Espinosa v. Perez

Background

Ysael Espinosa brought a case under the Fair Labor Standards Act, a federal wage-and-hour law, against Abraham Refrigeration Corp., doing business as Abraham Refrigeration, and Abraham Perez. The complaint alleged violations during Espinosa’s employment between January 2018 and July 2018.

After a one-day trial on June 10, 2019, the court found that Espinosa was an employee covered by the Act, rather than an unpaid trainee or intern. Judgment was entered for Espinosa in the amount of $40,893.94, plus prejudgment interest. The court also found that Espinosa was entitled to attorneys’ fees and costs and referred the fee request to Magistrate Judge Sarah Netburn.

Fee Recommendation and Objections

Espinosa sought $76,920 in attorneys’ fees for 195.2 hours of work by lawyers and a law clerk at Pechman Law Group PLLC, plus $2,050.25 in costs. Judge Netburn’s Report and Recommendation advised the district court to:

- accept the hours billed as reasonable; - use a $600 hourly rate for Louis Pechman; - reduce the requested $400 hourly rates for Gianfranco Cuadra and Lillian Marquez to $375; - use a $100 hourly rate for law clerk Maribel Lopez; and - award the requested costs without reduction.

The recommended total was $74,310.25, consisting of $72,260 in attorneys’ fees and $2,050.25 in costs.

The defendants objected to the recommendation except for the proposed costs. They argued that the case was simple, that the lawyers’ hours were excessive or duplicative, that certain work—including a motion about trial witnesses and a pretrial memorandum—should not be compensated fully, that the hourly rates were too high, and that Espinosa’s settlement demands unnecessarily forced the case to trial.

Court’s Analysis

Because the defendants largely repeated arguments they had already made to Judge Netburn, Judge Schofield reviewed the Report for clear error, meaning an obvious mistake in the findings or reasoning.

The court upheld the finding that the hours were reasonable. It noted that the pretrial memorandum involved substantial record citations and a complex discussion of whether Espinosa was an intern. It also rejected the challenge to time spent on the motion concerning trial witnesses because the motion was filed after the defendants failed to identify the witnesses they intended to call. The later decision not to call additional witnesses did not make the time spent on the motion unreasonable.

The court also adopted the recommended hourly rates. It approved $375 per hour for Cuadra and Marquez, $600 per hour for Pechman, and $100 per hour for Lopez. The court relied on the lawyers’ experience, rates charged to firm clients, and survey evidence concerning labor and employment lawyers’ rates. It rejected the defendants’ reliance on older cases with lower rates.

Finally, the court declined to reduce the award based on settlement negotiations. It stated that, absent bad faith, a party’s refusal to accept settlement offers should not reduce an otherwise appropriate fee award. The defendants had not shown bad faith.

Ruling

Judge Schofield overruled the defendants’ objections and adopted the Report and Recommendation granting in part Espinosa’s motion for attorneys’ fees. The court awarded $72,260 in attorneys’ fees and $2,050.25 in costs, for a total award of $74,310.25. The Clerk of Court was directed to close the motion at Docket No. 50.