Ferman v. Sturgis Cleaners, Inc.
Ferman v. Sturgis Cleaners, Inc.
Opinion
**488
*1197
This case requires us to consider whether employees, whose claim against their employer under the Wage Act,
**489
G. L. c. 149, §§ 148, 150, resulted in a favorable settlement agreement and stipulation of dismissal, "prevailed" in their suit for purposes of an award of attorney's fees and costs under the Wage Act's fee-shifting provisions.
3
The defendants contend that the trial judge should have applied the test for determining prevailing party status under Federal fee-shifting statutes established by
Buckhannon Bd. & Care Home, Inc
. v.
West Virginia Dep't of Health & Human Resources
,
1. Facts and procedural history . The facts and procedural posture of this case are not contested. The plaintiffs are former employees of the defendants' dry cleaning business who brought suit in November 2014, claiming that the defendants failed to pay them approximately $ 28,000 *1198 in regular and overtime wages as **490 required by G. L. c. 149, §§ 148 and 150, and G. L. c. 151, §§ 1A and 1B. Both of these chapters confer a private right of action on an employee "aggrieved" by an employer's violation of their provisions. 5 They further provide that "[a]n employee so aggrieved who prevails in such an action shall be awarded treble damages ... and shall also be awarded the costs of the litigation and reasonable attorneys' fees." See G. L. c. 149, § 150 ; G. L. c. 151, § 1B. In their complaint, the plaintiffs claimed treble damages, as well as costs and attorney's fees. 6
Following an almost two-year period in which there was the entry and lifting of a default judgment against the defendants, discovery, and the filing of various pretrial motions, the case was scheduled for trial in November 2016. Several weeks before the trial date, the court referred the parties to mediation. As a result of mediation, the parties executed a memorandum of understanding in which they agreed to settle the case for $ 20,500, but reserved the issue of the plaintiffs' entitlement to attorney's fees for resolution by the court. The parties then executed a mutual release and settlement agreement that provided that it "is the result of a compromise and that nothing set forth herein constitutes an admission of wrongdoing or liability." Subsequently, the parties filed a stipulation with dismissal in court, agreeing that "[p]ursuant to the Memorandum of Understanding and ... Mutual Release and Settlement Agreement ... Plaintiffs may file a Motion for Costs and Attorneys' Fees," following determination of which the matter would be "dismissed with prejudice" and "all **491 rights of appeal ... waived." 7
In their motion for attorney's fees, filed in February 2017, the plaintiffs claimed approximately $ 40,000 in attorney's fees and $ 1,000 in costs. The defendants opposed the motion. The judge concluded that the catalyst test and not the Buckhannon test applied to Massachusetts fee-shifting statutes. Applying the catalyst *1199 test, the judge found that the parties' agreement, which amounted to approximately seventy percent of the plaintiffs' initially demanded monetary relief, resulted "in a practical benefit as a result of their attorneys' efforts." This made the plaintiffs "prevailing parties" for purposes of an award of attorney's fees and costs. The judge granted the plaintiffs' motion with respect to $ 16,153 in attorney's fees and the entire amount of costs. 8 This appeal followed.
2.
Analysis
. Whether a plaintiff is a "prevailing party" for purposes of a statutorily authorized award of attorney's fees "is an issue of law that we consider de novo."
LaChance
v.
Commissioner of Correction
,
We conclude, as did the motion judge, that there are only two well-defined alternatives for determining whether a negotiated settlement arising under a fee-shifting statute qualifies a litigant as a prevailing party: the catalyst test, which only requires the lawsuit "to be a catalyst for a defendant's voluntary change in conduct"; and the
Buckhannon
test, which states that the judge must take an additional step and "at least impose its judicial
*1200
sanction on the agreed-upon material change in the legal relationship."
Nogeiro
v.
Commissioner of the Dep't of Transitional Assistance
,
We begin with the "two major purposes" of statutory fee-shifting provisions: "First, they act as a powerful disincentive against unlawful conduct. Second, they often provide an incentive for attorneys to provide representation in cases that otherwise
**493
would not be financially prudent for them to take on, and in that sense they help to assure that claimants who might not be able to afford counsel, or whose claims are too small to warrant an expenditure of funds for counsel, will be represented."
Commonwealth
v.
Augustine
,
The catalyst test promotes both purposes, and does so more vigorously than the
Buckhannon
test. See Albiston & Nielsen, The Procedural Attack on Civil Rights: The Empirical Reality of
Buckhannon
for the Private Attorney General, 54 U.C.L.A. L. Rev. 1087, 1121, 1130 (2007) (
Buckhannon
discourages public interest organizations from representing plaintiffs in enforcement actions). In particular, the catalyst test provides for attorney's fees if a party's lawsuit was a "necessary and important factor" in causing the defendant to provide a material portion of the requested relief, but does not require litigation to a final judicial determination or other judicial imprimatur.
Handy
v.
Penal Insts. Comm'r of Boston
,
The catalyst test thus recognizes that successful litigation may be reflected in settlements as well as court rulings, as settlements are often "the products of pressure exerted by [a] lawsuit."
**494
DeSalvo
v.
Bryant
,
The catalyst test also promotes the prompt settlement of meritorious cases, avoiding the need for protracted litigation, superfluous process, or unnecessary court involvement solely to "prevail" in a formalistic sense to ensure an award of attorney's fees and costs. Cf.
Graham
v.
DaimlerChrysler Corp
.,
The statutory language, structure, purpose, and history all confirm that the catalyst test is the correct standard to apply to the
**495
Wage Act. The Legislature specifically included fee-shifting provisions in the Wage Act to ensure its "rigorous enforcement" by private parties.
Lipsitt
v.
Plaud
,
The timing of the passage of the private right of action and accompanying fee-shifting provisions of the Wage Act provides further confirmation. The fee-shifting provisions of the Wage Act were enacted before
Buckhannon
, at a time when the catalyst test was the standard that courts applied under Federal fee-shifting statutes.
13
More specifically, at that time, we recognized that the catalyst test allowed a negotiated settlement to confer prevailing
**496
party status.
14
We therefore discern no reason why the Legislature would have thought another standard was appropriate for Massachusetts fee-shifting statutes when it enacted the fee-shifting provisions of the Wage Act.
15
See
Commonwealth
v.
Mogelinski
,
For all the foregoing reasons, we conclude that a plaintiff prevails for purposes of an award of attorney's fees under the Wage Act when his or her suit satisfies the catalyst test by acting as a necessary and important factor in causing the defendant to provide a material portion of the relief demanded in the plaintiff's complaint. Here, the criteria of the catalyst test are met because, as the trial judge correctly found, the plaintiffs' lawsuit caused the defendants to provide approximately seventy percent of the plaintiffs' monetary demands, which is clearly a material portion. Because the plaintiffs prevailed for purposes of an award of attorney's fees the Wage Act, we affirm the award.
3.
Award of appellate attorney's fees and costs
. A party that prevails on a Wage Act claim "is statutorily entitled to recover reasonable appellate attorney's fees and costs with respect to the
**497
claims on which he prevailed."
Fernandes
v.
Attleboro Hous. Auth
.,
4. Conclusion . For the foregoing reasons, we affirm the trial judge's award of attorney's fees to the plaintiffs.
So ordered .
The employees brought claims under both G. L. c. 149 and G. L. c. 151, which governs payment of overtime wages. Because our analysis is the same for both fee-shifting provisions, which are identically worded, for simplicity's sake we refer to the claims as brought under the Wage Act, unless otherwise noted.
We acknowledge the amicus briefs submitted in support of the plaintiffs by the Immigrant Worker Center Collaborative, the Mental Health Legal Advisors Committee, Community Legal Aid, Inc., the Center for Law and Education, the Disability Law Center, the National Consumer Law Center, Heisler Feldman & McCormick, P.C., and the Suffolk University Law School Accelerator-to-Practice Program; and by the Massachusetts Law Reform Institute and the American Civil Liberties Union of Massachusetts.
General Laws c. 149, § 150, permits "[a]n employee claiming to be aggrieved by a violation" of its provisions to "institute and prosecute in his own name and on his own behalf, or for himself and for others similarly situated, a civil action for injunctive relief, for any damages incurred, and for any lost wages and other benefits." General Laws c. 151, § 1B, allows an employee claiming an overtime pay violation to "institute and prosecute in his own name and on his own behalf, or for himself and for others similarly situated, a civil action for injunctive relief, for any damages incurred, and for the full amount of the overtime rate of compensation less any amount actually paid to him by the employer." As provided by G. L. c. 149, § 150, the plaintiffs first filed a written complaint with the Attorney General and requested and received written assent to bring a civil suit within ninety days of filing that complaint.
The plaintiffs also asserted breach of contract claims and violations of the Federal Fair Labor Standards Act,
The plaintiffs argue that the defendants have waived the right to appeal the issue of attorney's fees because the mutual release and settlement agreement says that the parties "agree to abide by the decision of the Court with regard to [the attorney's fees] petition." Given the result we reach today in favor of the plaintiffs, we need not resolve the issue whether the defendants waived their right to appeal altogether. We also note that we took the case on direct appellate review, and sought amicus briefing, to resolve the important, unresolved issue of the appropriate standard to apply for attorney's fees petitions under the Wage Act. Cf.
New Bedford Hous. Auth
. v.
Olan
,
The judge deducted claimed attorney's fees as to certain precomplaint work and motions, as well as to work relating to the claim under
Of course, as required by
Buckhannon
, we no longer consider the catalyst test as a "permissible basis" for determining prevailing party status under Federal fee-shifting statutes.
Buckhannon Bd. & Care Home, Inc
. v.
West Virginia Dep't of Health & Human Resources
,
As discussed infra , even if the matter were not conceded, we would conclude that the catalyst test is satisfied here and the amounts properly calculated.
At the same time, the catalyst test does not reward frivolous suits or nuisance settlements. The original case that set out the catalyst test in the United States Court of Appeals for the First Circuit explained that not only must the plaintiff's lawsuit be "causally related to the defendants' actions," but the defendants also must not have "acted gratuitously" by settling a lawsuit that was "frivolous, unreasonable, or groundless."
Nadeau
v.
Helgemoe
,
This conclusion accords with that of other States, which have expressly concluded that, following
Buckhannon
, the catalyst test still applies to determine prevailing party status for purposes of an award of attorney's fees under State fee-shifting statutes. See, e.g.,
DeSalvo
v.
Bryant
,
There has been a fee-shifting provision in G. L. c. 151, § 1B, since its enactment in 1962. St. 1962, c. 371. The present text of the private right of action and accompanying fee-shifting provision of G. L. c. 149, § 150, was enacted in 1993. St. 1993, c. 110, § 182. In 2008, the Legislature amended the fee-shifting provision of G. L. c. 151, § 1B, to conform to that of G. L. c. 149, § 150. St. 2008, c. 80, § 6. When the 1993 fee-shifting provision was enacted, prior to
Buckhannon
, the First Circuit and almost every other Federal Court of Appeals recognized the catalyst test. See
Buckhannon
,
See
Handy
v.
Penal Insts. Comm'r of Boston
,
See
Batchelder
v.
Allied Stores Corp
.,
Reference
- Full Case Name
- Belky FERMAN & Another v. STURGIS CLEANERS, INC., & Another.
- Cited By
- 4 cases
- Status
- Published