{"id":626,"date":"2023-07-03T21:35:07","date_gmt":"2023-07-04T01:35:07","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=626"},"modified":"2023-07-03T21:35:07","modified_gmt":"2023-07-04T01:35:07","slug":"in-a-stark-bench-slap-the-eighth-circuit-affirms-an-attorneys-fee-award-of-500-for-flsa-collective-action-settlement","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2023\/07\/03\/in-a-stark-bench-slap-the-eighth-circuit-affirms-an-attorneys-fee-award-of-500-for-flsa-collective-action-settlement\/","title":{"rendered":"In A Stark Bench-Slap, The Eighth Circuit Affirms An Attorneys\u2019 Fee Award Of $500 For FLSA Collective Action Settlement"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr., Emilee N. Crowther, and George J. Schaller<\/b><\/p>\n

Duane Morris Takeaways<\/i>: <\/i><\/b>In Vines et al. v. Welspun Pipes, Inc., et al.., No. 21-3537, 2023 U.S. App. LEXIS 16425 (8th Cir. June 29, 2023), the Eighth Circuit affirmed \u00a0<\/a>a district court\u2019s ruling in approving a settlement of an underlying class and collective action that reduced an attorneys\u2019 fee award to $500. The Eight Circuit determined that the district court did not abuse its discretion when it reduced the fee award on the basis that plaintiffs were not a \u201cprevailing party\u201d on appeal. \u00a0<\/i><\/p>\n

For employers facing wage & claims under the Fair Labor Standards Act and state law related wage-claims, this decision is instructive in terms of what reviewing courts will consider for attorney\u2019s fee awards, particularly where \u00a0a party\u2019s conduct may be considered unprofessional and\/or abusive.<\/i><\/p>\n

Case Background<\/b><\/p>\n

In the underlying case, Vines I, <\/i>Anthony Vines and Dominique Lewis (collectively \u201cPlaintiffs\u201d) brought a class and collective action against Defendants, Welspun Pipes Inc., Welspun Tubular LLC, and Welspun USA, Inc. (collectively \u201cWelspun\u201d or \u201cDefendants\u201d), under the Fair Labor Standards Act (\u201cFLSA\u201d) and the Arkansas Minimum Wage Act (AMWA). \u00a0Id. <\/i>at 1-2.\u00a0 Ultimately, the district court approved a settlement of the case. Id. <\/i>at 2.<\/p>\n

After approval of the settlement, Plaintiffs\u2019 counsel moved for an award of attorneys\u2019 fees and costs. Id.<\/i> Plaintiffs sought $96,000 in attorneys\u2019 fees following the $270,000 settlement deal. The district court rejected the request. It found significant that Plaintiffs\u2019 law firm assigned 17 lawyers, plus staffers, to watch the district court deemed a “run-of-the-mill” FLSA case, saying such cases were not intended to be “conduits for funneling unearned fees into lawyers’ pockets.” Id. As a result, the<\/span> district court partially granted the motion, awarding $1.00 in fees to the plaintiffs because of the billing practices of their law firm, Sanford Law Firm, PLLC (\u201cSLF\u201d).\u00a0 Id. <\/i>\u00a0Alternatively, the district court noted that it would award $25,000 in fees if $1.00 was improper. Id.<\/i>\u00a0 Plaintiffs\u2019 appealed the district court\u2019s decision.<\/p>\n

On appeal,\u00a0<\/i>the Eighth Circuit \u201cvacated the award of attorneys\u2019 fees,\u201d \u201c[b]ecause the record contained no lodestar calculation.\u201d Id.<\/i>\u00a0 The Eighth Circuit remanded the case for the \u201clodestar calculation\u201d and expressly noted the district court had discretion \u201cto consider. . . the party\u2019s unprofessional conduct in the case,\u201d for purposes of reducing any award of attorneys\u2019 fee. \u00a0Id. <\/i>at 2.<\/p>\n

On remand, the district court calculated a lodestar of $14,056.50. \u00a0Id.\u00a0 <\/i>However, relative to the award of attorneys\u2019 fees, \u00a0the district reduced the award to $500 \u201cbased on the SLF\u2019s egregious conduct.\u201d \u00a0Id.\u00a0 <\/i>The district court opined that the reduction was proper for \u201ca multitude of reasons\u201d including \u201cSLF\u2019s rejection of a \u2018substantial settlement offer,\u2019 \u2018an unearned fee demand,\u2019 and \u2018deterrence for [SLF\u2019s] unprofessional conduct.\u2019\u201d \u00a0Id. <\/i><\/p>\n

In response, Plaintiffs\u2019 moved to amend the judgment and for leave to file a supplemental petition for costs and fees. Id.\u00a0 <\/i>The district court denied Plaintiffs motion on the grounds that \u201c[Plaintiffs] were not a prevailing party on appeal \u2018because there [had] been no definitive ruling on the fees award and all<\/i> [p]laintiffs\u2019 other claims for relief were unequivocally rejected by the Eighth Circuit.\u201d Id. <\/i>at 3.<\/p>\n

Plaintiffs appealed the attorneys\u2019 fees award a second time. Id.<\/i> \u00a0In addition, the Plaintiffs\u2019 counsel argued the district court\u2019s decision was erroneous for: (i) \u201caward[ing] a fee amount \u2026 not based on the lodestar calculation\u201d; (ii) \u201cus[ing] the FLSA\u2019s statutory fee award as a vehicle for sanctions\u201d; (iii) \u201cfail[ing] to provide [them] with notice and an opportunity to respond prior to entering sanctions\u201d; and (iv) \u201cf[inding] that [they] were not prevailing parties and refus[ing] to award any fees related to the appeal.\u201d\u00a0 Id.<\/i><\/p>\n

The Eighth Circuit\u2019s Decision<\/b><\/p>\n

The Eighth Circuit affirmed the judgment of the district court in the second appeal. It found no abuse of discretion in the district court\u2019s award of $500.00 in attorneys\u2019 fees. \u00a0Id.\u00a0 <\/i>The Eighth Circuit held that the district court complied with its directive on calculating the award of attorneys\u2019 fees and lodestar reduction by \u201cprovid[ing] ample justification\u201d based on \u201cSLF\u2019s unprofessional conduct.\u201d\u00a0 Id.\u00a0 <\/i>The Eighth Circuit reasoned that \u201c[t]he trial court knows the case best. It knows what the lawyers have done, and how well they have done it. It knows what these efforts are worth.\u201d Id. <\/i><\/p>\n

The Eighth Circuit also rejected Plaintiffs\u2019 argument that the district court erred in determining Plaintiffs \u201c[were] not prevailing parties.\u201d\u00a0 Id.<\/i>\u00a0 The Eighth Circuit acknowledged the FLSA \u201callow[s] a reasonable attorney\u2019s fee to be paid by the defendant, and costs of the action,\u201d in addition to any judgment to the plaintiff. \u00a0Id.<\/i> at 4.\u00a0 But, \u201c[i]n general, if a plaintiff prevails in the district court, but then seeks and fails to obtain greater relief on appeal, he or she \u2018will be hard pressed to demonstrate an entitlement to . . . attorney\u2019s fees on appeal.\u2019\u201d \u00a0Id.<\/i><\/p>\n

The Eighth Circuit held that Plaintiffs \u201cdid not obtain the \u2018greater relief on appeal\u2019 that they sought in Vines I <\/i>and therefore were not prevailing parties.\u00a0 It rejected Plaintiffs\u2019 argument \u201cthat the district court erred in denying the March 2020 motion for approval of settlement.\u201d \u00a0Id.\u00a0 <\/i>Second, it also rejected Plaintiffs\u2019 request to \u201creassign the case to a new district judge on remand.\u201d \u00a0Id.<\/i><\/p>\n

For these reason, the Eighth Circuit affirmed the judgment of the district court.<\/p>\n

Implications For Employers<\/b><\/p>\n

The ruling of the Eighth Circuit is well worth a read by employers who are often confronted with settlement demands where counsel for employees seek hefty awards of attorneys\u2019 fees far in excess of the value of their clients\u2019 unpaid overtime.<\/p>\n

Employers that are confronted with appeals of attorney\u2019s fee awards, should take note that the Eighth Circuit in Vines<\/i> relied heavily on the district court\u2019s recitations of the procedural facts for its decision. \u00a0Further, from a practical standpoint, employers should carefully evaluate attorney\u2019s actions for misconduct during wage & hour settlements when an attorney\u2019s fee award is requested.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Emilee N. Crowther, and George J. Schaller Duane Morris Takeaways: In Vines et al. v. Welspun Pipes, Inc., et al.., No. 21-3537, 2023 U.S. App. LEXIS 16425 (8th Cir. June 29, 2023), the Eighth Circuit affirmed \u00a0a district court\u2019s ruling in approving a settlement of an underlying class and collective … <\/p>\n

Continue reading “In A Stark Bench-Slap, The Eighth Circuit Affirms An Attorneys\u2019 Fee Award Of $500 For FLSA Collective Action Settlement”<\/span><\/a><\/p>\n","protected":false},"author":583,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[30],"class_list":["post-626","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":30,"user_id":583,"is_guest":0,"slug":"classactiondefense","display_name":"Class Action Defense","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2020\/10\/dmlogo.jpg","author_category":"","last_name":"Defense","first_name":"Class Action","job_title":"","user_url":"","description":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/583"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=626"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/626\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=626"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}