Millea v. Metro-North Railroad: Calculation of Fee Awards under Fee-Shifting Statutes

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The Second Circuit has recently issued a decision with important guidance for trial courts assessing attorney fee applications under a fee-shifting statute. In Millea v. Metro-North Railroad, the plaintiff successfully brought claims against his former employer under the federal Family Medical Leave Act (FMLA), but was awarded only $204 in attorneys’ fees (one-third of the approximately $612 he recovered). See Millea v. Metro-North R.R. Co., 10-409-cv, 2011 U.S. App. LEXIS 16354 (2d Cir. Aug. 8, 2011) (available here).

Because the FMLA contains a fee-shifting provision, the Second Circuit began its analysis with the observation that both it and the U. S. Supreme Court have held that the lodestar method sets a presumptively reasonable fee in actions where a fee-shifting statute applies. See id. at *24. There was no express indication in the district court record of whether a lodestar analysis was conducted, though it does state that Millea requested fees totaling $144,792. Although downward adjustments to a lodestar are sometimes appropriate, the Second Circuit notes that such adjustments should be limited only to “rare circumstances.”  Id.

In assessing the district court’s stated reasons for reducing the fee request, the Second Circuit’s decision took up and rejected each in succession. The decision first addressed the district court’s reliance on the case’s supposed lack of novelty and complexity as one factor in reducing the fee request. The appellate panel reasoned that it is inappropriate to use such reasoning, since novelty and complexity are already embodied in a lodestar, which is based on the total hours billed. More complex or novel cases will naturally require expending a greater number of hours, while less complex issues require fewer hours.  See id. at *25. The panel also rejected the district court’s analysis that the plaintiff’s FMLA claim lacked public policy significance, reasoning that since Congress enacted the fee-shifting provision for FMLA claims, the public policy significance of such claims is not in dispute.  See id. at *26. As to the district court’s conclusion that the fee request should be reduced on the basis of the plaintiff losing on his intentional infliction of emotional distress (IIED) claim, the appellate panel pointed out that, again, this is already incorporated into a lodestar calculation, which excludes claims not eligible for fee shifting (such as the plaintiff’s IIED claim).  Id. at *27.

Finally, as a general statement of principal as to the rules for determining attorney fee awards under fee-shifting statutes, the appellate panel held that it was “legal error” for the district court to have “calculated its final fee award as a proportion of the damages” awarded to the plaintiff.  Id. at *30. The plaintiff’s FMLA-related award was $612.50, and the district court determined the $204 fee award in relation to those damages. The unanimous panel took issue with the implicit premise that the fees must be a fraction of the recovery, irrespective of the amount of the recovery or the significance of the legal issue, stating: “The whole purpose of fee-shifting statutes is to generate attorneys’ fees that are disproportionate to the plaintiff’s recovery.”  Id. at *31.