Opinion ID: 4519852
Heading Depth: 2
Heading Rank: 2

Heading: Downward Adjustment of the Lodestar

Text: A lodestar figure “is itself strongly presumed to be reasonable.” Resolution Trust Corp. v. Hallmark Builders, Inc., 996 F.2d 1144, 1150 (11th Cir. 1993); see Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010) (“[W]e have said that the [lodestar reasonableness] presumption is a strong one.” (quotation marks 16 Case: 19-13965 Date Filed: 03/26/2020 Page: 17 of 21 omitted)). Nonetheless, once the lodestar has been calculated, it may then be adjusted after considering other factors, such as the results obtained. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Relevant here, when “a plaintiff has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount.” Id. at 436. Molina insists the district court abused its discretion in declining to further reduce the lodestar because, it contends, Plaintiffs’ claims were based on frivolous demands (as reflected in Plaintiffs’ Rule 26(a) disclosures and the sworn responses to Molina’s interrogatories), Plaintiffs ultimately settled for an amount far below their initial demand, and the case was not complex and resulted in a nominal settlement amount. Here too, we find the district court acted within the bounds of its discretionary authority in declining to further adjust the lodestar. Molina first argues Plaintiffs’ initial damages estimates were grossly inflated and, indeed, fabricated. The district court acknowledged that certain class members apparently made excessive claims under oath, but concluded any allegedly fraudulent statements would only justify a reduction of the fee award if there was evidence the attorneys knew or should have known of the error. To the extent there was information available from which Plaintiffs’ counsel could have learned that the 17 Case: 19-13965 Date Filed: 03/26/2020 Page: 18 of 21 various class members’ estimated damages were overstated, the district court noted that Molina’s delay in providing discovery concerning the number of hours worked by individual class members may have contributed to the problem. In any case, the district court found the effect of the inflated damages claims on the hours expended to be minimal. Molina criticizes the district court’s decision not to attribute fraudulent intent to Plaintiffs’ counsel, arguing the idea that Plaintiffs’ counsel (who drafted the Rule 26(a) disclosures interrogatory responses) was unaware of the fraudulent nature of the responses “strains credulity.” Molina overstates the degree to which the record compels the conclusion that Plaintiffs’ counsel knowingly put forward fabricated damages estimates. True, the attorneys drafted the disclosures and interrogatory responses, but they apparently did so based on information obtained from their clients and in the absence of fulsome records. Thus, we cannot say the district court’s finding that Plaintiffs’ counsel did not knowingly provide inflated or fraudulent damages estimates is clearly erroneous. See Atlanta Journal & Constitution, 442 F.3d at 1287; Mut. Serv. Ins. Co., 358 F.3d at 1322. Molina also argues Plaintiffs’ inflated damages claims and their subsequent refusal to reduce their demands unnecessarily contributed to the continued expenditure of fees by both sides. The district court declined to fault Plaintiffs for not agreeing to accept $400,000 until shortly before trial, reasoning the record does 18 Case: 19-13965 Date Filed: 03/26/2020 Page: 19 of 21 not support Molina’s suggestion Plaintiffs could have necessarily obtained the same result earlier or with less effort. Again, we do not find the record compels a contrary conclusion—i.e., that Plaintiffs in bad faith rejected substantially similar offers with the intent of unnecessarily prolonging litigation. As for the complexity of the case and the degree of Plaintiffs’ “success,” the district court disagreed with Molina’s contention that the award in this case was “nominal,” finding that, in fact, the recovery for these plaintiffs was “substantial.” The district court further noted that the Plaintiffs’ success should not be measured solely by the size of their recovery. Rather, the district court considered it important and beneficial to the public that the FLSA was successfully enforced: [E]ach time the FLSA is enforced, it provides an incentive for employers to obey rather than flout the statute. This was not monumental litigation, and the case was settled, producing no precedential impact. But [Molina’s] effort to denigrate the willingness of these plaintiffs—and these attorneys—to pursue the litigation does not withstand analysis. We find this assessment of the Plaintiffs’ relative success to be wellreasoned. While it is obviously true that Plaintiffs in the end agreed to a damages award far below the initial multi-million-dollar estimate, it is not entirely fair to limit the assessment of Plaintiffs’ success to the size of the fee award. Plaintiffs were successful in all of their claims, and, as the district court noted, there is inherent value in enforcing the FLSA. See Parker v. DeKalb Chrysler Plymouth, 673 F.2d 1178, 1180 (11th Cir. 1982) (“The FLSA . . . was conceived with a public 19 Case: 19-13965 Date Filed: 03/26/2020 Page: 20 of 21 and a private purpose: it established a set of individual rights that would create a healthier environment for all workers.”); see also Fegley v. Higgins, 19 F.3d 1126, 1134–35 (6th Cir. 1994) (“Courts should not place an undue emphasis on the amount of the plaintiff’s recovery [in an FLSA case] because an award of attorney fees here encourages the vindication of congressionally identified policies and rights.” (quotation marks omitted)). As for the relative complexity of the case, as we discussed above, Molina’s contention that this case is and has always been a simple dispute about damages is an oversimplification. Accordingly, we find no abuse of discretion in the district court’s decision not to adjust the lodestar and defer to its finding that the overall fee here was reasonable.