Court Opinion

ID: 4504276
Source: CourtListenerOpinion
Date Created: 2020-02-04 17:00:28.266649+00
Date Added: 2024-06-11T13:39:51.468044
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                                       File Name: 20a0080n.06

                                                          No. 19-1556

                                  UNITED STATES COURT OF APPEALS                         FILED
                                       FOR THE SIXTH CIRCUIT                        Feb 04, 2020
                                                                                DEBORAH S. HUNT, Clerk
    BRIAN KRITCHER,                    )
                                       )
          Plaintiff-Appellee,          )
                                       )                                ON APPEAL FROM THE
    v.                                 )                                UNITED STATES DISTRICT
                                       )                                COURT FOR THE EASTERN
    PRUDENTIAL SECURITY, INC.; GREGORY )                                DISTRICT OF MICHIGAN
    WIER,                              )
                                       )                                       OPINION
          Defendants-Appellants.       )
                                       )

         BEFORE: SUHRHEINRICH, STRANCH, and NALBANDIAN, Circuit Judges.

           JANE B. STRANCH, Circuit Judge. Brian Kritcher and three other plaintiffs settled a

claim for unpaid overtime wages under the Fair Labor Standards Act with Prudential Security, Inc.

and its owner Gregory Wier.1 The settlement left unresolved the amount of attorney’s fees that

Kritcher is entitled to as the prevailing party. Kritcher filed a motion for attorney’s fees and costs

in the district court. The district court considered the experience and expertise of the attorneys,

the complexity of the case, and the specific circumstances of the case and reduced the proposed

hourly rate and the number of hours billed. Prudential appeals the fee award, requesting further

reductions. Because the district court did not abuse its discretion in granting the award with

reductions, we AFFIRM.

1
    Hereinafter referred to collectively as Prudential.
No. 19-1556, Kritcher v. Prudential Security, Inc., et al.

                                        I.      BACKGROUND

        At issue on appeal is only the district court’s award of attorney’s fees at the end of two-

and-one-half years of litigation that ultimately settled in favor of the plaintiffs. The relevant facts

are briefly summarized below.

        Brian Kritcher worked as a Security Guard for Prudential, was paid $11 per hour, but was

never paid overtime. When Prudential denied his request for his unpaid overtime wages, he filed

a complaint under the Fair Labor Standards Act (FLSA) on July 14, 2016. Kritcher was

represented by lead counsel Bryan Yaldou of the Law Offices of Bryan Yaldou, PLLC, who was

assisted by an associate in the firm.           Prudential filed a countercomplaint against Kritcher,

demanding $100,000, which was ultimately dismissed as part of the settlement. Kritcher sought

to certify a class of plaintiffs; a contested process of various class certification motions in the

district court resulted in three additional claimants joining the suit as plaintiffs in 2018.

        In an email exchange on April 28, 2017, Yaldou made a settlement offer to Prudential that

included a request for 75% of $52,920 in attorney’s fees for work done to date. Prudential did not

respond with a counteroffer but instead questioned the amount of attorney’s fees, to which Yaldou

responded, “It is possible that not all of the hours would be approved as reasonable and necessary,

so I am willing to discuss a lower amount.” Because Prudential did not respond, the litigation

continued. On November 7, 2018, Yaldou emailed Prudential with another settlement offer,

including a request for approximately $92,000 in fees and costs accrued to date. There is no

evidence in the record that Prudential responded to this email or made any documented attempt to

counter with a specific offer for settlement. Nor did Prudential make an offer of judgment pursuant

to Rule 68 of the Federal Rules of Civil Procedure. The attorney’s fees requested by Yaldou in

the two emails were much larger than the fees he ultimately requested for the corresponding time

periods in his later-filed petition for fees.

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No. 19-1556, Kritcher v. Prudential Security, Inc., et al.

        The parties reached a settlement of the case on January 23, 2019, settling all monetary

claims of the plaintiffs. The plaintiffs received a total of $19,437.20, which included unpaid wages

and liquidated damages, Prudential’s countercomplaint was dismissed with prejudice, and the

plaintiffs were named the prevailing party for purposes of attorney’s fees and costs to be addressed

separately by the district court.

        Kritcher filed a motion for attorney’s fees and costs that sought $71,111.50 in attorney’s

fees, billing at a rate of $400/hour for lead attorney Yaldou and $300/hour for his associate. The

district court heard oral argument from both counsel on the motion, which included a number of

factual disputes between counsel. The district court then addressed the legal considerations

governing fee awards, including the FLSA provisions for fee-shifting, the outcome and complexity

of the case, the amount of work done and risk taken by the attorneys, and the attorneys’ experience

and expertise; the court ordered a reduction of $100/hour in the hourly rates of both attorneys for

Kritcher and reduced the total number of hours billed by 12%. The district court granted attorney’s

fees with the specified reductions and with costs as requested. Prudential appeals the calculation

and argues that a larger reduction of fees is warranted.

                                         II.   ANALYSIS

        We review the district court’s award of attorney’s fees for abuse of discretion. Hubbell v.

FedEx SmartPost, Inc., 933 F.3d 558, 575 (6th Cir. 2019). We afford the award substantial

deference “[i]n light of a district court’s superior understanding of the litigation and the desirability

of avoiding frequent appellate review of what essentially are factual matters.” Id. (quoting Wilson-

Simmons v. Lake Cty. Sheriff’s Dep’t, 207 F.3d 818, 823 (6th Cir. 2000)). We have found an abuse

of discretion “where a district court fails to explain its reasoning adequately or to consider the

competing arguments of the parties.” Minor v. Comm’r of Soc. Sec., 826 F.3d 878, 883 (6th Cir.

2016) (quoting Garner v. Cuyahoga Cty. Juvenile Court, 554 F.3d 624, 643 (6th Cir. 2009)).

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No. 19-1556, Kritcher v. Prudential Security, Inc., et al.

       The FLSA provides a civil right of action for failure to pay employees in accordance with

wage and hour requirements. When an employer is found in violation of the FLSA, “[t]he court

in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a

reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b).

An award of attorney’s fees under § 216(b) is mandatory. United Slate, Tile & Composition

Roofers, Damp & Waterproof Workers Ass’n, Local 307 v. G & M Roofing & Sheet Metal Co.,

732 F.2d 495, 501 (6th Cir. 1984).

       There is no dispute in this case that Kritcher is entitled to attorney’s fees; the question on

appeal is whether the award is reasonable. See Gonter v. Hunt Valve Co., 510 F.3d 610, 616 (6th

Cir. 2007). A reasonable fee is “one that is adequately compensatory to attract competent counsel

yet which avoids producing a windfall for lawyers.” Geier v. Sundquist, 372 F.3d 784, 791 (6th

Cir. 2004) (quoting Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999)). The Gonter court also

noted, in finding attorney standing, not only the need to “attract competent representation” but the

purpose of that representation—to secure “the ability to vindicate the goals” of the legislation at

issue, here the FLSA. 510 F.3d at 615–16.

       The starting point for the calculation of reasonable attorney’s fees is the lodestar approach,

in which the number of hours reasonably expended is multiplied by a reasonable hourly rate. See

Hubbell, 933 F.3d at 575; Gascho v. Glob. Fitness Holdings, LLC, 822 F.3d 269, 279 (6th Cir.

2016). The district court may then adjust the lodestar figure to reflect case-specific considerations,

the most important of which is the degree of success that the attorney obtained. Hubbell, 933 F.3d

at 575. “The district court’s calculation of the lodestar value, as well as any justifiable upward or

downward departures, deserves substantial deference, but only when the court provides ‘a clear

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No. 19-1556, Kritcher v. Prudential Security, Inc., et al.

and concise explanation of its reasons for the fee award.’” Gonter, 510 F.3d at 616 (footnote

omitted) (quoting Hadix v. Johnson, 65 F.3d 532, 535 (6th Cir. 1995)).

       The district court provided a clear and concise explanation in the present case. It first

considered the degree of success of the attorney and emphasized the positive outcome for Kritcher.

It noted that the settlement required a great deal of work on the part of the attorneys and some risk.

Then, accounting for the attorneys’ experience and specialization in wage and hour matters and

the complexity of the case, it ordered a reduction in the hourly rates by $100/hour for both Yaldou

and his associate. For similar reasons, it “looked at certain entries that were done for research”

and considered things that “the firm should have or could have known representing these types of

clients.” It then reduced the billed hours by 12%. Having considered the full record and the

briefing and argument of counsel, the district court adjusted the fees downward as requested by

Prudential.

       These modifications and the explanation given support the district court’s award of

attorney’s fees. Prudential seeks a more significant reduction in the lodestar, however, citing to

cases from other circuits regarding consideration of substantial settlement offers in determining

fees. It argues that Yaldou requested fees in two emails during litigation in excess of the actual

amount incurred, without which the matter would likely have resolved quickly.

       We have recognized that a district court may consider substantial settlement offers that are

rejected in calculating fee awards as part of the “degree of success” in the litigation. See McKelvey

v. Sec’y of U.S. Army, 768 F.3d 491, 495 (6th Cir. 2014). This is because “[i]n a case where a

rejected settlement offer exceeds the ultimate recovery, the plaintiff—although technically the

prevailing party—has not received any monetary benefits from the postoffer services of his

attorney.” Marek v. Chesny, 473 U.S. 1, 11 (1985). That is not the case here. The record contains

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No. 19-1556, Kritcher v. Prudential Security, Inc., et al.

no offers of settlement from Prudential nor any offer of judgment under Rule 68. See Fed. R. Civ.

P. 68. In fact, the settlement process initially involved disputes over whether Prudential would

pay liquidated damages to the plaintiffs at all, and subsequently over the amounts of unpaid wages

and liquidated damages.

        The district court provided a clear and concise explanation of its reasons for the fee award.

This explanation and the reduction it ordered in favor of Prudential suggest that the court

considered Prudential’s position and arguments and exercised its discretion to determine the extent

of the reduction and set an appropriate fee. The district court’s decision is entitled to substantial

deference. We find no abuse of discretion in the district court’s reasoned reduction to the lodestar

or its setting of a reasonable fee.

                                      III.   CONCLUSION

        For the foregoing reasons, we AFFIRM the district court’s order granting in part Plaintiff’s

motion for attorney fees and costs.

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