Guillen v. Armour Home Improvement, Inc.

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JESUS NEHEMIAS MONTANO GUILLEN, Plaintiff, v. ARMOUR HOME IMPROVEMENT, INC., et al., Defendants.

Civ. No. DLB-19-2317

United States District Court, D. Maryland

August 20, 2024

MEMORANDUM OPINION

Deborah L. Boardman United States District Judge

The prevailing party in a Fair Labor Standards Act case is entitled to reasonable attorneys' fees and costs. Jesus Nehemias Montano Guillen is the prevailing party. His lawyers, Melehy & Associates, secured a modest win for him, then requested an unconscionable fee on indefensible grounds. So the Court awarded only a reasonable fraction of the unreasonable fee sought. Now, Melehy & Associates moves for reconsideration, urging the Court to award the firm even more. The Court denies the motion.

I. Background

To begin, the Court outlines the law governing fee petitions generally. Then the Court provides background on this case and the fee award at issue.

A. Fee Petitions Generally

If a plaintiff prevails on a Fair Labor Standards Act (“FLSA”) claim, “[t]he court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorneys' fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). The plaintiff is the prevailing party if they have succeeded “on any significant issue in litigation which achieves some of the benefit . . . sought in bringing suit.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). There is no dispute that Guillen prevailed here.

The amount to award is committed to the district court's “sound discretion.” Burnley v. Short, 730 F.2d 136, 141 (4th Cir. 1984). The calculation is a three-step process. McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013). First, the Court must determine the lodestar amount, which is a “reasonable hourly rate multiplied by hours reasonably expended.” Grissom v. The Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). In assessing reasonableness, the Court must consider the 12 factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974):

(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorneys' opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorneys' expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.

Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir. 1978) (adopting Johnson factors). Second, “the Court must ‘subtract fees for hours spent on unsuccessful claims unrelated to successful ones.'” McAfee, 738 F.3d at 88 (quoting Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 244 (4th Cir. 2009)). And third, “the court should award ‘some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff.'” Id. (quoting Robinson, 560 F.3d at 244). The plaintiff “bears the burden of demonstrating that the requested fees are reasonable.” Jones v. Dancel, 792 F.3d 395, 404 (4th Cir. 2015) (citing Fair Hous. Council v. Landow, 999 F.2d 92, 97-98 (4th Cir. 1993)).

A prevailing plaintiff is entitled to recover costs as well, but “only for reasonable litigation expenses.” Id. (quoting Daly v. Hill, 790 F.2d 1071, 1084 (4th Cir. 1986)).

As the Supreme Court has warned, “determination of fees should not result in a second major litigation.” Fox v. Vice, 563 U.S. 826, 838 (2011) (quotation omitted). To that end, district courts “need not, and indeed should not, become green-eyeshade accountants.” Id. Instead, they may “take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorneys' time.” Id. The goal: “rough justice.” Id.

B. Guillen's Fee Award

Jesus Nehemias Montano Guillen filed suit against Armour Home Improvement, Inc., Armour Construction LLC, Robert Stouffer, and Christina Stouffer for violations of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq.; the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. §§ 3-401 et seq.; and the Maryland Wage Payment and Collection Law, Md. Code Ann., Lab. & Empl. §§ 3-501 et seq. ECF 1 & 33. After a four-day bench trial, the Court found Christina Stouffer not liable because she was not Guillen's employer but found the other defendants liable for $8,777.02 plus reasonable attorneys' fees and costs. ECF 107, at 1.^[1]

Guillen's attorneys at Melehy & Associates, LLC (“M&A”) petitioned for fees and costs that were utterly unreasonable: $233,861.04 in fees and $32,082.87 in costs, for a total of $265,943.91. ECF 134-1, at 1. The firm charged for non-compensable work. It overstaffed and overbilled. It billed based on verifiably inaccurate claims. And this was not the first time M&A had overbilled in these ways and been called out for doing so. So the Court granted the motion in part and denied it in part, awarding reasonable fees and costs: $31,039.44. ECF 137 (opinion) & 138 (order).

The Court calculated M&A's fee award in three steps. First, the Court computed the lodestar fee. To identify the lodestar, the Court identified the reasonable rates for M&A's timekeepers, deducting 10 percent from the lodestar fee sought to approximate the appropriate reduction to the rates; identified the reasonable number of hours expended in each category, reducing the award in each category where and to the extent those hours were excessive; and reduced the resulting total by 75 percent (50 percent for poor billing judgment and then 25 percent for the persistence of poor billing judgment in the face of prior warnings from other courts). That yielded a lodestar fee of $43,406.51. Second, the Court considered whether to reduce the lodestar to eliminate hours expended on any completely unsuccessful claim. There was none, so the Court did not modify the lodestar on this basis. Third, the Court reduced the lodestar by 50 percent to account for the degree of success. That yielded the final fee award: $21,703.26.

The Court's deductions for persistently poor billing judgment bear elaboration here. Billing judgment requires billing accurately, with supporting documentation, for compensable tasks only. M&A did not exercise reasonable billing judgment. The Court provided several illustrative (but far from exhaustive) examples of M&A's failure to exercise billing judgment:

• Double billing: M&A billed $2,817.50 for one 4.9-hour trial preparation meeting between Ms. Melehy and Guillen on February 10, 2023. ECF 134-1, at 35. Then M&A billed the same amount for a meeting of the same length between the same people on the same day. Id. at 36. As M&A emphasized elsewhere, “The Plaintiff only speaks Spanish. Therefore, he needed an interpreter for all meetings and verbal communications with counsel.” ECF 114-1, at 16. But M&A only billed for one 4.9-hour session of interpretation that day- another $882.00. ECF 134-1, at 46. What happened was clear: Ms. Melehy met with Guillen once but billed twice.

• Implausible billing: M&A billed for 23.7 hours of Ms. Melehy's time in a single day: 4.3 hours in this case and 19.4 hours in a different case. See ECF 114-2, at 29; ECF 127-12, at 2-3. Pressed to account for that extraordinarily implausible claim, M&A retracted it. ECF 131, at 17. On M&A's subsequent account, a paralegal performed the 4.3 hours of work attributed to Ms. Melehy in this case on that day. Id. at 17-18. Who, specifically? M&A said it did not know. ECF 131-6, at 1-2.

• Impossible billing: M&A billed for more hours attending trial than there were hours of trial to attend, for three out of four days of the trial. M&A claimed its timekeepers attended trial for 29.5 hours: 7.5 hours on the first three days and 7 hours on the fourth. ECF 134-1, at 38. The minute entries told a shorter story. True, the first day of trial ran 7.5 hours. ECF 94. But the second was only 7 hours. ECF 95. The third dropped to 6 hours. ECF 96. And the fourth was not even 4.75 hours long. ECF 98. At best, these discrepancies revealed that counsel were reckless in failing to confirm their figures. At worst, these discrepancies suggested that counsel intentionally misrepresented how much time they spent in court in the hope of securing a bigger payout. Either way, M&A's billed hours for trial attendance were unreasonable because they were verifiably inaccurate.

• Non-compensable work: “Clerical work is not billable to an adversary.” Castillo Pacheco v. Mezeh-St. Mary's LLC, No. TDC-21-2521, 2023 WL 5411071, at *4 (D. Md. Aug. 22, 2023) (citing Ramirez v. 316 Charles, LLC, No. SAG-19-3252, 2021 WL 662185, at *3 (D. Md. Feb. 19, 2021)). Nevertheless, M&A billed the defendants for clerical work in virtually every category. To cite just one example of non-compensable clerical work M&A billed at paralegal or attorney rates: M&A billed for at least 60 hours of making binders- over $12,000 in binder bills-and refused to retract that request after the defendants rightly challenged it.

Implausible, inaccurate, and inappropriate billing entries like these compelled the Court to find that M&A had not exercised reasonable billing judgment.

But the Court did not have to rely on inferences alone to find that M&A had not exercised reasonable billing judgment. M&A said so. Under pressure from the defendants, M&A confessed to three of the errors in its fee petition: billing nearly 24 hours of Ms. Melehy's...