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Media Alerts - Randolph v. Powercomm Construction, Inc. -- Fourth Circuit
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November 27, 2017
  Randolph v. Powercomm Construction, Inc. -- Fourth Circuit
Construction Company Convinces Fourth Circuit to Rebuild Attorney's Fee Award

Areas of Law: Employment Law

Issue Presented: Whether the district court abused its discretion by including time-barred claims in its award of attorney's fees.

Brief Summary: In an unpublished opinion, the United States Court of Appeals for the Fourth Circuit held that the district court misapplied the fee analysis framework when it failed to provide any justification for including time-barred claims in its calculation of attorney's fees.

Extended Summary: In July 2014, a group of sixty five employees sued their employer, Powercomm Construction, Inc. ("Powercomm"), in a collective action seeking $790,000 in damages, including $263,305 in overtime wages and $526,661 in liquidated damages. A year later, the U.S. District Court for the District of Maryland dismissed the claims of ten of the employees because their claims were barred by the governing statutes of limitations. In April 2016, the remaining fifty five employees settled their claims with Powercomm for $100,000, excluding attorney's fees. Shortly thereafter, the attorney for the employees filed a motion requesting $227,577 in attorney's fees. Upon reviewing the merits of the request, the district court awarded fees, but reduced the amount to $183,764. Powercomm appealed, contending that the attorney's fees were excessive because (1) ten plaintiffs had been dismissed from the case; and (2) the settlement amount was far less than the amount initially requested.

On review, the Fourth Circuit held the district court had abused its discretion. The court first laid out the three-step fee analysis framework from McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013). Under this framework, the court must first multiply the number of hours expended by a reasonable hourly rate. Second, when an attorney is successful in some claims but unsuccessful in others, the court must deduct the fees allocated to the unsuccessful claims if they are unrelated to the successful claims and do not share a "common core of facts." Third, using some discretion, the court must consider the degree of success reached in order to determine the percentage of the remaining amount to award. Steps two and three were at issue in this case.

The court first looked at the second step of the McAfee fee analysis test. While the district court did address this step, the Fourth Circuit found that the lower court erred because it did not discuss whether the unsuccessful, time-barred claims shared a common set of facts with the successful claims. Even though the Fourth Circuit did resolve that question, it made its opinion clear, stating it was "difficult to imagine how the time-barred claims of the dismissed Plaintiffs [could be] intertwined with the successful claims." On remand, the Fourth Circuit instructed the district court to properly analyze the second step by determining whether the successful and unsuccessful claims were sufficiently related.

The court also held that the district court clearly erred in applying the third step of the McAfee framework because it relied on an inaccurate number in determining whether the attorney's fee award was proportional to the degree of success reached. Specifically, the district court chose not to reduce the award because, in the court's eyes, the plaintiffs received 38% of their claimed damages. However, the Fourth Circuit pointed out that the 38% only accounted for the $100,000 settlement number in comparison to the $267,777 claim for unpaid overtime wages. The Fourth Circuit held that this calculation was improper because it did not incorporate the additional claim for liquidated damages. Had the liquidated damages been considered, the plaintiffs would have received only 13% of their demand in comparison.

Because the district court misapplied steps two and three of the fee analysis framework, the Fourth Circuit vacated the award and remanded for further consideration.

To read the full opinion, click here.

Panel: Judges Shedd, Thacker, and Floyd.

Date of Issued Opinion: 10/31/2017

Docket Number: No. 16-2370

Decided: Decided by unpublished opinion.

Case Alert Author: Jeremy Himmelstein, Univ. of Maryland Carey School of Law

Counsel: Geoffrey M. Bohn, Robert A. Battey, BOHN & BATTEY, PLC, Arlington, Virginia, for Appellants. Nicholas Woodfield, R. Scott Oswald, EMPLOYMENT LAW GROUP, PC, Washington, D.C., for Appellees.

Author of Opinion: Per Curiam Opinion

Case Alert Supervisor: Professor Renée Hutchins

    Posted By: Renee Hutchins @ 11/27/2017 03:41 PM     4th Circuit  

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