Johnson v. Helion Techs.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, UNITED STATES DISTRICT JUDGE

Pending and ready for resolution in this Fair Labor Standards Act case are the motions of both parties for attorneys' fees and costs. (ECF Nos. 159, 160, 183, 184). The issues have been briefed, and the court now rules, no hearing being necessary. Local Rule 105.6. For the following reasons, each party's motion will be granted in part and denied in part.

I. Background^[1]

Former Plaintiffs Tyler Johnson and James Phelan filed this lawsuit on October 23, 2018, on behalf of themselves and others similarly situated, alleging that Defendant Helion Technologies, Inc. (“Helion”) failed to pay them overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”), the Maryland Wage and Hour Law, Md. Code Ann., Lab. & Empl. §§ 3-401 et seq. (“MWHL”), and the Maryland Wage Payment and

Collection Law, Md. Code Ann., Lab. & Empl. §§ 3-501, et seq. (“MWPCL”). (ECF No. 1). They sought unpaid wages, liquidated damages, treble damages, interest, attorneys' fees, and costs. Plaintiffs William Toomey, Joseph McCloud, and Milton Turnerhill joined the lawsuit on November 8, 2018, October 29, 2019, and December 3, 2019, respectively.^[2] (ECF Nos. 5, 56, 59). Other Plaintiffs joined, but many of them, along with the two original Plaintiffs, were dismissed before trial for various reasons. (ECF Nos. 36, 54, 76, 77, 107, 139).

The Plaintiffs then in the case filed a motion for conditional certification of the FLSA collective on December 21, 2018, and over Defendant's opposition, the motion was granted on September 17, 2019. (ECF Nos. 11, 21, 49). The parties' conditional certification notification plan was approved, and Plaintiffs' counsel administered the mailing of the notices and opt-in forms to the potential members of the collective. (ECF Nos. 51, 52, 159-4 at 3).

Meanwhile, on December 6, 2018, Defendant filed a lawsuit in state court against Plaintiff Toomey, alleging that he had breached his employment contract. Plaintiff Toomey, represented by the same counsel as in the present case, filed a counterclaim against

Defendant for retaliation under the FLSA and removed the action to federal court on January 4, 2019. See Helion Tech., Inc. v. Toomey, No. 19-CV-0037-DKC, ECF Nos. 1, 6. Defendant later filed an amended answer in the present case to assert its claim as a counterclaim in the original lawsuit, (ECF Nos. 41), and the other lawsuit was dismissed without prejudice on December 23, 2019. The complaint in the present case was eventually amended to add Plaintiff Toomey's counterclaim for retaliation. (ECF No. 88).

Also in late 2018, Defendant extended Plaintiff Toomey an Offer of Judgment, pursuant to Federal Rule of Civil Procedure 68. The offer, made on December 14, 2018, stated the following:

Defendant Helion Technologies, Inc.... pursuant to the Federal Rules of Civil Procedure and the Local Rules of this Court, hereby submits this Offer of Judgment to Plaintiff William Toomey and offers to allow judgment to be entered against Defendant, and in favor of Plaintiff Toomey, in the total amount of $11,305.00, exclusive of attorneys fees and costs[.]

(ECF No. 160-1). Plaintiff Toomey rejected the offer on December 27, 2018. (ECF No. 160-2). Other former Plaintiffs received separate offers and accepted them.

The parties engaged in discovery, during which eight total witnesses were deposed, and Defendant produced over 17,000 documents. (ECF No. 159-4 at 5). In July 2020, the remaining Plaintiffs moved for voluntary dismissal of eight Plaintiffs, which was granted; by the time the parties filed their summary

judgment motions, only four Plaintiffs remained in the case. (ECF No. 76, 77, 81, 89-1 at 4). Defendant moved for summary judgment in its favor as to the remaining Plaintiffs' claims, and the remaining Plaintiffs moved for summary judgment in their favor as to Defendant's counterclaim against Plaintiff Toomey and as to Plaintiff Toomey's retaliation claim against Defendant. (ECF Nos. 89, 92). While the motions were pending, Defendant filed a motion for leave to conduct additional discovery, which the remaining Plaintiffs opposed. (ECF Nos. 99, 100). On August 27, 2021, the court denied Defendant's motion for additional discovery, denied Defendant's motion for summary judgment,^[3] and granted the remaining Plaintiffs' motion for summary judgment. (ECF No. 106). Judgment was entered in favor of Plaintiff Toomey and against Defendant on Defendant's counterclaim in full and as to liability on the retaliation claim, with damages for the latter left for adjudication at trial. (ECF No. 107). Defendant filed a motion for reconsideration of that determination, which the remaining Plaintiffs opposed, and the court denied the motion on October 12, 2021. (ECF Nos. 109, 110, 112).

A jury trial was set to begin on March 21, 2022, with the four remaining Plaintiffs: William Toomey, Milton Turnerhill,

Joseph McCloud, and Wayne Carroll. (ECF No. 114). Plaintiff Toomey sought relief under the MWHL and the MWPCL, in addition to the FLSA; the others sought relief only under the FLSA. (ECF No. 120). Both parties filed motions in limine. The trial lasted approximately one week, and the jury rendered a verdict on March 28, 2022. (ECF Nos. 142-148). The jury found in favor of Plaintiffs Toomey, Turnerhill, and McCloud and against Plaintiff Carroll, finding that Plaintiff Carroll's position was exempt from the relevant FLSA provision under the “Computer Employee exception,” while the others' positions were not. (ECF No. 156). The jury awarded $1,420 to Plaintiff McCloud, $4,044.50 to Plaintiff Turnerhill, and $10,819 to Plaintiff Toomey in unpaid overtime wages.^[4] The jury found that Defendant had not willfully violated the FLSA or acted in bad faith, thus precluding an award of treble damages to Plaintiff Toomey under the MWPCL. See Md.Code Ann., Lab. & Empl. § 3-507.2(b).

Following the verdict, the court awarded Plaintiff Toomey nominal damages of $1.00 on his retaliation claim, having found during trial that he had not produced sufficient evidence of actual emotional distress damages. (ECF No. 149 at 1). The issue of whether Plaintiffs were entitled to liquidated damages under the

FLSA in an amount equal to their unpaid wages was tried to the court rather than the jury, and the court declined to award any liquidated damages, based on a finding that Defendant had acted in good faith. (ECF No. 149 at 2-3). In total, Plaintiffs were awarded $16,284.50.

On April 11, 2022, Plaintiffs filed a motion for attorneys' fees and costs. (ECF No. 159). Defendant filed its own motion for attorneys' fees and costs, as to the claims of Plaintiff Toomey, on April 12, 2022. (ECF No. 160). On April 26, 2022, Defendant filed a motion to alter or amend judgment, which Plaintiffs opposed. (ECF Nos. 163, 164). The motion was denied on August 2, 2022. (ECF No. 174). Defendant filed a notice of appeal on September 1, 2022. (ECF No. 176). After an unsuccessful court-ordered mediation, Defendant voluntarily dismissed the appeal. The United States Court of Appeals for the Fourth Circuit issued a mandate dismissing the appeal on October 18, 2022. (ECF No. 179). The parties filed supplements to their original motions for attorneys' fees and costs on November 9, 2022. (ECF Nos. 183, 184). They also filed responses to each other's motions and replies. (ECF Nos. 185, 189, 190, 191).

II. Defendant's Motion

Defendant has moved for an award of attorneys' fees and costs for the work done by its attorneys and costs expended on the claims by Plaintiff Toomey after he rejected the offer of judgment.

(ECF Nos. 160, 184). Defendant argues that, because it made an offer of judgment for an amount that was greater than the amount Plaintiff Toomey was ultimately awarded at trial, it is entitled, pursuant to Federal Rule of Civil Procedure 68, to recoup its attorney's fees and costs incurred after the offer was made.

Rule 68 provides that a defendant may, at least 14 days before trial, “serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued.” If the offeree does not accept and “the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” These “costs” include both the offeree's costs and the offeror's. See Said v. Va. Commonwealth Univ./Med. Coll. of Va., 130 F.R.D. 60, 63 (E.D.Va. 1990); see also Steven S. Gensler & Lumen N. Mulligan, 2 Federal Rules of Civil Procedure, Rules and Commentary Rule 68 (Feb. 2023) (“If the plaintiff rejects the offer and then wins the case, but the ultimate judgment fails to beat the offer, then . . . the plaintiff does not receive its post-offer costs and must pay the defendant's post-offer costs.”). In this case, the offer was for $11,305, and Plaintiff Toomey was only awarded $10,820 at trial.

Plaintiffs argue that Defendant is not entitled to attorney's fees and costs based on the unaccepted offer of judgment for a few reasons: (1) the offer was not a valid Rule 68 offer and (2) even

if the offer were valid, Defendant would only be entitled to costs and not attorney's fees. (ECF No. 185). Each argument will be addressed in turn.^[5]

A. Validity of the Offer

Plaintiffs argue that the offer was not a valid Rule 68 offer of judgment because (1) it “was not an attempt to settle the ‘dispute' between the parties when there was an outstanding Breach of Contract claim against Plaintiff [Toomey] in a related matter” and (2) the offer was “exclusive of attorneys['] fees and costs.”^[6](ECF Nos. 185 at 6, 190 at 2).

Plaintiffs cite no authority for their first...