Ivonne E. Galdames vs N & D Investment Corp.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
Nos. 10-11984 & 10-14523 ELEVENTH CIRCUIT
Non-Argument Calendar JUNE 23, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:08-cv-20472-MGC
IVONNE E. GALDAMES,
JACQUELINE GALDAMES,
GUILLERMO OSORIO,
on their own behalf and others similarly situated,
llllllllllllllllllllllllllllllllllllllll Plaintiffs - Appellees,
versus
N & D INVESTMENT CORP.,
a Florida Corporation,
d.b.a. Mr. Clean Commercial Laundry,
OFER MANOR, individually,
llllllllllllllllllllllllllllllllllllllll Defendants - Appellants.
________________________
Appeals from the United States District Court
for the Southern District of Florida
________________________
(June 23, 2011)
Before WILSON, MARTIN and BLACK, Circuit Judges.
PER CURIAM:
N & D Investment Corporation and Ofer Manor (“Defendants”) appeal an
adverse jury verdict and award of attorneys’ fees. Ivonne Galdames, Jacqueline
Galdames, and Guillermo Osorio (“Plaintiffs”) sued Defendants under the Fair
Labor Standards Act (“FLSA”), alleging that they were not compensated for
overtime work completed between 2005 and 2007. They sought just under
$22,000. The district court granted Plaintiffs’ partial summary judgment and then
conducted a jury trial on the remaining issues. The jury awarded Plaintiffs
approximately $14,000 in damages and found that Defendants either knowingly
violated the FLSA or showed reckless indifference to the law. Based on the jury’s
latter finding, the district court awarded liquidated damages, resulting in an award
of more than $28,000 for Plaintiffs. The district court also awarded Plaintiffs
more than $100,000 in attorneys’ fees as prevailing plaintiffs. After review of the
extensive record and Defendants’ brief, we affirm.1
I.
The FLSA requires covered “employers” to pay overtime wages once
“employees” exceed forty hours of work in a given week. 29 U.S.C. § 207(a).
Except for the explicit exceptions within the statute, “the term ‘employee’ means
1
Plaintiffs’ motion to participate in oral argument is denied as moot.
2
any individual employed by an employer.” § 203(e)(1). Either individual
coverage or enterprise coverage can trigger the FLSA, but here we are only
concerned with enterprise coverage. Polycarpe v. E & S Landscaping Serv., Inc.,
616 F.3d 1217, 1220 (11th Cir. 2010) (per curiam). Enterprise coverage is
triggered if an employer (1) “has employees engaged in commerce or in the
production of goods for commerce, or [] has employees handling, selling, or
otherwise working on goods or materials that have been moved in or produced for
commerce by any person” and (2) has at least $500,000 of “annual gross volume
of sales made or business done.” § 203(s)(1)(A). The FLSA defines “commerce”
as “trade, commerce, transportation, transmission, or communication among the
several States or between any State and any place outside thereof.” § 203(b).
A.
Defendants first contend that the district court committed reversible error in
failing to grant their post-trial motion for judgment as a matter of law pursuant to
Federal Rule of Civil Procedure 50. They believe that Plaintiffs are not
“employees” under the FLSA because they are illegal aliens. Defendants argue,
inter alia, that we should ignore binding, on-point precedent, Patel v. Quality Inn
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South, 846 F.2d 700 (11th Cir. 1988).2 They believe this is appropriate because
(1) Patel conflicts with Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137,
122 S. Ct. 1275 (2002), and (2) it was decided “more than twenty (20) years ago,
where [sic] the problems with illegal immigration and employment of illegal
immigrant workers had not reached the exceptional proportions that they are at
now in 2011 . . . .”
Earlier holdings by panels of this Court are binding “unless and until they
are clearly overruled by this court en banc or by the Supreme Court. While an
intervening decision of the Supreme Court can overrule the decision of a prior
panel of our court, the Supreme Court decision must be clearly on point.” Randall
v. Scott, 610 F.3d 701, 707 (11th Cir. 2010) (citations and internal quotation marks
omitted). A panel of this Court has previously determined that illegal aliens are
covered “employees” under the FLSA. Patel, 846 F.2d at 706 (“In short, we hold
2
Defendants present a number of other arguments under this heading as well. First, they
believe a number of so-called “practical and policy-based” reasons justify the conclusion that
illegal aliens are not covered by the FLSA. For example, coverage is not warranted because
“[t]he Plaintiffs, quite simply, are fugitives from justice, and should be dealt with the Court [sic]
in that manner . . . .” Second, Defendants argue that the doctrine of in pari delicto applies and
bars recovery since Plaintiffs, as illegal aliens, have entered the country in violation of the law
and “will tend to lie because they have no fear.” Third, Defendants allege (1) that Plaintiffs’
counsel committed a “serious felony” by representing illegal aliens and (2) that allowing illegal
immigrants to bring suit “makes everyone in the courtroom (if the appropriate action is not taken)
complicit with assisting a known illegal immigrant because two lawyers, the Judge, and the
Marshall’s service will all know that Plaintiffs are fugitives from justice . . . .” As none of these
arguments matter in light of Patel, we decline to discuss them.
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that undocumented workers are ‘employees’ within the meaning of the FLSA . . .
.”). Specifically, we concluded, after passage of the Immigration Reform and
Control Act of 1986 (“IRCA”), that illegal aliens were covered “employees” under
the FLSA and could sue for unpaid wages. Id. The Supreme Court’s opinion in
Hoffman Plastic ruled that the National Labor Relations Board could not award
backpay—for work never performed—to an illegal alien under the National Labor
Relations Act (“NLRA”) after Congress passed the IRCA. 535 U.S. at 147–49.
Hoffman Plastic is not “clearly on point” with Patel. First, Patel ruled on
the FLSA and Hoffman Plastic ruled on the NLRA. Furthermore, in Patel, the
illegal alien was “not attempting to recover back pay for being unlawfully
deprived of a job. Rather, he simply [sought] to recover unpaid minimum wages
and overtime for work already performed.” 846 F.2d at 705. Conversely, the
illegal alien in Hoffman Plastic sought backpay for being unlawfully deprived of
his job after engaging in union organizing activities. 535 U.S. 140–41. Based on
these distinctions, Hoffman Plastic did not clearly overrule Patel. Accordingly,
we reiterate that illegal aliens are “employees” covered by the FLSA.
B.
Defendants next argue that the district court committed error when it
granted Plaintiffs’ motion for summary judgment as to “enterprise coverage.”
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First, Defendants contend that the court mistakenly concluded that Defendants’
annual sales exceeded the $500,000 threshold established by § 203(s)(1)(A)(ii).
Second, Defendants argue that the district court incorrectly decided that they met
§ 203(s)(1)(A)(i)’s interstate commerce requirement. We review grants of
summary judgment de novo, applying the same legal standard as the district court.
Fogade v. ENB Revocable Trust, 263 F.3d 1274, 1287 (11th Cir. 2001).
We conclude that the district court properly granted summary judgment.
First, as to annual gross revenue, Plaintiffs’ complaint alleged “10. Based upon
information and belief, at all times material to this complaint Defendants had an
annual gross volume of sales or business done of not less than $500,000.00,
exclusive of excise taxes at the retail which are separately stated, and at least two
employees engaged in interstate commerce.” Defendants’ answer stated “10.
Defendants admit that the annual gross revenue exceeds $500,000 per year; all
other allegations contained in paragraph nine [sic] are denied.” We hold
Defendants to that admission. Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151,
1177–78 (11th Cir. 2009) (“[T]he general rule [is] that a party is bound by the
admissions in his pleadings. Indeed, facts judicially admitted are facts established
not only beyond the need of evidence to prove them, but beyond the power of
evidence to controvert them.” (citations and internal quotation marks omitted)).
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Second, after review of the entire record, we conclude that Defendants’
satisfied § 203(s)(1)(A)(i)’s interstate commerce requirement. Defendants seem to
be attempting to resurrect the so-called “coming to rest” doctrine, which we have
explicitly rejected. Polycarpe, 616 F.3d at 1221. Therefore, we affirm the district
court’s grant of partial summary judgment on this issue.3
II.
As prevailing parties, Plaintiffs filed a motion seeking approximately
$120,000 in attorneys’ fees and costs. The district court eventually awarded
$112,495. Defendants appeal that award, alleging (1) Plaintiffs’ motion for
attorneys’ fees was untimely, (2) the fees awarded were grossly excessive, and (3)
any fee award should have been reduced because Plaintiffs only partially
succeeded in the litigation.
A.
The district court entered final judgment on July 31, 2009. Defendants filed
a number of timely post-trial motions, including, inter alia, a motion for a new
3
Defendants raise two additional arguments regarding the trial proceedings. First, they
argue that the district court erred in concluding that plaintiff Osorio did not qualify for the
“executive exemption” to the FLSA. 29 C.F.R. § 541.100. Second, Defendants contend that the
district court abused its discretion by declining to allow Defendants (1) to impeach Plaintiffs’
credibility by referencing their status as illegal aliens, and (2) to call a rebuttal witness to
impeach Plaintiffs. After review of Defendants’ brief and the record, we conclude these claims
have no merit and do not warrant further discussion.
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trial pursuant to Federal Rule of Civil Procedure 59. The district court did not rule
on these motions until March 2010.
On October 8, 2009—68 days after the district court entered judgment but
before six months before it adjudicated post-trial motions—Plaintiffs moved for
attorneys’ fees. As prevailing parties, they requested more than $120,000 in fees
and costs. Three attorneys worked on the case—Mr. Marban, Mr. Valaquez, and
Mr. Diaz—and each submitted the number of hours worked and their requested
hourly fee: $350, $300, and $295, respectively. The magistrate judge
recommended that Plaintiffs be awarded $107,810 in attorneys’ fees and $4,685 in
costs. The district court adopted that recommendation and filed an order requiring
Defendants to pay $112,495.
B.
Defendants first argue that Plaintiffs’ motion for attorneys’ fees was
untimely. At the relevant time, the local rules of the Southern District of Florida
required that an attorneys’ fees motion “be filed and served within thirty days of
entry of a Final Judgment or other appealable order that gives rise to attorney’s
fees.” S.D. Fla. Rule 7.3(A)(vii). It is undisputed that Plaintiffs filed their motion
68 days after the district court entered judgment. Accordingly, Defendants insist
the motion is untimely and no fees should be awarded.
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A litigant’s failure to file a motion for attorneys’ fees within the prescribed
period can result in denial of that motion. See Clark v. Hous. Auth. of Alma, 971
F.2d 723, 727 (11th Cir. 1992). Certain post-trial motions, however, “operate[] to
suspend the finality of the district court’s judgment ‘pending the court’s further
determination whether the judgment should be modified so as to alter its
adjudication of the rights of the parties.’” Members First Fed. Credit Union v.
Members First Credit Union of Fla., 244 F.3d 806, 807 (11th Cir. 2001) (per
curiam) (quoting Browder v. Dir., Dep’t of Corr., 434 U.S. 257, 267, 98 S. Ct. 556(1978)) (holding that a Rule 59 motion to alter or amend judgment effectively tolls
the time requirement for filing a motion for attorneys’ fees). Therefore, judgments
do not actually become “final” for purposes of an attorneys’ fees motion until
certain post-trial motions are adjudicated. See id. (“[T]he finality of a judgment is
effectively postponed by the timely filing of a motion under Rule 59 . . . .”).
While it is uncontested that Plaintiffs moved for attorneys’ fees 68 days
after the district court entered judgment, Defendants fail to appreciate that their
timely Rule 59 motion extended Plaintiffs’ deadline for requesting attorneys’ fees.
In other words, Plaintiffs could have filed a timely motion for attorneys’ fees up to
30 days after the district court ruled on Defendants’ new trial motion. As
Plaintiffs filed their motion before the court’s March 2010 denial of defendant’s
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post-trial motion, it was necessarily timely. Accordingly, we reject Defendants’
procedural challenge to the attorneys’ fees award and address their substantive
attacks.
C.
Defendants next argue that the district court’s attorneys’ fees award was
grossly excessive. They allege that (1) the number of hours billed was excessive
because it was double that of defense counsel, (2) the hourly rates sought are
excessive, (3) the district court stated on the record—before trial—that it would
never award $100,000 in fees for Plaintiffs’ counsels’ work to that point, and (4)
Plaintiffs’ counsel should have been estopped from receiving fees because they
have taken inconsistent positions in unrelated FLSA litigation.4
We review the district court’s award of attorneys’ fees for an abuse of
discretion, closely analyzing any legal conclusions reached during the fee
determination. Gray v. Lockheed Aeronautical Sys. Co., 125 F.3d 1387, 1389
(11th Cir. 1997). “An abuse of discretion occurs if the judge fails to apply the
proper legal standard or to follow proper procedures in making the determination,
or bases an award upon findings of fact that are clearly erroneous.” In re Red
Carpet Corp. of Panama City Beach, 902 F.2d 883, 890 (11th Cir. 1990).
4
The last two arguments have no merit, and we decline to discuss them.
10
“Although a district court has wide discretion in performing these calculations, the
court’s order on attorney fees must allow meaningful review—the district court
must articulate the decisions it made, give principled reasons for those decisions,
and show its calculation.” Am. Civil Liberties Union of Ga. v. Barnes, 168 F.3d
423, 427 (11th Cir. 1999) (alterations omitted) (citations and internal quotation
marks omitted).
Generally, a prevailing plaintiff in a FLSA case is entitled to a reasonable
award of attorneys’ fees and costs. 29 U.S.C. § 216(b); Sahyers v. Prugh,
Holliday & Karatinos, P.L., 560 F.3d 1241, 1244 (11th Cir. 2009). Calculation of
attorneys’ fees involves multiplying the number of hours reasonably expended in
litigating the claim and the customary fee charged for similar legal services in the
relevant community (“lodestar amount”). See Hensley v. Eckherhart, 461 U.S.
424, 433, 103 S. Ct. 1993 (1983). A properly calculated lodestar amount “is itself
strongly presumed to be reasonable.” Resolution Trust Corp. v. Hallmark
Builders, Inc., 996 F.2d 1144, 1150 (11th Cir. 1993) (per curiam) (“Consequently,
the courts have severely limited the instances in which a lawfully found lodestar
amount may be adjusted to a higher or lower level.”).
The first step in determining the proper lodestar amount is calculating the
number of hours reasonably expended on the litigation. Prevailing plaintiff’s
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attorneys “must exercise their own billing judgment to exclude any hours that are
‘excessive, redundant, or otherwise unnecessary.’” Id. at 1149 (quoting Hensley,
461 U.S. at 434). Attorneys may bill adversaries for only the same hours they
would bill a client. Id. Similarly, “a court may reduce excessive, redundant or
otherwise unnecessary hours in the exercise of billing judgment.” Perkins v.
Mobile Hous. Bd., 847 F.2d 735, 738 (11th Cir. 1988) (emphasis added). If the
court concludes that the number of claimed hours is excessive, it may engage in
“an across-the-board cut,” so long as it provides adequate explanation for the
decrease. Bivins v. Wrap it Up, Inc., 548 F.3d 1348, 1350 (11th Cir. 2008) (per
curiam).
Here, the magistrate judge began his hours-expended analysis by noting:
[f]ollowing careful review of the submitted time records,
the undersigned finds that most, but not all, of counsels’
time entries are detailed, well documented and reflect a
reasonable amount of time devoted to each listed task. In
so finding, the undersigned has closely scrutinized the time
entries specifically challenged by defendants.
The magistrate judge spent the next three pages reviewing the reasonableness of
the hours presented. Notably, he reduced the fees for Mr. Marban by 20% because
“he describe[d] the work performed on numerous tasks with only one
corresponding time entry.” Then, in considering Mr. Marban’s hours, the
magistrate judge considered the same arguments raised here—such as taking
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excessive time to calculate damages, draft jury instructions, and generally
familiarize himself with the case. Ultimately, the magistrate judge concluded that,
after the 20% reduction, the number of hours Mr. Marban charged was reasonable
under the circumstances. As to the other two attorneys, the magistrate judge
concluded that their hours were reasonable because they clearly reflected the
services performed and a reasonable number of hours in completing each. In
conclusion, he stated that “[w]hile [the attorneys’ fees award] exceeds plaintiffs’
cumulative award, the undersigned notes that excessive hours were expended by
plaintiffs’ counsel due to defendants’ unnecessary litigation techniques which
prolonged this litigation . . . .” (emphasis added). After review, we cannot
conclude that the magistrate’s recommendation, as adopted by the district court,
demonstrated any abuse of discretion in determining reasonable hours expended.
Reasonable hourly rates are determined by comparing attorneys’ requested
rate with the “prevailing market rates in the relevant community.” Blum v.
Stenson, 465 U.S. 886, 895, 104 S. Ct. 1541 (1984). The party applying for fees
bears the burden of establishing the reasonableness of the proffered rate.
Duckworth v. Whisenant, 97 F.3d 1393, 1396 (11th Cir. 1996) (per curiam).
While previous hourly rate awards are not given controlling weight, they do
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provide some insight. See Dillard v. City of Greensboro, 213 F.3d 1347, 1354–55
(11th Cir. 2000) (per curiam). They do not, however, trump the attorney’s actual
billing rate to other paying clients. Id. at 1355.
Here, Plaintiffs’ attorneys submitted an affidavit from a board certified labor
and employment law attorney, who concluded that the hourly rate for each of the
attorneys was reasonable. Furthermore, Plaintiffs cited other district court cases
awarding two of Plaintiffs’ attorneys the exact fees sought in this case. The
magistrate judge cited these facts and noted that his “familiarity with such
litigation and attorney’s fees in general” supported the hourly rates requested by
Plaintiffs’ attorneys. Defendants complain that Plaintiffs’ attorneys provided no
evidence of their ordinary hourly rate, and they instead suggest that $100 per hour
would be appropriate. However, Defendants provide no evidence for that hourly
rate and only attack the credibility of Plaintiffs’ expert by noting that he litigates
similar cases. Nothing in Defendants’ brief points to any error that could be
considered an abuse of discretion in determining the appropriate hourly rate for
Plaintiffs’ attorneys.
As we have determined that the number of hours expended and the hourly
rates are appropriate, a strong presumption of reasonableness applies. See
Resolution Trust Corp., 996 F.2d at 1150. After review, we do not believe
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Defendants have demonstrated the district court abused its discretion in reaching
the ultimate fee award.
D.
Finally, Defendants argue that Plaintiffs “did not achieve total success, as
they received only 63.88% of the monies that they sought. Accordingly, the
lodestar should have been reduced by at least that amount.”
Plaintiffs’ success, or lack thereof, is an important consideration and can
result in a conclusion that the lodestar amount must be reduced. See Dillard, 213
F.3d at 1354–55. Here, however, Plaintiffs were successful on their sole claim
and received a significant portion of the damages sought. After liquidated
damages were accessed, Plaintiffs received more than the overtime salary they
originally requested. As such, we do not think the district court abused its
discretion in its ultimate determination.
III.
Based on the foregoing discussion, we affirm the district court’s rulings.
AFFIRMED.
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