Modest Success Justifies Cut in Lawyer's Fees, Panel Says
Mark Hamblett
August 12, 2008


The failure to secure certification of an overtime pay case as a collective action justified slashing an attorney's fee award, a federal appeals court has ruled.

Abdool Hassad, the attorney for Anetha Barfield, prevailed in showing that Bellevue Hospital was Barfield's joint employer along with the referral agencies who regularly placed her in temporary jobs there, but Hassad's success was only modest, according to the 2nd U.S. Circuit Court of Appeals.

In Barfield v. New York City Health and Hospitals Corp., 06-4137-cv, the circuit upheld a decision by Southern District Judge Jed Rakoff, who had taken a $340,375 fee request and knocked it down to $49,889.

Judges Dennis Jacobs, Guido Calabresi and Reena Raggi decided the appeal. Judge Raggi wrote the panel's 40-page opinion.

Barfield, a certified nursing assistant, was placed in several jobs at20Bellevue by three different agencies. One of the agencies, Ultra Care of Manhattan, required her to sign a copy of its written policies and procedures, which included the statement that all employees are limited to working 40 hours a week.

But Barfield claimed she worked well over 40 hours on several occasions, and that Bellevue supervising nurses signed off on time sheets so they knew how many hours individuals had worked, even hours accumulated through placement by different agencies.

Barfield sued in the Southern District claiming that in 16 weeks between 2003 and 2005 she worked more than 40 hours and did not receive overtime pay, a violation of the Fair Labor Standards Act, 29 U.S.C. §207(a)(1).

Barfield also sought to have her action be deemed a collective one, but Rakoff said she had submitted only "limited anecdotal hearsay" to support her claim that failure to pay overtime to temporary employees was a widespread problem at Bellevue.

Rakoff then concluded that Bellevue was Barfield's joint employer within the meaning of the labor act because, under the six-factor test outlined by the 2nd Circuit in Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003), the hospital had "functional control" over Barfield.

New York City's Health and Hospitals Corp. argued that Barfield was still not eligible for overtime20because Ultra Care had told her she could not work more than 40 hours per week and it insisted Bellevue was unable to determine how many hours she had worked at the hospital.

Rakoff rejected the arguments and awarded Barfield $887 in compensatory overtime, then doubled that amount to $1,774 through an award of liquidated damages. He also ordered the defendant to pay $6,565 in costs.

The judge took a more skeptical at look Hassad's request for $340,375 in attorney fees.

The hourly rate of $350 was consistent with Hassad's level of experience, the judge found, but "vague" entries in the record made it "impossible to determine" whether the number of recorded hours was reasonable. He imposed 25 percent reduction in the number of hours from 400, saying the 400-hour request was "entirely disproportionate" to the number of hours it should have taken to handle the case.

The judge made smaller reductions for travel hours and in the number of total hours for tasks he said should have been performed by a paralegal.

'ARBOR HILL'

Judge Rakoff then exercised his authority to reduce the lodestar number (determined by multiplying the reasonable hours worked by a reasonable hourly rate of compensation) of $99,778 by half, saying the "plaintiff's primary aim in this litigation" was collective action certification and Ms. Barfield had achieved only "limited success in the litigation as a whole."

Taken together, the compensatory and liquidated damages awards, the aw ard of costs and attorney fees totaled $58,229.

On the appeal, Judge Raggi first said Rakoff did not err in determining that Bellevue was an employer under the federal act because it exercised "formal and functional" control over Barfield, in part because "it is undisputed that her temporary work was performed exclusively at Bellevue on schedules set and approved by that hospital's staff."

Raggi said Rakoff did not have the benefit of the circuit's decision in Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F.3d 182 (2d Cir. 2008), in which the court said the "lodestar" metaphor should be abandoned because it creates confusion.

Instead, the circuit advised trial judges to exercise their considerable discretion " ... to bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of the attorney's fees in setting a reasonable rate" to be used in calculating a "presumptively reasonable fee."

But here, Raggi said, Rakoff did not have to employ the "specific technique" set forth in Arbor Hill because the attorney was not challenging the lodestar calculation, merely the judge's decision to cut it in half.

The circuit went on to agree that "the district court got it exactly right: the reasonableness of the attorney's fees incurred linked directly to the ability to maintain the case as an FLSA collective acti on."

Lorie E. Almon of Seyfarth Shaw represented the New York City Health and Hospitals Corp.