KRYSTAL GURULE; MELISSA HALL; RYAN MATTE; KIMBERLY TAYLOR, Plaintiffs-Appellants Cross-Appellees
LAND GUARDIAN, INCORPORATED; MOHAMMAD AYMAN JARRAH, Defendants-Appellees Cross-Appellants
Appeals from the United States District Court for the
Southern District of Texas
HAYNES, HO, and DUNCAN, Circuit Judges.
KYLE DUNCAN, CIRCUIT JUDGE.
case asks us to explore the relationship between the
cost-shifting mechanism in Federal Rule of Civil Procedure 68
and the fee-shifting provision in the Fair Labor Standards
Act (FLSA), 29 U.S.C. § 201 et seq. One of the
plaintiffs rejected a Rule 68 offer of judgment and proceeded
to trial, where she prevailed on her FLSA claim and was
awarded damages and attorney's fees. There was a catch,
however: the damages she won at trial were lower than the
offer she had earlier spurned, and so Rule 68 required her to
pay the defendants' post-offer costs. The issue is what
effect, if any, this should have on the plaintiff's fee
award. Several circuits have held that, in assessing a
plaintiff's degree of success under a fee-shifting
provision like the FLSA's, a court should consider a
plaintiff's rejection of a Rule 68 offer that would have
given her more than what she ultimately obtained at trial. We
think that approach makes sense and so join those circuits.
We AFFIRM the fee award, however, because the district court
properly considered the rejected Rule 68 offer in its
considerable downward adjustment of the lodestar. We AFFIRM
the district court's judgment in all other respects.
Krystal Gurule ("Gurule"), Melissa Hall
("Hall"), Ryan Matte ("Matte"), and
Kimberly Taylor ("Taylor") were employees at the
midtown Houston nightclub, Gaslamp. Gaslamp is owned and
operated by Appellees Land Guardian and Mohammad Ayman Jarrah
(collectively "Gaslamp"). Gurule and Hall were
employed as bottle-service waitresses, Matte and Taylor as
bartenders. In December 2015, those employees sued Gaslamp
under the FLSA for failure to pay minimum wage and overtime.
See 29 U.S.C. §§ 206(a), 207(a). Their
complaint alleged that Gaslamp violated the minimum wage
requirement by systematically diverting tips from tipped
employees, id. §§ 206(a), 203(m), and the
overtime requirement by failing to pay time-and-a-half to
employees working more than 40 hours per workweek,
id. § 207(a). As relief they sought minimum
wage for hours worked, "wrongfully diverted" tips,
overtime wages, as well as liquidated damages, attorney's
fees, and costs. In February 2016 Hall settled her claims
against Gaslamp for $300. In April 2017 Gaslamp moved for
partial summary judgment on Matte and Taylor's claims.
That same month Gurule, Matte, and Taylor were granted
stipulated dismissal of their overtime claims.
2017 the court granted Gaslamp summary judgment on Matte and
Taylor's remaining claim. The court found that Matte and
Taylor failed to produce any evidence showing "as a
matter of just and reasonable inference" that they had
"performed uncompensated work." See Harvill v.
Westward Commc'ns, LLC, 433 F.3d 428, 441 (5th Cir.
2005) (an FLSA plaintiff meets her initial burden
"'if [she] proves that [she] has in fact performed
work for which [she] was improperly compensated and if [she]
produces sufficient evidence to show the amount and extent of
that work as a matter of just and reasonable
inference'") (quoting Anderson v. Mt. Clemens
Pottery Co., 328 U.S. 680, 687-88 (1946)). Matte and
Taylor admitted they lacked "any evidence of their own
supporting their claims," but instead "exclusively
rel[ied] on the representative testimony of Plaintiff Gurule
to prove their hours worked and tips received." As the
court explained, such "representational testimony"
may establish a prima facie FLSA case under certain
circumstances. See, e.g., Tyson Foods, Inc. v.
Bouaphakeo, 136 S.Ct. 1036, 1047 (2016); see also
Albanil v. Coast 2 Coast, Inc., 444 Fed.Appx. 788, 806
(5th Cir. Oct. 13, 2011) (unpublished) (discussing
representational testimony in FLSA cases and collecting
authorities). But not here, the court concluded, given that
Gurule had different duties from Matte and Taylor, lacked
"personal knowledge" of their work, and "could
only speculate" about their hours. The court therefore
granted summary judgment on Matte and Taylor's
that remained was Gurule's minimum wage claim, which
would be tried to a jury in September 2017. About a
year-and-a-half before that, in February 2016, Gaslamp made
Gurule an offer of judgment under Federal Rule of Civil
Procedure 68 in the amount of $3, 133.44, which she rejected.
She also declined to accept subsequent offers ranging from
$1, 566 to $5, 000 in the months leading up to trial. After a
one-day trial, a jury returned a verdict in Gurule's
favor and awarded her $1, 131.39 in compensatory damages. The
district court subsequently awarded her $1, 131.39 in
liquidated damages and $25, 089.30 in attorney's fees.
See 29 U.S.C. § 216(b) (providing for
liquidated damages equal to compensatory damages and
reasonable attorney's fees). Because she had declined
Gaslamp's more favorable Rule 68 offer in February 2016,
however, Gurule was ordered to pay Gaslamp $1, 517.57 in
costs. See Fed. R. Civ. P. 68(d) (if offeree's
final judgment is "not more favorable than the
unaccepted offer," offeree "must pay the costs
incurred after the offer was made"); see also Marek
v. Chesny, 473 U.S. 1, 5-12 (1985) (discussing Rule 68).
and Taylor timely appealed the summary judgment grant, and
Gaslamp timely cross-appealed the district court's
attorney's fee award.
first address Matte and Taylor's challenge to the summary
judgment dismissing their FLSA claim. We review that judgment
de novo, applying the same legal standards as the
district court and drawing all justifiable factual inferences
in favor of the non-moving party. Hemphill v. State Farm
Mut. Auto. Ins. Co., 805 F.3d 535, 538 (5th Cir. 2015).
Summary judgment is proper "if the movant shows there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a). Matte and Taylor raise no argument on appeal
concerning the only issue litigated at summary
judgment-namely, whether they failed to prove a prima facie
FLSA case by relying solely on Gurule's
"representational testimony" about her own hours
and tips. They instead argue that Gaslamp did not actually
move for summary judgment on their "minimum wage"
claim at all, but instead challenged only their "stolen
tip" claim. We disagree.
district court addressed and rejected this argument in
response to Matte and Taylor's pre-trial "Memorandum
of Law," which argued that the summary judgment order
"did not dispose of [their] minimum wage claims"
but instead addressed only their "stolen tip"
claims. The district court correctly concluded that these two
claims were one and the same: "Plaintiffs' theory of
the case is that because Defendants diverted their tips, they
failed to satisfy the condition of the tip credit and
therefore violated the FLSA requirement to pay the minimum
wage. Th[ese] [are] not two separate causes of action but
rather one for failure to pay minimum wage." See,
e.g., Montano v. Montrose Rest. Assoc., Inc., 800 F.3d
186, 188 (5th Cir. 2015) (discussing "tip credit
exception" to FLSA "that permits employers to pay
less than the minimum wage-$2.13 per hour-to a 'tipped
employee' as long as the employee's tips make up the
difference between the $2.13 minimum wage and the general
minimum wage"); 29 U.S.C. § 203(m). The court also
correctly pointed out that Gaslamp's summary judgment
motion presented the "minimum wage" and
"stolen tip" claims as "one legal
theory," and that the court's summary judgment order
did the same. We agree with the district court that its
summary judgment disposed of Matte and Taylor's minimum
wage claim and we therefore affirm that
to Gaslamp's argument that the district court abused its
discretion in awarding Plaintiffs' counsel $25, 089.30 in
attorney's fees. The FLSA provides that the court
"shall, in addition to any judgment awarded to the
plaintiff or plaintiffs, allow a reasonable attorney's
fee to be paid by the defendant[.]" 29 U.S.C. §
216(b). This circuit uses the analysis in prevailing party
cases to set FLSA fee awards. Saizan v. Delta Concrete
Prod. Co., 448 F.3d 795, 799 n.7 (5th Cir. 2006). Courts
calculate a "lodestar" by multiplying the hours
reasonably spent on the case by an appropriate hourly rate.
Id. (citing Heidtman v. Cty. of El Paso,
171 F.3d 1038, 1043 (5th Cir. 1999)). Courts may then adjust
that amount based on the twelve Johnson factors.
Id. at 800; Johnson v. Georgia Highway Express,
Inc., 488 F.2d 714, 717-19 (5th Cir.
1974)). While "the most critical factor in
determining an attorney's fee award is the degree of
success obtained," Saizan, 448 F.3d at 799,
"'a low damages award alone … should not lead
the court to reduce a fee award.'" Black v.
SettlePou, P.C., 732 F.3d 492, 503 (5th Cir. 2013)
(quoting Saizan). We review challenges to a district