In a recent decision, the Fifth Circuit reversed the award of attorney fees to a prevailing plaintiff. In Cervantes v. Cotter, the lower court severely reduced the plaintiff’s fee request by some 75% because the plaintiff’s success was, in the view of the trial court, small. The plaintiffs, noted the trial court, were only warded $409 in lost overtime payments. The district court rejected the plaintiffs’ claim for liquidated damages and their claim for retaliation. So, their recovery was just the $409. Yet, the plaintiffs’ attorneys sought $14,000 in attorney fees. The trial court considered that to be an “extraordinary” amount in light of the relief obtained.
But, the purpose of the attorney fee provision in the Fair Labor Standard Act is to to encourage attorneys to accept these small cases. No attorney would accept a case in which the hard, economic damages was a mere $409. And, as the Fifth Circuit noted on appeal, there are twelve factors in assessing attorney’s fees, not just the one factor involving success at trial. See the Fifth Circuit decision here.
The lower court’s decision is not well thought out. The Magistrate discussed the settlement offers and lack of counter-offers by the parties. The Magistrate then concluded that the plaintiff lawyers were “greedy” and the defense attorney was “penny-pinching.” It is an extraordinary decision. The district court ignored eleven of the twelve factors in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). Johnson requires lower courts to look at twelve factors, including the success of the plaintiff, when it assesses a request for attorney’s fees.
The lower court in Cervantes looked just at one factor, the success of the plaintiffs. Then, it went beyond that and looked at the relative settlement success of the two parties. It mentioned one offer of $17,000 in attorney fees and a second offer of $22,000 in attorney fees. It noted the response by the employer of $210 in overtime pay and $1,000 in attorney fees. It almost seemed like the judge was annoyed at having to hear a small case when the parties could have easily settled the matter. I find that unfortunate. These “small” cases are quite large to those involved. The Fair Labor Standards Act is a federal law. If federal courts will not enforce federal laws, who will? In truth, these apparently small cases are not small, at all. These relatively small cases reflect a wider problem with many employers underpaying their employees and generally getting away with it. The Department of Labor can enforce the FLSA, but it rarely does. It is left to these “small” lawsuits to stand up for the little guy whose pay is being stolen by employers. If there is one plaintiff filing a case for a lost overtime of $210, then there are ten others who also suffered similar losses, but chose not to file suit. There was a time when I was working my way through college and law school. In those days, $210 was a very large amount to me indeed.
In effect, the trial court imposed some new requirement that appears to involve second-guessing settlement strategy. I think it was this that caught the eye of the Fifth Circuit. It vacated the trial court’s ruling in a per curiam, unpublished decision. “Per curiam” decisions are those which the court views as simple, routine, not needing extensive explanation. The higher court is saying this should be a simple issue. Courts cannot truly second-guess settlement strategy. There are just too many unknowns.