In Smith v. Service Master Corp., the Sixth Circuit vacated an attorney fee award of over $500,000, largely because the district court did not provide sufficient findings to support the award. The underlying case was brought under the Fair Labor Standards Act, and the plaintiffs recovered approximately $80,000 in the litigation. After the conclusion of the case, counsel sought an award of over a $500,000 for the services provided, and the Sixth Circuit vacated the five-page order that awarded them those fees.
The Sixth Circuit, in this opinion, noted, but did not resolve, several open issues concerning availability of fees and costs. The first issue implicated whether expenses for electronic legal research are recoverable. The Court noted that Sixth Circuit law “is unsettled” on this issue, and it specifically noted a split within districts of this Circuit as well as a circuit split. However, the uncertainty continues, because the Court did not have to resolve these issues. The entries provided by plaintiffs’ counsel were not sufficient to establish that each charge was reasonably related to the issues raised in the case, prompting a remand from the Court. Next, the Court tackled the issue of the appropriateness of the rates charges by law clerks and associates, which were higher than prevailing market rates for Tennessee because the law firm was from California. Again, the Court noted some uncertainty concerning what the “relevant market” is for the purpose of awarding fees, but it did not decide this issue but instead remanded because the district court did not adequately explain or discuss the governing criteria. A similar result obtained for fees for unsuccessful motions, issues, and claims.
Although this case does not decide very much, it is a good reminder for what counsel should do in order to secure a fee award that will withstand appellate scrutiny. In this case, it appears that counsel did not provide sufficient detail, which led to a district court award that likewise left much to the imagination. More thorough work on the front end of seeking fees can avoid the time, expense, and delay of an appeal and remand.
