Court Opinion

ID: 2821361
Source: CourtListenerOpinion
Date Created: 2015-07-29 14:01:30.58092+00
Date Added: 2024-06-11T11:31:00.099679
License: Public Domain

14-3304-cv
Gortat v. Capala Bros.

                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                         SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
29th day of July, two thousand fifteen.

PRESENT:    GUIDO CALABRESI,
            CHESTER J. STRAUB,
            DEBRA ANN LIVINGSTON,
                          Circuit Judges.
____________________________________________________

MIROSLAW GORTAT, HENRYK BIENKOWSKI, MIROSLAW FILIPKOWSKI, ARTUR LAPINSKI, JAN
SWALTEK, on behalf of themselves and on behalf of all others similarly situated,

                 Plaintiffs-Counter-Defendants-Appellees,

ARTUR KOSIOREK, HENRYK STOKLOSA,

                 Plaintiffs-Appellees,

GRZEGORZ DRELICH,

                 Plaintiff-Counter-Defendant,

                         v.                                         No. 14-3304-cv

CAPALA BROTHERS, INC., PAWEL CAPALA, ROBERT CAPALA,

            Defendants-Counter-Claimants-Appellants.
____________________________________________________
For Plaintiffs-Counter-Defendants-Appellees:           ROBERT WISNIEWSKI, Robert Wisniewski
                                                       P.C., New York, NY.

                                          FELIPE (PHILIP) E. ORNER, ESQ., Flushing,
For Defendants-Counter-Claimants-Appellants:
                                          NY.
_____________________________________________________

       UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and

DECREED that the judgment of the district court is AFFIRMED IN PART, REVERSED IN

PART, VACATED IN PART, and the case is REMANDED.

        In August 2007, Miroslaw Gortat, Henryk Bienkowski, Miroslaw Filipkowski, Artur

Lapinski, and Jan Swaltek, acting on behalf of themselves and others similarly situated

(collectively, “Plaintiffs”), filed a complaint in the United States District Court for the Eastern

District of New York against Capala Brothers, Inc., Pawel Capala, and Robert Capala

(collectively, “Defendants”), alleging claims under the Fair Labor Standards Act (“FLSA”), 29

U.S.C. § 201 et seq., and the New York Labor Law (“NYLL”). Plaintiffs are former employees

of Defendants’ contracting business. They sought compensation for unpaid regular and overtime

wages, liquidated damages, punitive damages, costs, and attorneys’ fees. Defendants answered

the complaint and filed counterclaims against several of the plaintiffs for negligence, conversion,

breach of fiduciary duty, and tortious interference.

       During the next several years, the district court issued a number of different opinions that,

inter alia, (1) dismissed Defendants’ negligence and breach of fiduciary duty counterclaims,

Gortat v. Capala Bros., 585 F. Supp. 2d 372, 376-77 (E.D.N.Y. 2008); (2) denied Defendants’

motion to deny class certification, Defendants’ motion for summary judgment on Plaintiffs’

FLSA claims, and Defendants’ motion to dismiss Plaintiffs’ claim for legal fees pursuant to

NYLL § 198, Gortat v. Capala Bros., 257 F.R.D. 353, 355-56, 361, 365, (E.D.N.Y. 2009); (3)

                                                 2
granted Plaintiffs’ motion for class certification, Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG)

(SMG), 2010 WL 1423018, at *1 (E.D.N.Y. Apr. 9, 2010); (4) granted Defendants’ motions to

remove fifty-four members from the NYLL class who opted out of class membership and to

exclude seven members from the FLSA collective action who failed to opt in, Gortat v. Capala

Bros., No. 07 Civ. 3629 (ILG) (SMG), 2011 WL 2133769, at *1-2 (E.D.N.Y. Mar. 27, 2011); (5)

denied Plaintiffs’ motion for summary judgment on Defendants’ remaining counterclaims,

Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2011 WL 6945186, at *1 (E.D.N.Y.

Dec. 30, 2011); and (6) denied Defendants’ second motion to decertify the class, Gortat v.

Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2012 WL 1116495, at *1 (E.D.N.Y. Apr. 3,

2012).

         Plaintiffs’ FLSA and NYLL claims and Defendants’ remaining counterclaims proceeded

to trial in April 2013. On May 10, 2013, the jury returned a verdict finding Defendants liable on

Plaintiffs’ FLSA and NYLL claims, and finding not liable those plaintiffs against whom

Defendants had filed counterclaims. After a separate damages phase of the trial, the jury found

that Defendants had willfully failed to pay wages under both the FLSA and the NYLL, and it

awarded damages to Plaintiffs for their unpaid wages and overtime. After receiving submissions

from the parties, the district court ultimately awarded Plaintiffs damages totaling $293,212.41.

Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2013 WL 3010827, at *2 (E.D.N.Y.

June 18, 2013). The district court adopted, in large part, Plaintiffs’ proposed judgment for

liquidated damages, and awarded them prejudgment interest on their NYLL claims. Gortat v.

Capala Bros., 949 F. Supp. 2d 374, 385-86 (E.D.N.Y. 2013).

         After prevailing at trial, Plaintiffs’ counsel filed a motion seeking $887,765.85 in

attorneys’ fees and $80,324.11 in costs. This motion was addressed in the first instance by

Magistrate Judge Steven M. Gold. He issued a Report and Recommendation on June 4, 2014,
                                                3
proposing that Plaintiffs’ counsel be awarded a substantially lower amount than what they had

requested: $514,284.00 in attorneys’ fees and $68,294.50 in costs (for a total amount of

$582,578.50).    Judge Gold recommended awarding no fees for the hours spent litigating

Defendants’ counterclaims and denying Plaintiffs’ counsel’s request for fees billed for a trial

specialist who assisted Plaintiffs. He otherwise recommended reimbursing Plaintiffs’ counsel for

the full number of hours requested for the time attributed to Plaintiffs’ affirmative claims. Judge

Gold recognized that the amount he recommended awarding, though substantially lower than

Plaintiffs’ counsel’s request, was nevertheless significantly more than the judgment obtained by

the Plaintiffs, and was “far greater than is typically required to litigate a case of this magnitude

and complexity.” J.A. 1020. He found, however, that “[m]uch of the responsibility” for the

inordinately high litigation costs of this case “rests with defendants.” Id. He disagreed with

Defendants’ contention that Plaintiffs had engaged in unnecessary and inefficient discovery.

Instead, he explained that delays in the case were due to Defendants’ combative and

extraordinary conduct that raised many unnecessary disputes regarding case management and

discovery “as revealed by even a cursory review of the docket sheet.” Id.

       Defendants objected to Judge Gold’s Report and Recommendation on many different

grounds.   For example, Defendants argued that the fee award should be reduced due to

inefficiency on the part of Plaintiffs’ counsel, and because Plaintiffs did not fully succeed in

certain aspects of the case. In addition, they argued that fees attributed to Plaintiffs’ affirmative

case by Plaintiffs’ counsel were actually incurred in defending against Defendants’

counterclaims. In response, Plaintiffs admitted that they had erroneously attributed a very small

amount of fees to Plaintiffs’ affirmative case that were actually incurred in defense of the

counterclaims.    They acknowledged that Judge Gold’s Report and Recommendation was

erroneous insofar as it recommended awarding fees for these amounts, and “concede[d] that their
                                                 4
Fee Award should be reduced by a total of $5,730.00.” J.A. 1080. Plaintiffs argued that

otherwise, all of Defendants’ objections lacked merit. Despite Plaintiffs’ counsel’s concessions,

the district court (Glasser, J.) adopted Judge Gold’s Report and Recommendation in its entirety.

Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2014 WL 3818614, at *3 (E.D.N.Y.

Aug. 4, 2014). The court stated that it had reviewed Judge Gold’s Report and Recommendation

de novo and “conclude[d] that the objections to it are supported neither factually nor legally.” Id.

Defendants now appeal the district court’s award of fees and costs to Plaintiffs’ counsel for

substantially the same reasons that they objected to Judge Gold’s Report and Recommendation.1

       We review a district court’s award of attorneys’ fees for abuse of discretion. Zalewski v.

Cicero Builder Dev. Inc., 754 F.3d 95, 107-08 (2d Cir. 2014). “A district court abuses its

discretion if it (1) bases its decision on an error of law or uses the wrong legal standard; (2) bases

its decision on a clearly erroneous factual finding; or (3) reaches a conclusion that, though not

necessarily the product of a legal error or a clearly erroneous factual finding, cannot be located

within the range of permissible decisions.” Millea v. Metro-North R.R., 658 F.3d 154, 166 (2d

Cir. 2011) (internal quotation marks omitted). In calculating the “presumptively reasonable fee,”

which is generally arrived at by multiplying “the number of hours reasonably expended on the

litigation . . . by a reasonable hourly rate,” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), this

Court has recommended that a district court take into account what a “paying client would be

willing to pay.” Arbor Hill Concerned Citizens Neighborhood Ass’n v. Cnty. of Albany, 522

F.3d 182, 183-84 (2d Cir. 2008). In setting the reasonable hourly rate, courts should “bear in

mind . . . case-specific variables that we and other courts have identified as relevant to the

       1
          Among their other challenges to the district court’s fee award, Defendants argue that the
district court erred in awarding expert fees pursuant to 29 U.S.C. § 216(b) of the FLSA. We
address this argument in an opinion issued simultaneously with this summary order, agreeing
that 29 U.S.C. § 216(b) does not provide a basis for the district court’s award of expert fees.

                                                  5
reasonableness of attorney’s fees.” Id. at 190. These include, “among others, the Johnson

factors.” Id. (referring to Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)).

The Johnson factors consist of, for example, “[t]he time and labor required,” “[t]he novelty and

difficulty of the questions,” “[t]he amount involved and the results obtained,” and “[a]wards in

similar cases.” Johnson, 488 F.2d at 717-19 (italics omitted). Importantly, “[t]here is no precise

rule or formula for making [fee] determinations,” Hensley, 461 U.S. at 436, and the court should

take into account “the circumstances of the particular case.” Zalewski, 754 F.3d at 107-08.

“[W]e give wide latitude to district courts to assess the propriety of attorneys’ fees and costs

requests.” CARCO GROUP, Inc. v. Maconachy, 718 F.3d 72, 85 (2d Cir. 2013).

         At oral argument before this Court, Plaintiffs’ counsel conceded that the district court

abused its discretion insofar as it included in its judgment the $5,730.00 in fees that Plaintiffs’

counsel acknowledged were erroneously attributed to litigating Plaintiffs’ affirmative FLSA and

NYLL claims. Plaintiffs’ counsel contends, however, that the district court’s judgment should

otherwise be affirmed.     With the exception of the district court’s award of expert fees to

Plaintiffs’ counsel (which, as discussed in the opinion issued simultaneously with this summary

order, we conclude were erroneously awarded pursuant to 29 U.S.C. § 216(b) of the FLSA), we

agree.

         Defendants contend that the district court did not properly consider the amount involved

in this case and the results obtained. But Magistrate Judge Gold, whose conclusions were

adopted by the district court upon de novo review, specifically acknowledged that the amount of

the fee award was unusually high for a case of this nature and was significantly higher than the

amount of damages obtained.        He nevertheless concluded that this result was attributable

primarily to the Defendants’ litigation tactics, a determination that is amply supported by the

record. Nor did the district court abuse its discretion in declining to adjust its award downward
                                                6
due to an alleged lack of success by Plaintiffs. As Magistrate Judge Gold explained, “Plaintiffs

were clearly successful at trial, having obtained a jury verdict in their favor on each of their

claims, including their claims of willfulness, as well as on defendants’ counterclaims.” J.A.

1030. Defendants appear to argue that the district court was required to downwardly adjust the

fee award because Plaintiffs were not successful in every individual motion that they filed in

pursuit of their claims.     We disagree.      While a district court should not award fees for

unsuccessful claims that are separable from Plaintiffs’ successful claims, see Dominic v. Consol.

Edison Co. of N.Y., 822 F.2d 1249, 1259 (2d Cir. 1987), there is no rule that Plaintiffs need

achieve total victory on every motion in pursuit of a successful claim in order to be compensated

for the full number of hours spent litigating that claim.

        Defendants also argue that the district court abused its discretion by granting

reimbursement for the full number of hours submitted by Plaintiffs’ counsel for litigating

Plaintiffs’ affirmative claims (with the exception of hours attributed to Plaintiffs’ trial specialist).

As discussed, the district court did abuse its discretion to the extent that it awarded fees even for

hours that Plaintiffs’ counsel admitted were erroneously attributed to Plaintiffs’ affirmative

claims. But after reviewing the record in this case, we conclude that the district court did not err

in finding the remaining hours reasonably incurred in pursuit of Plaintiffs’ affirmative claims.

        We have reviewed Defendants’ remaining arguments and find them to be without merit.

For the reasons stated in the opinion issued simultaneously with this summary order, we

VACATE the district court’s award of $10,425 in costs for expert fees and REMAND to the

district court to consider whether the NYLL authorizes the award of such expert fees, and if so,

                                                   7
whether to award them on that basis. For the reasons stated above, we REVERSE the judgment

of the district court insofar as it awarded Plaintiffs’ counsel the $5,730.00 in fees that counsel

conceded were erroneously billed. We otherwise AFFIRM the judgment of the district court.

                                                    FOR THE COURT:
                                                    Catherine O’Hagan Wolfe, Clerk

                                                8