592 F. App'x 363
6th Cir.2014Background
- Plaintiffs (former Terminix technicians) sued ServiceMaster under the FLSA alleging unpaid hours and overtime and imperfect timekeeping; originally filed by Smith and later amended to add Massaro and Yates.
- The district court transferred venue, later permitted amendment and transfer back; Massaro and Yates were compelled to arbitrate under their employment agreements, and the arbitrator allowed collective arbitration.
- After arbitration-related proceedings, ServiceMaster extended Rule 68 offers; each plaintiff accepted and obtained individual judgments totaling $82,341.52.
- Plaintiffs’ counsel then requested $516,890.25 in attorney’s fees and $18,908.85 in costs; the district court awarded the full amounts in a short five-page order.
- ServiceMaster appealed the fee/cost award, challenging (inter alia) electronic research costs, out-of-market rates for associates and clerks, fees for unsuccessful claims (notably collective-action work and arbitration defense), vague or block-billed time entries, duplicative/clerical billing, and travel-time fees.
- The Sixth Circuit vacated the award and remanded, finding the district court’s explanation inadequate and directing further factual and legal findings on multiple discrete issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Recoverability of electronic legal research costs | Research charges were case-specific, billed to client codes and thus reimbursable | Such costs are overhead and not separately recoverable; entries lack nexus detail | Remanded: circuit allows case-by-case recovery but district must develop local practice record and link charges to case-specific research |
| Hourly rates for associates and law clerks (out-of-forum rates) | National/specialized market and counsel’s expertise justify higher rates; firm applied discounts | Rates exceed prevailing local market; district should use local-market lodestar baseline | Remanded: district must assess prevailing market, apply Adcock–Ladd/Blum factors and explain any departure |
| Fees for unsuccessful claims (collective-action work, arbitration defense) | Much work overlapped and benefitted individual claims | Large portions devoted to unsuccessful collective-action pursuits and arbitration defense should be excluded | Remanded: district must evaluate degree of success, commonality of efforts, and reduce fee where work did not benefit successful claims |
| Sufficiency of time-entry descriptions and block-billing | Entries sufficiently describe subjects; block-billing permissible if adequate | Many entries are vague or block-billed, preventing reasonableness review | Remanded: district must review records, identify deficient entries, and adjust award accordingly |
| Duplicative or clerical billing (multiple attorneys, clerical tasks) | Multi-lawyer participation sometimes justified in complex litigation | Clerical tasks and overlapping attorney billing are noncompensable or should be reduced | Remanded: district must identify clerical or duplicative entries and apply reasonable reductions (possible small-percentage cut) |
| Attorney travel time | Travel time was claimed and consistent with counsel’s practices | No evidence attorneys worked while traveling; local practice unclear | Remanded: district must determine local practice and whether travel time was compensable or accompanied by work |
Key Cases Cited
- Moore v. Freeman, 355 F.3d 558 (6th Cir. 2004) (standard of review for fee awards)
- Adcock–Ladd v. Secretary of Treasury, 227 F.3d 343 (6th Cir. 2000) (lodestar and factors for hourly-rate determination)
- U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185 (6th Cir. 1997) (district court must explain which hours accepted or rejected)
- United Slate, Tile & Composition Roofers v. G & M Roofing & Sheet Metal Co., 732 F.2d 495 (6th Cir. 1984) (fee award mandatory under FLSA)
- Wooldridge v. Marlene Indus. Corp., 898 F.2d 1169 (6th Cir. 1990) (obligation to address non-frivolous objections and eliminate unreasonable billing)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (degree of success controls reasonableness of fee award)
- Imwalle v. Reliance Medical Products, Inc., 515 F.3d 531 (6th Cir. 2008) (focus on overall relief where claims share common facts)
- O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567 (6th Cir. 2009) (fees for failed collective-action efforts may be recoverable if they benefitted individual claims)
- Louisville Black Police Officers Org. v. City of Louisville, 700 F.2d 268 (6th Cir. 1983) (district court may consider non-local markets in exceptional cases)