Knox v. John Varvatos Enters. Inc.

520 F.Supp.3d 331

Tessa KNOX, Plaintiff,

v.JOHN VARVATOS ENTERPRISES INC., Defendant.

17 Civ. 772 (GWG)

United States District Court, S.D. New York.

Signed February 17, 2021

William Irvin Dunnegan, Laura Jean Scileppi, Richard Weiss, Dunnegan & Scileppi LLC, New York, NY, for Plaintiff.

Ned Henry Bassen, Amina Hassan, Hughes Hubbard & Reed LLP, Joanne Liu, New York, NY, for Defendant.

OPINION AND ORDER

GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

Plaintiff Tessa Knox, on behalf of a certified class of female salespeople, along with 13 other plaintiffs, brought this action against John Varvatos Enterprises, Inc., alleging that Varvatos's policy of giving a clothing allowance to male salespeople but not female salespeople violates various federal and state equal pay and anti-discrimination laws. After a six-day jury trial, the jury returned a verdict in favor of plaintiffs on all claims. Varvatos moved to set aside the judgment or for a new trial. The Court granted the motion for a new trial on damages but offered plaintiffs a remittitur, Knox v. John Varvatos Enterprises Inc., 512 F. Supp. 3d. 470 (S.D.N.Y. Jan. 12, 2021), which plaintiffs accepted. Plaintiffs now seek attorney's fees of $1,730,304.50 and costs of $14,287.21.¹ They also seek a service payment to Knox of $300,000 from the punitive damages award and an additional award of attorney's fees between $50,000 and $125,000 from the punitive damages award.

For the reasons stated below, plaintiffs are awarded a total of $748,321.21 in statutory attorney's fees and costs to be paid by Varvatos, and an additional $105,880.21 in attorney's fees to be paid from the damages verdict allocated to punitive damages, for a total of $854,201.42. Also, Knox is awarded a service payment of $20,000 from the punitive damages award.

I. PROCEDURAL BACKGROUND

Plaintiffs filed this action on February 1, 2017. (Docket # 1). After discovery and motion practice, including the granting of a motion for class certification, both parties moved for summary judgment (Docket ## 177, 185), which the Court denied (Docket # 219). A six-day trial was held between February 24, 2020, and March 2, 2020. On February 28, 2020, the jury delivered a verdict in favor of plaintiffs on all claims and awarded all the compensatory damages sought by plaintiffs (Docket # 334). Several days later, the jury awarded punitive damages under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII"), see 42 U.S.C. § 1981a(b)(1), to plaintiffs eligible for such an award (Docket # 335). The awards of compensatory and punitive damages were made on a per-plaintiff basis, calculated based on the amount of time each plaintiff worked at Varvatos. On March 23, 2020, a judgment was entered on the jury verdict awarding plaintiffs a total of $3,516,051.23 in compensatory and punitive damages (Docket # 361).

Defendant then moved for judgment as a matter of law, a new trial, or remittitur. (Docket # 374). In the meantime, Varvatos declared bankruptcy (Docket # 390), though the bankruptcy court later lifted the automatic stay as to this case (Docket # 391). This Court denied the motion for a judgment as a matter of law but ordered a new trial on compensatory and punitive damages, unless plaintiffs accepted a remittitur of 50% of the total damage award. See Knox v. John Varvatos Enterprises Inc., 512 F. Supp. 3d. 470 (S.D.N.Y. Jan. 12, 2021). Plaintiffs accepted the remittitur and an amended judgment of $1,758,025.61 was entered. (Docket ## 399, 403).

Plaintiffs filed the instant motion for attorney's fees and costs as well as the service payment. The motion was served on the plaintiff class. (Docket # 371). Varvatos contests the motion for statutory attorney fees and takes no position on the request for the service payment and the request for the extra attorney fee to be taken from the punitive damages award.

II. LEGAL STANDARD

Plaintiffs seek attorney's fees and costs, pursuant to the federal Equal Pay Act ("federal EPA"), the New York Equal Pay Act ("NY EPA"), Title VII, and the New York Human Rights Law ("NYHRL"). A prevailing plaintiff in a federal EPA action is statutorily entitled to "a reasonable attorney's fee to be paid by the defendant, and costs of the action." 29 U.S.C. § 216(b). The NY EPA similarly mandates such an award. See N.Y. Lab. Law § 198(1-a) ("In any action instituted in the courts upon a wage claim by an employee ... in which the employee prevails, the court shall allow such employee to recover ... all reasonable attorney's fees[.]"). The Supreme Court has held that under Title VII's fee-shifting provision, 42 U.S.C. § 1988, "a prevailing plaintiff ordinarily is to be awarded attorney's fees in all but special circumstances." Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412, 417, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978). Similarly, the NYHRL allows the Court to "award reasonable attorney's fees attributable to such claim to any prevailing party[.]" N.Y. Exec. Law § 297(10). Varvatos does not challenge plaintiffs’ status as the prevailing party or claim that special circumstances exist. Instead, Varvatos objects that the fees sought "do not meet the reasonableness standard in the Second Circuit." Opp. Mem. at 1.

Under Second Circuit case law, the "most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) ). This calculation yields a "presumptively reasonable fee," id. at 183, and is commonly referred to as the "lodestar," id. The lodestar figure "includes most, if not all, of the relevant factors constituting a reasonable attorney's fee," Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010) (citation and quotation marks omitted).

III. DISCUSSION

Varvatos challenges both the reasonableness of the rates and the reasonableness of the hours billed by plaintiffs’ counsel. Before addressing those issues, we address Varvatos's argument that the requested fees should be reduced based on the plaintiffs’ allegedly reduced "degree of success."

A. Degree of Success

Now that the plaintiffs have accepted the proposed remittitur and the jury verdict has been reduced by half, Varvatos argues that this outcome reflects on the plaintiffs’ "degree of success." See Jan. 27 Let. at 2. Varvatos points to case law holding that "the most critical factor in determining the reasonableness of a fee award is the degree of success obtained," Fisher v. SD Prot. Inc., 948 F.3d 593, 606-07 (2d Cir. 2020), and argues that because of the 50% reduction in damages, plaintiffs’ success at trial was correspondingly reduced, and thus "the attorney's fees awarded must also be reduced." Jan. 27 Let. at 2. It further argues that because plaintiffs’ requested fees "almost equal the amount of damages awarded" following the reduction, this fact alone renders the requested fees excessive. Id.

The Court rejects both arguments. First, the plaintiffs achieved exactly what they set out to achieve. While Varvatos prevailed in its efforts to reduce the amount of damages recovered, plaintiffs are still left with the largest possible compensatory award they could have achieved. And even though the punitive damages award was reduced, it is still a significant amount. These results do not reflect a lack of success. Rather, they reflect astounding success. That plaintiffs’ damages were reduced to comply with the amount that could legally be awarded to them does not alter the fact that plaintiffs completely succeeded on every claim brought against Varvatos. Thus, no reduction for lack of success is warranted. Because plaintiffs have "obtained excellent results" — indeed, the best possible results they could have obtained — their "attorney should recover a fully compensatory fee." Hensley, 461 U.S. at 435, 103 S.Ct. 1933.

Varvatos also points out that, because the verdict has been reduced, the fees plaintiffs seek are about the same amount as the verdict rather than half that amount, as had been true before the remittitur. See Jan. 27 Let. at 2. This appears to be an argument that the requested fee award is excessive because it is disproportionate to the verdict. Any such argument, however, is foreclosed by Second Circuit precedent rejecting "the notion that a fee may be reduced merely because the fee would be disproportionate to the financial interest at stake in the litigation." Kassim v. City of Schenectady, 415 F.3d 246, 252 (2d Cir. 2005) (citation omitted). Thus, "attorneys’ fee awards well in excess of the amount recovered by plaintiffs are routinely permitted." Douglas v. Anthem Productions, LLC, 2020 WL 2631496, at *7 (S.D.N.Y. May 26, 2020) (citation omitted); accord Reiter v. Metro. Transp. Auth. of New York, 2004 WL 2072369, at *1 (S.D.N.Y. Sept. 10, 2004) ("Because there is no rule that limits attorney's fees to a proportion of the damages ultimately awarded, the fee award may exceed the amount of damages.") (citation omitted). And a review of case law reveals that awards of attorney's fees in excess of damages are common. See, e.g., Hui Luo v. L & S Acupuncture, P.C., 649 Fed. App'x 1, 3 (2d Cir. 2016) (affirming attorneys’ fees award of $64,038 where plaintiff recovered $4,130.75 under the Fair Labor Standards Act ("FLSA")); Boutros v. JTC Painting & Decorating Corp., 2014 WL 3925281, at *8 (S.D.N.Y. Aug. 8, 2014) (awarding $82,531.25 in attorneys’ fees in FLSA action where two plaintiffs collectively settled for $66,000); Bridges v. Eastman Kodak Co., 102 F.3d 56, 57-58, 60 (2d Cir. 1996) (upholding a fee award of $753,202.99 in a Title VII case where $117,429.27 in damages was recovered).

B. Reasonable Hourly Rates

In determining whether the...