MEMORANDUM AND ORDER
I. INTRODUCTION
This is a case of first impression. Maeve and Jefflee Hermida (collectively, the “Hermidas”) brought this suit for declaratory judgment against their former landlord, ASN Reading LLC d/b/a Arch-stone Reading (“Archstone”) and fourteen
In light of the Chapter 93A fee-shifting policies, the Court requested that the parties brief whether the tender of the original settlement cut off the recovery of attorneys’ fees where the Hermidas made their demand as part of the putative class from the inception of the demand up until the offer to the class was made.
A. Stipulated Facts
The Hermidas rented apartment unit #302 located at Archstone Circle, Reading, Massachusetts, a property then owned by Archstone. Joint Stipulation Uncontested Facts (“Stipulated Facts”) ¶ 9, ECF No. 198. The Hermidas paid a one-time amenity-use fee of $475 to Archstone on April 30, 2007, in association with their initial lease agreement. Id.
On August 3, 2010, counsel for the Hermidas sent Archstone a demand letter (the “First Demand Letter”) alleging that Archstone and its affiliated entities violated Massachusetts General Laws chapter 186, section 15B (the “Security Deposit Statute”) and Massachusetts General Laws chapter 93A (the “Consumer Protection Statute”) by charging up-front amenity-use fees. Id. ¶¶ 1, 5. The Hermidas claimed actual “damages in the amount of $475.00, plus statutory interest since the date of payment.” Id. ¶ 1; see also Aff. Diane R. Rubin Supp. Def. Archstone’s Notice Removal, Ex. 2, Mass. Gen. Laws Ch. 93A Class Action Demand Letter (“First Demand Letter”) 2, ECF No. 1-1 (stating that the Hermidas sent the written demand letter on behalf of themselves and the “class of people who have lived in Archstone properties in Massachusetts from August 3, 2006 up to and including August 3, 2010”).
On September 1, 2010, in response to the Hermidas’ demand letter, and within thirty days of the date that demand was sent, Archstone offered to pay the Hermidas $665.67, which included both $475 in actual damages and statutory interest of twelve percent simple interest per annum calculated from the date the Hermidas paid the amenity-use fee through the date of the tender. Stipulated Facts ¶¶ 2-3; see also Aff. Rebecca J. Schwartz, Ex. B, Letter from Peter E. Strand, Shook, Hardy & Bacon L.L.P., to Matthew J. Fogelman, Fogelman & Fogelman LLC (Sept. 1, 2010) (“Archstone’s Resp. Hermidas”) 2, ECF No. 187-2 (noting that Archstone’s offer extended only to the Hermidas). Archstone expressly reserved the right to respond to any subsequent demand letter made on behalf of the “certified class” and tender a settlement offer to the members of the class that would “limit any recovery to the relief tendered.” Archstone’s Resp. Hermidas 2 (quoting Mass. Gen. Laws ch. 93A, § 9(3)) (internal quotation marks omitted). On October 28, 2010, the Hermidas filed a class action complaint in the Massachusetts Housing Court, which constituted an implied rejection of Archstone’s offer. Stipulated Facts ¶¶ 3-4; see Aff. Diane R. Rubin Supp. Def. Archstone’s Notice Removal, Ex. 1, Class Action Compl. (“Compl.”) ¶¶ 1, 51, ECF No. 1-1. On December 2, 2010, Archstone removed the action to this Court pursuant to the Class Action Fairness Act. Stipulated Facts ¶ 6.
On October 21, 2011, the Hermidas sent a demand letter (the “Second Demand
II. ANALYSIS
A. Entitlement to Attorneys’ Fees
To award attorneys’ fees, this Court must first determine if the fees are warranted, and, if so, the Court must determine the amount of fees appropriate. See Hensley v. Eckerhart,
1. Chapter 93A’s Demand Letter Requirement
Prior to filing a Chapter 93A claim, the plaintiff must send a written demand letter “identifying the claimant and reasonably describing the unfair or deceptive act or practice ... and the injury suffered.” Mass. Gen. Laws ch. 93A, § 9(3). “The purposes of the [demand] letter are twofold: (1) to encourage negotiation and settlement by notifying prospective defendants of claims arising from allegedly unlawful conduct and (2) to operate as a control on the amount of damages which the complainant can ultimately recover.” Spring v. Geriatric Auth. of Holyoke,
Multiple damages may be awarded if the defendant refuses to tender reasonable relief despite having “knowledge or reason to know that the act or practice complained of violated [Chapter 93A, Section 2].” Mass. Gen.'Laws ch. 93A, § 9(3); Burnham v. Mark IV Homes, Inc.,
2. Demand Letter on Behalf of a Class
Under Chapter 93A, a claimant may “bring the action on behalf of himself and such other similarly injured and situated persons.” Mass. Gen. Laws ch. 93A, § 9(2).
[Chapter 93A, Section 9(4) ] does not refer to class actions or to named class action plaintiffs. Nor do other sections of Chapter 93A specifically discuss multiple-party lawsuits. The statute simply offers a cause of action to a consumer or a group of consumers who claim that a business has defrauded them.1
Spielman v. Genzyme Corp.,
Once the initial demand letter requirement under Chapter 93A has been satisfied, a putative class action takes on a life of its own. This is true even when the party who initially sent the letter is no longer part of the class or other plaintiffs join the class without sending an additional demand letter. Bosque v. Wells Fargo Bank, N.A.,
A plaintiff may initiate a Chapter 93A claim without identifying it in the demand letter as a class action. See Mass. Gen. Laws ch. 93A, § 9(2); Baldassari v. Public Fin. Trust,
3. Response to a Demand Letter on Behalf of a Class
A plaintiffs recovery under Chapter 93A “may not exceed the relief tendered” by the defendant, so long as the settlement offer is reasonable. Kohl,
In Richards v. Arteva Specialties S.A.R.L.,
The Richards court reasoned that such an interpretation of Section 9(3) was consistent with the provision’s dual purpose of encouraging settlement and limiting the potential recovery of damages, as it may be virtually impossible to make a demand
Similarly, another court in this district concluded that an offer to settle an individual Chapter 93A claim coupled with an “express statement that ‘no payment is being made to the putative class [the petitioner] claims to represent,’... was clearly insufficient to remedy the classwide injury alleged by [the petitioner] and fell well short of the maximum relief [the petitioner] might obtain ... at trial.” Suk Jae Chang v. Wozo LLC, No. 11-10245-DJC,
The plain language of Chapter 93, Section 9(3) limits the “recovery to the relief tendered.” Mass. Gen. Laws ch. 93A, § 9(3). If the defendant tenders relief solely to the individual petitioner, she cannot expect this offer to control the amount of recovery for the entire class, to whom no relief was tendered. Additionally, a second round of demands and offers made after the certification of a class does not advance the purposes of Chapter 93A, Section 9(3), which are to give prospective defendants notice, avoid litigation, and encourage pre-suit negotiations and settlements. See Baldassari,
Here, on September 1, 2010, Arch-stone responded to the First Demand Letter by offering the Hermidas $665.67, the entire amount of their amenity-use fees plus interests. Archstone’s Resp. Hermidas 1. Archstone properly extended the offer only to the Hermidas, id. at 2, as it was not required to make a settlement offer to the uncertified class, Richards,
There is no dispute that Archstone’s offer to pay the totality of the Hermidas’ amenity-use fee plus interest was timely and reasonable. In making a reasonable settlement offer, Archstone was not required to include attorneys’ fees. Kohl,
It would be incongruent for Archstone, however, to tender a settlement offer to the Hermidas to refund their amenity-use fee but turn a blind eye to the rest of Archstone’s tenants who also paid amenity-use fees and suffered a similar injury. After the Hermidas First Demand Letter, Archstone knew or had reason to know that its amenity-use fee violated the Massachusetts Security Deposit Statute as to not only the Hermidas but also the rest of the tenants. See Burnham,
4. The Certified Class Is Entitled to Attorneys’ Fees from the Inception of the Class Action.
No Massachusetts court has yet decided whether the rejection of a reasonable offer made to the individual claimant, who made a pre-suit demand both on behalf of herself and a putative class, may limit recovery for attorneys’ fees for the entire class.
Under Massachusetts law, if the Court determines that there has been a violation of Chapter 93A, Section 2, “the petitioner shall ... be awarded reasonable attorney’s fees and costs incurred in connection” with “any action,” irrespective of the amount in controversy. Mass. Gen. Laws ch. 93A, § 9(4); see also id. § 2(a) (defining acts prohibited under Chapter 93A as any “[ujnfair methods of competition and unfair or deceptive acts or practices in ... any trade or commerce”).
“During the period between the commencement of a suit as a class action and the court’s determination that it may be so maintained, the suit should be treated as a class action.” Doucette v. Ives,
“The award belongs to the plaintiffs, not the attorneys.” Maston v. Poirier,
Here, Archstone argues that the Hermidas’ rejection of the offer to them as individuals foreclosed recovery of attorneys’ fees for the putative class until the class was certified. Def. ASN Reading LLC’s Br. Regarding Allowability Att’ys’ Fees (“Archstone’s Br.”) 3-4, ECF No. 201. Specifically, Archstone argues that prior to the class being certified, the Hermidas’ counsel performed legal work solely on behalf of the Hermidas and that it was not until September 15, 2011, when the class was certified, that the other class members actually entered the lawsuit.
The Hermidas argue that they have prosecuted the case as a class action since the initial demand letter and, upon an insufficient offer to refund classwide amenity-use fees, they were duty-bound to reject the offer, pursue the class action, and reasonably incur costs and legal fees in advancing the interests of the class. Mem. Concerning Payment Class-Action Att’ys’ Fees Pursuant Mass. Gen. Laws Ch. 93A (“Hermidas’ Br.”) 1-2, ECF No. 200.
This Court holds that a petitioner’s rejection of a settlement offer to the individual petitioner alone does not limit the recovery of damages or attorneys’ fees available to the class because the statute provides that the petitioner shall be awarded attorneys’ fees in “any action commenced hereunder.” Mass. Gen. Laws ch. 93A, § 9(4). Additionally, interpreting an offer to an individual claimant alone as preventing an entire putative class from recovering attorneys’ fees is analogous to
Here, the certified class prevailed in its action under Chapter 93A, Section 2.
B. Calculation of Attorneys’ Fees
1. Calculation of Attorneys’ Fees Under Chapter 93A
Reasonable attorneys’ fees under Chapter 93A are determined using a “less structured, more flexible approach” than the lodestar method. Trenwick Am. Reinsurance Corp. v. IRC, Inc., No. 07cv12160-NG,
[T]he nature of the case and issues presented, the difficulty of the legal and factual issues involved, the time and labor required, the amount of damages involved, the result obtained, the experience, reputation, ability and competence of the attorney, the usual price charged for similar services by other attorneys in the same area and the amount of awards in similar cases.
Pizzo v. Gambee,
2. Attorneys’ Fees for the Hermidas’ Individual Chapter 93A Claim
The Hermidas are entitled to “reasonable attorney[s’] fees and costs incurred in connection with” their Chapter 93A claim prior to October 28, 2010, when the Hermidas implicitly rejected Arch-stone’s settlement offer by filing a class action complaint. Mass. Gen. Laws ch. 93A, § 9(4); Compl. ¶¶ 1, 51; Stipulated Facts ¶¶ 3-M. Although the Hermidas’ attorneys briefed the Court regarding their entitlement to attorneys’ fees, they have not submitted a sworn statement detailing the time spent working on the case. Nevertheless, the Court, reviewing the record as a whole, may award reasonable attor
Several invoices prepared by the Hermidas’ counsel document the time they spent and costs they incurred working on the case. See Aff. Rebecca J. Schwartz, Ex. K, Invoice (“Fogelman & Fogelman’s Invoice”) 2-9, ECF No. 187-11; Aff. Rebecca J. Schwartz, Ex. K, Profl Servs. Rendered Through 02/29/2012 (“Todd & Weld LLP’s Invoice”) 10-17, ECF No. 187-11; Aff. Rebecca J. Schwartz, Ex. K, Profl Servs. (“Arrowood Peters’s Invoice”) 18-22, ECF No. 187-11.
These records show that counsel for the Hermidas spent a total of 35.5 hours on the case during the period in question: lead counsel from Fogelman & Fogelman spent 23.9 hours; lead counsel from Todd & Weld LLP spent 5.3 hours; and an associate from Todd & Weld LLP spent 6.3 hours. Fogelman & Fogelman’s Invoice 2-3; Todd & Weld LLP’s Invoice 10. Counsel from Fogelman & Fogelman incurred $51.51 in costs in preparing the case. Fogelman & Fogelman’s Invoice 3. Counsel from Fogelman & Fogelman charged $350 per hour spent working on the case. Fogelman & Fogelman’s Invoice 2-3. Lead counsel from Todd & Weld LLP charged $450 per hour, while the associate from Todd & Weld LLP charged $180 per hour. See Todd & Weld LLP’s Invoice 15.
“It is well settled in the First Circuit that clerical or secretarial tasks ought not to be billed at lawyers’ rates, even if a lawyer performs them.” Equal Emp’t Opportunity Comm’n v. AutoZone, Inc.,
For the purposes of calculating attorneys’ fees, courts in this circuit typically reduce by half any billed hours an attorney spent traveling instead of working on the case. See Maceira v. Pagan,
A reduction in attorneys’ fees is also appropriate when the records on which the award is based employ “block billing,” that is, when the records “describe] the type of work performed in a day and the total time spent on that work without assigning separate time values to each separate task.” Resnick,
Here, counsel from Fogelman & Fogelman employed block billing almost exclusively in documenting hours billed. Fogelman & Fogelman’s Invoice 2-3. Counsel from Todd & Weld also used block billing, albeit to a far lesser degree. Todd & Weld LLP’s Invoice 10. Accordingly, the Court deems a fifteen percent reduction reasonable, to be imposed after making the specific reductions and adjustments noted above.
The Court deems as reasonable a $350 hourly rate for the work performed by the lead attorneys, $275 per hour for an associate, and $125 per hour for administrative work, in light of: the complex nature of this class action, which presented many issues of first impression; the successful result obtained; the experience, reputation, ability, and competence of the attorneys; the usual price charged for similar services by other attorneys in the same area; and the amount of attorneys’ fees awarded in similar cases. See, e.g., Nelson v. Hecker, No. 09-10513-JLT,
In sum, the Hermidas are entitled to recover attorneys’ fees for the relevant period as detailed below:
Fogelman & Fogelman
Work Rate Hours Deduction Total
Lead Counsel $350 15 1.85 $4,602.50
Administrative $125 8.9 N/A $1,112.50
15% Fee Reduction -$857.25
Costs N/A $51.51 N/A $51.51
Subtotal (Fees Plus Costs) $4,909.26
Todd & Weld LLP
Work Rate Hours Deduction Total
Lead Counsel $350 4 N/A $1400
Associate $275 6.3 N/A $1,732.50
Administrative $125 1.3 N/A $162.50
15% Fee Reduction -$494.25
Costs N/A N/A N/A N/A
Subtotal (Fees Plus Costs) $2,800.75
3. Attorneys’ Fees for the Chapter 93 Class Action Incurred After the Hermidas’ Rejection
After rejecting Archstone’s offer to refund their amenity-use fee, the Hermidas were arguably no longer advancing their own interests in the action, except perhaps the chance to recover multiple damages. Rather, the Hermidas were acting as the class representative, and they reasonably incurred costs and legal fees to advance the interests of the class. See Hermidas’ Br. 1-2. Given that the Hermidas’ rejection of Archstone’s limited offer did not affect the class’s right to recover attorneys’ fees, as explained above, the class members are entitled to recover reasonable attorneys’ fees incurred between October 28, 2010, the day the Hermidas filed a class action complaint on their behalf, and February 13, 2012, when they rejected Archstone’s settlement offer. See Mass. Gen. Laws ch. 93A, § 9(4); Stipulated Facts ¶¶ 17-19.
Records indicate that class counsel worked a total of 338.7 hours on this matter between October 28, 2010, and February 13, 2012. See Fogelman & Fogelman’s Invoice 3-8 (reporting 126.6 hours of lead counsel work and 19.1 hours of associate or “blended rate” work); Todd & Weld LLP’s Invoice 10-15 (reporting 113.2 hours of lead counsel work and 30.6 hours of associate work); Arrowood Peters’s Invoice 18-21 (reporting 49.2 hours of lead counsel work). The total costs incurred during this period by class counsel were $1,906.16. See Fogelman & Fogelman’s Invoice 3-8 (reporting $1,297.76); Todd & Weld LLP’s Invoice 15-16 (reporting $600); Arrowood Peters’s Invoice 21-22 (reporting $8.40).
As with the Hermidas’ award of attorneys’ fees, the class’s attorneys’ fees must be adjusted to account for work that was administrative or clerical in nature and for hours spent traveling. Counsel from Fogelman & Fogelman reported spending at least some portion of two blocks, totaling eleven hours, traveling for which the court will deduct five and one half hours. Fogelman & Fogelman’s Invoice 5. After reviewing the record, the court concludes that 18.4 of the 148.8 hours spent by counsel from Fogelman & Fogelman constituted administrative work, as was 13.4 of the 143.8 hours spent by counsel from Todd & Weld LLP and 8.4 of the 49.2 hours spent by counsel from Arrowood Peters. See Fogelman & Fogelman’s Invoice 3-8; Todd & Weld LLP’s Invoice 10-15; Arrowood Peters’s Invoice 18-21. Additionally, the Court will make a fifteen percent reduction in attorneys’ fees due to the attorneys’ use of block billing in the same manner as with the Hermidas’ attorneys’ fees.
The Hermidas argue that during this period they conferred a benefit on the entire class, a benefit that extends not only to the certified class but also to those defendants that were dismissed. Hermidas’ Br. 4. The Court notes that the decision to add fourteen other defendants added complexity and expense to this action, including time researching Archstone affiliates’ corporate structure, discovery, motions to dismiss, and class certification.
It would be unfair, however, for Arch-stone to bear all the burden, especially considering Archstone was not served with the class action until April 22, 2011. See Defs.’ Unopposed Mot. Amend Class Certification Briefing & Hr’g Dates Set Ct.’s Elec. Notice Dated May 10, 2011, at 4, ECF No. 137. The majority of the class counsels’ work from when the suit was removed until Archstone’s appearance before this Court on May 13, 2011, Def. ASN Reading LLC’s Mot. Dismiss 1-2, ECF No. 139, was related to the other fourteen defendants. Although some of the work was useful for advancing the class’s interests, it is not reasonable for Archstone to bear the associated costs given that it did not have the chance to defend itself and the cases against all fourteen other defendants were ultimately dismissed. See Linthicum,
The Court will also deduct ten percent of the total attorneys’ fees and costs incurred during the relevant period to account for the effort of counsel to advance the Hermidas’ individual case,
The Court applies the same hourly rates to calculate the class’s attorneys’ fees as applied to the Hermidas’ award. The calculation of the class attorneys’ fees and costs is as follows:
Work Rate Hours Deduction Total
Lead Counsel $350 98.6 51.5 $20,510
Associate $275 18.4 2.7 $4,317.50
Administrative $125 25.8 11.5 $1,787.50
Fees Subtotal $26,615
Costs N/A $1,297.76 $32.44 $1,265.32
Todd & Weld LLP
Work Rate Hours Deduction Total
Lead Counsel $350 100.1 39.7 $21,140
Associate $275 30.6 6.2 $6710
Administrative $125 13.1 8.7 $550
Fees Subtotal $28,400
Costs N/A $600 $551 $49
Arrowood Peters
Work Rate Hours Deduction Total
Lead Counsel $350 40.8 N/A $14,280
Administrative $125 8.4 N/A $1050
Fees Subtotal $15,330
Costs N/A $8.40 N/A $8.40
TOTAL
Total Fees $70,345
15% Fee Reduction (Block Billing) -$10,551.75
Total Fees and Costs $61,115.97
10% Total Reduction for Hermidas’ Interests -$6,111.60
TOTAL(Fees and Costs) $55,004.37
Therefore, this Court awards the class members $55,004.87 in attorneys’ fees and costs-
III. CONCLUSION
For the reasons set forth herein, the Court awards the Hermidas $7,710.01 in attorneys’ fees and costs and awards the class members $55,004.37 in attorneys’ fees and costs.
SO ORDERED.
Notes
. The statute affords the same relief to a consumer whether she brings her claim individually or as part of a class of consumers. See Leardi v. Brown,
. Archstone also alleges that the attorneys’ fees ought be paid out of its offer to the class pursuant to the common fund doctrine. Archstone’s Br. 10-12. "The common fund doctrine is founded on the equitable principle that those who have profited from litigation should share its costs.” In re Thirteen Appeals Arising out of San Juan Dupont Plaza Hotel Fire Litig.,
. Involuntary resolution of a case usually arises in a class action scenario where the defendant tries to "pick off" or "buy off” class representatives:
These cases arise when, prior to class certification, a defendant in a proposed class action gives the named plaintiff the entirety of the relief claimed by that individual. The defendant then attempts to obtain dismissal of the action, on the basis that the named plaintiff can no longer pursue a class action, as the named plaintiff is no longer a member of the class the plaintiff sought to represent.
Watkins v. Wachovia Corp., 172 Cal.App.4th 1576, 1589,
[The defendant] may not avoid a class action simply by paying the amount due to the named plaintiff. The plaintiffs in their complaint have raised a significant legal claim which is entitled to resolution---[The defendant] cannot evade resolution of this legal question, involving small amounts of money for each individual [plaintiff] but larger amounts of money for the putative class ... simply by paying [the small amount] to the named plaintiff, since the plaintiff seeks to act on behalf of the class of insureds similarly situated. Rather, [the defendant] can evade resolution of this issue only if [the defendant] were to commit to paying [the requested amount] to all [plaintiffs].
Id. The circuits are split on whether a defendant may "pick off” the named plaintiffs in a class action. The split is most clearly exemplified in cases where courts have compelled acceptance of a settlement offer under Federal Rule of Civil Procedure 68. See, e.g., Pitts v. Terrible Herbst, Inc.,
. On May 9, 2011, after hearing the defendants' arguments on their motions for summary judgement, the Court ordered counsel to suspend any discovery related to the Arch-stone’s affiliated entities. By then, however, some discovery expenses had already been
. As noted, even after their rejection of Arch-stone’s limited settlement offer, the Hermidas still had an interest in seeking multiple damages in addition to the full amount of their amenity-use fees.
. This result is a consequence of the peculiar circumstances of this case and would not be warranted if the Hermidas' individual attorneys' fees were included in the class attorneys’ fees. See Eldridge,
. A federal district court may certify a question for decision by the Supreme Judicial Court "if there are involved in any proceeding before it questions of law of [the Commonwealth of Massachusetts] which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of [the Supreme Judicial Court].” Mass. S.J.C. Rule 1:03, § 1 (2010). This Court is aware that there is no controlling precedent guiding resolution of the underlying case; that the interpretation of the Massachusetts Security Deposit Law, Mass. Gen. Laws ch. 186, § 15B(l)(b), is purely a question of Massachusetts state law; and that the cases relied on therein are primarily those of the lower courts of the Commonwealth. Should either the Hermidas or Archstone wish to bring a motion for certification, this Court will entertain it. Mass. S.J.C. Rule 1:03, § 2 (allowing a question to be certified "upon the motion of any party to the cause”).
