TIMOTHY S. BLACK, District Judge.
This civil action is before the Court on Plaintiff's Verified Pleading in Support of Damages, and Attorney's Fees and Costs Award (Doc. 32), Defendant's Motion for Reconsideration (Doc. 35), Plaintiff's Motion to Strike (Doc. 39), and the parties' responsive memoranda (Docs. 34, 37, 38).
Plaintiff Shelly Stanford filed this action against Defendant Diligent Supportive Living, Inc. on September 26, 2012. (Doc. 1). Plaintiff asserted thirteen claims under state and federal law based on her employment and termination from Defendant. (Id.) After Defendant failed to timely answer, the Clerk docketed an Entry of Default. (Doc. 7). Attorney Carl Lewis subsequently entered an appearance on behalf of Defendant and filed its Answer. (Doc. 8). The Court accepted the Answer as filed and sua sponte vacated the Entry of Default and terminated as moot Plaintiff's application for entry of default judgment.
After settlement discussions proved unsuccessful, Plaintiff voluntarily dismissed eleven of her thirteen claims pursuant to Rule 41(a)(1) in notices filed May 30 and July 18, 2013. (Docs. 14, 15). Plaintiff subsequently filed a motion for leave to file an amended complaint on July 29, 2013. (Doc. 16). Defendant failed to timely oppose the motion, and the Court granted Plaintiff leave to amend on August 28, 2013.
Plaintiff's amended complaint pled three causes of action. (Doc. 17). Count I, failure to pay required minimum wage and overtime compensation in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and Count III, failure to pay wages in a timely manner as required under Ohio Rev. Code § 4113.15, remained from her original complaint. Plaintiff also added Count II, asserting failure to pay minimum wage and overtime compensation in violation of Ohio law. Ohio Rev. Code §§ 4111.02, 4111.03(A).
Plaintiff sought to proceed as a collective action on her FLSA claim pursuant to 29 U.S.C. § 216(b) and to proceed as a Rule 23 class on her state law claims. Finally, Plaintiff requested liquidated damages under the FLSA and state law, and an award of attorney fees and costs pursuant to 29 U.S.C. § 216(b), Ohio Rev. Code §§ 4111.10, 4113.15(B).
Defendant filed its answer to Plaintiff's amended complaint the next day, August 29, 2013. (Doc. 18). On September 19, 2013, a week before the discovery deadline, the parties jointly moved for a 60-day extension of the discovery deadline and dispositive motion deadline. (Doc. 20). The Court granted the joint motion and extended the deadlines to November 29 and December 28, 2013, respectively. (Doc. 21).
Plaintiff timely moved for summary judgment on December 11, 2013 supported only with Plaintiff's affidavit.
Defendant's new Counsel requested a twenty-one day extension to investigate the case and prepare its response to the pending motions. (Doc. 28). Plaintiff filed a response to the motion to withdraw and request for extension of time, noting Defendant's complete failure to engage in the discovery process by ignoring Plaintiff's discovery requests. (Doc. 29). The Court granted the motion for extension of time on February 12, 2014, affording new Counsel until March 5, 2014 to prepare and file Defendant's response to the pending motions.
The Court granted Plaintiff's motion for summary judgment in an Order filed April 2, 2014. (Doc. 31). The Court recounted in great detail the procedural history, declined to reopen discovery, and — noting that Defendant failed to provide any substantive response to the motion for summary judgment — considered the motion unopposed and the facts asserted as undisputed for purposes of Fed. R. Civ. P. 56(e)(2). Plaintiff presented uncontroverted evidence that she was employed by Defendant as a Caregiver from March 5, 2010 until August 8, 2011 and that she took care of disabled patients in their homes. Plaintiff often worked a continuous 49 hour shift in the patient's home from 7:00 a.m. Saturday until 8:00 a.m. Monday, she was never able to get at least five hours' sleep during her shifts, she worked during break periods and meal periods, and the parties had no agreement that sleep time would be excluded from the compensable hours for the continuous shift. Further, the Court found it undisputed that Plaintiff was paid a flat $300.00 for her continuous 49 hour shift, or $6.12 per hour, that there were numerous occasions when Defendant failed to make required bi-weekly payments to Plaintiff, and Defendant often failed to pay Plaintiff for more than 30 days after Plaintiff was supposed to receive her pay.
Based on these undisputed facts, the Court found that Plaintiff's sleep time must be counted as compensable time. 29 C.F.R. § 785.22. Accordingly, the Court concluded that Defendant's payment of $6.12 per hour for a continuous 49 hour shift necessitated the finding that Plaintiff was entitled to judgment as a matter of law on her claims that Defendant failed to pay minimum wage and overtime compensation as required by the FLSA and Ohio law.
The Court also concluded that Plaintiff was entitled to the full extent of liquidated damages on her FLSA claim because Defendant failed to produce any evidence that it acted in "good faith" or had "reasonable grounds for believing" that its failure to pay minimum wage or overtime compensation was not a violation of the FLSA. 29 U.S.C. §§ 216(b), 260. Finally, the Court determined that Plaintiff was entitled to reasonable attorney fees and costs under the FLSA. 29 U.S.C. § 216(b). The Court indicated that it intended to enter judgment against Defendant with regard to liability on Plaintiff's claims and ordered Plaintiff to evidence her damages, attorney fees, and costs by filing a verified pleading.
After the Court granted several extensions to permit the parties to engage in settlement discussions, Plaintiff filed her Verified Pleading evidencing damages on July 15, 2014. (Doc. 32). Plaintiff's Verified Pleading provided that she worked 74 shifts between March 5, 2010 and August 8, 2011, that each was a continuous 49 hour shift, and that she was paid a flat $300.00 for each shift, which amounts to $6.12 per hour. (Id. at 3). Accordingly, Plaintiff submitted that she was entitled to $3,344.80 in unpaid minimum wages and $3,170.16 in unpaid overtime compensation, for a total of $6,514.96 in actual damages.
Plaintiff also provided that her payments were over 30 days late on 15 occasions, which she asserted entitled her to an award of $200 in liquidated damages for each violation, totaling $3,000. (Doc. 32 at 3). Together, Plaintiff argued that she was entitled to $16,029.92 in damages. Plaintiff's counsel submitted an itemized billing statement in support of his claim for $27,130 in attorney fees and $362.75 in costs. (Id., Ex. 1).
After the Court granted Defendant another extension of time, Defendant filed its response together with a motion for reconsideration on August 19, 2014, arguing that the Court must reverse its Order granting summary judgment because Plaintiff provided companionship services and is an exempt employee under the FLSA. (Docs. 34, 35). In an affidavit attached to her memorandum contra, Plaintiff provides that over 20% of her hours work consisted of general household work (Doc. 37, Ex. A at ¶ 3), which would exclude her from the companionship services exemption. 29 C.F.R. § 552.6. Defendant's reply brief attached an affidavit of Defendant's CEO Vermonica Pope, who stated that Plaintiff never spent more than 20% of her time on general household work. (Doc. 38, Ex. 1 at ¶ 4). Plaintiff then moved to strike the Pope affidavit. (Doc. 39).
The Federal Rules of Civil Procedure do not provide for motions for reconsideration, Westerfield v. United States, 366 F. App'x 614, 619 (6th Cir. 2010), and neither party addresses the appropriate standard. District courts have authority under both common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case prior to the entry of final judgment.
For the first time in this litigation, Defendant asserts in its motion for reconsideration that Plaintiff is an exempt employee under the FLSA because she was employed in domestic service employment to provide companionship services.
"An employer may raise a plaintiff's status as an exempt employee as an affirmative defense to claims brought under the FLSA." Orton v. Johnny's Lunch Franchise, LLC, 668 F.3d 843, 846 (6th Cir. 2012). Exemptions "are to be narrowly construed against the employers seeking to assert them." Thomas v. Speedway SuperAmerica, 506 F.3d 496, 501 (6th Cir. 2007). "The employer bears the burden of establishing the affirmative defense by a preponderance of the evidence, and the employer satisfies this burden only by providing `clear and affirmative evidence that the employee meets every requirement of an exemption.'" Orton, 668 F.3d at 847.
An employer must generally claim an exemption in their first responsive pleading or forfeit the defense. Hopkins v. Chartrand, 566 F. App'x 445, 448-49 (6th Cir. 2014). Failure to raise an affirmative defense by responsive pleading does not always result in forfeiture, such as "when the plaintiff receives notice of the affirmative defense by some other means." Seals v. Gen. Motors Corp., 546 F.3d 766, 770 (6th Cir. 2008). Exceptions to the general rule of waiver are appropriate in limited circumstances, for example, when amendment is permitted under Rule 15(a). Id.
The Court must balance the competing principles of Rule 8(c)'s notice requirement and Rule 15(a)'s liberal policy permitting amendment. Hopkins, 566 F. App'x at 450. Failure to timely assert an affirmative defense can result in a waiver if its delayed assertion causes surprise and unfair prejudice to the opposing party. Smith v. Sushka, 117 F.3d 965, 969 (6th Cir. 1997). However, Rule 15(a) favors resolution of cases on their merits as opposed to the technicalities of pleadings and the Court should weigh several factors in determining whether amendment in proper, including "undue delay in filing, lack of notice to the opposing party, bad faith by the moving party, repeated failure to cure deficiencies by previous amendment, undue prejudice to the opposing party, and futility of the amendment." Seals, 546 F.3d at 770.
In Hopkins, the employer first raised the FLSA exemption in its motion for summary judgment and subsequently moved to amend his answer to assert the affirmative defense. Hopkins, 566 F. App'x at 447. The district court granted leave to amend by notation order without expressly analyzing whether this prejudiced the employees and proceeded to grant the employer's motion for summary judgment. Id. at 447-48. The Court of Appeals remanded because the district court did not balance the competing principles of Rule 8(c) and Rule 15(a). Id. at 450.
Upon consideration of these competing principles, the Court concludes that Defendant waived the affirmative defense. First, Defendant failed to raise the affirmative defense in its Answer to Plaintiff's original complaint (Doc. 8), its Answer to Plaintiff's amended complaint (Doc. 18), and in its response to Plaintiff's motion for summary judgment (Doc. 30). Instead, Defendant first raised Plaintiff's allegedly exempt status in its motion for reconsideration filed almost two years after Plaintiff instituted this action. The Court determines that Defendant's delayed assertion of the affirmative defense resulted in surprise and unfair prejudice to Plaintiff, and, therefore, is waived. Smith, 117 F.3d at 969.
Moreover, the Rule 15(a) factors weigh heavily against sua sponte granting leave to amend. Unlike the employer in Hopkins, Defendant asserted its defense well after the Court ruled on the motion for summary judgment. Hopkins, 566 F. App'x at 449. Defendant offers no adequate excuse for this undue delay and lack of notice. This Court has directly observed and interacted with counsel throughout the extensive course of this litigation. The Court previously declined to reopen discovery because Defendant did not provide an adequate excuse for its failure to engage in the discovery process before Attorney Lewis sought to withdraw his representation. (Doc. 31 at 2 n.1). The Court now reaffirms this decision. Defendant also provides no adequate excuse for its failure to provide a substantive response to Plaintiff's motion for summary judgment. That Defendant attempts to raise the FLSA exemption based on Plaintiff's affidavit submitted in support of her motion undermines the assertion that additional discovery was needed. Allowing Defendant to assert the affirmative defense, reverse the grant of summary judgment, and reopen discovery will unduly prejudice Plaintiff who has diligently prosecuted her case and would provide a windfall to Defendant after refusing to engage in discovery. Accordingly, the Court finds that Defendant has waived the affirmative defense.
Defendant's claim that its motion for reconsideration constituted the first time its new Counsel could respond to the merits of Plaintiff's motion for summary judgment is not supported by the record. (Doc. 34 at 4). The Court issued its Order to Show Cause on January 22, 2014, affording Defendant fourteen days to respond. (Doc. 25). Fourteen days later on February 5, 2014, Defendant's new Counsel requested a twenty-one day extension to investigate the case and prepare its response to the pending motions. (Doc. 28). The Court granted this motion on February 12, 2014, expressly noting that it ruled "[i]n the interests of justice, and in light of the appearance of new counsel on behalf of Defendant in this case," affording new Counsel until March 5, 2014 — one month after his appearance in the case and almost three months after Plaintiff filed her motions — to prepare and file Defendant's response. Defendant's response did not respond to the pending motions; rather, it requested that the Court allow additional discovery. (Doc. 30). The Court declined to reopen discovery and noted that Defendant failed to provide any substantive response to the motions. (Doc. 31 at 2 n.1). The Court never denied Defendant an opportunity to file a substantive response or to make the legal argument first presented in its motion for reconsideration, which new Counsel has now advanced based on the same record before the Court in February 2014. The Court provided ample opportunity for Defendant's new Counsel to do so.
Accordingly, Defendant's motion for reconsideration (Doc. 35) is
The FLSA provides that an employer is liable for actual unpaid minimum wage and overtime compensation, plus "an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). Unless the employer establishes both good faith and reasonable grounds for the incorrect classification under 29 U.S.C. § 260, this Court "has no power or discretion to reduce an employer's liability for the equivalent of double unpaid wages." Elwell v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 840 (6th Cir. 2002). The Court previously found that Defendant failed to meet this "substantial" burden, Martin v. Ind. Mich. Power Co., 381 F.3d 574, 584 (6th Cir. 2004), and Plaintiff is entitled to damages in an amount of double her unpaid wages.
Plaintiff's Verified Pleading demonstrates that her total unpaid wages is $6,514.96 and she is entitled to an equal amount as liquidated damages. (Doc. 32 at 3). Defendant presented no evidence to contradict Plaintiff's shifts worked, hours per shift, pay received, or any other aspect of her Verified Pleading. Accordingly, Plaintiff is
The Court also determined that Plaintiff was entitled to damages on her state law prompt pay claim. The statute provides:
Ohio Rev. Code § 4113.15(B). Plaintiff asserts she is entitled to $200 in liquidated damages for each of 15 instances of late payment, for a total of $3,000. (Doc. 32 at 3). Even though Defendant makes no argument in relation to this claim, the Court determines that the statute provides for a total of $200 in liquidated damages, not for $200 each instance.
An award of attorney fees under 29 U.S.C. § 216(b) is mandatory, but the amount of the award is within the discretion of the Court. Fegley v. Higgins, 19 F.3d 1126, 1134 (6th Cir. 1994). Attached to Plaintiff's Verified Pleading is an itemized billing statement evidencing $27,130 in attorney fees and $362.75 in costs. (Doc. 32, Ex. A). The billing statement provides an itemized list totaling 84.60 hours expended at an hourly rate of either $125 or $400, for a total of $27,130.
"The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). In determining the reasonableness of fees, the Court remains cognizant that the "purpose of the FLSA attorney fees provision is to insure effective access to the judicial process by providing attorney fees for prevailing plaintiffs with wage and hour grievances." Fegley, 19 F.3d at 1134. Further, "[c]ourts should not place an undue emphasis on the amount of the plaintiff's recovery because an award of attorney fees here encourage[s] the vindication of congressionally identified policies and rights." Id. at 1134-35.
When a party achieves only partial success, a court should not mechanically reduce attorney fees based on the ratio of successful claims. Deja Vu of Nashville, Inc. v. Metro. Gov't of Nashville & Davidson Cnty., 421 F.3d 417, 423 (6th Cir. 2005). Instead, the court must examine factors such as the degree of success obtained and the extent the claims are based on common facts and legal theories. Waldo v. Consumers Energy Co., 726 F.3d 802, 822-23 (6th Cir. 2013). The attorney must provide sufficient documentation "to enable the court to determine with a high degree of certainty that such hours were actually and reasonably expended in the prosecution of the litigation," and insufficient billing descriptions can justify a reduction in the award. Imwalle v. Reliance Med. Prods., Inc., 515 F.3d 531, 553 (6th Cir. 2008).
Here, Defendant does not challenge the reasonableness of the rate charged; however, it does challenge the number of hours expended on matters unrelated to her successful FLSA claims. Specifically, Defendant challenges time spent on the 11 sincedismissed claims in her original complaint and the unsuccessful motion for class certification.
Upon consideration of the operative factors, see Waldo, 726 F.3d at 822-23, the Court determines that a reduction in fees is appropriate. Plaintiff's motion for a collective action and class certification presented distinct legal issues from the merits of her underlying claims. Moreover, the Court denied the motion because it was based on conclusory assertions, was untimely filed, and did not comply with the rules governing certification. Based on the finding that Plaintiff abandoned her class allegations, it is appropriate to reduce the fee award in part. The supporting documentation also makes it difficult to determine whether all hours were reasonably expended and Plaintiff does not submit evidence to support the reasonableness of the $400 and $125 hourly rates, nor explain the difference. This further supports a partial reduction. The Court determines that a 10% reduction in fees is reasonable under the circumstances and does not thwart the purpose of the FLSA. Farmer v. Ottawa County, Nos. 98-2321, 99-1047, 2000 WL 420698, at *7 (6th Cir. Apr. 13, 2000) (affirming a 33% fee reduction in a FLSA case). Finally, Plaintiff's request for $362.75 in costs is reasonable and well supported.
Accordingly, Plaintiff is
For these reasons, Defendant's Motion for Reconsideration (Doc. 35) is
Defendant does not challenge the grant of summary judgment on Plaintiff's prompt pay claim.
