1:17-cv-00262
W.D.N.C.Jan 16, 2019Background
- Plaintiffs (casino employees) filed FLSA and NCWHA collective/class claims against Harrah’s alleging wage-and-hour violations; amended complaint followed.
- Harrah’s moved to dismiss under Rules 12(b)(1) and 12(b)(7); Magistrate Judge recommended denial of 12(b)(1) but granting 12(b)(7) for failure to join a necessary party; District Court adopted recommendation and entered judgment dismissing the case.
- Plaintiffs appealed to the Fourth Circuit. The day after the appeal, Harrah’s moved under Fed. R. Civ. P. 54(d) and local rules for attorneys’ fees ($59,355.50) and non-taxable costs ($6,340.83).
- Harrah’s sought fees under (1) the NCWHA provision authorizing fees for frivolous suits and (2) the court’s inherent power, alleging plaintiffs acted in bad faith.
- The Court reviewed whether the plaintiffs’ claims were frivolous or brought in bad faith and whether fee-shifting was appropriate while an appeal was pending.
- Court denied Harrah’s motion in full, finding plaintiffs made good-faith efforts to distinguish controlling precedent and that Harrah’s failed to show bad faith; award of fees under the NCWHA was discretionary and not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NCWHA authorizes fees for this suit | Case not frivolous; attempted good-faith distinctions from precedent | Suit was frivolous given controlling Fourth Circuit authority (Yashenko) | Denied — court held plaintiffs’ arguments were non-frivolous and declined to exercise discretion to award fees |
| Whether court may award fees under inherent bad-faith doctrine | Plaintiffs acted in good faith; no dishonesty or oppressive motive | Plaintiffs acted in bad faith, justifying fee award under court’s inherent powers | Denied — defendant failed to show plaintiffs acted in bad faith |
| Whether FLSA permits fee award | N/A (plaintiffs asserted FLSA claim but argued no fees available) | Harrah’s conceded FLSA contains no similar fee provision | Not available — Fourth Circuit precedent bars attorney-fee awards under the FLSA |
| Whether court should defer ruling because of pending appeal | Plaintiffs proceeded with appeal; fee motion timely | Harrah’s moved immediately after appeal; asked court to rule now | Court exercised its discretion and ruled on the fee motion rather than deferring or denying without prejudice |
Key Cases Cited
- United Food & Commercial Workers Local 400 v. Marval Poultry Co., Inc., 876 F.2d 346 (4th Cir.) (availability of attorney’s fees requires statutory or contractual authority)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (U.S.) (American Rule and narrow exceptions to fee-shifting)
- Yashenko v. Harrah’s NC Casino Co., LLC, 446 F.3d 541 (4th Cir.) (Rule 19 joinder issues involving tribal gaming enterprise)
- Andrews v. America’s Living Centers, LLC, 827 F.3d 306 (4th Cir.) (FLSA does not provide for prevailing-defendant attorney’s fees)
- Dattner v. Conagra Foods, Inc., 458 F.3d 98 (2d Cir.) (bad-faith standard for inherent-fee awards)