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Payne v. TRI-State Careflight, LLC

United States District Court, D. New Mexico

September 30, 2017

WILLIAM D. PAYNE; NICOLE PAYNE; LESLIE B. BENSON; KEITH BASTIAN; JACQUELINE FERNANDEZ-QUEZADA; CASON N. HEARD; GREGORY OLDHAM and SHERRY K. WELCH, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
TRI-STATE CAREFLIGHT, LLC, and BLAKE A. STAMPER, individually, Defendants.

          Christopher M. Moody Repps D. Stanford Alice Kilborn Moody & Warner, P.C. Albuquerque, New Mexico Attorneys for the Plaintiffs.

          Charles J. Vigil Jeffrey L. Lowry Melanie B. Stambaugh Rodey, Dickason, Sloan, Akin & Robb, P.A. Albuquerque, New Mexico Attorneys for the Defendants.

          MEMORANDUM OPINION AND ORDER

         THIS MATTER comes before the Court on: (i) the Plaintiffs Keith Bastian, Jaqueline Fernandez-Quezada, Cason N. Heard, Gregory Oldham and Sherry K. Welch's Motion for Award of Attorneys' Fees and Costs and Memorandum in Support, filed December 8, 2016 (Doc. 152)(“First Fee Motion”); and (ii) the Plaintiffs' Supplemental Motion for Attorneys' Fees & Costs, filed March 29, 2017 (Doc. 160)(“Supp. Motion”). The Court held a hearing on August 2, 2017. The primary issues are: (i) whether to approve the Plaintiffs' counsel's proposed fee rates, which are higher than the rates that the Court used earlier in the case when calculating fees for the attorneys' work for the Original Plaintiffs[1]; (ii) whether to reduce the total award, because the Plaintiffs did not respond to an early settlement offer; (iii) whether time that the Plaintiffs' counsel spent calculating damages and communicating with clients is compensable; (iv) whether to reduce one paralegal's fees because her time entries are block billed; and (iv) whether certain costs are compensable, such as travel, ordering transcripts, and using LexisNexis. The Court will award fees as the Motion requests, but will reduce the award by: (i) applying a lower attorneys' fee rate than the Plaintiffs' counsel requested; (ii) lowering the paralegal fees by $2, 500.00; and (iii) not awarding costs for LexisNexis. The Court will also adjust the total award request by applying the current gross receipts tax rate. Accordingly, the Court will grant in part and deny in part the Plaintiffs' First Fee Motion and Supp. Motion, and award fees and costs in the amount of $182, 867.16 ($170, 108.99 in fees and costs, and $12, 758.17 in tax).

         FACTUAL BACKGROUND

         Defendant Tri-State Careflight, LLC operates a medical transport service providing services in New Mexico, Arizona, and Colorado. See Second Amended Complaint Representative and Class Action Complaint for Damages for Violations of New Mexico Minimum Wage Act and New Mexico Common Law ¶ 11, at 2, filed January 28, 2016 (Doc. 100)(“Second Complaint”). Tri-State CareFlight operates a fleet of aircraft that it staffs with pilots and trained medical personnel. See Second Complaint ¶ 9, at 3. Tri-State Careflight employs or employed Plaintiff Keith Bastian as a flight paramedic; Plaintiffs Jaqueline Fernandez-Quezada and Sherry K. Welch as flight nurses; and Plaintiffs Cason N. Heard and Gregory Oldham as pilots. See First Fee Motion at 2-3; Errata Sheet to Opposed Motion to Intervene as Parties Plaintiff and Class Representatives at 1, filed January 4, 2016 (Doc. 84).

         PROCEDURAL BACKGROUND

         This case is a wage-and-hour dispute. See Second Complaint ¶ 1, at 1. The Plaintiffs seek recovery of: (i) unpaid overtime compensation under the New Mexico Minimum Wage Act (“NMMWA”); and (ii) other unpaid compensation on a theory of unjust enrichment. See Second Complaint ¶¶ 95-128, at 12-18.

         The Original Plaintiffs, William D. Payne and Nicole Payne, filed their case in state court on September 11, 2014. See Payne v. Tri-State Careflight, LLC, D-101-CV-2014-02048, 1st Jud. Dist. Ct., Cty. of Santa Fe, State of N.M., filed September 11, 2014 (Montes, J.). Tri-State CareFlight and Stamper removed the case to federal court on November 17, 2014. See Notice of Removal, filed November 17, 2014 (Doc. 1)(“Notice of Removal”). The Defendants invoked the Court's diversity jurisdiction, representing that there is complete diversity of citizenship between the Plaintiffs and the Defendants. See Notice of Removal ¶ 4, at 2.

         On August 24, 2015, W. Payne and N. Payne moved to amend their complaint to: (i) eliminate a claim asserted for compensation for certain travel time; and (ii) add an additional Plaintiff -- Plaintiff Leslie B. Benson. See Plaintiffs' Amended Opposed Motion for Leave to File First Amended Complaint, filed August 24, 2015 (Doc. 44)(“First Motion to Amend”). On September 4, 2015, W. Payne and N. Payne filed Plaintiffs' Motion for and Brief in Support of Class Certification, filed September 4, 2015 (Doc. 48)(“First Motion for Class Cert.”).[2] The Court held a hearing on the First Motion to Amend on October 28, 2015. See Clerk's Minutes, filed October 28, 2015 (Doc. 67)(“Oct. 28th Clerk's Minutes”); Notice of Motion Hearing, filed October 16, 2015 (Doc. 64). At the October 28, 2015 hearing, the Court granted the First Motion to Amend. See Oct. 28th Clerk's Minutes at 1; Order at 1, filed March 14, 2016 (Doc. 112). The same day as the hearing, W. Payne and N. Payne filed their Amended Complaint, in which W. Payne, N. Payne, and Benson asserted one count against the Defendants for their violation of the NMMWA.[3] See Amended Complaint ¶¶ 9-36, at 1-5.

         In November, 2015, W. Payne, N. Payne, and Benson each reached resolutions on their respective claims. See Memorandum Opinion and Order at 47, filed August 12, 2016 (Doc. 138) (“Intervenor MOO”). The Paynes reached a settlement with the Defendants on November 19, 2015 in which the Defendants agreed to provide them with full relief under the NMMWA. See Intervenor MOO at 47. Benson, meanwhile, signed a global release in an administrative proceeding before the Occupational Safety and Health Administration (“OSHA”) on or around November 19, 2015. See Intervenor MOO at 42.

         In December, 2015, the Plaintiffs filed Plaintiffs David and Nicole Payne's Opposed Motion for Award of Attorneys' Fees and Costs and Memorandum In Support, filed December 10, 2015 (Doc. 72)(“Paynes Fees Motion”). The Plaintiffs asserted that the settlement agreements between the Paynes and the Defendants provides that the Defendants would pay the Paynes' reasonable attorney's fees and costs. See Paynes Fees Motion at 4. The parties disputed whether reasonable attorneys' fees should include fees or costs associated with: (i) work on class certification, class communication, and other class-related activities; and/or (ii) an unsuccessful legal claim. See 2016 WL 5376321, at *1; Memorandum Opinion and Order at 1, filed August 17, 2016 (Doc. 142)(“Paynes Fees MOO”). The Court granted the Paynes Fees Motion only in part, deciding: (i) to not award any fees for class-related work, and (ii) to reduce the fee award for time spent on an unsuccessful claim. See 2016 WL 5376321, at *12-14; Paynes Fees MOO at 26-28. The Court also concluded that a $350.00 per hour rate Mr. Moody and a $300.00 per hour rate for Mr. Stanford were “reasonable for federal court practice in the District of New Mexico, ” and noted that “the Defendants do not object to the [requested] hourly rates.” 2016 WL 5376321, at *13.

         With all of W. Payne, N. Payne, and Benson's claims resolved, the Plaintiffs sought to replace them, by way of intervention pursuant to rule 24 of the Federal Rules of Civil Procedure. See Opposed Motion to Intervene as Parties Plaintiff and Class Representatives, filed December 15, 2015 (Doc. 73)(“First Intervention Motion”). The Plaintiffs asserted:

[N]one of the currently named Plaintiffs will be able to pursue this matter either individually or on behalf of the putative class members who were deprived of overtime pay pursuant to Defendants' uniform and unlawful overtime policies applicable to flight nurses, flight paramedics and pilots. Intervenors seek to pick up the prosecution of this lawsuit where the current Plaintiffs are soon to depart.

         First Intervention Motion at 2.

         As the motion to intervene was pending, the Defendants moved the Court, pursuant to rule 56 of the Federal Rules of Civil Procedure, to enter summary judgment in their favor and dismiss all claims in the Second Amended Complaint in their entirety and with prejudice. See Defendants Tri-State Careflight, LLC, and Blake A. Samper's Motion for Summary Judgment and Memorandum Brief in Support at 1, filed March 1, 2016 (Doc. 110)(“MSJ”). The Defendants argued that federal law preempts the Plaintiffs' state law claim for the alleged NMMWA violation and the state law claim for unjust enrichment. See MSJ at 1. The Plaintiffs opposed the Defendants' Motion for Summary Judgment and also filed their Motion to Exclude Consideration of New Law or New Argument Raised in Defendants' Reply to the Motion for Summary Judgment or, in the Alternative, to Permit Plaintiff to File a Surreply, filed on May 2, 2016 (Doc. 123)(“Motion to Exclude”), as a result of the Defendants' MSJ.

         On August 12, 2016, the Court, pursuant to rule 24(b) of the Federal Rules of Civil Procedure, granted the Plaintiffs' First Intervention Motion, permitting Bastian, Heard, Oldham, Welch, and Fernandez-Quezada to intervene as Plaintiffs. See Intervenor MOO at 1-2. The Court determined, among other things, that the resolution of W. Payne, N. Payne, and Benson's claims “did not render this case moot under Article III because the personal stake of the indivisible class may inhere prior to a definitive ruling on class certification.” Intervenor MOO at 41 (citing Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1244-47 (10th Cir. 2011)).

         In March, 2016, the Defendants filed the Defendants Tri-State Careflight, LLC, and Blake A. Stamper's Motion to Compel Plaintiffs to Supplement their Rule 26 Initial Disclosures and Answer Interrogatories and Respond to Requests for Production, filed March 28, 2016 (Doc. 116)(“Motion to Compel”). In their Motion to Compel, the Defendants argued that the Court should direct the Plaintiffs to “supplement their initial disclosures with a computation of each category of damages claimed by the Plaintiffs and the identification or production of the documents and other material on which each computation is based.” Motion to Compel at 1. The Plaintiffs responded with their Plaintiffs' Response to Motion to Compel, filed April 14, 2016 (Doc. 119)(“MTC Response”). In their MTC Response, the Plaintiffs argued that it was not necessary for the Plaintiffs to provide precise damage amounts at that stage of discovery, because, pursuant to a Joint Status Report and Provisional Discovery Plan, the first discovery stage related only to class certification issues, not liability, and damage amounts were not relevant to class certification. See MTC Response at 2 (citing Joint Status Report and Provisional Discovery Plan, filed February 10, 2015 (Doc. 13)). The Plaintiffs also asserted that the Defendants wanted the damage amounts “so that they can extend settlement offers to pick off and snipe one or more of the Plaintiffs to avoid the inevitable impact of class certification.” MTC Response at 2 n.1. The Court granted the Motion to Compel in a hearing. See Transcript of Hearing at 7:2-3 (taken August 12, 2016)(“MTC Hearing”).[4]

         In October, 2016, the Court denied the Defendants' MSJ, concluding that Congress “has not preempted the field of labor regulation for railroad and airline workers, and the present dispute does not involve the interpretation of a collective bargaining agreement.” 2016 WL 6396214, at *1; Memorandum Opinion and Order at 2, filed October 25, 2016 (Doc. 147)(“MSJ MOO”). In the same ruling, the Court also determined that the Defendants “raised a new issue of law in their reply in support of their Motion for Summary Judgment, to which the Plaintiffs may reply with a surreply should they deem it appropriate.” 2016 WL 6396214, at *1; MSJ MOO at 2.

         On November 17, 2016, the Defendants informed the Court that all five named Plaintiffs -- Bastian, Heard, Oldham, Welch, and Fernandez-Quezada -- had accepted the Defendants' Offer of Judgment pursuant to rule 68 of the Federal Rules of Civil Procedure. See Notice of Acceptance of Rule 68 Offer of Judgment, filed November 17, 2016 (Doc. 149) (“Acceptance Notice”). In the agreement, the Defendants agreed to pay attorneys' fees and costs “actually and reasonably incurred . . . up to the date of this offer.” Offer of Judgment, filed November 17, 2016 (Doc. 149-1). A few weeks later, the Plaintiffs sought a judgment on attorneys' fees and costs. See First Fee Motion at 1.

         1. The Second Motion for Attorneys' Fees and Costs.

         In December, 2016, the Plaintiffs filed the First Fee Motion, requesting $172, 231.50 in fees, $12, 594.43 in New Mexico gross receipts tax on the fees, $1, 973.99 in costs, and $144.35 in New Mexico gross receipts tax on the costs, for a total of $186, 944.27. See First Fee Motion at 4. The Plaintiffs also submitted a fee statement with time entries. See Fees Interim Statement (dated November 21, 2016), filed December 8, 2016 (Doc. 152-2)(“Fee Statement”).

         The Plaintiffs assert that (i) the Plaintiffs' counsel Christopher M. Moody, accrued 117.3 hours at $375.00 per hour; (ii) the Plaintiffs' counsel Repps D. Stanford accrued 345 hours at $325.00 per hour; (iii) paralegal Anne M. Chavez accrued 7.5 hours at $90.00 per hour; and (iv) paralegal Chelsea Buldain accrued 171 hours at $90.00 per hour. See First Fee Motion at 4-5. The Plaintiffs also seek costs for court reporter charges associated with depositions of the Plaintiffs, a “modest sum for Lexis legal research costs, ” and travel expenses for Heard to travel to New Mexico for a deposition at the Named Defendants' request. First Fee Motion at 5.

         The Plaintiffs assert that the attorneys' rates are appropriate in light of their experience, the case's complexity, and the “excellent results obtained for the Plaintiffs.” First Fee Motion at 5. Mr. Moody asserts, in a separate declaration, that, in his experience, “class action litigation counsel in this locality frequently bill at rates anywhere from $350 to $450 or more per hour.” Declaration of Christopher Moody ¶ 11, at 3, dated December 8, 2016, filed December 8, 2016 (Doc. 152-1)(“Moody Decl.”). Mr. Moody also asserts that he has “a number of clients that I charge $375 per hour.” Moody Decl. ¶ 11, at 3. Mr. Stanford, in his separate declaration, asserts that “$300.00 is the current hourly rate that I charge on most new employment matters for which the hourly rates are not otherwise set by insurance coverage” and adds that his hourly rate for class action suits is even higher. Declaration of Repps D. Stanford ¶ 14, at 3, filed December 8, 2016 (Doc. 152-3)(“Stanford Decl.”). Mr. Stanford asserts that, a recent class action lawsuit, a court approved his requested fee rate of $300.00 per hour and added that “[m]y involvement in the prosecution of this matter has been even more substantial, thereby warranting a higher fee rate here.” Stanford Decl. ¶ 15 at 4. Mr. Moody also asserts that he reviewed the time records and removed “all entries for work related to the class/collective action aspects of this case.” Moody Decl. ¶ 13, at 13.

         2. The Defendants' Response to the Second Motion for Attorneys' Fees and Costs.

         The Defendants filed their Response in Partial Opposition to Plaintiffs Keith Bastian, Jaqueline Fernandez-Quezada, Cason N. Heard, Gregory Oldham and Sherry K. Welch's Motion for Award of Attorneys' Fees and Costs, filed January 5, 2017 (Doc. 157)(“Response”). The Defendants argue that the Plaintiffs' overall fee “should be reduced by 20 percent because they failed to timely respond to Defendants' settlement offer and refused to provide computations of damages.” Response at 2. The Defendants also make several specific objections to the Plaintiffs' request. See Response at 2-3. First, the Defendants argue that the Court should “disallow the unjustified and unilateral increases in Plaintiffs' counsel's hourly rates.” Response at 3. The Defendants assert that the rates which the Court previously approved -- $350.00 hourly rate for Mr. Moody and $300.00 hourly rate for Mr. Stanford, see 2016 WL 5376321, at *13; 2016 Fee MOO at 27 -- were “on the very edge of reasonable, ” but they did not object, Response at 4. Now, the Defendants assert, the Plaintiffs' counsel “has since decided to cross the threshold of unreasonableness by giving themselves raises” -- requesting $375.00 an hour for Mr. Moody and $325.00 an hour for Mr. Stanford, see First Fee Motion at 4 -- despite “[n]othing in the lawsuit or in the market justif[ying] such increases, ” Response at 4.

         Second, the Defendants argue that the Court should disallow or substantially reduce fees for the Plaintiffs' paralegals, arguing that these paralegals “block-billed large quantities of time for secretarial and administrative tasks that are not true paralegal work and that no client would pay for or accept.” Response at 5.

         Third, the Defendants argue that the Court should disallow time spent on “retainer agreements” and “class member contacts, ” because “securing new clients and formalizing retainer agreements is not legal work for which Defendants should be charged.” Response at 7. Moreover, the Defendants argue that these entries are block-billed, such that it is impossible to discern how much time might be validly charged to the Defendants. See Response at 7.

         Fourth, the Defendants argue that the Court should disallow time that the Plaintiffs spent resisting the Defendants' request for production of damages computations, a dispute which the Plaintiffs ultimately lost. See Response at 8.

         Fifth, the Defendants argue that the Court should disallow “excessive attorney time analyzing and calculating damages” -- seventy hours -- that Mr. Moody and Mr. Stanford accrued after the Court granted the Defendants' Motion to Compel. The Defendants assert that, “[a]s with the time spent resisting their discovery obligations, it would be inequitable and unreasonable to provide a windfall of fees for the time Plaintiffs' counsel spent complying with a Court order that should have been unnecessary in the first place.” Response at 10. Additionally, the Defendants argue that there is no “legitimate reason” why so much attorney time would be requiring for calculating these numbers, given that (i) “putting numbers into spreadsheets and performing calculations” is clerical work, and (ii) the attorneys had already spent considerable time calculating damages before the Court granted the Defendants' Motion to Compel. Response at 10.

         Sixth, the Defendants contend that the Court should disallow time spent on a brief that was never filed. See Response at 10-11 (citing Fee Statement at 22 & 23).

         Seventh, the Defendants argue that the Court should disallow costs that the D.N.M. LR-Civ. do not authorize. See Response at 11 (citing D.N.M. LR-Civ. 54.2). The Defendants contend that the Plaintiffs seek certain costs that D.N.M.LR-Civ. 54.2 do not authorize, such as expenses that are not taxable, e.g., Lexis Nexis research and travel expenses. See Response at 11. The Defendants also argue that the transcript costs for the Plaintiffs' depositions taken by the Defendants is not taxable, because they were not, as the rule D.N.M.LR-Civ. 54.2(b)(2) requires, “reasonably necessary to the litigation.” Response at 11 (quoting D.N.M. LR-Civ. 54.2(b)(2)).

         Eighth, and finally, the Defendants ask the Court to reduce the Plaintiffs' fee award by twenty percent, because the Plaintiffs, after rejecting the Defendants' early settlement offer, did not make a counteroffer. See Response at 12. The Defendants assert that courts may consider a plaintiffs' rejection of a settlement offer when determining the appropriateness of an attorneys' fees award. See Response at 12 (citing Sheppard v. Riverview Nursing Ctr., Inc., 88 F.3d 1332, 1337 (4th Cir. 1996)). The Defendants assert that the Plaintiffs' “refusal to make a reasonable settlement demand (indeed, a settlement demand at all), to provide damage calculations, and to engage in settlement negotiations . . . all unnecessarily delayed the resolution of this case.” Response at 12-13.

         In all, the Defendants request that the Court reduce its overall award by twenty-percent, apply the previously approved rates for Plaintiffs' counsel, and not award fees for the following specific entries:

1. 171.60 hours for Chelsea Buldain;
2. 7.50 hours for Anne M. Chavez;
3. 4.3 hours for Christopher Moody for “retainer agreements” and class member contacts (.6 on 11/05/2015; 2.0 on 11/18/2015; 1.2 on 11/19/2015 (block-billed with other tasks); .5 on 12/03/2015 (block-billed with another task));
4. 26.9 hours for Repps Stanford for time spent resisting and refusing to provide damages computations and briefing and arguing motion to compel on that issue. (.5 on 3/21/2016; 4.2 on 3/23/2016; 3.5 on 4/11/2016; 6.7 on 4/13/2016; 8.20 on 4/14/2016; 3.8 on 7/12/2016);
5. 2.1 hours for Christopher Moody for time spent resisting and refusing to provide damages computation and briefing motion to compel on that issue. (.8 on 3/28/2016; .5 on 4/18/2016; .4 on 4/25/2016; .4 on 7/12/2016);
6. 61 hours for Repps Stanford for post-hearing time calculating damages;
7. 11.2 hours for Christopher Moody for post-hearing time calculating damages;
8. 11.1 hours for Repps Stanford for time spent on unfiled “supplemental brief regarding FAA preemption.” (3.6 on 10/07/2016; 2.9 on 10/11/2016; 4.6 on 10/24/2016);
9. All the “Expenses” set forth in the statement, along with ...

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