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Llanes v. Zalewski

United States District Court, D. Oregon

January 14, 2020

JESUSA LLANES, Plaintiff,
v.
ANDREA ZALEWSKI, SILVER RIDGE ADULT FOSTER CARE HOME, LLC, Defendants.

          OPINION AND ORDER

          STACIE F. BECKERMAN, UNITED STATES MAGISTRATE JUDGE

         Plaintiff Jesusa Llanes ("Llanes") brought this action against Andrea Zalewski ("Zalewski") and Silver Ridge Adult Foster Care Home, LLC ("Silver Ridge") (together, "Defendants"), alleging that Defendants violated the Fair Labor Standards Act ("FLSA"). The Court granted Defendants' motion for summary judgment (ECF No. 75). Defendants now seek a fee award and costs (ECF No. 84). For the reasons discussed below, the Court denies Defendants' fee petition and grants Defendants' amended cost bill.

         BACKGROUND

         Llanes filed this FLSA action in February 2018, alleging minimum wage and overtime violations. (ECF No. 1.) Defendants moved for summary judgment in April 2019, on the ground that Llanes does not qualify for individual FLSA coverage because she was not engaged in commerce or in the production of goods for commerce, and Silver Ridge does not qualify for FLSA's enterprise coverage because it is a local business operating wholly within Oregon. (Defs.' Mot. Summ. J. at 2.) The Court agreed, granted the motion, and entered judgment for Defendants. (Op. & Order at 12.) The Court's analysis of Llanes' individual FLSA coverage turned on whether Llanes engaged in activities that were directly related to interstate commerce. (Op. & Order at 8.)

         During discovery, Defendants served Llanes with an interrogatory that asked her to list her job duties. (Decl. of Vivek Kothari ("Kothari Decl.") Ex. 4 at 2, ECF No. 86-4.) Llanes responded, inter alia, that she "us[ed] the internet to order goods, including goods from out of state, for use in the business; [and used] telephone and mails to refill patient medications including through out-of-state mail-order pharmacies[.]" (Kothari Decl. Ex. 4 at 3.) Later, Defendants' counsel asked Llanes at her deposition whether "any out-of-state mail order pharmacies [were] used to refill patient medication?" (Kothari Decl. Ex. 1 at 6.) Llanes replied "[n]o." (Kothari Decl. Ex. 1 at 6.) Defendants' counsel asked Llanes if she "use[d] the internet to order any goods, including goods from out of state, for use in the business?" (Kothari Decl. Ex. 1 at 7.) Llanes replied "[n]o." (Kothari Decl. Ex. 1 at 7.) Defendants' counsel asked Llanes whether she had an opportunity to review her interrogatory responses, and she responded that she had. (Kothari Decl. Ex. 1 at 7.) Defendants' counsel asked Llanes several times if she "understood] that it was not truthful for [her] to state that [she] had used the internet to order goods, including goods from out of state[, ]" and Llanes replied that she could not answer. (Kothari Decl. Ex. 1 at 9-11.)

         DISCUSSION

         I. ATTORNEY'S FEES

         Defendants ask the Court to order Llanes to pay their attorney's fees because Llanes lied in her interrogatory responses in an attempt to establish an essential element of her FLSA claim.

         A. Legal Standards

         "Federal courts that award attorney's fees, unless statutorily prescribed, follow the 'American Rule' as set out in Aleyska Pipeline Serv. Co. v. Wilderness Soc 'y, 421 U.S. 240 (1975). There, the Court stated the general rule that, absent a specific provision of Congress, a litigant may not recover attorney's fees." Kreager v. Solomon & Flanagan, P.A., 775 F.2d 1541, 1543 (11th Cir. 1985). FLSA makes "fee awards mandatory for prevailing plaintiffs .... [but] does not specifically provide attorney's fees to prevailing defendants. We must therefore look beyond the Act for an exception to the American rule." Id; see also Flanagan v. Havertys Furniture Cos., Inc., 484 F.Supp.2d 580, 583 (W.D. Tex. 2006) ("In the absence of an express provision in the ADEA or FLSA that permits attorney's fees to a prevailing party, the 'American Rule' applies[.]").

         "Under the 'American Rule,' litigants ordinarily are required to bear the expenses of their litigation unless a statute or private agreement provides otherwise." Grove v. Wells Fargo Fin. Cal, Inc., 606 F.3d 577, 579 (9th Cir. 2010) (citations and quotation marks omitted). "Several exceptions to the American Rule have developed, however, based on the equitable powers of the court... to award attorney's fees when overriding considerations of justice seem to compel such a result[.]" Dir., Office of Worker's Comp. Programs, U.S. Dep 't of Labor v. Robertson, 625 F.2d 873, 879 (9th Cir. 1980) (citations and quotation marks omitted). "The 'bad faith' exception provides for the awarding of attorney's fees when the losing party has acted vexatiously or oppressively, and the rationale underlying the exception is therefore punitive." Id. (citing Hall v. Cole, 412 U.S. 1, 5(1973)).

         "Bad faith conduct encompasses a range of willful improper conduct, including taking actions that delay or disrupt litigation or hamper enforcement of a court order, or willfully abuse the judicial processes." Guerrav. United States, 75 F.Supp.3d 1276, 1281 (W.D. Wash. 2014) (citing Fink v. Gomez, 239 F.3d 989, 992-93 (9th Cir. 2001)). "The appropriate focus for the court in applying the bad-faith exception to the American Rule is the conduct of the party in instigating or maintaining the litigation . . . exhibited by, for example, its use of oppressive tactics or its willful violations of court orders." Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 345 (2d Cir. 1986). "A specific finding of bad faith or conduct tantamount to bad faith is required for inherent power sanctions." Physician's Surgery, Inc. v. German, 311 F.Supp.3d 1190, 1197 (S.D. Cal. 2018) (citation omitted). "The standards for bad faith are necessarily stringent." Odbertv. United States, 576 F.Supp. 825, 828 (E.D. Cal. 1983).

         B. Analysis

         Defendants argue that Llanes lied in her answers to their interrogatories, and that her dishonesty constitutes bad faith and justifies a fee award. Llanes counters that "[w]ith a relatively unsophisticated immigrant plaintiff, it is understandable that some facts may have been lost in translation[.]" (Pl.'s Resp. at 3.) Llanes adds that when she "was asked specific questions at deposition, testifying through a translator in her primary language of Tagalog, she could and did correct any ...


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