Gortat v. Capala Bros., No. 14-3304 (2d Cir. 2015)

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Justia Opinion Summary

Plaintiffs filed suit against defendants under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and the New York labor Law (NYLL). After plaintiffs prevailed, the district court awarded plaintiffs' counsel $514,284.00 in attorneys’ fees and $68,294.50 in costs. Of that amount, it awarded $10,425 to reimburse plaintiffs' counsel for costs incurred retaining an expert accountant for plaintiffs' affirmative case against defendants. Defendants appealed, arguing that the district court’s award of fees and costs constituted an abuse of discretion. The court concluded that because section 216(b) does not explicitly authorize awards reimbursing plaintiffs for expert fees, the district court erred in granting such an award pursuant to this provision. Therefore, the court vacated the district court’s award of $10,425 in costs for expert fees and remanded to the district court to consider whether the NYLL authorizes the award of such fees and, if so, whether to award them pursuant to the NYLL. In a summary order issued simultaneously with this opinion, the court affirmed in part and reversed in part as to defendants' other challenges.

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14 3304 cv Gortat v. Capala Bros. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2014 (Argued: June 16, 2015 Decided: July 29, 2015) No. 14 3304 cv –––––––––––––––––––––––––––––––––––– MIROSLAW GORTAT, HENRYK BIENKOWSKI, MIROSLAW FILIPKOWSKI, ARTUR LAPINSKI, JAN SWALTEK, on behalf of themselves and on behalf of all others similarly situated, Plaintiffs Counter Defendants Appellees, ARTUR KOSIOREK, HENRYK STOKLOSA, Plaintiffs Appellees, GRZEGORZ DRELICH, Plaintiff Counter Defendant, v. CAPALA BROTHERS, INC., PAWEL CAPALA, ROBERT CAPALA, Defendants Counter Claimants Appellants. –––––––––––––––––––––––––––––––––––– Before: CALABRESI, STRAUB, and LIVINGSTON, Circuit Judges. Defendants appeal from the judgment of the United States District Court for the Eastern District of New York (Glasser, J.) awarding plaintiffs attorneys’ fees and costs after a jury issued a verdict in favor of plaintiffs (i) on their claims 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 brought pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor Law (“NYLL”), and (ii) on counterclaims brought by defendants. The district court’s award of costs included $10,425 sought by plaintiffs as reimbursement for fees paid to retain an accounting expert in proving their affirmative claims. We hold that expert fees may not be awarded pursuant to 29 U.S.C. § 216(b) of the FLSA and vacate the district court’s award of costs reimbursing plaintiffs’ expert fees pursuant to this provision. We remand this case to the district court for the limited purpose of determining whether the NYLL authorizes the award of such expert fees and, if so, deciding whether to award such costs pursuant to the NYLL. For the reasons stated in a summary order issued simultaneously with this opinion, we affirm in part and reverse in part the other portions of the district court’s judgment. ROBERT WISNIEWSKI, Robert Wisniewski P.C., New York, NY, for Plaintiffs Counter Defendants Appellees. FELIPE (PHILIP) E. ORNER, Flushing, NY, for Defendants Counter Claimants Appellants. PER CURIAM: 23 24 Bienkowski, Miroslaw Filipkowski, Artur Lapinski, and Jan Swaltek, acting on 25 behalf of themselves and others similarly situated (collectively, “Plaintiffs”), and 26 Capala Brothers, Inc., Pawel Capala, and Robert Capala (collectively, 27 “Defendants”), in which Plaintiffs prevailed, the District Court for the Eastern 28 District of New York (Glasser, J.) awarded Plaintiffs’ counsel $514,284.00 in 29 attorneys’ fees and $68,294.50 in costs. Of that amount, it awarded $10,425 to After nearly seven years of litigation between Miroslaw Gortat, Henryk 2 1 reimburse Plaintiffs’ counsel for costs incurred retaining an expert accountant for 2 Plaintiffs’ affirmative case against Defendants, brought pursuant to the Fair 3 Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor 4 Law (“NYLL”). Defendants appeal, arguing that the district court’s award of fees 5 and costs constituted an abuse of discretion. Of particular relevance here, they 6 contend that the district court was not permitted to award costs reimbursing 7 Plaintiffs’ counsel for expert fees pursuant to 29 U.S.C. § 216(b) of the FLSA. In 8 this opinion, we consider this claim. We conclude that because § 216(b) does not 9 explicitly authorize awards reimbursing plaintiffs for expert fees, the district 10 court erred in granting such an award pursuant to this provision. We vacate the 11 district court’s award of $10,425 in costs for expert fees and remand to the district 12 court to consider whether the NYLL authorizes the award of such fees and, if so, 13 whether to award them pursuant to the NYLL. For the reasons stated in the 14 summary order issued simultaneously with this opinion, we affirm in part and 15 reverse in part as to Defendants’ other challenges to the judgment awarding 16 Plaintiffs’ counsel attorneys’ fees and costs. 17 3 1 BACKGROUND 2 In August 2007, Plaintiffs filed a complaint in the Eastern District of New 3 York against Defendants, alleging claims under the FLSA and the NYLL. 4 Plaintiffs are former employees of Defendants’ contracting business. They 5 sought compensation for unpaid regular and overtime wages, liquidated 6 damages, punitive damages, costs, and attorneys’ fees. Defendants answered the 7 complaint and filed counterclaims against several of the plaintiffs for negligence, 8 conversion, breach of fiduciary duty, and tortious interference. 9 The case proceeded to trial nearly six years later. In the interim, the 10 district court issued a number of opinions that, inter alia, dismissed some of 11 Defendants’ counterclaims, denied Plaintiffs’ motion for summary judgment on 12 the remaining counterclaims, and denied Defendants’ motion for summary 13 judgment and motions to decertify the class. See Gortat v. Capala Bros., 585 F. 14 Supp. 2d 372, 376 77 (E.D.N.Y. 2008); Gortat v. Capala Bros., 257 F.R.D. 353, 355 56, 15 361, 365 (E.D.N.Y. 2009); Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2011 16 WL 6945186, at *1 2 (E.D.N.Y. Dec. 30, 2011); Gortat v. Capala Bros., No. 07 Civ. 17 3629 (ILG) (SMG), 2012 WL 1116495, at *1 (E.D.N.Y. Apr. 3, 2012). The trial on 18 Plaintiffs’ FLSA and NYLL claims and Defendants’ remaining counterclaims took 4 1 place in April and May of 2013. On May 10, 2013, the jury returned a verdict 2 finding Defendants liable on Plaintiffs’ FLSA and NYLL claims, and finding not 3 liable those plaintiffs against whom Defendants had filed counterclaims. After a 4 separate damages phase of the trial, the jury found that Defendants had willfully 5 failed to pay wages under both the FLSA and the NYLL, and it awarded 6 damages to Plaintiffs for their unpaid wages and overtime. After receiving 7 submissions from the parties, the district court ultimately awarded Plaintiffs 8 damages totaling $293,212.41. Gortat v. Capala Bros., No. 07 Civ. 3629 (ILG) 9 (SMG), 2013 WL 3010827, at *2 (E.D.N.Y. June 18, 2013). The district court 10 adopted, in large part, Plaintiffs’ proposed judgment for liquidated damages, 11 and awarded them prejudgment interest on their NYLL claims. Gortat v. Capala 12 Bros., 949 F. Supp. 2d 374, 385 86 (E.D.N.Y. 2013). 13 Subsequently, Plaintiffs’ counsel filed a motion seeking $887,765.85 in 14 attorneys’ fees and $80,324.11 in costs. Plaintiffs’ counsel’s request for costs was 15 supported by several different invoices that separately detailed the costs 16 associated with Plaintiffs’ affirmative claims and those associated with the 17 counterclaims. These invoices mainly reflected routine “taxable” expenses that 18 are recoverable under Federal Rule of Civil Procedure 54(d)(1), such as filing, 5 1 service, transcription, and electronic research. In addition, Plaintiffs requested 2 $2,200 for storage costs, and $8,779.61 in interest. They also requested $11,475 for 3 costs incurred engaging the services of an accounting expert, Glenn Pannenborg. 4 Plaintiffs’ counsel’s motion for fees and costs was addressed in the first 5 instance by Magistrate Judge Steven M. Gold, who issued a Report and 6 Recommendation regarding the motion on June 4, 2014. Judge Gold 7 recommended a substantial reduction from the amount requested by Plaintiffs’ 8 counsel, proposing an award of $514,284.00 in attorneys’ fees and $68,294.50 in 9 costs (for a total amount of $582,578.50). Regarding costs, Judge Gold 10 determined that the $57,869.50 which Plaintiffs’ counsel sought to recover for 11 routine taxable expenses were well documented and reasonable. He 12 recommended, however, denying the amounts sought by Plaintiffs’ counsel for 13 storage costs and for interest on Plaintiffs’ costs. In addition, he recommended 14 that Plaintiffs only partially recover the costs attributed to Pannenborg’s expert 15 fees. Of the $11,475 requested, $1,050 was incurred in connection with 16 Defendants’ counterclaims. Judge Gold recommended denying an award for this 17 portion of the expert fees on the grounds that “expert fees are not ordinarily 18 taxable absent a fee shifting statute.” J.A. 1036. Yet, he recommended that 6 1 Plaintiffs’ counsel be able to recover the remaining $10,425, noting that “courts 2 have awarded expert fees to prevailing parties in cases brought pursuant to the 3 FLSA.” J.A. 1035. He did not discuss whether such fees are recoverable 4 pursuant to the NYLL. 5 Defendants filed several objections to Judge Gold’s Report and 6 Recommendation, including an objection to his recommendation that costs be 7 awarded for Pannenborg’s expert fees. The district court rejected these objections 8 and adopted Judge Gold’s Report and Recommendation in its entirety. Gortat v. 9 Capala Bros., No. 07 Civ. 3629 (ILG) (SMG), 2014 WL 3818614, at *3 (E.D.N.Y. Aug. 10 4, 2014). The court did not specifically address the issue of expert fees, stating 11 only more generally that it had reviewed the Report and Recommendation de 12 novo and “conclude[d] that the objections to it are supported neither factually nor 13 legally.” Id. Pursuant to the district court’s order, judgment was entered 14 awarding Plaintiffs’ counsel $514,284.00 in fees and $68,294.50 in costs. 15 Defendants now appeal that judgment, arguing that, for a number of different 16 reasons, the district court abused its discretion in determining the amount of the 7 1 fee award. In addition, they argue that expert fees may not be awarded under 2 the FLSA. In this opinion, we address this latter claim.1 3 DISCUSSION 4 We review a district court’s decision regarding the amount of any award of 5 attorneys’ fees and costs for abuse of discretion. Louis Vuitton Malletier S.A. v. LY 6 USA, Inc., 676 F.3d 83, 105 (2d Cir. 2012). The question whether fees or costs may 7 be awarded under a given statute, however, is one of statutory interpretation that 8 we review de novo. See id. 9 This Court has not yet addressed whether, above and beyond the per diem 10 and travel allowances permitted to be awarded for witnesses pursuant to 28 11 U.S.C. § 1920 and 28 U.S.C. § 1821,2 a district court may award expert fees to a 12 prevailing plaintiff pursuant to 29 U.S.C. § 216(b), which provides that where a 13 defendant has violated the provisions of sections 206, 207, or 215(a)(3) of the 14 FLSA, “[t]he court . . . shall, in addition to any judgment awarded to the . . . 15 plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs Defendants’ remaining claims are addressed in the summary order filed simultaneously with this opinion. 2 In relevant part, 28 U.S.C. § 1920 provides that “[a] judge or clerk of any court of the United States may tax as costs the following: . . . (3) Fees and disbursements for . . . witnesses.” 28 U.S.C. § 1821 provides for, inter alia, payment of witnesses at a per diem rate of $40, as well as reimbursement for witnesses’ travel expenses. 1 8 1 of the action.” Here, we conclude that this provision does not authorize district 2 courts to award costs reimbursing plaintiffs for expert fees. We therefore vacate 3 the district court’s award of $10,425 to Plaintiffs’ counsel representing costs 4 incurred to retain accounting expert Glenn Pannenborg for Plaintiffs’ affirmative 5 claims. We remand this case to the district court for the limited purpose of 6 determining whether the NYLL provides a basis for recovery of these expert fees 7 and, if so, whether to award them on that basis. 8 The Supreme Court has made clear on multiple occasions that, absent 9 explicit statutory authorization, a district court may not award reimbursement 10 for expert fees beyond the allowances authorized by 28 U.S.C. § 1920, as limited 11 by 28 U.S.C. § 1821. See Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 12 291, 301 (2006) (“[N]o statute will be construed as authorizing the taxation of 13 witness fees as costs unless the statute refers explicitly to witness fees.” (internal 14 quotation marks and brackets omitted)); W. Va. Univ. Hosps., Inc. v. Casey, 499 15 U.S. 83, 86 (1991) (witness fees authorized by § 1920 as limited by 28 U.S.C. 16 § 1821 “define the full extent of a federal court’s power to shift litigation costs 17 absent express statutory authority to go further”); Crawford Fitting Co. v. J. T. 18 Gibbons, Inc., 482 U.S. 437, 445 (1987) (“[A]bsent explicit statutory or contractual 9 1 authorization for the taxation of the expenses of a litigant’s witness as costs, 2 federal courts are bound by the limitations set out in 28 U.S.C. § 1821 and 3 § 1920.”). Unlike other statutory provisions explicitly authorizing such 4 reimbursement, 29 U.S.C. § 216(b) of the FLSA does not expressly address 5 awards reimbursing prevailing plaintiffs for expert fees. See, e.g., 15 U.S.C. 6 §§ 2618(d), 2619(c)(2) (providing that a court may award the “costs of suit and 7 reasonable fees for attorneys and expert witnesses” (emphasis added)); 15 U.S.C. 8 § 2060(c) (“A court may in the interest of justice include in such relief an award of 9 the costs of suit, including . . . reasonable expert witnesses’ fees.”); 42 U.S.C. 10 § 1988(c) (“In awarding an attorney’s fee under subsection (b) of this section in 11 any action or proceeding to enforce a provision of section 1981 or 1981a of this 12 title, the court . . . may include expert fees . . . .”). In particular, § 216(b)’s 13 reference to “costs” does not constitute explicit statutory authorization to award 14 expert fees. In Arlington, the Supreme Court stated that the word “‘costs’ is a 15 term of art that generally does not include expert fees.” 548 U.S. at 297 (emphasis 16 added; internal quotation marks omitted). In the context of a fee provision 17 contained in the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. 18 § 1415(i)(3)(B), that likewise referred to “costs,” the Supreme Court stated that 10 1 “[t]he use of this term of art, rather than a term such as ‘expenses,’ strongly 2 suggests that § 1415(i)(3)(B) was not meant to be an open ended provision that 3 makes participating States liable for all expenses incurred by prevailing parents 4 in connection with an IDEA case.” Id. 5 Arlington’s reasoning is applicable here. Because 29 U.S.C. § 216(b) of the 6 FLSA does not explicitly authorize courts to award reimbursement for expert 7 fees, it does not permit a court to award such fees beyond the allowances 8 recoverable pursuant to 28 U.S.C. § 1920 as limited by 28 U.S.C. § 1821.3 For this 9 reason, the district court erred in awarding $10,425 in costs for expert fees 10 pursuant to this provision. We vacate this award and remand for the limited 11 purpose of considering whether expert fees are recoverable pursuant to the 12 NYLL and, if so, whether an award of such costs is appropriate here. 13 CONCLUSION 14 In the summary order issued simultaneously with this opinion, we reverse 15 the district court’s judgment to the extent that it included within the fee award 16 amounts acknowledged by Plaintiffs’ counsel to have been erroneously This conclusion is in accord with the decisions of those of our sister circuits that have addressed the issue. See Tyler v. Union Oil Co. of Cal., 304 F.3d 379, 404 05 (5th Cir. 2002); Bankston v. Ill., 60 F.3d 1249, 1256 57 (7th Cir. 1995); Gray v. Phillips Petroleum Co., 971 F.2d 591, 593 95 (10th Cir. 1992); Glenn v. Gen. Motors Corp., 841 F.2d 1567, 1573 76 (11th Cir. 1988). 3 11 1 attributed to Plaintiffs’ affirmative claims rather than their defense of the 2 counterclaims, but otherwise affirm the district court’s judgment in all respects 3 except for the award of $10,425 in expert fees. For the foregoing reasons, the 4 judgment of the district court is hereby AFFIRMED IN PART, REVERSED IN 5 PART, and VACATED IN PART, and the case is REMANDED. 12