Kastrati v. M.E.G. Restaurant Enterprises Ltd.

Background

Mike Kastrati sued M.E.G. Restaurant Enterprises Ltd., doing business as Novita Restaurant, Marco Fregonese, and Elizabeth Yoshida. According to the allegations summarized by the court, Kastrati worked at Novita from about 2006 through April 3, 2019, eventually becoming a manager and minority owner after investing $95,000 for a 20% share. He alleged that Fregonese and Yoshida discriminated and harassed him because he was not Italian, denied him access to business financial records, demoted and terminated him after he complained, and replaced him with an Italian man. He also alleged that they later used a reverse stock split to remove him as an officer and shareholder and paid him $20,000 less than his initial investment.

The lawsuit asserted discrimination and retaliation claims under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, the New York State Human Rights Law, and the New York City Human Rights Law. It also sought judicial dissolution of Novita under New York Business Corporation Law § 1104-a(a)(1). In an earlier ruling, the court dismissed the business-law claim without prejudice on abstention grounds, leaving the discrimination and retaliation claims. The parties conducted substantial discovery, including exchanging thousands of documents and taking nine depositions, litigated discovery disputes, and attended two mediations. They reached a settlement except for the dispute over attorneys’ fees.

Fee request and parties’ arguments

Kastrati’s lawyers requested $358,962.50 in attorneys’ fees based on 929.75 hours of work, plus $24,306.27 in costs. The requested costs included electronic discovery, transportation, printing, online research, express mail, and messenger services. The defendants did not challenge the hourly rates or the costs, but argued that the hours were excessive, duplicative, inefficient, or inadequately described. They sought a 30% across-the-board reduction. Kastrati’s lawyers responded that they had already written off some time, that the staffing was appropriate, and that much of the work was necessary to litigate the employment claims.

Court’s analysis

The court used the lodestar method, which calculates a presumptively reasonable fee by multiplying a reasonable hourly rate by the reasonable hours worked. It found the requested hourly rates reasonable and consistent with rates awarded in the Southern District of New York. The court also found that some of the billed time was excessive. In particular, it identified overlapping work by two associates, excessive time on discovery disputes, complaint drafting, preparation for two depositions, mediation preparation and attendance, and research related to the proposed amended complaint and the business-law issues.

The court determined that some work related to the proposed amended complaint and stock-split retaliation theory could be compensable because it was connected to the litigated retaliation claims. However, it found that the amount of time spent on those tasks was excessive. Rather than impose the defendants’ requested 30% reduction, the court applied a 10% reduction to the requested fees. That reduced the fee request by $35,896.25.

Disposition

The court granted Kastrati’s application for attorneys’ fees as modified. It awarded $323,066.25 in fees. It also granted the application for costs and awarded $24,306.27. The opinion did not make factual findings about the underlying allegations because the case settled without an admission of liability.