October 19, 2022
A recent Indiana Lawyer story by Marilyn Odendahl, “7th Circuit Rules Victory Merits Reduced Attorney Fees” reports that the 7th Circuit Court of Appeals has affirmed a reduction in attorney fees of more than 50% for an Indiana attorney who had been previously admonished by the appellate court for trying to up his compensation. Ronald Weldy represented a group of drivers against Jerry W. Bailey Trucking Inc. The plaintiffs claimed the company and its owners violated the Fair Labor Standards Act and Indiana wage laws by not paying drivers for time spent working before and after hauling jobs.
After the litigation began, the U.S. District Court for the Northern District of Indiana asked Weldy for additional information as to whether he could adequately perform as class counsel. The court noted he had only recently gotten his law license reinstated following a disciplinary suspension. Weldy was able to convince the court once he provided examples of his work as class counsel following his reinstatement.
However, although the district court conditionally certified an FLSA collective and certified a Rule 23 class, the drivers were only able to identify less than 20 individuals who met the class definition. Subsequently, the court granted the defendants’ motion to decertify the class and collective.
The two drivers who initiated the lawsuit were able to win a partial summary judgment, successfully arguing the company had violated federal and state wage laws. Later, the employees were able to negotiate settlements for each of the remaining plaintiffs. Once the court approved the settlements, the drivers petitioned for an award of attorney fees of more than $200,000. Their request reflected a billing rate of $450 per hour for about 416 hours of work performed by Weldy, plus additional hours billed by Weldy’s associate at $200 per hour and his paralegal at $150 per hour.
The district court disagreed with the calculations and made three modifications. First, the court found a $350 per hour rate was more reasonable. Second, the court struck some of the time Weldy billed, finding the attorney should not be able to recover fees for the time he had to spend showing he was capable of handling the case.
Finally, the court reduced the fee because Weldy achieved only partial success in litigating the case. The court noted he failed on the suit’s primary objective of obtaining a judgment on behalf of a class and collective. The district court thus cut the fee to $70,000.
In response to the fees order, the defendants mailed a check to Weldy and filed a satisfaction of judgment with Weldy’s approval. The drivers responded by filing a motion for reconsideration, but the court concluded the employees had waived any objection to the fee award. The drivers then appealed to the 7th Circuit, which affirmed the ruling in Daniel Koch, et al. v. Jerry W. Bailey Trucking, Inc., and Estate of Jerry W. Bailey, 21-2952.
The 7th Circuit’s opinion concluded the district court had reasonably cut the counsel’s billable hours and had reasonably determined the employees obtained only a partial victory. In reviewing the drivers’ damages, the appellate panel noted not only did they receive significantly less than they originally sought, but also, their attorney wanted sought a healthy fee.
“Altogether, the employees recovered about $60,600 of the $103,500 they claimed in damages, with each individual plaintiff receiving between 17% and 73% of that plaintiff’s claim. This limited recovery was particularly striking when compared against Weldy’s request for more than $200,000 in fees, about triple what his clients received. A district court assessing a plaintiff’s degree of success may consider how the size of the final recovery stacks up against the amount plaintiff originally sought,” Judge Candace Jackson-Akiwumi wrote for the court, citing Spegon v. Cath. Bishop of Chi., 175 F.3d 544, 558 (7th Cir. 1999).
In 2015, the 7th Circuit ruled in a different case that involved Weldy’s fees for representing a class. That panel blocked the attorney’s attempt to increase his fee of $302,780 by claiming a share of the compensation that clients received.