Court Opinion

ID: 4033645
Source: CourtListenerOpinion
Date Created: 2016-09-14 19:00:38.557002+00
Date Added: 2024-06-11T07:45:12.330269
License: Public Domain

United States Court of Appeals
                     For the First Circuit
                      _____________________

No. 15-2299

     CHRISTOPHER HEIEN, individually and on behalf of all others
  similarly situated; ANNA NGUYEN, individually and on behalf of
  all others similarly situated; ANNA MINIUTTI, individually and
   on behalf of all others similarly situated; BENJAMIN SPILLER,
    individually and on behalf of all others similarly situated;
      ANTONIA PEABODY, individually and on behalf of all others
similarly situated; ENDICOTT PEABODY, individually and on behalf
 of all others similarly situated; HUMOUD AL SABAH, individually
  and on behalf of all others similarly situated; BRIAN EPSTEIN,
    individually and on behalf of all others similarly situated;
 LAURA NESCI, individually and on behalf of all others similarly
    situated; RON LEVY, individually and on behalf of all others
  similarly situated; ANDREA MANGONE, individually and on behalf
of all others similarly situated; NICOLAI JAKOBSEN, individually
           and on behalf of all others similarly situated,

                     Plaintiffs, Appellants,

                                v.

 ARCHSTONE; ARCHSTONE COMMUNITIES, LLC; ASN PARK ESSEX, LLC; ASN
    QUINCY, LLC; ASN QUARRY HILLS, LLC; ASN NORTH POINT I, LLC;
    ARCHSTONE NORTH POINT, LLC; ARCHSTONE CRONIN'S LANDING; ASN
  WATERTOWN, LLC; ASN KENDALL SQUARE, LLC; ARCHSTONE AVENIR, LP;
                        ASN BEAR HILL, LLC,

                     Defendants, Appellees.
                      _____________________

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. William G. Young, U.S. District Judge]
                      _____________________
                               Before
               Torruella and Barron, Circuit Judges,
                     and Lisi,* District Judge.
                       _____________________

     Edward Foye, with whom Michael Brier, Kevin Thomas Peters,
Arrowood Peters LLP, Matthew J. Fogelman, Fogelman & Fogelman
LLC, Joshua N. Garick and Law Offices of Joshua N. Garick were
on brief, for appellants.
     Craig M. White, with whom Baker & Hostetler LLP, Thomas H.
Wintner and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. were on brief, for appellees.

                       _____________________

                         September 14, 2016
                       _____________________

    *
        Of the District of Rhode Island, sitting by designation.
                                -2-
            LISI,   District         Judge.     The    Plaintiffs      in   this   class

action are former and current tenants of residential property in

Massachusetts leased to them by Defendants Archstone and several

related    entities.       In   their    suit,        the    Plaintiffs     challenged

certain “amenity use fees,” which, they alleged, were imposed by

the   Defendants      in     violation        of    the     Massachusetts      Security

Deposit Statute, Mass. Gen. Laws ch. 186, § 15B, and Chapter 93A

of the Massachusetts Consumer Protection Act, Mass. Gen. Laws

ch. 93A, § 1 et seq. The underlying litigation having long been

resolved with a complete settlement between the parties, this

appeal springs solely from class counsel’s dissatisfaction with

the amount of attorneys’ fees awarded to them by the district

court. Because the district court did not abuse its discretion

in fashioning the fee award, we affirm.

A.    Background

      1.    The Hermida Litigation

            In the related case of Hermida v. Archstone et. al,

C.A. No. 10-12083-WGY (D. Mass., U.S. District Judge William G.

Young presiding), other Archstone tenants had previously brought

identical    claims        against    one      of     the    Defendants’     corporate

affiliates. The Hermida plaintiffs were represented by the same

law firms as in the instant case.

            On   November       29,     2011,       the     district   court    granted

                                          -3-
summary     judgment      on      liability        in    favor      of   the    Hermidas,

determining that the amenity use fees charged by the Defendants

violated the Massachusetts Security Deposit Statute. Hermida v.

Archstone et. al, 826 F. Supp. 2d 380 (D.Mass. 2011). Eventually,

the Hermida case was settled and the district judge awarded

attorneys’ fees and costs of $62,714.38, which was less than

half of the lodestar amount requested by counsel. Hermida v.

Archstone    et.    al,     950 F. Supp. 2d 298      (D.Mass.     2013).       In    a

detailed Memorandum and Order, the district judge explained the

reduction    in    fees     for    time     spent       by   counsel     on    travel,      on

performing       clerical      and    administrative          tasks,      and    for     the

practice of block billing. Id. at 311-315.

     2.     The Heien Litigation

            On May 17, 2012, after the question of liability had

already been decided in Hermida, the Plaintiffs filed a class

action suit against Archstone and eleven other related entities.

In their complaint, the Plaintiffs stated that “the principal

common issues with respect to the class are whether Archstone’s

charging    of    the     amenity      fee    violated        the    Security     Deposit

statute and chapter 93A.” Complaint at ¶ 71 (ECF No. 2-1) The

Plaintiffs    acknowledged           that    “Judge      Young’s     decision      in    the

Hermida v. ASN Reading case, Docket No. 1:10-CV-12083-WGY, is

precisely on point.” Id.

                                             -4-
               On    August        23,    2012,     the       district    court       stayed   the

instant       class    action,           pending    waiver         or    resolution      of    all

appeals of the judgment entered in Hermida. Electronic Order

(ECF    No.    41).        In    a   September          30,    2012     status    report,      the

Plaintiffs informed the district court that the parties were in

settlement discussions. Status Report (ECF No. 43).

               On March 13, 2014, the Plaintiffs filed an unopposed

motion in which they requested, inter alia, preliminary approval

of a proposed settlement. Pltfs.’ Mot. for Settlement (ECF No.

47). The settlement agreement reflects that the case was being

settled simultaneously with Hermida and that “by virtue of the

settlement in Hermida there will be no appeals and therefore

there is no longer a reason to stay the Action.” Class Action

Settlement          Agreement        (ECF    No.        49    at   Page    2     of    29).    The

settlement          fund     was     capped        at     $1,300,000       for    payment       of

individual claims and attorneys’ fees and costs. Id. at Page 3

of     29.    Under        the   terms      of     the        settlement       agreement,      the

Defendants agreed “[t]o not object to the payment of attorneys’

fees and expenses from the Class Settlement Fund in an amount up

to 15% of the total Fund amount ($1,300,000.00).” Id. at Page 5

of 29. Any sums remaining in the settlement fund after payment

of     all     individual            claims,        administration             expenses,       and

attorneys’ fees were to be returned to the Defendants. Id. at

                                                 -5-
Page 8 of 29. The district court granted the Plaintiffs’ motion

to approve the settlement on March 27, 2014. Electronic Order

(ECF No. 50).

             On June 3, 2014, Plaintiffs’ counsel filed a motion

for attorneys’ fees and costs, in which they requested payment

of    $429,000    (33%    of   the    maximum      settlement    fund)    for   their

services in this case. Pltfs.’ Mot. for Attorneys’ Fees and

Costs (ECF No. 53). In their motion, the Plaintiffs acknowledged

that the case “by itself did not involve intense litigation,

given the imposition of the stay,” and they conceded that the

case “only was filed because Judge Young concluded that the

Hermidas did not have standing to assert claims against the

defendants in this action.” Id. at 7. Counsel’s submissions in

support of the fee motion included billing records that showed

lodestar attorneys’ fees of $58,693. Exhibits A-F to Pltfs.’

Mot. for Attorneys’ Fees and Costs (ECF Nos. 53-1, 53-2, 53-3).

The    Defendants       responded     with   an     objection    to     the   motion,

suggesting       that    the   district      court    consider    the    effect    of

Hermida on the case, as well as the significantly lower lodestar

amount submitted by Plaintiffs’ counsel. Defs.’ Obj. to Class

Counsel’s Petition for Attorneys’ Fees (ECF No. 54 at 1-2).

       3.    The Order

             On   October      2,    2014,   the    district    judge    entered   an

                                          -6-
electronic       order        awarding,      without       further      explanation     or

analysis,    attorneys’         fees    in    the    sum    of    $29,250.     Electronic

Order (ECF No. 66). Plaintiffs’ counsel promptly filed a Motion

for Written Findings of Fact and Rulings of Law (ECF No. 67), in

response to which the district court issued a written order on

October    15,    2015.       Order    (ECF    No.       73).    The   order   states   as

follows:

                            ORDER
          In response to Class Counsel’s Motion for Written
     Findings of Fact and Rulings of Law, ECF No. 67, this
     Court clarifies its order awarding the attorneys’ fees
     in the sum of $29,250.00. Order, ECF. No.66.
          The attorneys’ fees in the awarded amount are
     appropriate because this Court resolved the issues of
     law relevant for this case in a related action Hermida
     v. Archstone, 826 F. Supp. 2d 380 (D. Mass. 2011).
     Moreover, this Court stayed this class action pending
     waiver or resolution of all appeals of the judgment
     entered in Hermida. Order, ECF No. 41. This case,
     therefore, did not proceed to the discovery stage and
     the parties did not engage in significant motion
     practice. This Court also considered the actual
     benefit recovered for the class members, Joint Report
     Status 3, ECF No. 60, and took into account that the
     Defendants promptly agreed to settle the dispute.
          SO ORDERED.

B.   Standard of Review

             This Court reviews a district court’s determination

regarding attorneys’ fees only for a mistake of law or abuse of

discretion.      In      re     Volkswagen         and    Audi     Warranty     Extension

Litigation, 692 F.3d 4, 13 (1st. Cir. 2012); United States v.

                                             -7-
Metropolitan Dist. Com'n, 847 F.2d 12, 14 (1st Cir. 1988)(citing

Wojtkowski v. Cade, 725 F.2d 127, 130 (1st Cir.1984)); Maceira

v. Pagan, 698 F.2d 38, 39 (1st Cir.1983). While mistakes of law

“always     constitute      abuses    of    a    court’s     discretion,”      Airframe

Sys.,    Inc.   v.    L–3    Commc'ns      Corp.,      658 F.3d 100,    108    (1st

Cir.2011), a fee determination will be set aside only “if it

clearly appears that the trial court ignored a factor deserving

significant weight, relied upon an improper factor, or evaluated

all   the    proper    factors     (and     no    improper      ones),   but      made   a

serious mistake in weighing them.” Id. (quoting Gay Officers

Action      League    v.    Puerto    Rico,      247 F.3d 288,    292–93     (1st

Cir.2001)).

             As this Court has previously explained, “in a common

fund case the district court, in the exercise of its informed

discretion, may calculate counsel fees either on a percentage of

the fund basis or by fashioning a lodestar.” In re Thirteen

Appeals     Arising    Out    of     San     Juan      Dupont    Plaza   Hotel      Fire

Litigation,      56 F.3d 295,        307    (1st     Cir.1995).       The    Court

recognized that the percentage-of-fund method “in common fund

cases is the prevailing praxis” and acknowledged the “distinct

advantages that the POF method can bring to bear in such cases.”

Id. However, the Court has also noted that the percentage-of-

fund approach “may result in the overcompensation of lawyers in

                                           -8-
situations      where       actions       are        resolved        before       counsel       has

invested   significant           time    or       resources.”        Id.    If    the    fee     is

determined      according        to     the       lodestar       approach,        “it    is    the

court's prerogative (indeed, its duty) to winnow out excessive

hours,   time      spent    tilting       at       windmills,        and    the    like.”      Gay

Officers Action League v. Puerto Rico, 247 F.3d at 296 (citing

Coutin v. Young & Rubicam Puerto Rico, Inc., 124 F.3d 331, 337

(1st Cir.1997)).

             Finally, the Court is mindful of the Supreme Court’s

admonition that “fee litigation can, but should not, transform

into the tail that wags the dog.” Victor Corp. v. Vigilant Ins.

Co., 674 F.3d 1, 20 (1st Cir.2012)(citing City of Burlington v.

Dague,   505 U.S. 557,    566,       112 S. Ct. 2638,     120 L. Ed. 2d 449

(1992)).   As      long    as    there       is    a     basis   for     understanding         the

district     court’s        reasoning,             the     findings        “‘need       not     be

infinitely      precise,         deluged          with      details,       or     even        fully

articulated.’” Victor Corp. v. Vigilant Ins. Co., 674 F.3d at 20

(quoting     Foley     v.       City    of        Lowell,      948 F.2d 10,    20    (1st

Cir.1991)).

C.   The Parties’ Positions

             The    Plaintiffs          make       two    arguments        on    appeal.      They

assert that in considering the actual benefit recovered for the

class members, the district court committed legal error under

                                               -9-
Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S. Ct. 745, 62 L. Ed.
2d   676   (1980)(affirming    attorney     award    from       total    amount   of

class action judgment, including unclaimed portion, on the basis

that the class action bestowed a benefit even on class members

who did not file a claim). In the alternative, the Plaintiffs

contend that when viewed against other cases in which attorney

awards ranged between 20 and 30 percent of the total common

fund, it was abuse of discretion by the district court to award

to class counsel what amounts to 2.25 percent of the common fund

in this case.

            On    their   part,    the   Defendants        contend       that     the

attorneys’ fees awarded in this case are tied to the lodestar

award in Hermida, and they suggest that the rationale for the

reduced award in the instant case is implied in the district

judge’s reasoning in Hermida.

D. Discussion

            It is undisputed that the relevant legal issues in

this case were decided in Hermida before this case was even

filed; that the case was stayed shortly after its commencement

until final settlement; and that the parties did not engage in

any discovery or motion practice. Moreover, although the common

benefit    fund   amounted    to   $1,300,000,      only    a    small    portion,

$180,480, was paid out to the individual claimants. Joint Status

                                     -10-
Report (ECF No. 60 at Page 3 of 4). Following settlement of the

case, class counsel sought $429,000 in attorneys’ fees, more

than seven times counsel’s asserted lodestar amount of $58,693.

              In the October 15, 2015 order, the district court gave

several reasons why the court deemed the amount of the award

appropriate.     First,     the   court   pointed   out    that    the       relevant

legal issues had already been resolved in Hermida. Order ECF No.

73 at 1. “Moreover,” the court pointed out that the Heien case

had been stayed pending waiver or resolution of all appeals in

Hermida and that, as a result, the Heien case had not proceeded

to discovery, nor had the parties engaged in any significant

motion practice. Id. at 2. Further, the court took into account

the    fact    that   the   Defendants    agreed    to    settle    this       matter

“promptly.” Id. Finally, the court stated that it had “also

considered” the actual benefit recovered for the class members

in Heien. Id.

              The Plaintiffs have focused on the single reference to

the claimed portion of the common benefit fund to arrive at the

conclusion that the court impermissibly based the fee award on

only    that    consideration.      However,    the      order     as    a     whole,

especially when viewed against the procedural history of this

case and the close connection to Hermida, makes clear that this

consideration was only one of the factors the district court

                                      -11-
included. The primary reason given for the size of the award is

that the case had required little, if any, legal work. As the

Plaintiffs had repeatedly conceded, the legal issues in this

case had already been resolved in Hermida. The fee award in this

case,    set   at    almost     exactly   half   of    the   lodestar    amount

submitted by the Plaintiffs, was entirely consistent with the

lodestar-based attorneys’ fee award in Hermida, where counsel

had already been provided with detailed reasoning and precise

calculations by the court. The order in this case makes two

separate references to Hermida, indicating that, just like in

Hermida, the award for attorney’s fees was based on the lodestar

method and then reduced to what the district court considered an

appropriate award. Boeing, which affirmed a fee award based on

the total amount of a class action judgment, does not render a

consideration of the claimed benefits as one of the factors in

awarding attorney’s fees legal error in a lodestar calculation.

Such    consideration      is   not   impermissible     under   the     lodestar

method because it clearly relates to one of the twelve factors

enunciated in Hensley v. Eckerhart, 461 U.S. 424, 430, 103 S. Ct.
1933, 76 Ed.2d 40 (1983)(listing among the factors “the amount

involved   and      the   results   obtained”    and   confirming     that   “the

level of a plaintiff’s success is relevant to the amount of fees

to be awarded.”).

                                      -12-
             The Plaintiffs’ alternative suggestion that the fee

award constitutes an impermissibly low percentage of the total

common fund may be dealt with in short order. As stated by the

district court, it reflects the court’s effort to fashion a

reasonable and appropriate fee award in consideration of the

unique procedural history of this case and its close connection

to Hermida. The court gave several reasons for awarding $29,250

to   class   counsel,    none    of   which   are   the   subject   of   factual

dispute. In addition, the district judge detailed in the fee

memorandum    and   order   in    Hermida     his   rationale   for      reducing

attorneys’ fees for block billing and for time spent on travel

and administrative tasks.

             The order in this case left room for speculation by

the parties as to the method utilized by the district court to

arrive at the fee award. While the inclusion of an explanation

as to the district court’s elected method or of the court’s

calculation of the award might have foreclosed such speculation—

and, we think it to be the better practice—neither the absence

of such mathematical analysis nor the amount of the award itself

constitute an abuse of discretion.

             Affirmed.

             Each side to bear its own costs.

                                       -13-