Gary v. Carbon Cycle Ariz. LLC

398 F.Supp.3d 468

Michael GARY, Plaintiff,

v.CARBON CYCLE ARIZONA LLC, et al., Defendants.

No. CV-18-02796-PHX-JAT

United States District Court, D. Arizona.

Signed August 16, 2019

James Joseph Weiler, Jason Saul Barrat, Jessica Elizabeth Miller, Michael David Zoldan, Zoldan Law Group PLLC, Scottsdale, AZ, for Plaintiff.

Joshua William Carden, Joshua Carden Law Firm PC, Scottsdale, AZ, for Defendants.

ORDER

James A Teilborg, Senior United States District Judge

At issue is Plaintiff Michael Gary's Motion for Attorneys' Fees and Costs (Doc. 50) to which Defendants Jerald F. Kovacich, Tom Mulholland, Samuel W. Grossman, Carbon Cycle Energy, LLC, Carbon Cycle Arizona, LLC, and Carbon Cycle Holdings, LLC filed a Response (Doc. 51), and Plaintiff filed a Reply (Doc. 57). The Court now rules on Plaintiff's Motion.

I. BACKGROUND

On September 5, 2018, Plaintiff brought this action against Defendants Carbon Cycle Arizona, LLC, Carbon Cycle Energy, LLC, Carbon Cycle Holdings, LLC, Samuel W. Grossman, Jerry Kovacich, Carlos E. Sala,¹ and Tom Mulholland. (Doc. 1 at 1). In his Complaint, Plaintiff asserted claims for failure to pay minimum wage in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 – 219 and the Arizona Minimum Wage Statute, A.R.S. §§ 23-362 – 23-364, and failure to make timely and reasonable payment of wages in violation of the Arizona Wage Statute, A.R.S. §§ 23-351, 23-353, and 23-355. (Id. at 1–2). Plaintiff sought to recover unpaid minimum wage compensation, liquidated damages, and statutory penalties for Defendants' alleged violations of the FLSA, as well as unpaid wages, treble damages, and statutory penalties for Defendants' alleged violations of the Arizona Wage Statute. (Id. at 2).

Plaintiff asserts that on November 26, 2018, Defendants Carbon Cycle Arizona, LLC, Carbon Cycle Energy, LLC, Carbon Cycle Holdings, LLC, Jerry Kovacich, and Tom Mulholland transferred a gross amount of $11,490.64, less applicable taxes to equal a net amount of $8,492.33, via direct deposit into Plaintiff's bank account. (Doc. 50 at 2).² On January 14, 2019, these Defendants sent a Rule 68 Offer of Judgment to Plaintiff, which stated:

Defendants Jerry Kovacich, Tom Mulholland, Carbon Cycle Energy, LLC, Carbon Cycle Arizona, LLC, Carbon Cycle Holdings, LLC ("Defendants") hereby offer to allow judgment to be entered in favor of Plaintiff Michael Gary and against these Defendants, in full resolution of all claims raised in the Complaint, as follows:

In addition to all sums previously paid, Defendants will pay to Plaintiff the sum of five thousand dollars ($5,000), exclusive of taxable court costs and attorney's fees, for all claims sought in Plaintiff's complaint. Defendants reserve the right to object to any costs and fees sought by Plaintiff if this offer is accepted.

(Doc. 46-1 at 1). Plaintiff accepted Defendants' Jerry Kovacich, Tom Mulholland, Carbon Cycle Energy, LLC, Carbon Cycle Arizona, LLC, Carbon Cycle Holdings, LLC Rule 68 Offer of Judgment on January 16, 2019. (Doc. 46-2 at 1). Thereafter, these Defendants filed a Notice of Acceptance of Rule 68 Offer of Judgment on January 22, 2019. (Doc. 46). On January 23, 2019, the Clerk of the Court entered judgment against Carbon Cycle Arizona LLC, Carbon Cycle Energy LLC, Carbon Cycle Holdings LLC, Jerry Kovacich, and Tom Mulholland in the amount of $5,000.00, exclusive of taxable court costs and attorney's fees. (Doc. 48).

On January 28, 2019, Plaintiff filed the Motion for Attorneys' Fees and Costs (hereinafter, "Motion") at issue, seeking recovery of his attorneys' fees in the amount of $13,487.50 and $1,072.90 in costs. (Doc. 50 at 9). Plaintiff specifies that his Motion is directed at Carbon Cycle Arizona, LLC, Carbon Cycle Energy, LLC, Carbon Cycle Holdings, LLC, Jerry Kovacich, and Tom Mulholland. (Id. at 2 n.1). Defendants, as well as Defendant Samuel Grossman, filed a Response (Doc. 51) on February 12, 2019.³ Also on February 12, 2019, Plaintiff filed its Reply (Doc. 57).

On April 12, 2019, Plaintiff accepted Defendant Samuel W. Grossman's Rule 68 Offer of Judgment for "the sum of two hundred fifty dollars ($250.00), exclusive of taxable court costs and attorney's fees, for all claims sought in Plaintiff's complaint." (Docs. 64; 64-1).⁴ In accordance with Plaintiff's Notice of Acceptance of Offer of Judgment (Doc. 64), the Clerk of Court entered judgment against Defendant Samuel Grossman in the amount of $250.00, exclusive of taxable court costs and attorney's fees. (Doc. 65).

Unless specified otherwise, the Court uses the phrase "Defendants" in this Order to refer to Carbon Cycle Arizona, LLC, Carbon Cycle Energy, LLC, Carbon Cycle Holdings, LLC, Jerry Kovacich, and Tom Mulholland.

II. ELIGIBILITY AND ENTITLEMENT TO FEES

Plaintiff requests $13,487.50 in attorneys' fees and $1,072.90 in costs in accordance with Fed. R. Civ. P. 54(d), LRCiv 54.2, and 29 U.S.C. § 216(b), the FLSA fee-shifting statute which "provides for attorney fees and costs to a successful plaintiff." Haworth v. State of Nev. , 56 F.3d 1048, 1050 n.1 (9th Cir. 1995) ; (see Doc. 50 at 1, 9). For the reasons that follow, the Court concludes that Plaintiff is eligible for, and entitled to, attorneys' fees and non-taxable costs.

A. Whether Plaintiff was the Prevailing Party

Plaintiff argues that it is the prevailing party—and therefore entitled to attorneys' fees—because the filing of this action caused Defendants to pay unpaid wages to Plaintiff and because Plaintiff accepted Defendants' Rule 68 Offer of Judgment. (Doc. 50 at 3). Defendants do not contest that Plaintiff is the prevailing party. (See Doc. 51).

"[P]laintiffs may be considered ‘prevailing parties’ for attorney's fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit." Hensley v. Eckerhart , 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). In Farrar v. Hobby , the Supreme Court clarified that "a plaintiff ‘prevails’ when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Farrar v. Hobby , 506 U.S. 103, 111–12, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). Notably, "[a] judgment for damages in any amount, whether compensatory or nominal, modifies the defendant's behavior for the plaintiff's benefit by forcing the defendant to pay an amount of money he otherwise would not pay." Id. at 113, 113 S.Ct. 566.

In this case, Plaintiff accepted Defendants' Rule 68 Offer of Judgment, (Doc. 46-2 at 1), and the Court thereafter entered judgment against Defendants "in the amount of $5,000.00, exclusive of taxable court costs and attorney's fees[,]" (Doc. 48). Accordingly, Plaintiff is the "prevailing party" under the standard set forth in Farrar v. Hobby. Farrar , 506 U.S. at 111–13, 113 S.Ct. 566 ; see also Delta Air Lines, Inc. v. August , 450 U.S. 346, 376, 101 S.Ct. 1146, 67 L.Ed.2d 287 (1981) ("[A] Rule 68 offer of judgment is a proposal which by definition stipulates that the plaintiff shall be treated as the prevailing party[.]"); Rother v. Lupenko , 691 F. App'x 350, 351 (9th Cir. 2017) (affirming district court's award of attorneys' fees to plaintiffs who accepted defendants' Rule 68 Offer of Judgment in FLSA action and noting that it was "undisputed that Plaintiffs were the prevailing party"); Flores v. Fergiss Inc. , No. 3:13-CV-01480-KI, 2014 WL 1123638, at *3 (D. Or. Mar. 20, 2014) (noting that plaintiffs, who accepted defendant's Offer of Judgment under Rule 68 in FLSA action, were prevailing parties for purposes of attorneys' fees and costs); Orozco v. Borenstein , No. CV-11-02305-PHX-FJM, 2013 WL 4543836, at *2 (D. Ariz. Aug. 28, 2013) (determining that plaintiff was the prevailing party where the filing of the FLSA action caused the defendants to pay plaintiff his unpaid wages). As the prevailing party, Plaintiff is entitled to his attorneys' fees in this FLSA action. See Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n , 434 U.S. 412, 415 n.5, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978) (noting that a fee award is "mandatory for prevailing plaintiffs" in actions brought under FLSA).

B. Whether Each Defendant was Plaintiff's "Employer" For Purposes of the FLSA

Section 216(b) of the FLSA states, in relevant part:

Any employer who violates the provisions of section 206 or section 207 of [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.... An action to recover the liability prescribed in the preceding sentences may be maintained against any employer [.]... The 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) (emphasis added). The Ninth Circuit has held that this section allows recovery from an employer who violates the FLSA, explaining that "the word ‘defendant’ is used to describe the party who may be liable for the plaintiff's attorney's fees[,]" and "refers to the employer against whom the charge of violation has been brought." Richardson v. Alaska Airlines, Inc. , 750 F.2d 763, 766 (9th Cir. 1984) (emphasis added). Therefore, Plaintiff may not recover attorney's fees from Defendants unless they were his employers at the time he alleges he was not paid the required minimum wage. See id. (holding that the Age Discrimination in Employment Act, which incorporates the remedial provisions of the FLSA including the attorney's fee provision of 29 U.S.C. § 216(b), does not allow an award of attorney's fees against a non-employer); Rueling v. MOBIT LLC , No. CV-18-00568-PHX-BSB, 2018 WL 6047015, at *4 (D. Ariz. Nov. 19, 2018).

1. The Definition of "Employer" Under the FLSA

The FLSA...