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Fast v. Cash Depot, Ltd.

United States Court of Appeals, Seventh Circuit

July 30, 2019

Timothy J. Fast, Plaintiff-Appellant,
v.
Cash Depot, Ltd., Defendant-Appellee.

          Argued May 14, 2019

          Appeal from the United States District Court for the Eastern District of Wisconsin. No. 16-CV-1637 - William C. Griesbach, Chief Judge.

          Before Flaum, Kanne, and Scudder, Circuit Judges.

          KANNE, CIRCUIT JUDGE.

         Cash Depot underpaid employees for their overtime work. Timothy Fast, a former employee, filed this action under the Fair Labor Standards Act on behalf of himself and other Cash Depot employees. In response, Cash Depot hired an accountant to investigate the matter and subsequently issued checks to all underpaid current and former employees covered by the suit. The company also issued checks to Fast for his underpaid wages, an amount for liquidated damages under the FLSA, and the amount of Fast's disclosed attorney fees to that point in the litigation. Fast and his attorney never cashed their checks.

         Cash Depot then moved to dismiss the suit as moot or, alternatively, for summary judgment. The district court denied the motion to dismiss because Fast contested whether Cash Depot correctly calculated the amount it owed him and other employees. However, the court granted partial summary judgment for Cash Depot, "to the extent that [it] correctly calculated" what it owed Fast. Eventually Fast's attorney conceded that Cash Depot correctly paid the missing wages and urged that only a dispute over additional attorney fees remained.

         After Fast's demand for additional attorney fees went unanswered, he filed a motion for attorney fees. Cash Depot responded in kind with a motion to dismiss or, alternatively, a motion for summary judgment. The court determined that because Fast was not a prevailing party for the purposes of the FLSA, he was not entitled to attorney fees, and granted Cash Depot's motion for summary judgment. Fast appeals, arguing that he was a prevailing party and is entitled to reasonable attorney fees. But because he never received a favorable judgment, we affirm.

         I. Background

         Cash Depot maintains and services ATMs in the Green Bay, Wisconsin area. Timothy Fast, a former service technician, believed that Cash Depot underpaid him by failing to count certain non-discretionary bonuses and other payments in his base pay when the company calculated his overtime pay. He brought this suit against Cash Depot on behalf of himself and all similarly situated service technicians in the Eastern District of Wisconsin, alleging that Cash Depot's failure to pay the proper overtime amounts violated the Fair Labor Standards Act of 1938, 29 U.S.C. § 203 et seq.

         Shortly after filing suit and exchanging initial discovery, Cash Depot determined that the cost of defending a class action suit would likely outweigh the class members' potential damages. To assess whether it had underpaid its employees, Cash Depot hired an accounting firm that ultimately confirmed that the company miscalculated overtime pay. The accounting firm tallied Cash Depot's cumulative underpayments at less than $22, 000.

         Cash Depot then issued checks to all its current and former employees covered by the suit for the amounts the company underpaid them individually. The company's counsel also mailed a letter and check for $338.98 to Fast's counsel to compensate Fast for his underpaid wages and liquidated damages provided under the FLSA. The letter informed Fast that Cash Depot also intended to compensate him for all reasonable attorney fees incurred up to that point in the litigation. In its early discovery correspondence with Fast, Cash Depot requested the amount of legal fees Fast's counsel had incurred so far. Relying on a discovery disclosure made by Fast's counsel, Cash Depot sent Fast's counsel a check for $13, 333.35 to cover attorney fees and costs. Neither Fast nor his counsel cashed their checks.

         Cash Depot then filed a motion to dismiss the case as moot because it paid Fast and all other members of the putative class in full. It also filed, in the alternative, a motion for summary judgment that asked the district court to establish that it only owed Fast $380.76 in underpaid wages, his costs, and his reasonable attorney fees. The district court denied Cash Depot's motion to dismiss, noting that as a representative for the putative class, Fast had a right to avoid a forced settlement and to refuse to accept the money. However, the district court partially granted Cash Depot's motion for summary judgment as to the amount of Fast's damages (to the extent that Cash Depot made correct calculations). Cash Depot had provided its calculations of the amount it underpaid Fast to his counsel and to the court, but Fast's counsel claimed that he believed they were incorrect. Yet Fast's counsel neither explained the basis for this belief, nor revealed his own calculations of how much Cash Depot owed. The district court noted that Fast had an interest in serving as a potential class representative, and therefore could avoid Cash Depot's attempts to moot the case by declining to disclose the amount.

         After the district court denied Cash Depot's motion to dismiss, it lifted a stay on discovery. Cash Depot then provided Fast's counsel redacted copies of its calculations and payment information for all its employees in December 2017, even though Fast still had not moved for class certification. In February 2018, Fast's counsel finally conceded that Cash Depot had correctly paid all wages owed to its employees (including Fast) and stated that the parties only needed to reconcile the appropriate amount of attorney fees. By that point in the litigation, Fast's counsel claimed that his reasonable fees had risen to $50, 137.04. He sent e-mails to Cash Depot requesting an update on settling attorney fees, but Cash Depot's counsel never responded. Fast eventually filed a motion for attorney fees on June 20, 2018. Cash Depot then filed a motion to dismiss or, alternatively, for summary judgment on July 25, 2018.

          In November 2018, the district court denied Fast's motion for attorney fees and granted Cash Depot's motion for summary judgment. In its order, the district court explained that § 216(b) of the FLSA provides that an award of attorney fees is contingent on a favorable judgment for the plaintiff. However, looking to our decision in Palmetto Props., Inc. v. Cty. of DuPage,375 F.3d 542, 547 (7th Cir. 2004), the district court determined that the Supreme Court's Buckhannon analysis for "prevailing parties" in discretionary fee-shifting statutes also applied. The Supreme Court's decision in Buckhannon required that a "prevailing party" under federal fee-shifting statutes must attain a judgment in his favor, a court-approved settlement, or some other favorable resolution with a "judicial imprimatur." See Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health & Human Res.,532 U.S. 598, 603-05 (2001). The district court noted that Fast received no judgment in his favor and that Cash Depot's voluntary payments never received court approval. The court then determined that because Fast never ...


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