Association of Disabled Americans v. Neptune Designs, Inc.

The Association of Disabled Americans, Michelle Wisniewski, and Daniel Ruiz (collectively, the “Association”) appeal from a final order of the district court adopting the magistrate judge’s Report and Recommendation (“R&R”) granting in part and denying in part Plaintiffs’ Verified Application for Attorney’s Fees and granting in part and denying in part Plaintiffs’ Verified Application for Costs, Expert Fees and Litigation Expenses. The Association claimed fees and costs as prevailing parties in a lawsuit against Neptune Designs, Inc., Jay Pfahl, Carmenza Pfahl, and Fioradelle A. Pfahl (collectively, “Neptune”) under 42 U.S.C. § 12181 et seq., Title III of the Americans with Disabilities Act (“ADA”).

On appeal, the Association argues that the district court erroneously reduced the award of legal fees and expert costs on the ground that the Association failed to provide pre-suit notice of the alleged ADA violations to Neptune. In response and through their cross appeal, Neptune argues that the district court erred in awarding any fees and costs to the Association. We vacate the award and remand.

I. BACKGROUND

The Association’s Complaint against Neptune Designs, a jewelry store and retail facility, requested injunctive relief for access and barrier removal pursuant to the ADA. The Complaint also requested prevailing party attorney’s fees, costs, and litigation expenses, as provided for by 42 U.S.C. § 12205.

The parties agreed to mediation and entered into a settlement agreement (the “Agreement”), resulting in a Joint Notice of Voluntary Dismissal with Prejudice. The Agreement provided that the court retain jurisdiction to enforce the settlement and to determine the parties’ entitlement to fees and costs. The Association filed a Verified Fee Application, seeking $18,669.75 in attorney fees, $752.34 for litigation expenses and costs, and $3,370.50 in expert fees and costs. Neptune opposed the Association’s motion for fees and costs on the basis that no notice was provided prior to the filing of the Association’s Complaint.

The Magistrate, without holding an evi-dentiary hearing, issued a Report & Recommendation (“R&R”), granting in part and denying in part the Association’s Verified Fee Application. While upholding the Association counsel’s hourly rate and finding the Plaintiffs to be the prevailing party, the R&R granted the Association a significantly reduced award of fees and costs. The Association timely filed objections to the R&R. The district court entered a one page order adopting the R&R *1359in full. .Both parties now appeal from that order.

II. DISCUSSION

Section 12205 of the ADA authorizes a court, in its discretion, to “allow the prevailing party, other than the United States, a reasonable attorney’s fee, including litigation expenses, and costs .... ” 42 U.S.C. § 12205. In calculating a reasonable attorney’s fee award, the court must multiply the number of hours reasonably expended on the litigation by the customary fee charged in the community for similar legal services to reach a sum commonly referred to as the “lodestar.” Hensley v. Eckerhart, 461 U.S. 424, 433-34, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983); Norman v. Housing Auth., 836 F.2d 1292, 1299 (11th Cir.1988). The court may then adjust the lodestar to reach a more appropriate attorney’s fee, based on a variety of factors, including the degree of the plaintiffs success in the suit.1 Hensley, 461 U.S. at 435-36, 103 S.Ct. at 1940-41.

In this case, the magistrate judge found the requested fee “excessive or unnecessary” under the Hensley formula and reduced the award, noting that “no notice was given before suit was filed,. and less than twenty days after the service of the complaint, the. defendants advised the plaintiffs of their willingness to make whatever changes the plaintiffs wanted.” The magistrate also referred to the experience and skill of the Association’s counsel, the “cookie-cutter” nature of the suit and settlement agreement,2 and the secretarial nature of some of the work for which payment was requested. The district court.adopted these findings and the magistrate’s recommendation to reduce the fee award from the amount requested based on these findings.3 We review the district court’s decision to award fees and expenses under the ADA for abuse of discretion. Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1179 (11th Cir.2005). “ ‘An abuse of discretion occurs if the judge fails to apply the proper legal standard or to follow proper procedures in making the determination, or bases an award upon findings of fact that are clearly erroneous.’” Id. at 1180, quoting In re Red Carpet Corp., 902 F.2d 883, 890 (11th Cir.1990).

As the magistrate acknowledged, unlike some other civil rights statutes, the ADA does not require pre-suit notice for claims filed against private public accom*1360modations. See 42 U.S.C. §§ 12188(a)(1), 2000a-3(a). A person may file a suit seeking relief under the ADA without ever notifying the defendant of his intent to do so, and the district court may not dismiss the suit for lack of pre-suit notice. Of course, in awarding attorney’s fees, a district court has discretion to consider, among other things, whether the litigation is frivolous or whether the plaintiff declined to settle after receiving a fair offer of judgment. See, e.g., Fed.R.Civ.P. 11, 68.4 And, a district court may consider whether the plaintiffs failure to ask for or to accept voluntary compliance prior to suit indicates that the plaintiff has acted in bad faith, has been unduly litigious, or has caused unnecessary trouble and expense.

We stress that pre-suit notice is not required to commence suit under the ADA and that lack of pre-suit notice does not compel a reduction of the requested fee award.5 But where the factual record supports a finding that the plaintiff filed or maintained a suit unnecessarily, a district court may properly consider such a finding in setting the amount of attorney’s fees. Here, the factual record is incomplete and now does not support the reduction in the fee award. The only evidence the magistrate judge allowed on the contested issues of pre-suit notice and Neptune’s offer of compliance was an untimely affidavit from the owners of Neptune stating that they had no.t received pre-suit, notice of the ADA violations from the Association and that they had agreed to “do everything the Plaintiffs wanted with the exception of paying any unreasonable fee to Plaintiffs.”6 Receiving evidence from only one party on *1361a disputed material fact outside the court’s expertise is inherently unfair and an abuse of discretion. See Love v. Deal, 5 F.3d 1406, 1409 (11th Cir.1993) (district court abused its discretion by failing to hold an evidentiary hearing where there was dispute of material fact that could not be resolved from the record); Norman v. Housing Auth., 836 F.2d 1292, 1304 (11th Cir.1988) (“[Wjhere there is a dispute of material historical fact such as whether or not a case could have been settled without litigation ..., an evidentiary hearing is required.”).

III. CONCLUSION

Because the magistrate judge failed to hold an evidentiary hearing to resolve disputed facts material to whether the litigation was unnecessary, the district court abused its discretion in adopting the magistrate’s R&R, which recommended reducing the fee award based on that factor. Therefore, we vacate the award and remand for further proceedings, consistent with this opinion, on the amount of attorney’s and expert fees to be awarded to the Association.

VACATED AND REMANDED.