Oscar Perez v. Carey International, Inc.

FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
APRIL 9, 2010
JOHN LEY
CLERK
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 08-16115
________________________
D. C. Docket No. 06-22225-CV-PAS
OSCAR PEREZ,
FRANCISCO RENGIFO,
JOHN HUMPHREYS,
JUAN ALBA,
WILHELM PERIERA,
ED MAZZEO,
Plaintiffs-Counter-
Defendants-Appellants,
MIOMIR MAKSIMCEV,
GEORGE POWELL,
Plaintiffs-Appellants,
DIMITRE KARABOYTCHEV, et al.,
Plaintiffs,
LAW FIRM OF GLASSER, BORETH & KLEPPIN, P.A.,
Interested Party-Appellant,
versus

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CAREY INTERNATIONAL, INC.,
a Delaware corporation qualified to
do business in the State of Florida,
CAREY LIMOUSINE FLORIDA, INC.,
a Delaware corporation qualified to
do business in Florida,
Defendants-Counter-
Claimants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(April 9, 2010)
Before O’CONNOR, Associate Justice Retired, CARNES and ANDERSON,*
Circuit Judges.
PER CURIAM:
This appeal is about attorney’s fees and costs in a retaliation lawsuit brought
under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. A court-appointed
special master helped the parties settle the lawsuit, and the parties agreed to have
him consider the plaintiffs’ motion for attorney’s fees and costs as if he were a
magistrate judge. Plaintiffs’ counsel requested $204,525 in fees. The special
master issued a report and recommendation that the plaintiffs’ attorneys should be
Honorable Sandra Day O’Connor, Associate Justice (Retired) of the United States*
Supreme Court, sitting by designation.
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awarded a total of $94,080 in fees and $9,342.43 in costs. Those amounts reflected
a reduction in the compensable hours and the hourly rates of the lawyers and a
reduction in the amount of costs requested.
While the special master’s report was being considered by the district court,
plaintiffs’ counsel moved to put into the record a transcript of a session that the
parties had with the special master on August 21, 2007. The district court denied
that motion after finding that the transcript was a record of confidential settlement
negotiations.
The district court adopted the special master’s report and recommendation in
its entirety, except that the court lowered the recommended amount of attorney’s
fees by $2,397.50. Eight of the plaintiffs and the law firm of Glasser, Boreth &
Kleppin, P.A. have appealed the district court’s fees and costs judgment.
I.
“We . . . review the district court’s award of attorneys’ fees and costs for
abuse of discretion, revisiting questions of law de novo and reviewing subsidiary
findings of fact for clear error.” Atlanta J. & Const. v. City of Atlanta Dep’t of
Aviation, 442 F.3d 1283, 1287 (11th Cir. 2006). “In reviewing the district court’s
hourly rate determination, an appellate court must be mindful that, although an
attorney fees award is reviewed for abuse of discretion, the determination of what
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constitutes a reasonabl[e] hourly rate is a finding of fact subsidiary to the total
award and is therefore reviewed under the clearly erroneous standard.” ACLU of
Ga. v. Barnes, 168 F.3d 423, 436 (11th Cir. 1999) (quotation marks and alteration
omitted).
II.
The plaintiffs contend that the district court abused its discretion by finding
that attorney Harry O. Boreth was not entitled to any fees. They also contend that
the court should not have reduced Chris Kleppin’s and Lloyd Glasser’s hourly
rates and the number of hours that they claimed. The plaintiffs also challenge the
district court’s refusal to tax as costs the special master’s fees and the costs
associated with two depositions taken by plaintiffs’ counsel. Finally, they contend
that the district court abused its discretion by finding that the transcript of the
parties’ session with the special master on Aug. 21, 2007, was an inadmissible
record of confidential settlement negotiations. We will address each of those1
contentions in turn.
A.
The plaintiffs sought $17,820 in fees for 39.6 hours of work done by
We reject the plaintiffs’ argument that the special master erred by failing to hold a fee1
hearing. When determining reasonable attorney’s fees, “[o]ccasionally, evidentiary hearings are
necessary.” Norman v. Hous. Auth. of Montgomery, 836 F.2d 1292, 1303 (11th Cir. 1988). Not
always, but only occasionally. See id. This was not one of those occasions.
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attorney Boreth at an hourly rate of $450. The district court awarded nothing.
Conducting a lodestar analysis, the court found that all of Boreth’s time
“duplicate[d] the work performed by Attorneys Kleppin and Glasser,” which led it
to conclude that none of Boreth’s time was reasonably expended on the litigation.
(R.4-146 at 3.) The court reinforced that conclusion with its finding that the
quality of Kleppin’s work did not reflect guidance from a senior attorney. (See id.)
The plaintiffs assert that district court should have counted Boreth’s work on
the following tasks: (1) reviewing and signing the scheduling report; (2) reviewing
the scheduling order and ensuring that the dates were properly calendared and
scheduled; (3) drafting proposed settlement agreements and an ADEA addendum;
(4) working all day at mediation on July 27 with law partners Glasser and Kleppin.
The plaintiffs argue that Boreth’s presence was required at the mediation because
there were many clients who had different demands, offers, and responses to
offers. They assert that the district court erred by concluding that none of Boreth’s
time was compensable. Their position is that because they were the prevailing
party in the litigation, and Boreth was one of their attorneys, they should be
awarded a lodestar amount of fees for his legal work on their behalf.
The lodestar is calculated using “‘the number of hours reasonably expended
on the litigation multiplied by a reasonable hourly rate.’” Kenny A. ex rel. Winn v.
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Perdue, 532 F.3d 1209, 1219 (11th Cir. 2008) (quoting Hensley v. Eckerhart, 461
U.S. 424, 433, 103 S. Ct. 1933, 1939 (1983)), cert. granted, 129 S. Ct. 1907
(2009). The lodestar is “‘the guiding light of our fee-shifting jurisprudence.’” Id.
(quoting City of Burlington v. Dague, 505 U.S. 557, 562, 112 S. Ct. 2638, 2641
(1992)). Redundant, excessive, or otherwise unnecessary hours should not be
included in the calculation of hours reasonably expended. Hensley, 461 U.S. at
434, 103 S. Ct. at 1939–40. Even when a party prevails, the district court still must
determine whether time was reasonably expended, and if it was not, that time
should be excluded from the fee calculation. See id.
In the present case the district court properly conducted a lodestar analysis
and did not err in its application of the law to the calculation of Boreth’s
compensable fees. Because the record supports the district court’s finding that the
time expended by Boreth was redundant, excessive, or otherwise unnecessary, the
court did not abuse its discretion by concluding that none of Boreth’s time was
compensable.
B.
The plaintiffs sought $15,660 in fees for attorney Glasser based on 34.8
hours of work at an hourly rate of $450. The special master recommended
reducing Glasser’s hourly rate to $350 and his compensable hours to 29.1 for a
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total fee of $10,185. The special master found that $350 an hour was a reasonable
rate for Glasser because of the “nature of the work performed by Mr. Glasser, his
background and experience, and his limited participation in this lawsuit.” (R.4-131
at 13.) The district court adopted those findings. The plaintiffs contend that the
district court should have calculated the lodestar for Glasser using an hourly rate of
$450 because that is Glasser’s usual rate, and the record contains no basis for
reducing it.
“A reasonable hourly rate is the prevailing market rate in the relevant legal
community for similar services by lawyers of reasonably comparable skills,
experience, and reputation.” Norman v. Hous. Auth. of Montgomery, 836 F.2d
1292, 1299 (11th Cir. 1988). Although “limited participation” is not a proper basis
for reducing an attorney’s hourly rate, the “nature of the work” and the
“background and experience” of the attorney are proper considerations. We cannot
conclude that the district court clearly erred by considering those factors and
setting Glasser’s hourly rate at $350.
In calculating Glasser’s number of compensable hours, the district court
acted within its discretion. The court adopted the special master’s findings that set
out the precise time entries by Glasser that were disallowed, resulting in a
reduction of compensable hours. All of the disallowed time involved consultations
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between multiple partners or one partner’s review of another one’s work. Based on
those findings, the district court’s decision that the hours it disallowed were
duplicative or unnecessary did not amount to an abuse of discretion. See Hensley,
461 U.S. at 434, 103 S. Ct. at 1939–40.
C.
1.
The plaintiffs contend that the district court erred when it set attorney
Kleppin’s hourly rate at $175. In their sessions with the special master, the
plaintiffs did not submit expert fee affidavits because the master planned to set the
hourly rate as it was determined by the district court in a related case, Powell v.
Carey International, Inc., 547 F. Supp. 2d 1281 (S.D. Fla. 2008). In his report the2
special master noted, “At the time the parties agreed to have me issue this report
and recommendation[,] they were aware that I had intended to rely on the hourly
rates utilized by the Court in the not yet issued Powell fee orders in my report. At
that time, neither party objected.” (R.4-131 at 13 n.9.) The plaintiffs’ objections
quickly arose, however, after the district court decided to set Kleppin’s hourly rate
at $175 in Powell.
In Powell the plaintiffs sought $481,887 in attorney’s fees, and the district
The plaintiffs, defendants, counsel for both sides, district judge, magistrate judge, and2
special master were the same in the present case and in the Powell case.
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court awarded plaintiffs $88,623.15 in fees. 547 F. Supp. 2d at 1283. Kleppin
sought fees for 1,534.6 hours of work at $270 per hour. Id. at 1284. The district
court found that Kleppin’s “conduct in this case . . . bears directly on the proper
hourly rate and the amount of hours for which he should be compensated.” Id. at
1286. The court had this to say about Kleppin:
Unfortunately, Plaintiffs’ counsel was never able to grasp or was
unwilling to acknowledge the simple legal nature of this case. . . .
Even responding to Defendants’ strenuous defense, this case could
have and should have been litigated in less than a third of Kleppin’s
time. The disturbing undercurrent in this case from the outset has
been on what will ultimately generate the greatest fees rather than
legitimate recovery for Plaintiffs.
Furthermore, Plaintiffs’ counsel’s lack of understanding of the
substantive and evidentiary law, repeated failures to comply with
Court directions and rules, as well as their failure to exercise the
critically important independent judgment, prolonged the litigation
and generated unnecessary work for both counsel and the Court. This
fact bears significantly on the appropriate hourly rate and number of
hours that the Court can consider as reasonable in light of the nature
of the case.
Id.
Specifically, the court criticized Kleppin’s “unrealistic and legally
unsupportable damage calculations” and pointed out that some of the plaintiffs
received less than they would have if they had settled their claims before this
lawsuit was filed. Id. at 1286–88. The court took into account what it described as
Kleppin’s “actions in demanding grossly inflated and totally unsupported damage
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claims and ignoring settled law. . . .” Id. at 1289. The court explained that it had
appointed a special master (the same one as in the present case) to help Kleppin
“learn the procedures for preparing for trial, including the organization of relevant
evidence and the calculation of damages, and to help him learn to present the legal
aspects of the case to a court.” Id. at 1290 n.12. The court also criticized
Kleppin’s motions practice, finding that he “filed multiple motions that often were
a waste of time, money and resources.” Id. at 1290.
As for Kleppin’s hourly rate, the court found that “[b]ased on the quality of
the papers filed, the in-court presentations and the repeated lack of familiarity with
his evidentiary obligations, Kleppin’s performance was more akin to a new
associate and the customary rate in the community for all associates is in the range
of $150 to $350.” Id. at 1294. The court exercised its independent judgment, see
Norman, 836 F.2d at 1303, and determined that a rate of $175 was appropriate for
Kleppin. 546 F. Supp. 2d at 1294. After hearing oral argument, this Court
affirmed the district court’s judgment. Powell v. Carey Int’l, Inc., 323 Fed. App’x
829 (11th Cir. Apr. 21, 2009) (unpublished).
Even in the face of the affirmance of the Powell judgment, which included
an hourly rate of $175 for Kleppin, the plaintiffs contend that is not a reasonable
hourly rate for him. They point out that Kleppin has been awarded higher hourly
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rates in other cases. They argue that the Powell case is different from the present
one, suggesting that the factors leading to a reduced hourly rate in that case do not
justify one here.
We disagree. The special master and the district court specifically found
that the quality of Kleppin’s work product in the present case revealed some of the
same deficiencies that the court had also identified in Powell. In determining a
reasonable hourly rate, “[a] court . . . is itself an expert on the question and may
consider its own knowledge and experience concerning reasonable and proper fees
and may form an independent judgment either with or without the aid of witnesses
as to value.” Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir. 1994) (quotation
marks omitted). In determining a reasonable hourly rate, a court may assess the
skills of the lawyers and the quality of the representation in the case currently
before the court. See Turner v. Sec’y of Air Force, 944 F.2d 804, 808–09 (11th
Cir. 1991) (affirming district court judgment that took into account counsel’s work
product, preparation, and general ability when setting an hourly rate). We cannot
conclude that the district court clearly erred by finding that the hourly rate it
awarded to Kleppin in the Powell case was also an appropriate hourly rate for the
present case based on the similarity of his performance in both cases. Cf. Norman,
836 F.2d at 1299 (stating that a reasonable hourly rate may be determined based on
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“similar services by lawyers of reasonably comparable skills”).
2.
The plaintiffs also contend that the district court abused its discretion by
reducing Kleppin’s number of compensable hours. Their arguments about
reduction of time are either conclusory, composed of rhetorical questions, or are
otherwise unpersuasive. The district court reduced Kleppin’s number of
compensable hours based on a detailed chart evaluating precisely which hours
were unnecessary, imprecisely logged, excessive, or redundant.
That chart shows that the largest single block of time disallowed is 34.3
hours for work defending against the defendants’ counterclaims. (R-4.131 at 11.)
The special master concluded that it was “[n]on-compensable work as not related
to prosecution of FLSA claims.” (Id.) The district court agreed. (R-4.146 at 7.)
The sole basis for the plaintiffs’ argument that they should have been
compensated for their counsel’s work on the counterclaims is rooted in Lawrence
v. Credit Thrift of Am., Inc., 622 F.2d 1207 (5th Cir. 1980). There is a problem3
with their reliance on that decision, which is that the decision was vacated when
the case was taken en banc. 628 F.2d 931 (5th Cir. 1980) (en banc). The en banc
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), we3
adopted as binding precedent all decisions of the former Fifth Circuit handed down before
October 1, 1981.
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opinion in Lawrence held that the “portion of the opinion of the district court
which denies plaintiff recovery of attorney’s fees for time spent in defending the
compulsory counterclaim is affirmed by an evenly divided court.” Lawrence v.
Credithrift of Am., Inc., 644 F.2d 506 (5th Cir. 1981). As a result, that part of
Lawrence has no precedential value. See Lacy v. Gen. Fin. Corp., 651 F.2d 1026,
1028 (5th Cir. Unit B July 1981) (“An affirmance by an evenly divided court,
however, has no precedential value. . . .”).
In the Lacy opinion, our predecessor court explained that the Truth in
Lending Act permits the award of reasonable attorney’s fees if those fees are
incurred in order to enforce TILA liability. Id. at 1029. The counterclaim in Lacy,
which was for the balance of underlying debt, was related to the TILA claim and
was a compulsory counterclaim. Id. at 1027, 1029. The court held, however, that
the prevailing plaintiff could not collect attorney’s fees incurred in the defense of
the counterclaim because it did not arise under TILA. Id. That reasoning applies
with equal force to the Fair Labor Standards Act claims in the present case.
Furthermore, as the district court recognized, time spent on discrete and
unsuccessful claims is not compensable. See Hensley, 461 U.S. at 434–35, 103 S.
Ct. at 1940; Norman, 836 F.2d at 1302. Thus, the district court correctly
concluded that the time plaintiffs’ counsel spent on the counterclaims was not
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compensable.
D.
The plaintiffs sought $26,605.45 in costs, but the court awarded only
$9,342.43. The largest cost item requested, and disallowed, was for payment of
$13,133.75 for the services of the special master. The district court’s order
appointing the special master had authorized him to apportion his costs between
the parties. See Fed. R. Civ. P. 53(g) (relating to compensation of a special master
and the allocation of payment between the parties). The special master
recommended that his costs should be shared equally by the parties, basing that
recommendation “on the reasons for [his] appointment, the role that [he] played in
the proceedings[,] and [his] observation of the litigation.” (R.4-131 at 18.) The
district court agreed. (R.4-146 at 9.)
The plaintiffs rely on Carpa, Inc. v. Ward Foods, Inc., 567 F.2d 1316,
1323–24 (5th Cir. 1978), overruled on other grounds by, Copper Liquor, Inc. v.
Adolph Coors Co., 701 F.2d 542 (5th Cir. 1983), to argue that special master costs
are to be paid to the prevailing party even if, when the master was appointed, the
parties agreed to each pay half of the master’s costs. See id. (“The trial court also
taxed the defendants as costs $3,000 which initially had been assessed against the
plaintiffs as their share of the special master’s fee. . . . The fact that the trial court
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appointed the master constitutes a sufficient showing that the master’s services
were necessary. It was thus within the scope of the trial court’s discretion to award
as costs to the prevailing party their share of the special master’s fee.”). But Carpa
did not hold that it was mandatory for the district court to award special master
costs to the prevailing party, only that it was within the court’s discretion to do so.
See id. Moreover, Carpa probably did not survive Crawford Fitting Co. v. J.T.
Gibbons, Inc., 482 U.S. 437, 107 S. Ct. 2494 (1987). In Crawford Fitting the
Supreme Court limited the taxation of costs to those set forth in 28 U.S.C. §§ 1821
and 1920. See id. at 441–42, 107 S. Ct. at 2497. Neither section permits the
taxation of the fees of a special master as costs. See 28 U.S.C. §§ 1821, 1920.
The district court was authorized to split the cost of the special master’s
services between the parties, see Fed. R. Civ. P. 53(g), and it provided legitimate
reasons for doing so. There was no abuse of discretion.4
E.
The plaintiffs contend that the district court abused its discretion when it
prohibited them from filing as part of the record the transcript of a settlement
session with the special master on August 21, 2007. The plaintiffs sought to file
The plaintiffs alternatively argue that the special master is really an expert, and therefore4
his fees are taxable under 28 U.S.C. § 1920(6). We disagree. The special master functioned as a
special master, not as a court-appointed expert, and his fees are not taxable as costs. See
Crawford Fitting, 482 U.S. at 441–42, 107 S. Ct. at 2497.
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that transcript to support their assertion that statements made by the special master
during the August 21 session are inconsistent with his later recommendations about
attorney’s fees. In their reply brief to this Court, the plaintiffs quoted extensively
from the parts of the transcript that they believed supported their arguments. Even
if we were to consider the excerpts from the transcript that the plaintiffs rely on, we
still find their arguments unpersuasive. We are not convinced that the district court
abused its discretion by refusing to admit and consider the transcript of the August
21 hearing, and we are convinced that it would have made no difference.5
III.
For the foregoing reasons, the judgment of the district court is AFFIRMED.
We deny as moot both the plaintiffs’ motion to file with this Court the transcript and a5
related memorandum and the defendants’ motion “to strike (disregard)” the portions of the
plaintiffs’ reply brief that quote from the transcript.
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