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Pelayo v. Platinum Limousine Services, Inc.

United States District Court, D. Hawaii

September 27, 2016

ARSENIO PELAYO, FRANCIS MANANKIL, and BRANDON BORELIZ, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; Plaintiffs,
v.
PLATINUM LIMOUSINE SERVICES, INC., KURT TSUNEYOSHI, and DOES 1-10, Defendants.

          ORDER ADOPTING IN PART AND MODIFYING IN PART FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFFS' MOTION FOR ATTORNEYS' FEES AND COSTS

          DERRICK K. WATSON, UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Both parties object to portions of the Magistrate Judge's June 6, 2016 Findings and Recommendation (“F&R”), granting in part and denying in part Plaintiffs' post-settlement motion for attorneys' fees and costs.[1]

         The Court adopts the conclusions of the F&R as to numerous specified time deductions, and the appropriate hourly rate for Plaintiffs' paralegal. The Court modifies the F&R with respect to the reasonable hourly rates for Plaintiffs' attorneys and awards $225 per hour to Richard Holcomb, Esq. and $310 per hour to Timothy Mac Master, Esq., respectively. The Court also modifies the F&R and employs a 50 percent reduction in the lodestar amount to account for the level of success achieved in this action.

         As more fully explained below, the Court awards Plaintiffs attorneys' fees of $44, 785.58 and costs of $3, 131.76.

         BACKGROUND

         I. Plaintiffs' Claims and Settlement

         Limousine driver-employees filed a collective action against Platinum Limousine Services, Inc. (“Platinum”) and its principal, Kurt Tsuneyoshi, alleging that Defendants failed to pay wages and expenses for various employment-related activities, as required by state and federal law. Following amendment of the complaint, and the partial granting of Defendants' motion to dismiss on September 20, 2015, the following claims remained: (1) violation of Hawaii Revised Statutes (“HRS”) § 388-6 for failure to timely pay wages due (Count 1); (2) unjust enrichment (Count 3); and (3) violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. (Count 4). See Dkt. No. 62.

         In a December 30, 2015 order, the Court denied Plaintiffs' motion to conditionally certify a collective action under FLSA § 216(b) and HRS § 388-11(a), granted Platinum's motion to compel arbitration of the claims brought by Manankil and two putative plaintiffs, and held the parties' motions for summary judgment in abeyance pending further settlement discussions. See Dkt. No. 112. January 15, 2016 settlement discussions with the Magistrate Judge succeeded, concluding with the placement of a settlement on the record. See Dkt. No. 122. As described more fully in the F&R:

The parties participated in three settlement conferences with Magistrate Judge Barry M. Kurren on August 27, 2015; November 12, 2015; and January 15, 2016. See ECF Nos. 57, 82, 122. With Judge Kurren's assistance, Plaintiff Pelayo and Plaintiff Boreliz entered into a Settlement Agreement and General Release (the “Settlement Agreement”) with Defendants for $5, 000 and $575, respectively. See ECF No. 124-12. The parties agreed to submit the issue of Plaintiffs' attorneys' fees to the Court in the Settlement Agreement. Id. at 1. The Settlement Agreement explicitly provides that the filing of a Stipulated Dismissal “shall not divest the Court of jurisdiction to determine the amount of attorneys' fees and award those fees or otherwise enforce [the Settlement Agreement].” ECF No. 124-12 at 2. The Stipulation for Dismissal with Prejudice was filed on February 10, 2016.

F&R at 6-7.

         II. Attorneys' Fees Awarded By The F&R

         The Magistrate Judge first scrutinized the Settlement Agreement pursuant to the FLSA, finding it was a fair and reasonable resolution of a bona fide dispute over FLSA provisions. See F&R at 7-11 (citing Almodova v. City & Cnty. of Honolulu, 2010 WL 1372298, at *3 (D. Haw. Mar. 31, 2010), adopted by, 2010 WL 1644971 (D. Haw. Apr. 20, 2010)).

         The F&R next addressed the determination of attorneys' fees under the FLSA's mandatory fee- and cost-shifting provision, 29 U.S.C. § 216(b). Plaintiffs requested fees for three timekeepers: attorneys Richard Holcomb ($300 per hour), Timothy Mac Master ($450 per hour), and a paralegal ($85 per hour). The Magistrate Judge found that the requested hourly rates for Mr. Holcomb and Mr. Mac Master were excessive based upon the community's prevailing rates, the hourly rates generally granted by the court, and Plaintiffs' counsels' submissions. F&R at 15. Instead, he recommended a reasonable hourly rate of $200 per hour for Mr. Holcomb and $285 for Mr. Mac Master. F&R at 15-18. The unnamed paralegal's rate of $85 per hour was found to be reasonable. F&R at 19-20.

         With respect to hours reasonably expended, the Magistrate Judge recommended deducting time spent on the following tasks that did not contribute to the litigation of the case: (1) 7.3 hours from Mr. Holcomb's time and 1 hour from Mr. Mac Master's time spent on client agreements; and (2) 0.5 hours that Mr. Holcomb expended conferring with the Office of Disciplinary Counsel (“ODC”) about his potential conflict with a Rule 30(b)(6) designee. F&R at 21-22. The Magistrate Judge further recommended that certain duplicative time entries for settlement conferences, co-counsel and client meetings, hearings and Rule 30(b)(6) depositions attended by both Mr. Holcomb and Mr. Mac Master be reduced. F&R at 22-29. The Magistrate Judge also deducted 24.2 hours of paralegal time that was deemed “clerical” and that should have been absorbed as an overhead expense, and reduced 7.1 hours of Mr. Holcomb's time as both clerical and excessive. F&R at 30-31. Next, the Magistrate Judge recommended deducting excessive time spent on the following tasks: (1) 16.9 hours of Mr. Holcomb's time expended on drafting the various complaints; (2) 6.7 hours of Mr. Holcomb's time devoted to Plaintiffs' motion to compel production of Manankil's records; (3) 15.5 hours of Mr. Holcomb's time incurred drafting Plaintiffs' attorneys' fees motion and 5.5 hours for the reply; (4) 9.7 hours of Mr. Holcomb's time spent preparing for the Rule 30(b)(6) deposition; and (5) 4 hours of Mr. Holcomb's time spent on a supplemental brief. F&R at 32-39.

         Finally, the Magistrate Judge recommended a 30 percent reduction of the lodestar figure based on Plaintiffs' limited success in the litigation. He found that an award of $73, 103.00 in fees would be excessive based on the ultimate success obtained by Plaintiffs - a combined settlement amount of $5, 575.00. F&R at 41. The Magistrate Judge recommended awarding $51, 109.10 in attorneys' fees and $2, 408.26 in GET for a total fee award of $53, 517.36. F&R at 42. He found that all costs requested by Plaintiffs were reasonable, thereby recommending an award of costs in the amount of $3, 131.76.[2] F&R at 43. Both sides object in part to the F&R.

         STANDARD OF REVIEW

         When a party objects to a magistrate judge's findings or recommendations, the district court must review de novo those portions to which the objections are made and “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he district judge must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise.”).

         Under a de novo standard, this Court reviews “the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006); see also United States v. Silverman, 861 F.2d 571, 576 (9th Cir. 1988). The district court need not hold a de novo hearing. However, it is the Court's obligation to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendation to which a party objects. United States v. Remsing, 874 F.2d 614, 616 (9th Cir. 1989). The district judge may accept the portions of the findings and recommendation to which the parties have not objected as long as it is satisfied that there is no clear error on the face of the record. See United States v. Bright, 2009 WL 5064355, at *3 (D. Haw. Dec. 23, 2009); Fed.R.Civ.P. 72(b) advisory committee's note.

         DISCUSSION

         I. The Parties' Objections

         Plaintiffs assert that: (1) the awarded hourly rates are too low; (2) hours were improperly deducted for time spent working on retainer agreements and the phone call to ODC; (3) hours should not have been reduced for duplicative billing; (4) no deduction was warranted for clerical entries; (5) counsel did not spend excessive time on the case; and (6) the award should not be further reduced by 30 percent. Platinum's lone objection concerns the lodestar reduction. Platinum asserts that the Magistrate Judge's 30 percent decrease did not go far enough, and suggests that 80 percent is appropriate. Each contention is addressed below.

         A. Reasonable Hourly Rate

         Plaintiffs object to the Magistrate Judge's reduction of the reasonable hourly rates for Messrs. Holcomb and Mac Master. They contend that: (1) the rate non-indigent clients are charged in other types of cases is the amount that should be awarded in fee-shifting cases; (2) Mr. Holcomb was awarded the same rate that he was awarded for work done four years ago and is due an increase; and (3) the awarded rate is not adequate to attract counsel to cases like this one.

         Under federal law, reasonable attorneys' fees are generally based on the traditional lodestar calculation set forth in Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). In determining the reasonable hourly rate, some of the relevant factors to consider include the level of skill required, time limitations, the amount involved in the litigation, the attorney's reputation and experience, the quality of the representation, the attorney's success or failure in the outcome, and the undesirability of the case. See Chalmers v. City of Los Angeles, 796 F.2d 1205, 1213 (9th Cir. 1986).

         Despite Plaintiffs' argument to the contrary, it is well-established that a reasonable hourly rate should reflect the “prevailing market rates in the relevant community, ” Gonzalez v. City of Maywood, 729 F.3d 1196, 1205 (9th Cir. 2013), which generally “is the forum in which the district court sits.” Prison Legal News v. Schwarzenegger,608 F.3d 446, 454 (9th Cir. 2010). “Importantly, the fee applicant has the burden of producing ‘satisfactory evidence' that the rates he requests meet these standards.” Gonzalez, 729 F.3d at 1206 (citing Dang v. Cross, 422 F.3d 800, 814 (9th Cir. 2005)); see also S.E.C. v. Gemstar-TV Guide Int'l, Inc., 401 F.3d 1031, 1056 n.8 (9th Cir. 2005) (“[I]t is “the fee applicant [that] has the burden of producing satisfactory evidence, in addition to the affidavits of its counsel, that ...


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