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Andujar v. General Nutrition Corp.

United States District Court, D. New Jersey, Camden Vicinage

August 20, 2018




         This matter is before the Court on plaintiff's “Motion for Attorney's Fees, Costs, [Prejudgment Interest] and Negative Tax Consequences” [Doc. No. 67]. Also before the Court is defendant's Motion to Strike the Amended Reply Affidavit of Plaintiff's Counsel” [Doc. No. 81]. The Court received the parties' extensive opposition and supplemental submissions [Doc. Nos. 68, 75, 76, 78, 83, 84, 88, 89, 90, 92, 107 and 108] and held oral argument. For the reasons to be discussed, plaintiff's motion is granted in part and denied in part and defendant's motion is denied. The Court grants a statutory attorney fee of $127, 215.00 (lodestar) plus an enhancement of 25% or $31, 803.75, for a total attorney fee award of $159, 018.75. The Court also awards costs in the amount of $1, 823.80, prejudgment interest in the amount of $1, 207.64, and negative tax consequences in an amount to be determined. The enforcement of this award is stayed at least until the Third Circuit rules on defendant's pending appeal.


         The parties are familiar with the background of this matter so there is no need to set out a detailed summary. The Court incorporates by reference the background set forth in its February 28, 2018 Opinion denying defendant's motion for a new trial or in the alternative amending the judgment. 2018 WL 1087494 (D.N.J. Feb. 28, 2018) . Briefly, plaintiff alleged he was terminated from his job as the Manager of a General Nutrition store on account of his age. On October 26, 2017, the jury returned a verdict in plaintiff's favor finding defendant violated the New Jersey Law Against Discrimination ("NJLAD"). Plaintiff was awarded $123, 926 in back pay, $75, 000 in emotional distress damages and $60, 000 in front pay damages, for a total damage award of $258, 926. Judgment in this amount was entered on October 30, 2017. [Doc. No. 66]. On February 28, 2018, defendant's motion for a new trial or to amend the judgment was denied. [Doc. Nos. 85, 86] . Defendant appealed the decision to the Third Circuit where the appeal is pending.[1]

         Plaintiff seeks an award of attorney's fees, costs and prejudgment interest. Plaintiff also seeks an award for the negative tax consequences resulting from the judgment. Plaintiff requests a lodestar of $130, 500 in fees, plus an enhancement of 50%. Plaintiff also requests $1, 823.90 in costs, $2, 481.42 in prejudgment interest and $69, 443.00 for negative tax consequences. Defendant asserts various objections to plaintiff's requests which will be discussed herein.

         For present purposes it is important to discuss how plaintiff's counsel proposes to compute his final fee. Plaintiff's retainer agreement provides he is to be paid a contingency fee of 45% of the net recovery. At first plaintiff contended he was entitled to the full amount of his Court awarded fee plus his contingency fee. In other words, a dual fee recovery.[2] Plaintiff proposed to pay a 1/3 referral fee of his 45% net recovery to his referring attorney. In addition, plaintiff proposed to pay a 1/3 referral fee of the Court's fee award to the referring attorney.[3] Defendant did not object to counsel's proposed dual recovery but argued this should be taken into account when determining whether a lodestar enhancement should be awarded and the percentage.[4]

         After the Court questioned counsel's proposed dual recovery and asked for supplemental briefs on the issue, counsel submitted a new proposal to calculate his attorney fee. See Plaintiff's July 5, 2018 LB. Counsel now proposes that he is entitled to 45% of the jury award plus 45% of the attorney fee award. According to counsel, plaintiff will not only receive 55% of the jury award, but also "fifty-five cents (550) on every dollar awarded, including any award of attorney's fees and costs." Id. at l.[5] Defendant opposes plaintiff's new computation as excessive. See July 17, 2018 LB, Doc. No. 108.


         The parties do not dispute that a party that prevails on a NJLAD claim is entitled to a reasonable attorney's fee award. N.J.S.A. 10:5-27.1. There also is no dispute that plaintiff is a prevailing party since plaintiff succeeded on a "significant issue in litigation which achieve[d] some of the benefit the parties sought in bringing suit." P.N. v. Clementon Board of Education, 442 F.3d 848, 855 (3d Cir. 2006)(citation and quotation omitted). In addition, the parties do not dispute the starting point in the attorney's fee analysis is to determine the lodestar amount. Lanni v. New Jersey, 259 F.3d 146, 149 (3d Cir 2001) . The lodestar is computed by multiplying the reasonable hourly rate by the reasonable number of hours expended. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) . The lodestar is presumptively reasonable but may require subsequent adjustment. United Automobile Workers Local 259 Social Security Dept. v. Metro Auto Center, 501 F.3d 283, 290 (3d Cir. 2007).

         1. Hourly Rate

         Plaintiff asks for an hourly rate of $450. The Court finds this rate is reasonable and appropriate in the case. A reasonable hourly rate is calculated according to the prevailing market rate in the community. S.D. v. Manville Bd. of Educ, 989 F.Supp. 649, 656 (D.N.J. 1998). "This burden is normally addressed by submitting the affidavits of other attorneys in the relevant legal community, attesting to the range of prevailing rates charged by attorneys with similar skill and experience." Id. A court should assess the skill and experience of the prevailing party's attorneys and compare their rates to the rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation. Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990) . The party seeking to recover attorney's fees has the initial burden of "producing sufficient evidence of what constitutes a reasonable market rate for the essential character and complexity of the legal services rendered in order to make out a prima facie case." Lanni, 259 F.3d at 149.

         Plaintiff's counsel's certification, affidavits and representations reveal he is an experienced and skilled employment law litigator. Richard M. Pescatore, Esquire, has been admitted to the Bar for over 30 years and he has been a Certified Trial Attorney since the mid-1990's (Certification of Counsel ("Cert.") ¶4, Doc. No. 67-1). Counsel has handled hundreds of employment law cases. Amended Affidavit ("Am. Aff.") ¶6, Doc. No. 78. Further, counsel has submitted the affidavits of three (3) experienced South Jersey employment law litigators who attest to the fact $450 per hour is a reasonable hourly rate in the South Jersey legal community for an attorney of Mr. Pescatore's skill and experience. See Exhibit B to Plaintiff's Motion, Doc. Nos. 67-5, 68.[6] Based on plaintiff's submissions, the Court will award plaintiff's counsel an hourly rate of $450.00 per hour.

         Defendant argues counsel's hourly fee should be rejected because counsel did not provide information concerning his skill, experience, reputation and employment experience. Defendant's Opposition Brief ("Opp.") at 6, Doc. No. 75. The Court disagrees. As noted, plaintiff's counsel's certification and affidavits attest to this information. Notably, defendant does not otherwise challenge plaintiff's $450.00 per hour fee. Accordingly, the Court rules that plaintiff's $450.00 per hour fee for the work done on this case is reasonable and appropriate.

         2. Reasonableness of Fees

         The parties do not dispute plaintiff is entitled to a reasonable attorney's fee as a prevailing party in the case. As noted, the lodestar provides the starting point for determining a reasonable attorney's fee. Lanni, 259 F.3d at 149. The lodestar is calculated by multiplying a reasonable hourly rate by the number of hours the moving counsel reasonably billed for the litigation. Id. A district court may discount any hours that it deems unreasonable, including those considered to be "excessive, redundant, or otherwise unnecessary[.]" See Hensley, 461 U.S. at 433. Although the Court has substantial discretion to determine what constitutes a reasonable billing rate and reasonable hours, once the lodestar is determined it represents the presumptive reasonable fee. Lanni, 259 F.3d at 149.

         After the lodestar amount is calculated a court has discretion to adjust the fee up or down based on a number of different factors. Id. at 151; Pub. Interest Research Group of N.J., Inc. v. Windall, 51 F.3d 1179, 1185 (3d Cir. 1995). These factors include, but are not limited to: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the "undesirability" of the case; (11) the nature and length of the professional relationship of the clients; and (12) awards in similar cases. Hensley, 461 at 429-30 n.3.

         A plaintiff's fee petition must be specific enough to allow the court to determine if the hours claimed are unreasonable for the work performed. Washington v. Phila. County Ct. of Common Pleas, 89 F.3d 1031, 1037 (3d Cir. 1996) . Nevertheless, exacting detail is not necessary: "a fee petition should include some fairly definite information as to the hours devoted to various general activities, e.g., pretrial discovery, settlement negotiations.... However, it is not necessary to know the exact number of minutes spent nor the precise activity to which each hour was devoted nor the specific attainments of each attorney." Id. at 1037-38 (citation and guotation omitted) . The time to prepare and present an application for fees is recoverable. Maldonado v. Houstoun, 256 F.3d 181, 187 (3d Cir. 2001) . The lodestar and Hensley reduction analysis applies to the claimed fees to prepare a fee petition. Id. at 188.

         3. Lodestar Analysis

         Plaintiff submitted two sets of time sheets documenting his time. The first set is attached to plaintiff's motion (Doc. No. 67, Exhibit A) and includes time from 3/17/14 to 11/6/17. The total requested lodestar is $111, 150.00. The second set of time sheets is attached to plaintiff s supplemental affidavit (Doc. No. 88, Exhibit A) and includes time from 11/8/17 to 3/13/18. The total requested lodestar is $19, 350.

         Defendant challenges the reasonableness of plaintiff's fees in several general respects. Defendant's arguments are rejected. To the extent defendant argues this was a straightforward simple case, the Court disagrees. Although plaintiff and defense counsel have likely litigated more complex cases, the case was not routine. Discovery was contentious and the Court had to address and resolve challenging discovery disputes. In addition, plaintiff successfully opposed defendant's motion for summary judgment and participated in a three-day trial. To his credit, plaintiff's counsel (as did defense counsel) zealously represented his client. Mr. Andujar deserved nothing less. Plaintiff's counsel would have been shirking his professional responsibilities if he took "shortcuts."

         In support of his fee application Mr. Pescatore submitted his detailed timesheets. After reviewing counsel's time entries in detail, the Court finds counsel's time was well spent, reasonable and appropriate. Counsel will not be penalized because he runs a small office and does not have the benefit of a large staff of young attorneys. Under the circumstances, counsel's "hands on" approach to the litigation was reasonable, necessary and appropriate.

         Although not clear, defendant seems to argue the sixteen (16) hours plaintiff's counsel spent to prepare for trial was excessive since counsel allegedly only presented "minimal testimony and evidence." Opp. at 8. This argument is rejected. The Court finds 16 hours is a reasonable expenditure of time given that plaintiff's counsel not only had to prepare his case, but he also had to prepare to rebut defendant's case. Defendant is fortunate plaintiff's counsel used his time wisely and only spent 16 hours to prepare for trial.

         Defendant argues the Court should disallow hours spent on "purely clerical and administrative entry tasks[.]" Opp. at 9. The Court agrees. However, defendant does not support, other than by general arguments, his contention counsel spent time on clerical and administrative tasks. Defendant argues every time entry for . 1 should be disallowed. Tr. at 17:10-15. ("[W]e did not parse every single record[.]"). In addition, defendant argues all time entries for .5 hours or under "indicate[ ] a routine or ministerial task." Opp. at 9.[7] Instead of considering defendant's general objections to plaintiff's time entries, the Court has individually reviewed defendant's objections and plaintiff's time entries to determine if they are appropriate. The Court will not issue a carte blanche ruling that all time entries less than .5 should be disallowed. Defendant identified its objections by striking out what it deemed administrative work. See Opp., Exhibit D.

         Almost all of defendant's objections are off base. It is plain to the Court that not every time entry of . 5 or lower is objectionable. For example, it is appropriate to compensate plaintiff for his initial phone call from his referring attorney (3/17/14 - .5), receipt of correspondence from client (3/21/14 - .2) and preparing letters to defendant (3/25/14 - .3, 4/16/14 - .3) . Many of counsel's .1 and .2 time entries are for the receipt of correspondence and communications from the Court. Plaintiff's counsel should be compensated for this time. This task is not appropriately done by clerical staff.

         As to plaintiff's request for fees through November 6, 2017, the Court has thoroughly reviewed defendant's individual objections to plaintiff's time entries of .5 or less. The Court did not identify any time entries that are objectionable. Plaintiff's counsel's "hands on" approach to the case was appropriate. However, the Court will deduct the 6.5 hours ($2, 925.00) counsel estimated it would take to prepare his application for fees. The actual time counsel spent on counsel's fee application is included in the time sheets attached to counsel's supplemental affidavit.

         Defendant argues the 12 hours counsel spent to oppose defendant's dispositive motion was excessive. Id. at 10. The Court disagrees and rules that plaintiff's counsel's time was well spent. Thus, the Court approves plaintiff's lodestar application for $108, 225.00 ($111, 150.00 $2, 925.00) in fees through November 6, 2017.

         In addition to the lodestar through November 6, 2017, plaintiff also seeks a fee award for the time spent addressing his fee motion and other work performed from 11/7/17 to 3/13/18. As already noted, the time spent to prepare a fee petition is recoverable. So too is the time plaintiff spent to oppose defendant's post-trial motion. These additional fees are set forth in Mr. Pescatore's supplemental affidavit. Counsel requests reimbursement for an additional 43 hours or a total lodestar of $19, 350. The Court reviewed plaintiff s time entries and finds that the .2 time entries on 12/8/17 and 12/13/17 should not be reimbursed because the time was spent on the administrative/clerical task of filing William Martini's affidavits. Thus, only 42.2 additional hours or $18, 990.00 in additional fees is awarded.

         For the foregoing reasons the Court finds that the appropriate lodestar is $108, 225.00 plus $18, 990.00 or $127, 215.00. The Court also finds the lodestar is reasonable and will not be increased or decreased based on the Hensley, supra, factors.

         4. Calculation of Plaintiffs Attorney's Fee

         Under New Jersey law a lawyer's fee must be reasonable. Rule of Professional Conduct ("RPC") 1.5(a); see also A.W. by B.W. v. Mount Holly Twp. Bd. of Educ., 453 N.J.Super. 110, 121 (App. Div. 2018)(even when a plaintiff applies for fee shifting the fee award must be reasonable). Further, in the first instance counsel's fee or retainer agreement must be examined to determine how his fee should be calculated. Starkey v. Estate of Nicolaysen, 340 N.J.Super. 104, 119-20 (App. Div. 2001), aff'd as modified 172 N.J. 60 (2002) (the purpose of a written fee agreement "is to memorialize the agreement as to quantum of the fee"). Here, plaintiff initially proposed that he receive his 45% contingency fee or $115, 695.99, plus his Court-awarded lodestar of $127, 215.00. These two amounts total $242, 910.99 .[8] Under plaintiff's new calculation plaintiff proposes he receive 45% of the total of the judgment plus the Court awarded fee. These two amounts total $386, 141 ($258, 926 plus $127, 215). Counsel's 45% share of this total is $173, 763.45.[9] If the proposed 50% enhancement of the Court awarded fee is added to this amount, counsel would receive approximately $237, 000.00 in fees. Under counsel's new proposal, the net amount payable to plaintiff, exclusive of interest and negative tax consequences, is only approximately $210, 000.[10]

         The Court rejects counsel's proposed fee calculation as inconsistent with plaintiff's written fee agreement and the applicable case law. Plaintiff's fee agreement states as follows:

Net recovery is the total recovered on your behalf, exclusive of attorney fees, minus costs and expenses.... The fee will be as follows: 45% attorney fees, computed upon net recovery or $450.00 hourly rate which ever is greater. Law firm shall be entitled to, as an additional fee notwithstanding the above, any increase in fees or enhancements allowed by the court.

Doc. No. 67-8. The agreement states plaintiff is entitled to 45% of the net recovery or the $450.00 hourly rate, whichever is higher. The net recovery is the total recovered on behalf of plaintiff, minus costs. The amount recovered on plaintiff's behalf is the jury verdict, not the jury verdict plus the Court awarded fees. The agreement, therefore, provides that counsel's attorney fee is the higher of the 45% contingency fee on the net jury verdict, or the Court awarded fee.[11]

         The Court rejects the argument that when plaintiff's fee agreement refers to the "total recovered on [plaintiff's] behalf" it refers to the jury award plus the Court awarded fee and negative tax consequences. Counsel drafted the fee agreement. If this is what he intended it should have been specifically stated. Cohen v. Radio-Electronics Officers Union, Dist. 3, NMEBA, 146 N.J. 140, 156 (1996) (any ambiguity in a fee agreement will be construed in favor of the client) . ...

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