Court Opinion

ID: 2995247
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:19:15.2996+00
Date Added: 2024-06-11T11:45:24.639460
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 00-4339

Kimberly Small, et al.,

Plaintiffs-Appellants,

v.

Richard Wolf Medical Instruments Corp.,

Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 1345--William J. Hibbler, Judge.

Argued August 8, 2001--Decided August 29, 2001

  Before Ripple, Manion, and Rovner, Circuit
Judges.

  Manion, Circuit Judge. Plaintiffs
Kimberly Small, Yvonne Schlotzer, and
Ursula Lentz, all former employees of
Richard Wolf Medical Instruments Corp.
("Wolf"), brought this suit alleging that
Wolf failed to pay them overtime in
violation of the Fair Labor Standards Act
("FLSA"), 29 U.S.C. sec. 207. After the
parties reached a consent judgment on the
issue of back wages, the plaintiffs filed
a petition seeking $54,940.87 in
attorney’s fees and costs. The court
found both the hourly rate and the number
of hours claimed excessive and instead
awarded $24,288.37. Plaintiffs appeal,
claiming that the district court abused
its discretion in reducing the fees. We
affirm.

  In 1999, Ms. Small, Ms. Schlotzer, and
Ms. Lentz brought suit to recover back
wages and liquidated damages under the
FLSA against Wolf, a manufacturer of
medical instruments. All three claimed
that during their employment they had
worked more than forty hours per week but
were not compensated for overtime as
required by the FLSA. Wolf initially
claimed that the plaintiffs fell under
the administrative employee exception to
the FLSA. In April 2000, however, shortly
before the scheduled trial date but after
completion of a final pre-trial order,
jury instructions, and motions in limine,
the parties reached a settlement as to
overtime wages. Ms. Small received
$2,539.90, Ms. Schlotzer $3,589.97, and
Ms. Lentz $6,122.22. The court awarded
double damages to each plaintiff in
accordance with the FLSA’s liquidated
damages provision, 29 U.S.C. sec. 216(b).
The only remaining issue, then, was the
plaintiffs’ attorney’s fees.

  Plaintiffs’ counsel in this case, Ernest
T. Rossiello, has previously appealed fee
awards to this court. See, e.g., Connolly
v. National School Bus Serv., 177 F.3d
593 (7th Cir. 1999) (affirming reduction
of Rossiello’s hourly fee from $320 to
$285); Uphoff v. Elegant Bath, Ltd., 176
F.3d 399 (7th Cir. 1999) (affirming
reduction of Rossiello’s hourly fee from
$320 to $280); Spegon v . Catholic Bishop
of Chicago, 175 F.3d 544 (7th Cir. 1999)
(affirming reduction of Rossiello’s hour
ly fee from $320 to $280). In the present
motion for attorney’s fees submitted to
Judge Hibbler on June 9, 2000, Rossiello
sought an hourly rate of $425 for 111
hours of work. He also sought
compensation for 10.4 hours spent by his
staff, at rates of $260 per hour for Lara
A. Walicek, an attorney with eight years’
experience who was also a certified
public accountant; $230 an hour for Sheni
Hajat, an attorney with five years’
experience; $137.50 an hour for Joanna M.
Kielczewski, an attorney with one year’s
experience; and $120 an hour for Dina
Cavico, a paralegal with 10 years’
experience.

   Attorney Rossiello alleged that
neither he nor his firm had any clients
who pay on an hourly basis, but that he
collects all his fees on a contingency
basis or through court award. To
substantiate his requested hourly rate,
Rossiello attached to his motion numerous
fee awards he obtained in other
employment (though not all FLSA) cases
ranging from $250 to $375 per hour. Also
attached to the motion were affidavits
from three Chicago attorneys attesting,
based on their familiarity with the rates
charged in employment-related cases, to
the reasonableness of the requested
rates. To substantiate his billable
hours, Rossiello attached typed time
records for himself and each staff
member.
  Wolf submitted a detailed response to
the plaintiffs’ motion, challenging both
the hourly rate and the number of hours
claimed. With respect to the hourly rate,
Wolf argued that $425 was not Rossiello’s
"market rate," because the highest rate
he had ever been awarded, as indicated by
the cases he himself attached to his
motion, was $375 an hour. The affidavits
submitted by Rossiello were
"disingenuous" and "irrelevant," Wolf
argued, because they failed to
distinguish between the hourly rate for
attorneys engaged in FLSA overtime cases
and hourly rates for attorneys engaged in
more complex civil rights litigation.
Relying on several recent cases in which
Rossiello’s fee awards ranged from $280
to $300, Wolf suggested an hourly rate of
$300 for Rossiello and accordingly lower
rates for his staff.

  Wolf also attacked the number of hours
Rossiello claimed he expended on the
litigation, raising several overarching
complaints, including that Rossiello had
created unnecessary work in the case, had
billed for tasks that were not properly
compensable, and had inflated the time
expended on certain projects. Wolf also
provided a five-page chart outlining
specific objections to many individual
entries in Rossiello’s time sheets.

  In their reply, plaintiffs asserted that
their motion for attorney’s fees should
be granted in its entirety,
notwithstanding Wolf’s "ad hominem
remarks attacking counsel." They asserted
that Wolf failed to present any evidence
that $425 was not Rossiello’s market
rate. Plaintiffs did not submit line-by-
line responses to the detailed objections
in Wolf’s five-page chart, but instead
stated that "there are no unnecessary or
unreasonable hours included."

  After the motion was fully briefed,
counsel for Wolf sent a letter to the
court with two recent decisions involving
Rossiello’s fees in the Dormeyer v.
Comerica Bank litigation, 223 F.3d 579
(7th Cir. 2000) (affirming reduction of
Rossiello’s fees and ordering him to show
cause why he should not be sanctioned for
filing frivolous appeal), and 226 F.3d
915 (7th Cir. 2000) (imposing $10,000
sanction against Rossiello), which he
asserted might be relevant to the court’s
determination. Plaintiffs responded with
a one-page motion requesting an
evidentiary hearing on the fee
application "to determine the relevancy,
if any, and the applicability, vel non,
of these opinions." The court denied the
motion "for reasons stated in open court"
(these reasons are not disclosed in the
record)./1

  The district court concluded that both
the hours and hourly rate claimed by
Rossiello were excessive. Citing a number
of examples of what it believed to be
excessive billings, the court reduced
Rossiello’s hours from 111 to 66, but did
not reduce the hours of his staff. The
court also found that $425 was not in
fact Rossiello’s market rate and was
"unreasonable for a case which is neither
novel nor complex." The court found that
a rate in excess of $400 "is not
consistent with the rates charged by
attorneys engaged in FLSA cases in this
market." The court considered the
affidavits submitted by Rossiello but
determined that they were "unpersuasive,"
because they did not differentiate
between rates charged for FLSA cases and
rates charged for more complex employment
discrimination cases. Based on the "non-
complex" issue presented in the case, as
well as Rossiello’s prior fee history,
the court determined that $300 was a
reasonable hourly rate. Consistent with
this reduction of lead counsel’s rate,
the court reduced the rates of supporting
counsel and staff to $200 for attorney
Walicek, $170 for attorney Hajat, and $90
for paralegal Cavico. The court did not
reduce attorney Kielczewski’s $137.50
rate. Plaintiffs timely filed their
notice of appeal.

  On appeal, plaintiffs raise three
arguments: (1) that the court abused its
discretion in reducing Rosiello’s hourly
rates and those of his staff; (2) that
the court failed to provide a proper
explanation for its reduction of the
hours claimed (which the plaintiffs have
computed as a 40% reduction); and (3)
that the district court abused its
discretion in refusing to grant the
request for an evidentiary hearing.

   Prevailing plaintiffs, which may
include plaintiffs who favorably settle
their cases, are entitled to reasonable
attorney’s fees under the FLSA. 29 U.S.C.
sec. 216(b); Batt v. Micro Warehouse,
Inc., 241 F.3d 891, 893 (7th Cir. 2001);
Connolly, 177 F.3d at 595. There is no
dispute here that the plaintiffs
"prevailed"; the only issue is whether
the fee award was reasonable. The
district court has wide discretion in
determining attorney’s fees under the
FLSA, and appellate review is thus
limited to the highly deferential abuse
of discretion standard. Batt, 241 F.3d at
893. "This deferential standard is
appropriate in view of the district
court’s superior understanding of the
litigation and the desirability of
avoiding frequent appellate review of
what are essentially factual matters."
Id. (citations and internal quotation
marks omitted).

  To determine fees under the FLSA, the
district court will generally follow the
"lodestar" approach, multiplying a
reasonable hourly rate by the number of
hours reasonably expended on the
litigation. Uphoff, 176 F.3d at 407. A
reasonable hourly rate should reflect the
attorney’s market rate, defined as "the
rate that lawyers of similar ability and
experience in the community normally
charge their paying clients for the type
of work in question." Id. (citations and
internal quotation marks omitted). The
attorney is entitled to his market rate
and not some "medieval just price"
determined by the court. See In re
Continental Illinois Securities
Litigation, 962 F.2d 566, 568 (7th Cir.
1992).

  The fee applicant bears the burden of
proving the market rate. Uphoff, 176 F.3d
at 407. The attorney’s actual billing
rate for comparable work is considered to
be the presumptive market rate. If,
however, the court cannot determine the
attorney’s true billing rate--such as
when the attorney maintains a contingent
fee or public interest practice--the
applicant can meet his or her burden by
submitting affidavits from similarly
experienced attorneys attesting to the
rates they charge paying clients for
similar work, or by submitting evidence
of fee awards that the applicant has
received in similar cases. Id. Once the
fee applicant has met his or her burden,
the burden shifts to the defendants to
demonstrate why a lower rate should be
awarded. Id.
  Rossiello stated that he has no fee-
paying clients and, therefore, no billing
rate that can be presumed to be his
market rate. Although the district court
must consider submitted evidence of the
hourly rates of attorneys with comparable
experience, the court is "entitled to
determine the probative value of each
submission and must arrive at its own
determination as to a proper fee." Batt,
241 F.3d at 895. Here, the district court
determined that the affidavits submitted
by Rossiello were of limited probative
value because they failed to distinguish
between employment-related civil rights
litigation and FLSA overtime cases. In
Spegon, we explicitly pointed out the
limitations of an affidavit submitted by
Rossiello that listed cases (several
involving non-FLSA claims) in which he
claimed he was awarded high market rates.
"Hourly rates awarded in non-FLSA
overtime cases are not particularly
relevant as evidence of Rossiello’s
market rate in this case because the
reasonable hourly rate is capped at the
prevailing market rate for attorneys
engaged in FLSA work." Spegon, 175 F.3d
at 555 n.6. Judges in the Northern
District have also noted that FLSA cases
are less complex than Title VII and other
employment-related civil rights
litigation. See, e.g., Shea v. Galaxie
Lumber & Constr. Co., No. 94 C 0906, 1997
U.S. Dist. LEXIS 1217 at *16-17 (N.D.
Ill. 1997) (counsel’s actions in
attaching fee awards from Title VII
actions to determine fees in FLSA case
was "disingenuous given the differences
in complexity between FLSA claims and
Title VII claims."), vacated on other
grounds, 152 F.3d 729 (7th Cir. 1998);
Holyfield v. Quinn & Co., No. 90 C 507,
1991 U.S. Dist. LEXIS 5293 at *1 (N.D.
Ill. 1991) ("Issues under the FLSA are
not unusually complicated or beyond the
capability of an attorney of average
ability.").

  Moreover, the affidavits submitted by
the plaintiffs were "neutralized" by the
evidence submitted by Wolf showing that
Rossiello recently had been awarded rates
of $280 and $300 for work in similar
cases. See Connolly, 177 F.3d at 595;
Uphoff, 176 F.3d at 407; Spegon, 175 F.3d
at 554. We thus conclude that the
district court acted within its
discretion in awarding the $300 hourly
rate. This case is inapposite to the
cases cited by the plaintiffs in which
the court rejected uncontroverted
evidence of the attorney’s market rate.
See, e.g., Eddleman v. Switchcraft, 965
F.2d 422, 425 (7th Cir. 1992) (court
abused discretion in employment
discrimination case by awarding $60
hourly rate equivalent to that given
attorneys appointed under the Criminal
Justice Act rather than attorney’s
"market rate").

  Plaintiffs next argue that the court
abused its discretion in reducing
Rossiello’s billable hours. In
determining the reasonable number of
hours, the court should exclude hours
that are "excessive, redundant or
otherwise unnecessary." Hensley v.
Eckerhart, 461 U.S. 424, 434 (1983). This
is a factual determination that depends
heavily on the district court’s greater
familiarity with the case and thus is
given "great deference" on appeal.
Uphoff, 176 F.3d at 409. The district
court must, however, provide a "concise
but clear explanation of its reasons" for
any reduction. Id. In other words, the
court cannot simply "eyeball the fee
request and cut it down by an arbitrary
percentage because it seemed excessive to
the court." People Who Care v. Rockford
Bd. of Educ, 90 F.3d 1307, 1314 (7th Cir.
1996) (citations and internal quotation
marks omitted).

  It is notable that Rossiello attributes
111 hours of work performed by him
personally but only a total of 10.4 hours
for his three subordinate attorneys. At
oral argument, he insisted his expertise
was required because the case was more
complex than the district court
determined. But it is understandable that
the judge would assume that much of the
more routine work would be delegated to
competent attorneys in the firm who
charge at a much lower hourly rate. Here,
the district court provided a two-
paragraph explanation of its reasons for
reducing the hours. The court offered a
general explanation for the reduction,
namely, that the hours were excessive for
a "self-proclaimed highly experienced
FLSA attorney" in a case which the court
found was "neither novel nor complex."
The court spotlighted certain billings
that it characterized as "excessive," and
although the court does not elaborate,
the submissions on which it focused seem
questionable. For instance, the claimed
12 hours for the fee petition appears
excessive, given that this court recently
affirmed a reduction from 9.9 hours to
1.6 hours for time Rossiello spent
preparing a fee petition in a similar
FLSA case. See Uphoff, 176 F.3d at 411.
We note that while Uphoff and two earlier
cases settled on 1.6 hours for preparing
a request for attorney’s fees, that is
not an automatic fixed rate for such a
request. But the reduction in this case
is not an abuse of discretion.

  Other than citing these and a few other
examples, the court does not provide a
detailed explanation of how it arrived at
the 66-hour figure. Although the court
does not say so, the court appears to
have simply accepted wholesale Wolf’s
objections; the court adopted without
elaboration the 66-hour figure suggested
by Wolf. As in Uphoff, we conclude that
the district court’s explanation for
reducing the hours claimed was "limited
but sufficient." See Uphoff, 176 F.3d at
409 (explanation sufficient where
district court found time spent on
summary judgment motion excessive given
simplicity of the subject matter and the
quality of the motion). This is not a
case in which the court simply "eye-
balled" the petition and reduced the
award by an arbitrary percentage, People
Who Care, 90 F.3d at 1314, nor is it a
case in which the reasons for the
reduction are not apparent from the
record, Hutchison v. Amateur Electronic
Supply, Inc., 42 F.3d 1037, 1047 (7th
Cir. 1994). We therefore affirm the
district court’s reduction of the
billable hours.

  Last, we conclude that the district
court did not err in declining to conduct
an evidentiary hearing on the fee
petition. The plaintiffs made their
request for a hearing only to determine
the relevance of the Dormeyer decisions,
not to respond to any particular
objection raised by Wolf. The court
agreed with the plaintiffs that these
opinions had "no bearing" on the case.
Further, the cases on which plaintiffs
rely to support their request for an
evidentiary hearing are distinguishable,
because in those cases the party seeking
fees was not given an opportunity to
respond to the reasons for the reduction.
See Spellan v. Board of Educ., 59 F.3d
642, 646 (7th Cir. 1995); Hutchison, 42
F.3d at 1048. Here, conversely, Wolf
raised a multitude of specific objections
to the fee petition and the plaintiffs
had ample opportunity to respond. Nothing
in the court’s order suggests that the
court devised additional reasons sua
sponte to reduce the fee award without
giving plaintiffs an opportunity to
respond.

  The judgment of the district court is
AFFIRMED.

FOOTNOTE

/1 Plaintiffs’ appellate brief, however, character-
izes the district court as stating that the
Dormeyer decisions "had no relevance."