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Sahyers v. Prugh, Holliday & Karatinos, PL, No. 08-10848 (11th Cir. Mar. 3, 2009)


Here's a head-snapper: attorney fees are denied outright in an FLSA case, despite an offer of judgment that expressly allows an award, because the defendants were partners in an law firm (along with the partnership itself). That is not the full story, but enough for a gander.

Sahyers v. Prugh, Holliday & Karatinos, PL, No. 08-10848 (11th Cir. Mar. 3, 2009): The plaintiff, a paralegal, alleged that her former employer owed her overtime under the FLSA.  The fatal mistake here is that her own lawyer (according to the opinion) never made a pre-filing demand on the employer, instead carrying out his client's desire to file the lawsuit immediately. After discovery closed in the matter, the defendants tendered and plaintiff accepted a Rule 68 offer of judgment "for $3,500 plus any attorney's fees and costs to which the district court determined Plaintiff was entitled."

The district court decided that a "reasonable fee" under the circumstances was a goose-egg, and the Eleventh Circuit affirms. The panel summarizes the district court findings:

"On its own initiative, the district court scheduled oral argument on the issue. At that hearing, the district court asked Plaintiff's lawyer, among other things, to respond to Defendants' contention that he afforded Defendants no notice of Plaintiff's claim before filing suit. Plaintiff's lawyer admitted that the allegation was true. The lawyer's sole explanation was that he was only following the instructions of his client. After reviewing the parties' briefs and hearing oral argument (allowing the district court to interrogate Plaintiff's lawyer and to observe his demeanor), the district court concluded that Plaintiff had prevailed in the civil action. But the district court denied attorney's fees and costs. The district court wrote that 'there are some cases in which a reasonable fee is no fee' and found that this case was such a case."

The Eleventh Circuit takes umbridge at the supposed lack of collegiality that plaintiff's lawyer showed the law firm defendants, and holds that it is within the court's inherent power to regulate the practice of law before it. That power "encompasses, among other things, the authority to police lawyer conduct and to guard and to promote civility and collegiality among the members of its bar." The plaintiff lawyer's duty to the court and bar, it holds, demanded that the lawyer try to settle the matter amicably: "Defendants are lawyers and their law firm. And the lawyer for Plaintiff made absolutely no effort -- no phone call; no email; no letter -- to inform them of Plaintiff's impending claim much less to resolve this dispute before filing suit. Plaintiff's lawyer slavishly followed his client's instructions and -- without a word to Defendants in advance -- just sued his fellow lawyers."

The panel, in the waning paragraphs of the opinion, attempts to mitigate the potential repercussions of a "law-firm" exception to attorneys' fees awards:

"We strongly caution against inferring too much from our decision today. These kinds of decisions are fact-intensive. We put aside cases in which lawyers are not parties. We do not say that pre-suit notice is usually required or even often required under the FLSA to receive an award of attorney's fees or costs. Nor do we now recommend that courts use their inherent powers to deny prevailing parties attorney's fees or costs. We declare no judicial duty. We create no presumptions. We conclude only that the district court did not abuse its discretion in declining to award some attorney's fees and costs based on the facts of this case."

Are we forgetting, yes?, that the fee belongs to the client and not the attorney. Evans v. Jeff D., 475 U.S. 717, 730 (1986).  So who exactly is taking the hit in this case?

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