An interesting decision of the Federal District Court for the Northern District was rendered in November 2018. The connection of that decision to workers' compensation may not be obvious to some. However, it determines attorney fees, which in a general sense are the subject of discussion in Florida workers' compensation. The subject of fee calculation and "reasonableness" comes up in many conversations I have with regulators in various other states as well. A significant number of those discussions were generated in part by the decisions of Florida courts in Castellanos and Miles.
The November ruling is by Judge Roger Vinson in the Pensacola Division of the Northern District Court. The case is Moss v. Pav'r Construction Inc., and Michel Breton, Case No. 3:17cv408-RV/EMT. It is a 35-page explanation of some of the intricacies of the Fair Labor Standards Act (FLSA). Workers' compensation sometimes is intertwined with such analysis; a common workers' compensation issue is a determination of the injured worker's earnings, based upon which wage replacement or "indemnity benefits" are paid.
The case involves Mr. Moss' departure from his employment with Pav'r. The Court noted that he "broke multiple pieces of company equipment during his brief stint with the defendants." When he was "told he would have to pay for some of" that equipment, he "'walked off' the job and quit." Therefore, the defendants elected to keep Mr. Moss' last paycheck in partial payment, "a small portion" of that debt.
This withholding "meant that he was paid less than minimum wage for that one pay period." Judge Vinson concluded that withholding pay in that manner violated the FLSA. And, if violation of the FLSA is "willful" (meaning "with knowledge or reckless disregard"), then "the employee may recover the full wages," and additionally recover "double that amount in liquidated damages." By that calculation, "assuming" the action was willful, the Court concluded the wages due would be $248.31 and the total damages "at most" would be $496.62.
There is a popular idiom about "not making a federal case out of it." The Free Dictionary imparts that this means "to exaggerate or build up the importance of something; to make a big deal out of something." Some might see the total here of $496.62 and express some surprise that this was in fact a federal case. However, the FLSA is federal law, and those disputes normally proceed in federal court. But, even when a case thus belongs in federal court, it can nonetheless be exaggerated or overstated.
Judge Vinson describes how the lawsuit was originally filed against two companies, each of which was owned by defendant Breton. The Judge noted that it "soon became clear" that the second company (PRCP) "had never employed plaintiff," and "had been sued in error." However, the plaintiff's attorney did not dismiss the claims against that second company, despite that knowledge. The case continued against this second company "even after plaintiff himself testified he had no evidence to" contradict Mr. Breton's testimony that "plaintiff never worked for the (second) company."
In January 2018, the defendants (Pav'r and Breton) filed an Offer of Judgement. This is a procedural tool to "encourage settlement: and to "discourage protracted litigation." The plaintiff did not accept the offer. Thereafter, the plaintiff conducted "a shockingly large amount of discovery," which included interrogatories, requests for production, and at least nine depositions." Judge Vinson conceded that this volume of discovery is not uncommon in a "typical federal lawsuit," but characterized it as "objectively excessive here."
Three months later, PRCP (mistakenly sued) filed for summary judgment. The plaintiff filed a nine-page response to the motion, essentially concluding plaintiff "does not disagree" with the summary judgment (The plaintiff might instead have just dismissed PRCP). The judge "finally dismissed (PRCP) from the case in June 2018. In that order, he mentioned the prospects for a claim for attorney fees in this matter, noting "I am not inclined to award much - if anything - more than a nominal fee award," citing the overall circumstances in the case.
In November, in a brief paragraph, Judge Vinson cited Rule 68 of the Federal Rules of Civil Procedure and awarded costs to the defendant. He explained that when "an Offer of Judgement is made" and that is "not accepted, and the offeree later fails to obtain more than . . . was offered, the offeree must pay the offeror's post-offer costs." Thus, the plaintiff recovered $496.62 in his wage claim in this litigation but was ordered to pay $1,133.54 in costs. The plaintiff's net recovery from filing this litigation was -$636.92. The plaintiff prevailed on his claims and ended up writing the defendant a check.
Judge Vinson then turned attention to the Plaintiff's claim for $28,351.00 in attorney's fees, noting that prevailing plaintiff fees are "expressly provided" by statute: "shall . . . allow a reasonable attorney's fee." Judge Vinson noted that authority supports that "distinct courts have very broad discretion in determining the amount of the (fee) award." (citations omitted). In fact, citing Sahyers v. Prugh, Holliday & Karatinos, 560 F.3d 1241, 1244 (11th Cir 2009), he noted that "there are some cases in which a reasonable fee is no fee."
The discussion of the fee claim proceeds for pages of the November order. Judge Vinson cites various decisions involving prevailing party fees. He notes the obligation of the Court to consider facts such as the "Rule 68 Offer of Judgement," the:
"stage of the litigation at which the offer was made, what services were rendered thereafter, the amount obtained by judgement, and whether it was reasonable to continue litigating the case after the Rule 68 offer was made." Marek v. Chesney, 473 U.S. 1 (1985).
Judge Vinson noted this was not "an exhaustive list" of appropriate considerations. He concluded that "it appears well established" that the Court could "deny attorney fees" if the Court found the attorney "acted in bad faith."
Judge Vinson noted that both plaintiff and defendant contended that the other acted in bad faith, and thus prolonged the litigation over the $496.62. The judge expounds for several pages on the communication between the parties, quoting at length from various correspondence. He concluded that the plaintiff's counsel was "churning the file to prolong the litigation and run up his attorney fees." A key lesson here may be that communicating in writing is effective for memorializing and documenting.
As an example, the Judge reminded of the failure to dismiss PRCP from the suit "even after it was or should have been obvious that plaintiff never worked there." This might be characterized as continuing litigation "without reasonable ground." When PRCP moved for summary judgment, Plaintiff filed a "nine-page response" with "47 pages of exhibits" to "say that he agreed PRCP" should be dismissed. The court also discussed the apparent lack of any real dispute. The plaintiff initially asked for $496.62 and the defendant essentially offered to pay that amount, yet the litigation continued and even intensified.
As an example, the Judge reminded of the failure to dismiss PRCP from the suit "even after it was or should have been obvious that plaintiff never worked there." This might be characterized as continuing litigation "without reasonable ground." When PRCP moved for summary judgment, Plaintiff filed a "nine-page response" with "47 pages of exhibits" to "say that he agreed PRCP" should be dismissed. The court also discussed the apparent lack of any real dispute. The plaintiff initially asked for $496.62 and the defendant essentially offered to pay that amount, yet the litigation continued and even intensified.
Judge Vinson noted that 15.7 attorney hours at more than $220 per hour average were claimed to draft Plaintiff's motion for summary judgment. The 31-page motion and 90 pages of exhibits for payment of $496.62. He noted that the defendants agreed in response to pay the "full $496.62," the plaintiff then "filed a 10-page reply . . . requesting that plaintiff be awarded the $496.62 that the defendants had just stipulated to." That reply was "another 4.7 hours, at $215 per hour or $1,010.50. This was perceived by Judge Vinson as inappropriate and perhaps indicative of the tenor of the litigation overall.
Judge Vinson noted that the defense had opposed the "plaintiff's motion for fees." Its attorney had "painstakingly gone through (counsel's) time sheets to show even more file-churning and bill-padding." The judge cites several of these in the order. He describes the use of a "boilerplate complaint," drafting of "standard form letters ordinarily handled by secretaries or paralegals," and over a half hour "accrued . . . to read three sentences."
In another example, the attorney "logged 2.1 hours to draft nine Notices of Deposition . . . (which) were identical except for the name of the deponent and the time of their appearance." He questioned why "the lead and named attorney" would perform that work instead of a "secretary or paralegal." Coincidentally, when some depositions were rescheduled, "incredibly, he listed the exact same amount of billable time for each amended notice." The order seems to express incredulity about these various time entries.
In another example, the attorney "logged 2.1 hours to draft nine Notices of Deposition . . . (which) were identical except for the name of the deponent and the time of their appearance." He questioned why "the lead and named attorney" would perform that work instead of a "secretary or paralegal." Coincidentally, when some depositions were rescheduled, "incredibly, he listed the exact same amount of billable time for each amended notice." The order seems to express incredulity about these various time entries.
Judge Vinson concluded the "billing records are both inflated and unprofessional." He said "there is simply no justifiable reason why he (plaintiff's counsel) accumulated 103.9 hours" on "a case with a maximum of $496.62 at issue." He conceded that a "lopsided fee" could be justified in some circumstances, citing one such case. But noted that in this case "the damages at issue were always in the nuisance value range," a distinction from the example cited in which a "lopsided fee award" was justified.
Judge Vinson finally noted the attorney's contention that "he should be awarded fees because he expediently and with great skill achieved in the excellent result for the Plaintiff." But the judge disagreed, concluding "he actually did the exact opposite." Instead,, "he dragged this exceedingly simple and straightforward lawsuit out as long as he could and made his client wait to receive what the defendants had offered several months before." Thus, "his unprofessional conduct shocks the conscience of the court." On that finding, Judge Vinson held "a 'reasonable fee' in this case is no fee."
In closing, the judge noted that the defendants did not ask for payment of "some or all of their fees," but they "expressly declined to do so." Had such a request been made, the judge "would have granted that request as an appropriate sanction." Thus, he noted, Plaintiff's counsel "should consider himself lucky" receiving zero.
The lesson of this, applicable to workers' compensation and any litigation, is that all parties should be constantly vigilant for opportunities to resolve issues. When there is an agreement (such as PRCP should not be a party to the suit), that agreement should be effectuated immediately and simply. That should occur by admission, stipulation, or dismissal. It should not require lengthy motions, responses, and time investments to effectuate issues upon which the parties agree.
Furthermore, the obligation of attorneys is clear. They are bound to represent the best interests of their respective client. They are officers of the legal system, and they owe a duty to be efficient, honorable, and truthful. Their aspirations should be "fairness, integrity, and civility." See Oath of Admission. Their goals should encompass effectively representing their client's interests while remaining respectful of the time and resources of the judicial system in which they practice. Those obligations may bear periodic reinforcement or reminders.
The lesson of this, applicable to workers' compensation and any litigation, is that all parties should be constantly vigilant for opportunities to resolve issues. When there is an agreement (such as PRCP should not be a party to the suit), that agreement should be effectuated immediately and simply. That should occur by admission, stipulation, or dismissal. It should not require lengthy motions, responses, and time investments to effectuate issues upon which the parties agree.
Furthermore, the obligation of attorneys is clear. They are bound to represent the best interests of their respective client. They are officers of the legal system, and they owe a duty to be efficient, honorable, and truthful. Their aspirations should be "fairness, integrity, and civility." See Oath of Admission. Their goals should encompass effectively representing their client's interests while remaining respectful of the time and resources of the judicial system in which they practice. Those obligations may bear periodic reinforcement or reminders.
