Ferman v. Sturgis Cleaners, Inc.

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SJC-12602
BELKY FERMAN & another1 vs. STURGIS CLEANERS, INC., & another.2
Suffolk. December 4, 2018. - February 19, 2019.
Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, &
Kafker, JJ.
Massachusetts Wage Act. Practice, Civil, Attorney's fees.
Civil action commenced in the Superior Court Department on
November 19, 2014.
Following a stipulation of dismissal, an application for
attorney's fees and costs was heard by Karen F. Green, J.
The Supreme Judicial Court granted an application for
direct appellate review.
John J. McGlone, III (David T. Norton also present) for the
defendants.
Elizabeth Soltan (Patricio S. Rossi also present) for the
plaintiffs.
Joseph Michalakes & Liliana Ibara, for Immigrant Worker
Center Collaborative & others, amici curiae, submitted a brief.
Margaret E. Monsell & Ruth A. Bourquin, for Massachusetts
Law Reform Institute & another, amici curiae, submitted a brief.
1 Veronica Guillen.
2 Peter Triantos.
2
KAFKER, J. This case requires us to consider whether
employees, whose claim against their employer under the Wage
Act, G. L. c. 149, §§ 148, 150, resulted in a favorable
settlement agreement and stipulation of dismissal, "prevailed"
in their suit for purposes of an award of attorney's fees and
costs under the Wage Act's fee-shifting provisions.3 The
defendants contend that the trial judge should have applied the
test for determining prevailing party status under Federal fee-
shifting statutes established by Buckhannon Bd. & Care Home,
Inc. v. West Virginia Dep't of Health & Human Resources, 532
U.S. 598 (2001) (Buckhannon). Because Buckhannon requires a
prevailing litigant to obtain judicial approval or "imprimatur"
of a private settlement, the defendants argue that the
plaintiffs did not prevail. Id. at 605. The plaintiffs
disagree, arguing that, because we have previously decided that
the Buckhannon test has no applicability to Massachusetts fee-
shifting statutes, the correct standard to determine prevailing
party status under the Wage Act is the "catalyst test." Under
the catalyst test, if the plaintiff's lawsuit is a necessary and
important factor in causing the defendant to grant a material
3 The employees brought claims under both G. L. c. 149 and
G. L. c. 151, which governs payment of overtime wages. Because
our analysis is the same for both fee-shifting provisions, which
are identically worded, for simplicity's sake we refer to the
claims as brought under the Wage Act, unless otherwise noted.
3
portion of the requested relief, a settlement agreement, even
without any judicial involvement, may qualify the plaintiff as a
prevailing party for fee-shifting purposes. None of the parties
disputes that the plaintiffs met the catalyst test; rather, the
central issue is the threshold question of the proper test to
apply to determine prevailing party status under the Wage Act.
We hold that the catalyst test applies to Wage Act claims and
that the trial judge correctly found that the plaintiffs
satisfied that test in the instant case, and we therefore affirm
the award of attorney's fees to the plaintiffs under the fee-
shifting provisions of the Wage Act.4
1. Facts and procedural history. The facts and procedural
posture of this case are not contested. The plaintiffs are
former employees of the defendants' dry cleaning business who
brought suit in November 2014, claiming that the defendants
failed to pay them approximately $28,000 in regular and overtime
wages as required by G. L. c. 149, §§ 148 and 150, and G. L.
c. 151, §§ 1A and 1B. Both of these chapters confer a private
4 We acknowledge the amicus briefs submitted in support of
the plaintiffs by the Immigrant Worker Center Collaborative, the
Mental Health Legal Advisors Committee, Community Legal Aid,
Inc., the Center for Law and Education, the Disability Law
Center, the National Consumer Law Center, Heisler Feldman &
McCormick, P.C., and the Suffolk University Law School
Accelerator-to-Practice Program; and by the Massachusetts Law
Reform Institute and the American Civil Liberties Union of
Massachusetts.
4
right of action on an employee "aggrieved" by an employer's
violation of their provisions.5 They further provide that "[a]n
employee so aggrieved who prevails in such an action shall be
awarded treble damages . . . and shall also be awarded the costs
of the litigation and reasonable attorneys' fees." See G. L.
c. 149, § 150; G. L. c. 151, § 1B. In their complaint, the
plaintiffs claimed treble damages, as well as costs and
attorney's fees.6
Following an almost two-year period in which there was the
entry and lifting of a default judgment against the defendants,
discovery, and the filing of various pretrial motions, the case
was scheduled for trial in November 2016. Several weeks before
5 General Laws c. 149, § 150, permits "[a]n employee
claiming to be aggrieved by a violation" of its provisions to
"institute and prosecute in his own name and on his own behalf,
or for himself and for others similarly situated, a civil action
for injunctive relief, for any damages incurred, and for any
lost wages and other benefits." General Laws c. 151, § 1B,
allows an employee claiming an overtime pay violation to
"institute and prosecute in his own name and on his own behalf,
or for himself and for others similarly situated, a civil action
for injunctive relief, for any damages incurred, and for the
full amount of the overtime rate of compensation less any amount
actually paid to him by the employer." As provided by G. L.
c. 149, § 150, the plaintiffs first filed a written complaint
with the Attorney General and requested and received written
assent to bring a civil suit within ninety days of filing that
complaint.
6 The plaintiffs also asserted breach of contract claims and
violations of the Federal Fair Labor Standards Act, 29 U.S.C.
§§ 207 and 216(b), but did not claim additional damages with
respect to these claims. The plaintiffs conceded that they had
not achieved prevailing party status on these claims.
5
the trial date, the court referred the parties to mediation. As
a result of mediation, the parties executed a memorandum of
understanding in which they agreed to settle the case for
$20,500, but reserved the issue of the plaintiffs' entitlement
to attorney's fees for resolution by the court. The parties
then executed a mutual release and settlement agreement that
provided that it "is the result of a compromise and that nothing
set forth herein constitutes an admission of wrongdoing or
liability." Subsequently, the parties filed a stipulation with
dismissal in court, agreeing that "[p]ursuant to the Memorandum
of Understanding and . . . Mutual Release and Settlement
Agreement . . . Plaintiffs may file a Motion for Costs and
Attorneys' Fees," following determination of which the matter
would be "dismissed with prejudice" and "all rights of appeal
. . . waived."7
7 The plaintiffs argue that the defendants have waived the
right to appeal the issue of attorney's fees because the mutual
release and settlement agreement says that the parties "agree to
abide by the decision of the Court with regard to [the
attorney's fees] petition." Given the result we reach today in
favor of the plaintiffs, we need not resolve the issue whether
the defendants waived their right to appeal altogether. We also
note that we took the case on direct appellate review, and
sought amicus briefing, to resolve the important, unresolved
issue of the appropriate standard to apply for attorney's fees
petitions under the Wage Act. Cf. New Bedford Hous. Auth. v.
Olan, 435 Mass. 364, 372 (2001) (despite waiver of issue,
"[b]ecause there is some uncertainty over the question, because
it involves a matter of public interest that is likely to arise
in the future, and where the issue has been fully briefed, we
will address the issue").
6
In their motion for attorney's fees, filed in February
2017, the plaintiffs claimed approximately $40,000 in attorney's
fees and $1,000 in costs. The defendants opposed the motion.
The judge concluded that the catalyst test and not the
Buckhannon test applied to Massachusetts fee-shifting statutes.
Applying the catalyst test, the judge found that the parties'
agreement, which amounted to approximately seventy percent of
the plaintiffs' initially demanded monetary relief, resulted "in
a practical benefit as a result of their attorneys' efforts."
This made the plaintiffs "prevailing parties" for purposes of an
award of attorney's fees and costs. The judge granted the
plaintiffs' motion with respect to $16,153 in attorney's fees
and the entire amount of costs.8 This appeal followed.
2. Analysis. Whether a plaintiff is a "prevailing party"
for purposes of a statutorily authorized award of attorney's
fees "is an issue of law that we consider de novo." LaChance v.
Commissioner of Correction, 475 Mass. 757, 764 (2016), quoting
Newell v. Department of Mental Retardation, 446 Mass. 286, 298,
cert. denied, 549 U.S. 823 (2006). To determine whether the
plaintiffs here were prevailing parties, the defendants argue
that the trial judge should not have defaulted to the catalyst
8 The judge deducted claimed attorney's fees as to certain
precomplaint work and motions, as well as to work relating to
the claim under 29 U.S.C. § 207, as to which she found that the
plaintiffs did not prevail.
7
test, but rather should have considered whether, as required by
Buckhannon, there was a "material alteration of the legal
relationship of the parties" (citation omitted) and a "judicial
imprimatur on the change." Buckhannon, 532 U.S. at 604-605.
The plaintiffs are correct, however, that we have expressly
"rejected the application of Buckhannon . . . and its progeny to
fee requests under Massachusetts fee-shifting statutes or other
Massachusetts authority." Brown v. F.L. Roberts & Co., 452
Mass. 674, 689 (2008), citing T & D Video, Inc. v. Revere, 450
Mass. 107, 115 n.21 (2007).9 Consequently, the question is not
whether the Buckhannon test or the catalyst test applies, but
whether the catalyst test or another, previously undefined test
applies. If the catalyst test applies, we have nothing further
to decide, because the defendants concede that the plaintiffs
9 Of course, as required by Buckhannon, we no longer
consider the catalyst test as a "permissible basis" for
determining prevailing party status under Federal fee-shifting
statutes. Buckhannon Bd. & Care Home, Inc. v. West Virginia
Dep't of Health & Human Resources, 532 U.S. 598, 610 (2001).
See LaChance v. Commissioner of Correction, 475 Mass. 757, 765
(2016); Newell v. Department of Mental Retardation, 446 Mass.
286, 297-299, cert. denied, 549 U.S. 823 (2006); Mendoza v.
Licensing Bd. of Fall River, 444 Mass. 188, 211-212 (2005). See
also Nogeiro v. Commissioner of the Dep't of Transitional
Assistance, 72 Mass. App. Ct. 496, 499 (2008). Yet "we are not
. . . bound by interpretations of the Federal statute in
construing our own State statute." College-Town, Div. of
Interco, Inc. v. Massachusetts Comm'n Against Discrimination,
400 Mass. 156, 163 (1987).
8
prevail under the catalyst test, and do not contest the amount
awarded pursuant to that test.10
We conclude, as did the motion judge, that there are only
two well-defined alternatives for determining whether a
negotiated settlement arising under a fee-shifting statute
qualifies a litigant as a prevailing party: the catalyst test,
which only requires the lawsuit "to be a catalyst for a
defendant's voluntary change in conduct"; and the Buckhannon
test, which states that the judge must take an additional step
and "at least impose its judicial sanction on the agreed-upon
material change in the legal relationship." Nogeiro v.
Commissioner of the Dep't of Transitional Assistance, 72 Mass.
App. Ct. 496, 499 (2008). Although we have never expressly
applied the catalyst test to determine prevailing party status
under a State fee-shifting statute, we have, as previously
stated, expressly rejected the alternative. In this case, we
take the logical next step and conclude that the catalyst test
applies in the context of determining prevailing parties under
the Wage Act. We do so for the following reasons.
We begin with the "two major purposes" of statutory fee-
shifting provisions: "First, they act as a powerful
10As discussed infra, even if the matter were not conceded,
we would conclude that the catalyst test is satisfied here and
the amounts properly calculated.
9
disincentive against unlawful conduct. Second, they often
provide an incentive for attorneys to provide representation in
cases that otherwise would not be financially prudent for them
to take on, and in that sense they help to assure that claimants
who might not be able to afford counsel, or whose claims are too
small to warrant an expenditure of funds for counsel, will be
represented." Commonwealth v. Augustine, 470 Mass. 837, 842
(2015). See Buckhannon, 532 U.S. at 623 (Ginsburg, J.,
dissenting) (rejection of catalyst test will "impede access to
court for the less well heeled, and shrink the incentive . . .
created" by fee-shifting statutes enforced by private attorneys
general). It is for these reasons that the Legislature included
such provisions in select statutes such as the Massachusetts
Civil Rights Act, G. L. c. 12 § 11I, and the Massachusetts
consumer protection act, G. L. c. 93A, §§ 9 and 11, as well as
the wage laws at issue here. See Augustine, supra (citing these
and other statutes containing fee-shifting provisions).
The catalyst test promotes both purposes, and does so more
vigorously than the Buckhannon test. See Albiston & Nielsen,
The Procedural Attack on Civil Rights: The Empirical Reality of
Buckhannon for the Private Attorney General, 54 U.C.L.A. L. Rev.
1087, 1121, 1130 (2007) (Buckhannon discourages public interest
organizations from representing plaintiffs in enforcement
actions). In particular, the catalyst test provides for
10
attorney's fees if a party's lawsuit was a "necessary and
important factor" in causing the defendant to provide a material
portion of the requested relief, but does not require litigation
to a final judicial determination or other judicial imprimatur.
Handy v. Penal Insts. Comm'r of Boston, 412 Mass. 759, 765
(1992).11
The catalyst test thus recognizes that successful
litigation may be reflected in settlements as well as court
rulings, as settlements are often "the products of pressure
exerted by [a] lawsuit." Id. Cf. DeSalvo v. Bryant, 42 P.3d
525, 530 (Alaska 2002) (catalyst test, rather than Buckhannon,
applies to determine prevailing party status under State fee-
shifting statute because "[e]ven without formal judicial relief,
many plaintiffs achieve the goals of their litigation").
Importantly, the catalyst test prevents an employer from
11At the same time, the catalyst test does not reward
frivolous suits or nuisance settlements. The original case that
set out the catalyst test in the United States Court of Appeals
for the First Circuit explained that not only must the
plaintiff's lawsuit be "causally related to the defendants'
actions," but the defendants also must not have "acted
gratuitously" by settling a lawsuit that was "frivolous,
unreasonable, or groundless." Nadeau v. Helgemoe, 581 F.2d 275,
281 (1st Cir. 1978), quoting Christiansburg Garment Co. v. Equal
Employment Opportunity Comm'n, 434 U.S. 412, 422 (1978). The
First Circuit later suggested that the inquiry is whether the
relief obtained by the plaintiff was "material[]" and not "de
minimis." Pearson v. Fair, 980 F.2d 37, 44-45 (1st Cir. 1992).
We conclude that a materiality analysis better identifies and
rewards meritorious legal work, distinguishing it from frivolous
suits that may nonetheless result in nuisance settlements.
11
escaping liability for attorney's fees by an "eleventh hour"
settlement of a meritorious case. See Buckhannon, 532 U.S. at
636 n.10 (Ginsburg, J., dissenting), quoting Vermont Low Income
Advocacy Council v. Usery, 546 F.2d 509, 513 (2d Cir. 1976)
(Congress did not intend fee-shifting statute to be evaded by
"eleventh hour" compliance). See also Albiston & Nielsen, supra
at 1091, 1130 (presenting empirical evidence that Buckhannon
increased occurrences of "strategic capitulation" in which
"defendants faced with likely adverse judgments attempt to moot
the case and to defeat the plaintiff's fee petition by providing
the requested relief before judgment"). If such settlements did
not result in the obligation to pay attorney's fees, there would
be a disincentive to bring such cases in the first place,
thereby leaving other unlawful conduct unaddressed and
uncorrected. See id. at 1130. Consequently, the catalyst test
best promotes the purposes of fee-shifting statutes by
encouraging attorneys to take cases under such statutes to
correct unlawful conduct and rewarding them accordingly when
they do so. See Augustine, 470 Mass. at 842. See also
Buckhannon, 532 U.S.at 623 (Ginsburg, J., dissenting)
(explaining that catalyst test encourages enforcement by
"private attorneys general").
The catalyst test also promotes the prompt settlement of
meritorious cases, avoiding the need for protracted litigation,
12
superfluous process, or unnecessary court involvement solely to
"prevail" in a formalistic sense to ensure an award of
attorney's fees and costs. Cf. Graham v. DaimlerChrysler Corp.,
34 Cal. 4th 553, 573 (2004), as modified (Jan. 12, 2005)
(catalyst test, rather than Buckhannon, applies to determine
prevailing party status under State fee-shifting statute in part
because catalyst test encourages judicial economy). It also
provides a disincentive for defendants to stretch out cases and
delay settlement for strategic advantage, as they would only be
increasing the legal fees they would ultimately be required to
pay. See Buckhannon, 532 U.S. at 639 (Ginsburg, J., dissenting)
("the longer the litigation, the larger the fees"). See also
Albiston & Nielsen, supra at 1130 ("qualitative data" suggests
that shift from catalyst to Buckhannon test has made settlement
more difficult and prolonged litigation).
The statutory language, structure, purpose, and history all
confirm that the catalyst test is the correct standard to apply
to the Wage Act. The Legislature specifically included fee-
shifting provisions in the Wage Act to ensure its "rigorous
enforcement" by private parties. Lipsitt v. Plaud, 466 Mass.
240, 247 (2013). As small amounts were often at stake, and
employees otherwise lacked the resources to hire counsel, the
fee-shifting provisions were deemed necessary to serve the act's
purpose, which was "to prevent the unreasonable detention of
13
wages" by "unscrupulous employers" (citation omitted). Id. at
245. The fee-shifting provisions thus provide both a necessary
incentive for attorneys to take such cases and a powerful
disincentive for employers to withhold the wages in the first
place. Prompt resolution of such cases is also highly valued as
the timely payment of wages is a critical component of the Wage
Act. See id. at 251 ("Legislature's intent behind the Wage Act
that employees receive timely payment of wages" [citation
omitted]). For this reason, it is especially important to
encourage settlement of such cases, and to provide attorney's
fees for such settlements. Thus, all the rationales discussed
above supporting the application of the catalyst test to fee-
shifting statutes in general directly apply to the Wage Act.12
The timing of the passage of the private right of action
and accompanying fee-shifting provisions of the Wage Act
provides further confirmation. The fee-shifting provisions of
the Wage Act were enacted before Buckhannon, at a time when the
catalyst test was the standard that courts applied under Federal
This conclusion accords with that of other States, which
12
have expressly concluded that, following Buckhannon, the
catalyst test still applies to determine prevailing party status
for purposes of an award of attorney's fees under State fee-
shifting statutes. See, e.g., DeSalvo v. Bryant, 42 P.3d 525,
530 (Alaska 2002) (wage detention statute); Tipton-Whittingham
v. Los Angeles, 34 Cal. 4th 604, 608 (2004) (Fair Employment and
Housing Act); Bonanno v. Verizon Business Network Sys., 196 Vt.
62, 72 (2014) (workers' compensation statute).
14
fee-shifting statutes.13 More specifically, at that time, we
recognized that the catalyst test allowed a negotiated
settlement to confer prevailing party status.14 We therefore
13There has been a fee-shifting provision in G. L. c. 151,
§ 1B, since its enactment in 1962. St. 1962, c. 371. The
present text of the private right of action and accompanying
fee-shifting provision of G. L. c. 149, § 150, was enacted in
1993. St. 1993, c. 110, § 182. In 2008, the Legislature
amended the fee-shifting provision of G. L. c. 151, § 1B, to
conform to that of G. L. c. 149, § 150. St. 2008, c. 80, § 6.
When the 1993 fee-shifting provision was enacted, prior to
Buckhannon, the First Circuit and almost every other Federal
Court of Appeals recognized the catalyst test. See Buckhannon,
532 U.S. at 602. See also Newell, 446 Mass. at 303 (before
Buckhannon decision, catalyst test recognized basis for award of
attorney's fees). Accordingly, we recognized the catalyst test
as a proper basis for awards of attorney's fees under Federal
statutes. See Guardianship of Hurley, 394 Mass. 554, 559 & n.6
(1985), quoting Nadeau, 581 F.2d at 278-279, and Coalition for
Basic Human Needs v. King, 691 F.2d 597, 599 (1st Cir. 1982)
("Individuals prevail 'for attorney's fees purposes if they
succeed on any significant issue in litigation which achieves
some of the benefit the parties sought in bringing suit' or
'when plaintiff's lawsuit acts as a "catalyst" in prompting
defendants to take action to meet plaintiff's claims'"; "[These]
two tests are separate and distinct; satisfying either of them
is sufficient to qualify a party as prevailing"). See also
cases cited in note 14, infra.
14See Handy v. Penal Insts. Comm'r of Boston, 412 Mass.
759, 764-765 (1992) (plaintiff prisoners who entered into
settlement requiring defendants to improve prison conditions
were "prevailing parties" for purposes of award of attorney's
fees under 42 U.S.C. § 1988 [1988], because their "lawsuit was a
necessary and important factor" in causing defendants to settle
and thus "catalyst that prompted change"). See also Draper v.
Town Clerk of Greenfield, 384 Mass. 444, 452-453 (1981), cert.
denied sub nom. Draper v. Prescott, 456 U.S. 947 (1982)
(plaintiffs' negotiated settlement qualified them as prevailing
parties under 42 U.S.C. § 1988 because they satisfied criteria
of catalyst test as established by First Circuit in Nadeau, 581
F.2d at 278-279).
15
discern no reason why the Legislature would have thought another
standard was appropriate for Massachusetts fee-shifting statutes
when it enacted the fee-shifting provisions of the Wage Act.15
See Commonwealth v. Mogelinski, 466 Mass. 627, 646 (2013) ("We
presume that the Legislature enacts legislation with an
aware[ness] of the prior state of the law as explicated by the
decisions of this court" [citation omitted]).
For all the foregoing reasons, we conclude that a plaintiff
prevails for purposes of an award of attorney's fees under the
Wage Act when his or her suit satisfies the catalyst test by
acting as a necessary and important factor in causing the
defendant to provide a material portion of the relief demanded
in the plaintiff's complaint. Here, the criteria of the
catalyst test are met because, as the trial judge correctly
found, the plaintiffs' lawsuit caused the defendants to provide
approximately seventy percent of the plaintiffs' monetary
demands, which is clearly a material portion. Because the
15 See Batchelder v. Allied Stores Corp., 393 Mass. 819,
821-822 (1985) ("Legislature intended 'prevail' to have the same
meaning" under G. L. c. 12, § 11I, as under analogous Federal
fee-shifting statute at time, 42 U.S.C. § 1988, because
"Legislature is presumed to have been aware of the use and
meaning of this term in the Federal statute"). See also Cronin
v. Tewksbury, 405 Mass. 74, 75-76 (1989) (relying on case law
interpreting prevailing party status under 42 U.S.C. § 1988 to
determine whether plaintiffs prevailed under G. L. c. 12,
§ 11I).
16
plaintiffs prevailed for purposes of an award of attorney's fees
the Wage Act, we affirm the award.
3. Award of appellate attorney's fees and costs. A party
that prevails on a Wage Act claim "is statutorily entitled to
recover reasonable appellate attorney's fees and costs with
respect to the claims on which he prevailed." Fernandes v.
Attleboro Hous. Auth., 470 Mass. 117, 132 (2014). The party
must have made the request for appellate attorney's fees in its
brief. Fabre v. Walton, 441 Mass. 9, 10 (2004). Because the
plaintiffs made such a request in their briefing, they may file
a request for appellate attorney's fees and costs with this
court in accordance with the procedure described in Fabre,
supra.
4. Conclusion. For the foregoing reasons, we affirm the
trial judge's award of attorney's fees to the plaintiffs.
So ordered.