Shea v. United States

In the United States Court of Federal Claims
No. 16-793C
(Filed: June 2, 2021)
)
JOHN A. SHEA, ) Prevailing plaintiff’s claim for reasonable
) attorneys’ fees pursuant to the Fair Labor
Plaintiff, ) Standards Act, 29 U.S.C. § 216(b); partial
) success
v. )
)
UNITED STATES, )
)
Defendant. )
)
Linda Lipsett, Bernstein & Lipsett, P.C., Washington, D.C., for plaintiff John A. Shea.
With her at the hearing and on the briefs was Daniel M. Rosenthal, James & Hoffman, P.C.,
Washington, D.C., and on the briefs was Alice C. Hwang, James & Hoffman, P.C., Washington,
D.C.
David M. Kerr, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Washington, D.C., for the United States. With him on the briefs
were Brian M. Boynton, Acting Assistant Attorney General, Martin F. Hockey, Jr., Acting
Director, and Claudia Burke, Assistant Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington D.C., Henry Karp, Senior Trial Attorney,
Naval Litigation Office, and S. Christopher Mullins, Jr., Assistant Counsel, Civilian Personnel
Law, Naval Criminal Investigative Services, Quantico, Virginia.
OPINION AND ORDER
LETTOW, Senior Judge.
John A. Shea, a federal civilian employee with the Naval Criminal Investigative Service
(“NCIS”), has successfully litigated his claim for compensatory damages and back pay under the
Fair Labor Standards Act (“FLSA”). See Shea v. United States, 143 Fed. Cl. 320, 340 (2019),
aff’d, 976 F.3d 1292 (Fed Cir. 2020). The court found that NCIS “erred by classifying Mr. Shea
as exempt from the FLSA,” id. at 323, and awarded him $42,750.84 in back pay, id. at 340. The
court also noted that “Mr. Shea may apply for an award of reasonable costs and reasonable fees
for witnesses and attorneys under 29 U.S.C. § 216(b).” Id.Pending before the court is plaintiff’s motion for attorneys’ fees, costs, and interest on
back wages. See Pl.’s Am. Mot. for Atty’s’ Fees Costs, & Interest on Back Wages (“Pl.’s
Mot.”), ECF No. 84. While the initial request was for fees and costs incurred through March 21,
2021, plaintiff “update[d] his request to include fees and costs incurred from March 22, 2021, to
April 30, 2021.” Pl.’s Reply at 3-4, ECF No. 86. Following the completion of briefing, see
Def.’s Resp., ECF No. 85; Pl.’s Reply; Def.’s Sur-Reply, ECF No. 90, the court held a hearing
on May 18, 2021.
BACKGROUND
Mr. Shea, an Investigations Specialist for NCIS, filed suit in this court on July 1, 2016.
See Compl., ECF No. 1. Mr. Shea alleged that NCIS had willfully violated the FLSA by
classifying his position as “FLSA exempt,” Compl. ¶¶ 9-12, and sought declaratory relief, back
pay, premium pay, liquidated damages, interest, attorneys’ fees, and costs, Compl. at 5. After
the government filed its answer to the complaint, see ECF No. 5, the parties proceeded with
discovery, see Order of November 14, 2016, ECF No. 8. In September and October of 2017, the
parties cross-moved for summary judgment on issues of liability, specifically addressing whether
Mr. Shea fell within an administrative exemption and, if he had been erroneously classified as
exempt, whether the misclassification was made “in good faith” and with a reasonable basis or
with what amounted to a “willful violation.” Shea v. United States, 136 Fed. Cl. 95, 97-98
(2018). The court granted summary judgment for the government on the issue of willfulness,
rejecting plaintiff’s claim in that regard, but denied the parties’ cross-motions “as to whether Mr.
Shea was erroneously classified as FLSA-exempt and whether the government acted [regarding
Mr. Shea’s classification] in good faith and with reasonable basis.” Id. at 114. Mr. Shea
proceeded to file a motion for reconsideration of the court’s decision on the issue of willfulness,
see ECF No. 25, but the court denied the motion, see Order of June 15, 2018, ECF No. 30.
On November 26, 2018, the government made an offer of judgment pursuant to Rule 68
of the Rules of the Court of Federal Claims (“RCFC”). See Def.’s Resp. Appx., ECF No. 85-1.
The government offered “to allow judgment to be entered against it in this action in the amount
of $110,000, inclusive of attorney’s fees and costs, and . . . [to] agree[] to change the status of
Mr. Shea’s position to non-exempt” under the FLSA. Id. at 1. Mr. Shea declined the offer,
however, Def.’s Resp. at 2, and a two-day trial commenced on December 17, 2018, Shea, 143
Fed. Cl. at 328.
In May 2019, the court held that “NCIS’s classification decision, though erroneous,
evidenced a reasonable basis and was done in good faith.” Shea, 143 Fed. Cl. at 340. The court
awarded Mr. Shea $42,750.84 in back pay, id., but concluded that he was not entitled to
liquidated damages, id. at 338. Mr. Shea appealed the denial of liquidated damages, but the
Federal Circuit affirmed this court’s decision. See Shea, 976 F.3d 1292. Following the
unsuccessful appeal, Mr. Shea filed his motion for attorneys’ fees, costs, and interest on back
wages in this court. See Pl.’s Mot.
STANDARDS FOR DECISION
Section 216(b) of the Fair Labor Standards Act provides an express statutory
authorization for the payment of attorneys’ fees and costs in a suit brought under the Act: “[t]he
court . . . shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a
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reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. §
216(b). “[W]here an employee prevails on a FLSA claim, the award of attorneys’ fees under §
216(b) is mandatory.” Slugocki v. United States, 816 F.2d 1572, 1579 (Fed. Cir. 1987) (citing
Beebe v. United States, 226 Ct. Cl. 308 (1981)). “The amount to be allowed as attorneys’ fees
shall be determined by the trial [court], . . . taking into account various pertinent factors.” Beebe,
226 Ct. Cl. at 329 (citing Rau v. Darling’s Drug Stores, Inc., 388 F. Supp. 877 (W.D. Pa. 1975)).
“Factors to be considered in arriving at a fair award for attorney’s fees are: the amount of the
overtime compensation award, the nature and complexity of the issues involved, and the efforts
of the [p]laintiff’s counsel in obtaining the award.” Rau, 388 F. Supp. at 887. An offer of
judgment pursuant to RCFC 68 is also a relevant factor to consider. See Hubbert v. United
States, 62 Fed. Cl. 73, 75 (2004). “Evidence of an unaccepted offer is not admissible except in a
proceeding to determine costs.” RCFC 68(b). Notably, “[i]f 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.” RCFC 68(d).
“[P]laintiffs are only entitled to recover attorneys’ fees to the extent of plaintiffs’ success
at trial.” Bull v. United States, 68 Fed. Cl. 212, 229 (2005); see also Hensley v. Eckhart, 461
U.S. 424, 440 (1983) (“[W]here the plaintiff achieved only limited success, the district court
should award only that amount of fees that is reasonable in relation to the results obtained.”).
“For example, ‘[i]f plaintiffs do not prevail on the claim for liquidated damages, they will not be
entitled to recover any attorneys’ fees or costs which are incurred in connection with or are
attributable to the trial and resolution of that issue.’” Bull, 68 Fed. Cl. at 229 (alteration in
original) (quoting Beebe, 226 Ct. Cl. at 329).
ANALYSIS
I. Interest on Award of Back Pay
Mr. Shea asks for $9,664.86 in interest on his award of back pay. Pl.’s Mot. at 22; id.
Appx. B, ECF No. 84-5. The government argues that Mr. Shea is ineligible for such relief
because FLSA does not include an express waiver of sovereign immunity from suits for interest
payments. Def.’s Resp. at 16-17. Defendant further contends that even if Mr. Shea may recover
interest under FLSA, he waived this claim by omitting it from his post-trial brief. Id. at 18-19.
The question of whether Mr. Shea is entitled to interest on his award of back pay is
analogous to one of the issues presented in Astor v. United States. In that case, firearms
instructors at the Federal Law Enforcement Training Center in Glynco, Georgia sued for
overtime compensation under the Fair Labor Standards Act. Astor v. United States, 79 Fed. Cl.
303, 304 (2007). In examining whether the instructors were entitled to pre-judgment interest
under the Back Pay Act, the court noted that “FLSA itself does not provide for recovery of
interest within its provisions and does not waive sovereign immunity for suits against the
[g]overnment for interest.” Id. at 318 (citing Doyle v. United States, 931 F.2d 1546, 1550-51
(Fed. Cir. 1991)). The court concluded, however, that the government’s failure to provide
overtime compensation to the instructors fell “squarely within the B[ack Pay Act]’s provisions,
and as such, . . . [p]laintiffs should be awarded interest on their FLSA back overtime pay award.”
Id. at 319. Even though the instructors’ claim was brought pursuant to FLSA, the court held that
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they were entitled to pre-judgment interest because all “three criteria for an award to bear
interest” under the Back Pay Act were met: “(1) the employee must have been affected by an
unjustified or unwarranted personnel action; (2) the employee must have suffered a withdrawal
or reduction of all or part of his pay; and (3) but for the action, the employee would not have
experienced the withdrawal or reduction.” Id. (citing Social Sec. Admin. v. FLRA, 201 F.3d 465,
468 (D.C. Cir. 2000)).
Here, similar to the plaintiffs in Astor, Mr. Shea is seeking interest under the Back Pay
Act on his award made pursuant to FLSA. While Mr. Shea cannot rely on FLSA itself to show
that Congress waived sovereign immunity as to suits against the government for interest, see
Doyle, 931 F.2d at 1550-51, the Back Pay Act can operate “as a congressional waiver of
sovereign immunity from interest claims on awards arising under other statutes, such as . . .
FLSA.” FLRA, 201 F.3d at 468. The government’s erroneous classification of Mr. Shea as
“FLSA-exempt” deprived him of the overtime pay rate of one-and-one-half base pay, and thus
constituted an “unjustified or unwarranted personnel action which . . . resulted in the withdrawal
or reduction of all or part of [Mr. Shea’s] pay.” 5 U.S.C. § 5596(b)(1). But for this
classification, Mr. Shea “would not have experienced the denial of overtime pay for hours
worked above [his] usual forty-hour work schedule.” Astor, 79 Fed. Cl. at 319; see also Shea,
143 Fed. Cl. at 323 (noting that Mr. Shea had received overtime pay “equal to 25% of his base
salary, in lieu of overtime pay at the rate of one-and-one-half base pay under the Fair Labor
Standards Act”).
Notably, “the [c]ourt cannot award both interest and liquidated damages.” Def.’s Resp.
at 17; see also Astor, 79 Fed. Cl. at 319 (stressing that “plaintiffs are seeking interest on their
back pay awards, not on a liquidated damages award”) (emphasis in original). The court
previously held that Mr. Shea was not entitled to liquidated damages. Shea, 143 Fed. Cl. at 338.
Therefore, consistent with Astor, an award of interest is still available to Mr. Shea. As for the
government’s contention that Mr. Shea waived his claim for interest, see Def.’s Resp. at 18-19,
Mr. Shea requested such relief at the onset of this litigation as an adjunct to his FLSA claim, see
Compl. at 5; Astor, 79 Fed. Cl. at 319 (noting that the instructors “included the [Back Pay Act] in
their complaint, in addition to their FLSA claim”); see also Hr’g Tr. 28:21 to 29:10 (May 18,
2021) (noting that plaintiff was still seeking liquidated damages when he filed his post-trial
brief). Consequently, the court finds that plaintiff is entitled under the Back Pay Act to recover
interest on his award of overtime pay.
In calculating the amount of interest due, Mr. Shea used the interest rates reported by the
Office of Personnel Management (“OPM”) for back pay. See Pl.’s Mot. at 26; OPM, Fact Sheet:
Interest Rates Used for Computation of Back Pay, https://www.opm.gov/policy-data-
oversight/pay-leave/pay-administration/fact-sheets/interest-rates-used-for-computation-of-back-
pay/ (last visited June 1, 2021). Applying these rates to the award of $42,750.84 in back pay, the
total amount of interest through March 20, 2021 is $9,664.86. See Pl.’s Mot. Appx. B. The
interest rate provided by OPM is also applied for the period from March 21, 2021 through the
date of judgment, amounting to $268.67, to account for the additional interest owed to Mr. Shea.
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II. Attorneys’ Fees and Costs
A. Whether Defendant’s Offer of Judgment Precludes an Award of Fees and Costs
Mr. Shea asks for a total of $249,938.35 in fees and $16,696.68 in costs. See Pl.’s Mot.
Appx. A at 1, ECF No. 84-4; Pl.’s Reply at 3-4. 1 The government contends that Mr. Shea’s
rejection of the offer of judgment made on November 26, 2018 disqualifies him from recovering
any attorneys’ fees or costs after that date. Def.’s Resp. at 8. By discounting the requested fees
as either “redundant and unnecessary,” id. at 6, or “attributable to the liquidated damages issue,”
id. at 7, the government estimates the value of Mr. Shea’s claim to be $109,230.37, id. at 8.
Given that this amount is less than the government’s offer of judgment of $110,000, defendant
argues that RCFC 68(d) precludes an award of fees and costs. Id. Plaintiff counters that the
government’s reductions are unwarranted and that the government fails to take “any potential
recovery of interest or liquidated damages” into account. Pl.’s Reply at 9.
Putting aside whether the government’s various discounts of plaintiff’s fees and costs are
reasonable, its estimated claim value of $109,230.37 ignores the possibility that Mr. Shea could
recover interest on his award of back pay. As noted supra, plaintiffs may claim interest under
the Back Pay Act on an award made pursuant to FLSA, so long as liquidated damages have not
been awarded. See FLRA, 201 F.3d at 468; Astor, 79 Fed. Cl. at 319. Even if the government’s
assumptions regarding reductions to Mr. Shea’s requested fees and costs are applied, the award
of $9,664.86 in interest through March 21, 2021 increases the value of plaintiff’s claim above the
amount offered by the government. Therefore, Mr. Shea may “apply for an award of reasonable
costs and reasonable fees for witnesses and attorneys under 29 U.S.C. § 216(b)” notwithstanding
the government’s offer of judgment. Shea, 143 Fed. Cl. at 340.
B. Calculation of Fees and Costs
Mr. Shea represents that his request for attorneys’ fees and costs reflects a voluntary
reduction of $52,798.50, namely 151 hours of work associated with events such as settlement
discussions and plaintiff’s appeal to the Federal Circuit. See Pl.’s Mot. Appx. A at 2. The
requested attorneys’ fees, calculated using the USAO Matrix, reflect an average hourly rate of
$346. Pl.’s Mot. at 8; see also USAO ATTORNEY’S FEES MATRIX – 2015-2021,
https://www.justice.gov/usao-dc/page/file/1305941/download. The government does not
challenge the use of this matrix, but instead contends that Mr. Shea’s “partial or limited success”
in this case warrants a further reduction in fees and costs beyond what plaintiff proposes. Def.’s
Resp. at 15-16 (quoting Hensley, 461 U.S. at 436); Def.’s Sur-Reply at 1-2. While the
government first argues that plaintiff is not entitled to any fees incurred after the government
made its offer of judgment, it requests in the alternative that the court address “only the fees
incurred after the judgment.” See Def.’s Resp. at 16.
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Mr. Shea initially sought $234,836.35 in legal fees and $15,473.02 for costs incurred in
this case, Pl.’s Mot. Appx. A at 1, but he amended his request to include an additional $15,102 in
fees and $1,223.66 in expenses incurred from March 22, 2021, to April 30, 2021, Pl.’s Reply at
3-4.
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Given that the parties appear to agree on the use of the USAO Matrix to calculate the
applicable lodestar, 2 the threshold issue regarding the requested attorneys’ fees is whether Mr.
Shea “achieved only partial or limited success” at trial. Hensley, 461 U.S. at 436. “[T]he most
critical factor” in determining the proper fee award “is the degree of success obtained.” Id.Plaintiff’s status as the prevailing party is not determinative of “whether the expenditure of
counsel’s time was reasonable in relation to the success achieved.” Id. While Mr. Shea
recovered $42,750.84 in back pay, Shea, 143 Fed. Cl. at 340, he had sought $73,139.41 in back
pay at trial, id. at 323. Furthermore, plaintiff was unsuccessful in proving willfulness, Shea, 136
Fed. Cl. at 114, as well as entitlement to liquidated damages, Shea, 143 Fed. Cl. at 338. 3 Thus,
“the ultimate damages award reflects lack of success and the fee award should be reduced
accordingly.” Radtke, 254 F. Supp. 3d at 174.
Radtke v. Cashetta informs the issue at hand. In Radtke, the plaintiff employees filed a
motion for attorneys’ fees and costs after prevailing on their claims brought pursuant to FLSA.
Radtke, 254 F. Supp. 3d at 167. The court noted that “[d]istrict courts should consider the
disparity between the amount of damages sought versus the amount of damages ultimately
awarded,” id. at 173 (citing Combs v. City of Huntington, 829 F.3d 388, 395 (5th Cir. 2016)),
explaining that the employees’ failure to prove willfulness had reduced their awards at trial, id. at
2
The methodology used to compute the rates in the USAO Matrix “replaces that used
prior to 2015, which started with the matrix of hourly rates developed in Laffey v. Northwest
Airlines, Inc.[,] 572 F. Supp. 354 (D.D.C. 1983), aff’d in part, rev’d in part on other grounds,
746 F.2d 4 (D.C. Cir. 1984), cert. denied, 472 U.S. 1021 (1985).” USAO ATTORNEY’S FEES
MATRIX – 2015-2021, at n.4. Both the USAO Matrix and its predecessor have been deemed
acceptable starting points for calculating the applicable lodestar. See Biery v. United States, 818
F.3d 704, 714 (Fed. Cir. 2016) (holding that the trial court’s use of the Adjusted Laffey Matrix
was “sufficient to adequately compensate counsel”); McCarty v. United States, 142 Fed. Cl. 616,
(2019) (concluding that “the USAO Matrix is more appropriate here, as that matrix is based on
changes in prices for goods and services, including legal services in Washington, D.C.”).
3
Notably, plaintiff’s request for back pay and his request for liquidated damages required
different proofs. Compare Shea, 143 Fed. Cl. at 337 (explaining that NCIS erred by classifying
Mr. Shea as exempt from FLSA), with id. at 338 (holding that NCIS’s misclassification was done
in good faith, thus precluding an award of liquidated damages). Furthermore, the issue of
liquidated damages was the subject of plaintiff’s appeal. See Shea, 976 F.3d at 1295. These
different legal bases for monetary relief, however, do not constitute separate claims for the
purpose of determining a fee award. The Supreme Court clarified in Hensley that a fee award
may be reduced if the plaintiff “fail[ed] to prevail on claims that were unrelated to the claims on
which he succeeded.” Hensley, 461 U.S. at 434 (emphasis added). While “there is no certain
method of determining when claims are ‘related’ or ‘unrelated,’” id. at 437 n.12, claims that are
“‘distinctly different’ in all respects, both factual and legal, from plaintiff’s successful claims”
are generally considered unrelated, Morgan v. District of Columbia, 824 F.2d 1049, 1066 (D.C.
Cir. 1987) (quoting Hensley, 461 U.S. at 434). Given the interrelated nature of liability and
entitlement to liquidated damages, see Pl.’s Mot. at 20-21, the court will treat plaintiff’s failure
to prove such entitlement as a “lack of success” instead of a failed separate claim, see Radtke v.
Caschetta, 254 F. Supp. 3d 163, 173-75 (D.D.C. 2017).
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174. “[T]he greatest reduction in both plaintiffs’ damages,” however, arose from their inability
to prove entitlement to liquidated damages. Id. Given the employees’ “lack of success on two
major issues that would otherwise have greatly increased their damages,” id. at 175, the court
found that “a 40% reduction on pre-appellate time billed for lack of success” was appropriate, id.
at 184.
“There is no precise rule or formula” for reducing attorneys’ fees and costs in the event of
a plaintiff’s partial success; the court may either “identify specific hours that should be
eliminated” or “simply reduce the award to account for the limited success.” Hensley, 461 U.S.
at 436-37. Taking into account plaintiff’s success in recovering the requested back pay along
with his lack of success in proving willfulness or entitlement to liquidated damages, the court
concludes that a 30 percent reduction in attorneys’ fees “is reasonable in relation to the results
obtained.” Hensley, 461 U.S. at 440; see also Combs, 829 F.3d at 396 (“The district court may
properly compare what [plaintiff] sought with what [he] was ultimately awarded.”).
Accordingly, the court awards Mr. Shea $174,956.85 in fees, 70 percent of the total requested
amount. As for costs, however, the issues of liability and entitlement to liquidated damages were
intertwined. See Radtke, 254 F. Supp. 3d at 175 (reducing fee award based on “lack of success”
instead of time spent on unsuccessful claims). For example, Mr. Shea correctly points out that
his counsel “still would have needed to depose Shea’s supervisor” regardless of whether he
sought liquidated damages. Pl.’s Mot. at 20-21. In light of the related nature of these issues, the
court awards $16,696.68 in costs, the full amount requested.
CONCLUSION
The court GRANTS IN PART plaintiff’s motion for attorneys’ fees, costs, and interest on
back wages. Plaintiff is awarded $174,956.85 in fees, $16,696.68 in costs, plus $9,933.53 in
interest (computed at the rate provided by OPM through the date of this decision), for a total of
$201,587.06.
The court directs the Clerk to enter final judgment in accord with this disposition.
No further costs.
It is so ORDERED.
s/ Charles F. Lettow
Charles F. Lettow
Senior Judge
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