iN

employer (the defendant here) bear the burden of proving that the employee (the
plaintiff) fits within the exemption. Corning Glass Works v. Brennan, 417 U.S. 188,
196-97 (1974). Lastly, ‘‘a determination of whether an employee has [administration] as
his primary duty must be based on all the facts in a particular case.” (29 C.F.R. §
541.103).

Therefore, because there is no evidence that plaintiff or her lead counsel acted in
bad faith neither one is liable for defendant’s attorney fees under 29 U.S.C. § 201 et seq.
or 28 U.S.C. § 1927. Although the plaintiff ultimately lost her case, “sanctions are not
automatically warranted where a party loses a dispositive motion.” Walter v. Fiorenzo,
840 F.2d 427, 436 (7th Cir. 1988). “It is important...to resist the understandable
temptation to engage in post hoc reasoning by concluding that, because plaintiff did not
ultimately prevail, [her] action must have been unreasonable or without foundation. This
kind of hindsight logic could discourage all but the most airtight claims, for seldom can a
prospective plaintiff be sure of ultimate success.” Christiansburg Garment Co., v. Equal
Employment Opportunity Commission, 434 U.S. 412, 421-22 (1978).

CONCLUSION
For the foregoing reasons, the Court denies the defendant’s motion for an award

of attorney fees [39-1].

SO ORDERED Entered: Yay/o2

HON. RONALD A. GUZMAN
United States Judge



In addition to the FLSA and the bad faith exception to the American rule, the
defendant also cites 28 U.S.C. § 1927 in his argument for an award of attorney fees.
(Mem. Supp. Def.’s Mot. Att’y Fees at 2.) This statute essentially restates the American
tule by allowing an award of attorney fees only when one attorney “multiplies the
proceedings. ..unreasonably and vexatiously.” TCI Lid. v. Needler, 769 F.2d 441, 445
(7th Cir. 1985). “Vexatious” has been interpreted to mean either objective or subjective
bad faith, which may be evidenced by intentional ill will or reckless conduct. Kotsilieris
v. Chalmers, 966 F.2d 1181, 1184 (7th Cir. 1992). Mere negligence does not satisfy the
bad faith requirement and thus “something more than ordinary negligence must exist in
order to justify the order of sanctions.” Jd. at 1185.

In the present case, neither the plaintiff nor her lead counsel is liable for attorney
fees because there is no evidence of bad faith on the part of either. In contrast, in Fred A.
Smith Lumber Co. v. Edidin, the court awarded the prevailing defendant attorney fees
pursuant to 28 U.S.C. § 1927 because the plaintiff ignored dispositive authority, persisted
with claims barred by the statute of limitations, and further acted in bad faith by filing a
fraud claim against the defendant without any supporting facts. Fred A. Smith Lumber
Co. v. Edidin, 845 F.2d 750, 752-53 (7th Cir. 1988).

Here, both the plaintiff and her lead counsel made a good faith effort to show that
plaintiff did not fit within the FLSA administrative employee exemption. They
attempted to dispute “defendant’s evidence on the various factual point[s] involved in the
administrative exemption” as well as “in good faith cited Department of Labor
regulations and relevant cases and distinguished defendant’s cases.” (Pl.’s Mem. Opp’n

Def.’s Mot. Att’y Fees at 8.) In addition, the FLSA short test analysis requires that the

3 !


‘Minute Order Form (06/97)

“

United States District Court, Northern District of Illinois

nivoe Magia uae Ronald A. Guzman “hun hag Sudge
CASE NUMBER 01 C 6642 DATE 9/23/2003
CASE Terry D "Angelo vs. J&F Steel Corp.
TITLE i |
[In the following box (a) indicate the party filing sain e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.] I |
DOCKET ENTRY:
63) Q Filed motion of [ use listing in “Motion” box above,]
(2) oO Brief in support of motion due
(3) Q Answer brief to motion due___. Reply to answer brief due___.
(4) QO Ruling/Hearingon___setfor___at
(5) o Status hearing[held/continued to] [set for/re-set for]on__setfor__at
(()) Oo Pretrial conference[held/continued to] [set for/re-set for] on setfor__ se at__
(a) a Trial[set for/re-set for]on__at
(8) o [Bench/Jury trial] [Hearing] held/continued to__ at
(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
COFRCP4(m) (ClLocal Rule 41.1 COFRCP41(a)(1) [© FRCP41(a)(2).
ao = [Other docket entry] ENTER MEMORANDUM OPINION AND ORDER: the Court denies the

defendant’s motion for an award of attorney fees [39-1].

(il) mf [For further detail see order attached to the original minute order.]
No notices required, advised in open court,
No notices required. sarmber of notices
ie iled by judge's staff.
tet ile by net SEP 2 4 2003
Notified counsel by telephone, ate doc!
WY | Docketing to mail notices, >
Mail AO 450 form. tuna Lortsig sn -
. yyatg dock initials
Copy to judge/magistrate judge.
07:9 WY 42 d3S C9
ase mailed notice
BK depuy's OK dWIGd BOS gas
initials ++
Date/time received in
“_central Clerk’s Office Z ‘mailing deputy initiate



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

TERRY D’ANGELO,
Plaintiff,
Judge Ronald A. Guzman

ve

J&F STEEL CORPORATION, No: 01 C 6642

werner

Defendant.

MEMORANDUM OPINION AND ORDER 2003
Plaintiff Terry D’ Angelo sued the defendant J&F Steel Corp. for overtime wages

and damages, pursuant to the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and the
Illinois Minimum Wage Law. This Court granted defendant’s motion for summary
judgment based upon defendant’s affirmative defense that plaintiff was an exempt
employee under the Fair Labor Standards Act and thus not entitled to overtime
compensation. The defendant then moved pursuant to 28 U.S.C. § 1927 and 29 U.S.C.
§§ 201-219 to hold plaintiff and/or plaintiff's lead counsel, David L. Lee, liable for
defendant’s attorney fees. For the reasons stated herein, defendant’s motion for an award
of attorney fees is denied.

FACTS

Terry D’Angelo filed suit against her former employer J&F Steel Corp., pursuant
to the Fair Labor Standards Act (“FLSA”) and the Illinois Minimum Wage Law. (Mem.
Supp. Def.’s Mot. Att’y Fees at 1.) The FLSA requires an employer to pay its

nonexempt employees one and a half times their regular wages for the number of hours i |



"

worked in excess of forty hours per week. (P1.’s Mem. Opp’n Def.’s Mot. Att’y Fees at
1.) However, the defendant was able to show that Ms. D’Angelo was an exempt
employee under the FLSA “short test” for administrative employees. (Id. at 7.) The
“short test” contains three prongs: (1) the salary basis test, as defined in the regulations,
(2) the employee’s classification as an administrative, executive, or professional, and (3)
the employee’s primary duties test. (Mem. Supp. Def.’s Mot. Att’y Fees at 5.) Because
Ms. D'Angelo fit within the three prong “short test” as an exempt administrative
employee, she was not entitled to overtime compensation and thus the defendant’s
motion for summary judgment was granted by this Court. (PI.’s Mem. Opp’n Def.’s
Mot. Att’y Fees at 1.)
DISCUSSION

The plain language of the FLSA allows a prevailing plaintiff to recover attomey
fees from the defendant, but does not provide for a prevailing defendant to recover such
fees: “The court in such action shall, in addition to any judgment awarded the plaintiff
or plaintiffs, allow a reasonable attorney’s fees to be paid by the defendant, and the costs
of the action.’ [29 U.S.C. §216(b) (emphasis added).}” (/d. at 4.) Despite the plain
language of the FLSA, the defendant claims that applicable case law interpreting the
statute provides that prevailing defendants may recover an award of attorney fees “where
the plaintiff has acted in bad faith.” (Mem. Supp. Def.’s Mot. Att’y Fees at 3.) In other
words, the defendant asserts that the bad faith exception to the American rule applies.
(id. at 4.) The American rule provides that each party must bear its own attomey fees
unless the opposing party has acted in bad faith. Alyeska Pipeline Serv. Co. v.
Wilderness Society, 421 U.S. 240, 258 (1975).

2