over $325,000 but
voluntarily reduced that amount by one-quarter to account for the
inevitable existence of duplicative or overly time-consuming tasks.
4
denied entirely as untimely or, if not denied, then at least
reduced more substantially. As noted previously, we have no
need to reach most of these arguments because we conclude
the lower court’s clear error with regard to the facts “driving”
the fee reduction is sufficient to require remand.
II
As an initial matter, the Employers claim appellants’ fee
petition must be denied in its entirety because it was untimely.
Federal Rule of Civil Procedure 54 requires a petition for
attorney’s fees “be filed no later than 14 days after the entry
of judgment.” Fed. R. Civ. P. 54(d)(2)(B)(i). Appellants
admittedly filed their petition 15 days after the lower court’s
initial entry of judgment. The Employers thus moved to
strike the fee petition, and appellants responded by filing a
motion for leave to file the petition nunc pro tunc. The lower
court denied the former and dismissed the latter as moot. The
Employers moved for reconsideration, but the court again
denied the motion, albeit based on different reasoning. The
Employers moved yet again for reconsideration. This time,
though, the court dismissed the motion as moot without
explanation after awarding appellants their attorney’s fees.
We need not concern ourselves with the lower court’s
two earlier justifications for denying the employers’
motions—nor do we need to address the parties’ other
arguments regarding whether the appellants’ late filing was
excusable—as the court reached the correct result when it
dismissed the motion as moot. 2 While Federal Rule of Civil
2
The outcome—not the reasoning—is relevant here because we are
free to affirm the lower court on alternative grounds. See RSM
Prod. Corp. v. Freshfields Bruckhaus Deringer U.S. LLP, 682 F.3d
1043, 1045 n.2 (D.C. Cir. 2012). That the district court gave no
reason for dismissing the Employers’ motion is therefore irrelevant.
5
Procedure 54 requires a fee petition to be filed “no later than”
14 days after judgment is entered, the Advisory Committee’s
Notes provide: “A new period for filing will automatically
begin if a new judgment is entered following . . . the granting
of a motion under Rule 59.” FED. R. CIV. P. 54 advisory
committee’s note (1993). The Supreme Court instructs that
guidance from the Advisory Committee is entitled to
“weight,” see Torres v. Oakland Scavenger Co., 487 U.S.
312, 316 (1988) (quoting Mississippi Publ’g Corp. v.
Murphree, 326 U.S. 438, 444 (1946)), and nothing in the text
of the Rule or our precedent suggests the Committee’s
interpretation is incorrect.
Our sister circuits have agreed with the Advisory
Committee’s construction of the Rule, holding that a fee
petition “is timely if filed no later than 14 days after the
resolution of a Rule 50(b), Rule 52(b), or Rule 59 motion.”
Bailey v. Cnty. of Riverside, 414 F.3d 1023, 1025 (9th Cir.
2005); see also Miltimore Sales, Inc. v. Int’l Rectifier, Inc.,
412 F.3d 685, 689 (6th Cir. 2005); Quigley v. Rosenthal, 427
F.3d 1232, 1237 (10th Cir. 2005); Members First Fed. Credit
Union v. Members First Credit Union of Fl., 244 F.3d 806,
807 (11th Cir. 2001); Weyant v. Okst, 198 F.3d 311, 315 (2d
Cir. 1999). That is exactly the situation here—after partially
granting a motion under Rule 59, the lower court entered an
amended judgment on May 15, 2014, well after appellants
filed their fee petition. Once the court entered the amended
judgment, the Employers’ earlier-filed motion to strike
became moot because the new judgment created “[a] new
period for filing” a fee petition. FED. R. CIV. P. 54 advisory
committee’s note.
The Employers argue, however, that appellants failed to
take advantage of this new filing period because they never
renewed their fee petition—meaning they failed to file within
6
14 days of the May 15, 2014 amended judgment. But the text
of Rule 54 never says when the filing period begins, only
when it ends. The plain language of the rule requires a
petition be filed “no later than” 14 days after judgment is
entered, not “within” 14 days of a new judgment. A pre-
judgment petition like appellants’ therefore satisfies this “no
later than” requirement.
The Employers suggest the rule both opens and closes the
filing window. In Weyant, the Second Circuit noted that the
14-day filing window “began with” entry of the district
court’s order denying all post-judgment motions. 198 F.3d at
315. But the Weyant court was evaluating the filing of a fee
petition seeking compensation for services rendered in
opposing post-judgment motions—a petition that was filed
after the court resolved (and denied) both motions. Because
no pre-judgment petition was at issue there, the language
Employers cite in support of their position is merely dicta.
See United States v. Wade, 152 F.3d 969, 973 (D.C. Cir.
1998) (explaining that even if an earlier opinion could be read
to reach the relevant issue, because “that issue was not before
the court, its overly broad language would be obiter dicta and
not entitled to deference”). Moreover, although Weyant “is
deserving of respect as a decision of a sister circuit,” it is “not
binding authority on us.” See Indep. Petrol. Ass’n of Am. v.
Babbitt, 92 F.3d 1248, 1257-58 (D.C. Cir. 1996).
The Advisory Committee’s explanation for Rule
54(d)(2)(B)’s 14-day deadline further reinforces our
conclusion that a pre-judgment petition satisfies the Rule.
The deadline ensures “the opposing party is informed of the
claim before the time for appeal has elapsed.” FED. R. CIV. P.
54 advisory committee’s notes. That purpose is served just as
well by a pre-judgment petition. The Employers here were
certainly on notice that appellants were seeking attorney’s
7
fees. Relatedly, the deadline “enables the court . . . to make
its ruling on a fee request in time for any appellate review of a
dispute over fees to proceed at the same time as review on the
merits of the case.” Id. Again, that purpose is served just as
well, if not better, by a pre-judgment petition. Finally,
“[p]rompt filing affords an opportunity for the court to resolve
fee disputes shortly after trial, while services performed are
freshly in mind.” Id. The earlier a petition is filed, the more
likely that is to be the case; in fact, the Employers’ preferred
interpretation requiring filing after the court has ruled on
post-judgment motions (perhaps months after trial) undercuts
that purpose.
In sum, while appellants’ fee petition originally was
untimely, the court’s entry of an amended judgment created
“[a] new period for filing” and cured that untimeliness,
notwithstanding the fact that the petition was filed before
entry of the new judgment. Appellants thus satisfied Rule
54(d)(2)(B)’s dictates, leaving no ground on which to deny
appellants’ fee petition in its entirety for lack of timeliness.
III
Having determined that appellants are entitled to fees, we
now consider the parties’ arguments regarding the amount.
Appellants primarily contest the district court’s decision to
adjust the lodestar downward because, according to the court,
appellants achieved only “limited success.” We do not reach
that claim, however, because another error—the district
court’s incorrect finding that appellants did not provide a
damages estimate until the eve of trial—requires remand.
We review a fee award “for abuse of discretion and will
reverse the district court if its decision rests on clearly
erroneous factual findings.” Ass’n of Am. Physicians &
8
Surgeons, Inc. v. Clinton, 187 F.3d 655, 660 (D.C. Cir. 1999)
(per curiam). The error here is quite clear. Though the lower
court listed a variety of reasons justifying the fee reduction,
what was really “driving” its decision—and what most
concerns us here—was the appellants’ alleged “inability to
provide a meaningful demand for actual damages suffered . . .
until the eve of trial.” J.A. 40-41.
In fact, appellants were not negligent or dilatory in
providing a damages estimate; they did so time and again,
including before they filed suit. See J.A. 108 (pre-suit
November 2006 letter estimating damages at $22,700); J.A.
282 (December 2007 Rule 26(a)(1) disclosures, calculating
damages at just under $22,680); J.A. 319-21 (May 2008
expert reports calculating damages at somewhere between
approximately $13,000 and $20,000); J.A. 290-91, 306
(February 2009 response to interrogatories, itemizing
compensatory damages and calculating them at approximately
$17,500). They even offered an early settlement, but the
Employers never responded. See J.A. 117 (December 1, 2006
offer to settle for $30,000, inclusive of liquidated damages
and attorney’s fees); J.A. 118-19 (December 28, 2006 offer to
settle for $25,000, inclusive of liquidated damages and
attorney’s fees).
Although the district court was unaware of it, appellants
prepared and delivered the early damages calculation required
by Federal Rule of Civil Procedure 26(a)(1). The court
lauded the important role Rule 26 plays by mandating early
disclosure of damages, thereby enabling the opposing party to
decide whether to settle before expending immense resources.
See J.A. 41. Yet the court never inquired whether the
appellants had provided a Rule 26(a)(1) disclosure and
therefore failed to discover that they had done so as early as
December 2007, six years before trial. See J.A. 282. At a
9
minimum, the court should have known appellants furnished
damages calculations to the Employers far in advance of trial
because appellants attached to their fee petition several 2006
settlement letters, which contained estimates of their
damages. See ECF No. 167, Ex. 5, 6, 7. The court’s
erroneous factual finding, which was based in part on the
court’s failure to ascertain whether appellants had provided
damages estimates to the defendants, requires remand.
The Employers’ response seems to be that appellants’
estimates were for “wildly varying amounts,” Oral Arg.
Recording 39:26-39, and did not accurately predict the
ultimate verdict of less than $6,000. These arguments fail at
the outset because they misconstrue what the district court
found, and we, as an appellate court, cannot reimagine the
lower court’s factual findings. See, e.g., Icicle Seafoods, Inc.
v. Worthington, 475 U.S. 709, 713-14 (1986) (holding the
court of appeals was mistaken to engage in factfinding rather
than simply reviewing the district court’s factual findings for
clear error). The district court’s complaints here were about
the (non)existence of the appellants’ damages calculations,
not their consistency or accuracy. The court claimed it
“struggled mightily” with appellants before any damages
estimate was provided, pointing to the absence of any
damages calculations in their complaint or amended
complaint. J.A. 40-41. It also found appellants “first
purported to provide a damages calculation in their Trial
Brief” (filed December 5, 2013), and even then “failed to
actually file the attachment with the damages calculation.”
J.A. 41. The court concluded it had first received damages
calculations on December 18, 2013—“the eve of trial.” Id.
10
But as described previously, this finding was blatantly
inaccurate. 3
Even assuming the district court had the Employers’
arguments in mind when making its findings, those claims
still fail. The first contention is a mischaracterization of the
facts; the compensatory damages estimates ranged from a low
of approximately $13,000 to a high of just under $23,000.
Any variance beyond that was due to escalating attorney’s
fees accrued by virtue of the protracted litigation.
As to the second contention, there is no indication
appellants’ demands were unreasonable, frivolous, or
otherwise entirely disconnected from reality. That the jury
ultimately awarded less than requested—especially in a case
where most of the requested damages were calculated by
multiplying compensatory damages—is not an indictment of
appellants’ actions. In any event, appellants offered to settle
for $25,000 to $30,000 very early in the dispute, yet the
Employers never responded, much less counter-offered. See
J.A. 117-19. The Employers, moreover, could have protected
themselves from significant attorney’s fees by making a Rule
68 offer of judgment. See FED. R. CIV. P. 68(d) (“If the
judgment that the offeree finally obtains is not more favorable
than the unaccepted offer, the offeree must pay the costs
incurred after the offer was made.”). But they failed to do so.
They cannot now complain appellants acted unreasonably,
allegedly leaving the Employers no way to protect themselves
from ever-escalating fees.
3
To the extent the court’s complaint was that appellants had not
provided the court with any damages calculations (even though
they had provided multiple such calculations to the Employers, as
described above), that fact is irrelevant to the court’s purported
reason for insisting on a prompt calculation—allowing the parties
to decide whether to settle or continue litigating.
11
In the end, there is no support in the record for the district
court’s finding that appellants failed to promptly provide a
damages calculation that could have facilitated early
settlement. This clear factual error requires remand.
Additionally, because we cannot ascertain whether or how
significantly this mistaken factual finding impacted other
aspects of the district court’s fee reasonability assessment, we
must vacate the entire decision. None of the lower court’s
previous determinations will be law of the case as a
consequence. On remand, the parties are free to reargue and
the court is free to reconsider any of the issues that we have
not reached.
IV
For the foregoing reasons, the judgment of the district
court is vacated, and the case is remanded for proceedings
consistent with this opinion.
So ordered.