Opinion
CIVIL ACTION NO. 02-7359
July 23, 2003
MEMORANDUM AND ORDER
On June 23, 2003, the court entered judgment in favor of the Plaintiffs in the amount of $80,626.52 in this breach of contract action. We specifically found that the Defendants had violated the Pennsylvania Wage Payment and Collection Law by requiring the Plaintiffs to sign releases to obtain any value for the units of the Equivalent Ownership Plan upon the sale of LP Industries to RV Industries. Since the WPCL provides for attorneys' fees in addition to any judgment, see 43 P.S. § 260.9a(f), we requested Plaintiffs' counsel to submit a petition for fees within ten days. The Defendants oppose Plaintiffs' petition for attorneys' fees, arguing that their modest victory does not qualify as having succeeded on their claim for purposes of awarding attorneys' fees.
I. Entitlement to Fees
According to the Defendants, the court awarded Plaintiffs only 30% of their claim and the Defendants had offered the Plaintiffs 75% of the amount ultimately awarded in an Offer of Judgment. Therefore, argue the Defendants, the Plaintiffs are not entitled to attorneys' fees because they did not succeed on their claims.
Contrary to the Defendants' position, the WPCL does not render the award of attorneys' fees contingent on the degree of success.
The court in any action brought under this section shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow costs for reasonable attorneys' fees of any nature to be paid by the defendant.43 P.S. § 260.9(f). In fact, the Pennsylvania courts have determined that an award of attorneys' fees to a prevailing plaintiff in a WPCL case is mandatory. Oberneder v. Link Computer Corp., 674 A.2d 720 (Pa.Super. 1996), aff'd 696 A.2d 148 (Pa. 1997).
Despite the Defendants' protestations, the Plaintiffs were prevailing parties. In the context of 42 U.S.C. § 1988, "plaintiffs may be considered `prevailing parties' for attorney's fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit." Hensley v. Eckerhart, 461 U.S. 424, 433 (1982) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978)). Having succeeded on their WPCL claim, the Plaintiffs are unquestionably "prevailing parties" and, pursuant to the WPCL, entitled to attorneys' fees. Moreover, because the Plaintiffs' recovered more than the Offer of Judgment, Rule 68's cost shifting provision does not apply. II. Calculation of Fees
Federal Rule of Civil Procedure 68 provides:
At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. . . . If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the cost incurred after the making of the offer. . . .
Utilizing the lodestar approach, multiplying the hours reasonably expended by a reasonable hourly rate, the Plaintiffs have requested $25,116.50 in attorneys' fees and $953.41 in costs. The Defendants have complained about the reasonableness of a total of 45 hours expended prior to the filing of suit and the overall reasonableness of the requested fees in light of the fact that the Plaintiffs recovered only thirty cents on the dollar of what they were claiming.
Reviewing the billing records reveals that the Plaintiffs' firm billed 40.1 hours prior to September 18, 2002, the date on which the complaint was filed. However, we agree that 40 hours seems a bit excessive for pre-filing work in a contract dispute. Mr. Wilson states in his Memorandum that "Mr. Rayne was primarily responsible for the file prior to Wilson's joining [the firm] in July 2002 and until it became clear that it had to be litigated." (Plaintiffs' Memorandum, at 5). As such, it appears that some duplication of effort occurred when Mr. Wilson took over the file. We will reduce Mr. Rayne's hours by 5, representing conferences with Mr. Wilson and repetitive conferences with the clients when other counsel was also contacting them. The other hours billed during this time frame, including the consultation with a tax attorney, appear reasonable.
As for the Defendants' argument that the fees requested are not reasonable in light of the overall award, the Third Circuit has rejected a strict proportionality test for the calculation of attorneys' fees. See Davis v. Southeastern Pennsylvania Transportation Authority, 924 F.2d 51, 54 (3d Cir. 1991). However, we agree with the Defendants to the extent the hours expended on the ERISA claims were not reasonable because the Plaintiffs did not prevail on this theory. See Hensley, at 434-35 ("work on an unsuccessful claim cannot be deemed to have been expended in pursuit of the ultimate result obtained"). Therefore, we will reduce Mr. Wilson's hours by .5, the amount of time he expended solely for ERISA research.
What Defendants have not attacked are the hourly rates charged by each of the people who worked on the case. Based on the affidavits provided by Plaintiffs' counsel in support of the rates billed, we find that those rates are reasonable: Wilson Schauer — $270/hr; Rayne Bellinghieri — $220/hr; Butler — $90/hr.
Having reduced Mr. Rayne's hours by 5 and Mr. Wilson's by .5, we will award the Plaintiffs $24,013.50 in attorneys' fees and $834.61 in costs. An appropriate Order follows.