Zhang v. Zhang

Background

Plaintiffs Meide Zhang and Zhongliang Qui brought claims under the Fair Labor Standards Act and New York Labor Law against Liang Zhang, Ru Qiu Li, and Sunshine USA Inc., doing business as Wu Liang Ye.

At the first trial, the jury found that Qiu Li was not plaintiffs’ employer and otherwise returned a verdict for plaintiffs against Zhang and Sunshine. The court later granted defendants’ post-trial motion for a new trial and sanctions against plaintiffs’ attorney, David Yan, based on misconduct during trial. The court ordered Mr. Yan to pay defendants’ reasonable fees and costs connected with the post-trial motion and new trial.

The second trial addressed only Liang Zhang’s liability, and the jury returned a verdict for Zhang. An amended judgment was entered for plaintiffs against Sunshine. After an appeal, the Court of Appeals affirmed the first-trial order except as to the sanctions order because the district court had not specified the amount of fees. The case returned to the district court for further proceedings on the amount of the sanction.

Fee Motions and Report

Plaintiffs renewed their request for attorneys’ fees and costs as the prevailing party. They sought $149,165.50 in fees and $12,959.64 in costs. Defendants sought $114,852.50 in fees and $1,212.74 in costs, including fees and costs sought as sanctions against Mr. Yan.

The motions were referred to Magistrate Judge Sarah L. Cave. Her Report and Recommendation proposed awarding plaintiffs $89,050.00 in fees and $11,153.64 in costs, and awarding defendants $67,262.50 in fees and $1,104.74 in costs. Both sides filed objections. Judge Schofield reviewed specifically objected-to portions of the report anew and reviewed the remaining portions for clear error, meaning an obvious mistake in the record.

Plaintiffs’ Fee Award

Judge Schofield adopted the recommended $350 hourly rate for Mr. Yan and rejected defendants’ request to reduce it to $250. The court found that Mr. Yan was an experienced wage-and-hour attorney and that his performance issues were adequately reflected in a reduction of the hours claimed.

The court also upheld a 40 percent reduction in the hours claimed by Mr. Yan and Norman Chan. The reduction accounted for travel time, administrative work, duplicative or excessive internal conferences, and Mr. Yan’s generally subpar performance. The court rejected defendants’ request for a 50 percent reduction.

The court upheld the recommended $11,153.64 in costs, including interpreter costs. It found that plaintiffs had sufficiently supported those costs with an invoice, even though the invoice had not yet been paid. The court also rejected defendants’ argument that an alleged fraudulent scheme by plaintiffs’ counsel barred plaintiffs from receiving fees and costs.

Defendants’ Sanction Award

The court found that defendants provided adequate billing documentation, including attorney affidavits and contemporaneous invoices identifying the dates, hours, and nature of the work. It also upheld the recommended hourly rates for Hugh Mo, Pedro Medina, and Elizabeth Mo.

The court upheld reductions to defendants’ claimed hours based on inconsistent attendance at status conferences and excessive attorney conferences. It also found that the reductions adequately addressed block billing and any excessive time claimed by Elizabeth Mo or spent preparing fee applications.

The court determined that the sanction covered fees and costs connected with defendants’ first-trial post-trial motion, the second trial, a limited deposition conducted before the second trial, and post-trial motions following the second trial. It excluded 1.2 hours spent reviewing and correcting the judgment and conferring about a writ of execution because those tasks would have been necessary even without the second trial. This reduced defendants’ fee award to $66,987.50.

The court also excluded $289.30 in PACER fees because defendants had not shown that those fees related to the sanctioned motions or the second trial. It allowed the transcript and subpoena costs and awarded defendants $815.44 in total costs.

The court declined to consider plaintiffs’ unclean-hands argument because plaintiffs had not raised that legal theory before Magistrate Judge Cave.

Disposition

Judge Schofield held that the parties’ objections were overruled in part and adopted the Report and Recommendation as modified. Plaintiffs were awarded $89,050.00 in attorneys’ fees and $11,153.64 in costs. Defendants were awarded $66,987.50 in attorneys’ fees and $815.44 in costs. The clerk was directed to close the specified docket entries.