Gonzalez v. Scalinatella, Inc., 112 F. Supp. 3d 5

Background

Plaintiff Gonzalez sued under the FLSA and NYLL alleging unpaid wages, overtime, and improper tip retention; he sought collective certification and counsel sought attorneys’ fees after settling individual claims for $7,500 (exclusive of fees).
Court granted conditional certification (notice to putative collective members) but denied final collective/class certification; no opt-ins joined the collective.
Parties negotiated a settlement in principle and could not agree on attorneys’ fees; plaintiff moved for $81,252.50 in fees and $1,150.60 in costs.
Defendants opposed, arguing (inter alia) that fees must be proportional to the low recovery, should be reduced for lack of success (failed class certification), for certain unsuccessful discovery positions, and for Rule 26 disclosure failures.
The magistrate conducted a lodestar analysis: adjusted hourly rates, struck hours attributable to unsuccessful certification and an extension request, applied a 10% reduction to lead counsel’s hours, and awarded $48,366.50 in fees plus $1,150.60 in disbursements.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FLSA fees must be proportional to plaintiff’s recovery	Fees need not be proportional; awarding reasonable fees vindicates statutory rights	Fees here are grossly disproportionate to the $7,500 recovery and should be drastically reduced	Rejected proportionality rule; lodestar governs and disproportion alone is not dispositive
Effect of unsuccessful motion for (final) class certification on fees	Time on certification reasonably related to case; some work overlaps	Reduce fees for lack of success on certification—Barfield supports substantial reduction	Court reduced fees only for specific hours attributable to the unsuccessful certification motion rather than an across-the-board cut
Compensability of time spent on conditional certification that yielded no opt-ins	Conditional certification was granted and notice process was proper; no opt-ins outside counsel’s control	Time spent on conditional certification produced no additional plaintiffs and should be reduced	Court declined to reduce fees for conditional-certification work given its success (granting conditional certification) and the notice/dissemination was beyond counsel’s control
Rule 26 initial-disclosure omission as bar to fee recovery	Any disclosure deficiencies were cured in discovery and settlement, and sanctions under Rule 37 were the proper avenue	Plaintiff failed to disclose a damages computation; therefore fees should be precluded	Rejected as too late and procedural remedy was Rule 37; no preclusion of fees on this basis

Key Cases Cited

Barfield v. New York City Health & Hosps. Corp., 537 F.3d 132 (2d Cir. 2008) (approves reducing lodestar where primary aim was collective certification and plaintiffs failed on that objective)
Farrar v. Hobby, 506 U.S. 103 (U.S. 1992) (degree of success is critical in fee determinations)
Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (hours not reasonably expended should be excluded; courts may identify specific hours or reduce award proportionally)
Perdue v. Kenny A., 559 U.S. 542 (U.S. 2010) (lodestar yields a presumptively reasonable fee; fee must be sufficient to attract competent counsel)
Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182 (2d Cir. 2008) (reasonable hourly rate is that which a paying client would pay; lodestar principles)
City of Riverside v. Rivera, 477 U.S. 561 (U.S. 1986) (proportionality rule would impede plaintiffs with small damages from obtaining counsel)
Quarantino v. Tiffany & Co., 166 F.3d 422 (2d Cir. 1999) (exclude hours devoted to severable unsuccessful claims)
LeBlanc-Sternberg v. Fletcher, 143 F.3d 748 (2d Cir. 1998) (standards for awarding litigation disbursements and when documentation is required)