Natalie Reeser v. Henry Ford Hospital
695 F. App'x 876
| 6th Cir. | 2017Background
- Reeser (laboratory assistant) sued Henry Ford Hospital for retaliatory discharge under the FLSA and Michigan’s Whistleblowers’ Protection Act (WPA) after being fired; jury found for Reeser on WPA claim and awarded $3,200 in actual damages.
- Reeser sought $315,133.32 in attorneys’ fees under the WPA (1,189.7 hours at $250–$300/hr).
- District court awarded only $10,000 in fees, without calculating a lodestar (reasonable hourly rates × reasonable hours) and relied primarily on the low damages recovery and some Wood factors.
- Reeser appealed the fee award as legally deficient under Michigan fee-law requirements; Henry Ford moved to strike portions of Reeser’s appellate brief as raising new arguments.
- Sixth Circuit held Michigan law (Smith/Pirgu framework) governs WPA fee awards and found the district court abused its discretion by failing to compute the lodestar and by not addressing all required Wood/MRPC factors; it vacated and remanded for recalculation.
- The court denied Henry Ford’s motion to strike and ordered Henry Ford’s counsel to show cause under 28 U.S.C. § 1927 why sanctions should not be imposed for the motion to strike.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court applied the correct legal framework to calculate a WPA attorney-fee award | Reeser: Michigan law requires the Smith three-step lodestar process (determine local hourly rate, multiply by reasonable hours, then adjust using Wood/MRPC factors) | Henry Ford: Smith framework inapplicable or not mandatory here; results achieved can alone justify large reduction | Court: Smith/Pirgu framework applies to WPA; district court abused discretion by failing to calculate lodestar and consider all required factors; vacated and remanded |
| Whether the district court could rely primarily on the small damages award to justify dramatic fee reduction without lodestar | Reeser: Lodestar must be calculated first; damages/result is only one adjustment factor | Henry Ford: Low recovery justifies significant downward departure without full lodestar | Court: Reeser's argument accepted; amount recovered is relevant only after lodestar and cannot substitute for the mandatory analysis |
| Whether appellate briefing raised new arguments warranting striking parts of Reeser’s brief | Reeser: She raised the same fee arguments below and may cite new controlling authorities on appeal | Henry Ford: Portions of brief cite new authorities and arguments not presented to district court; should be struck | Court: Denied motion to strike; appellate citation to new controlling authority (Pirgu) is permissible; strike motion improper |
| Whether sanctions under 28 U.S.C. § 1927 are warranted for Henry Ford’s motion to strike | Reeser: Motion to strike was improper and multiplied proceedings; sanctions appropriate | Henry Ford: Motion was a proper challenge to preservation/new arguments | Court: Ordered counsel to show cause within 14 days why § 1927 sanctions should not be imposed (motion may have unreasonably multiplied proceedings) |
Key Cases Cited
- Smith v. Khouri, 751 N.W.2d 472 (Mich. 2008) (adopts three-step lodestar framework and requires calculation of reasonable hourly rate and reasonable hours before adjustments)
- Pirgu v. United Services Automobile Ass’n, 884 N.W.2d 257 (Mich. 2016) (holdings: Smith framework applies to all statutes awarding a “reasonable fee”; trial courts must calculate lodestar and address specific factors on the record)
- Wood v. Detroit Auto. Inter-Ins. Exch., 321 N.W.2d 653 (Mich. 1982) (original multi-factor reasonableness test later incorporated into Smith/Pirgu adjustments)
- Bailey v. Scoutware, [citation="599 F. App'x 257"] (6th Cir. 2015) (applies Michigan Smith framework to WPA fee awards)
- Kennedy v. Robert Lee Auto Sales, 882 N.W.2d 563 (Mich. Ct. App. 2015) (reverses fee award where trial court focused chiefly on amount recovered rather than full factor analysis)