                                                              FILED
                                                  United States Court of Appeals
                     UNITED STATES COURT OF APPEALS       Tenth Circuit

                            FOR THE TENTH CIRCUIT                          May 7, 2013

                                                                      Elisabeth A. Shumaker
                                                                          Clerk of Court
DONACIANO OLIVO;
CLARENCE PACHECO,

             Plaintiffs-Appellants,

v.                                                         No. 12-2116
                                                (D.C. No. 6:10-CV-00782-BB-LFG)
CRAWFORD CHEVROLET INC.,                                     (D. N.M.)

             Defendant-Appellee,

and

CARL ROMERO,

             Defendant.


                            ORDER AND JUDGMENT*


Before LUCERO, ANDERSON, and BALDOCK, Circuit Judges.




*
      After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
      Plaintiffs Donaciano Olivo and Clarence Pacheco appeal from the district

court’s partial grant of their request for attorney’s fees under 29 U.S.C. § 216(b), as

prevailing parties. We affirm in part and reverse in part.

                                     I. Background

      Plaintiffs sued defendants, asserting four claims: (1) violations of the Fair

Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, and the New Mexico Minimum

Wage Act (NMMWA); (2) retaliation under the FLSA and the NMMWA; (3) unjust

enrichment; and (4) discrimination under 42 U.S.C. § 1981. See Aplt. App. at 154.

Plaintiffs were represented by Brandt Milstein, a Colorado attorney who specializes

in wage cases, and Daniel Yohalem, a New Mexico lawyer who specializes in

discrimination cases. The case was tried to the court, which found for plaintiffs and

awarded damages to them only on their FLSA claim. Id. at 35-36. As prevailing

parties on this claim, plaintiffs were entitled to an award of attorney’s fees under

29 U.S.C. § 216(b).

      In their motion for attorney’s fees, Mr. Yohalem and Mr. Milstein requested

$160,677.00 in fees (expressly including the New Mexico Gross Receipts Tax for

Mr. Yohalem) and $5360.00 in recoverable costs, for a total initial requested award

of $166,037.00.1 Aplt. App. at 40. Their motion explained that they had already

“adjusted their billings to eliminate work performed on claims Plaintiffs lost at trial,”

had “taken care to exclude duplication of effort and all unnecessary team efforts,”
1
      We have corrected a transposition error in the total stated in the motion.


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had reduced their billings for “[a]ny amount of time that may have been excessive for

a particular task,” and had charged “[n]o time spent on any clerical activities.” Id.

at 44. They also explained that Mr. Yohalem had reduced his billings by a greater

percentage than Mr. Milstein “because Mr. Yohalem specializes in discrimination

cases, and thus spent more time on the discrimination aspects of this litigation [on

which plaintiffs did not prevail], while Mr. Milstein specializes in wage cases, and

thus spent more time on the wage aspects of this litigation” on which plaintiffs were

successful. Id. at 44-45. They also stated that they had deducted all of the costs

related to plaintiffs’ expert witness and “all costs associated with Plaintiffs’

interviews of their medical providers.” Id. at 49. They attached affidavits in support

of their requested hourly rates, as well as their adjusted invoices, which showed “NO

CHARGE” or zeroed-out charges on various lines throughout. See generally id.

at 61-68, 77-104. Mr. Yohalem’s invoices included a line item showing an amount

for the New Mexico Gross Receipts Tax at 8.1875 percent. Id. at 68. In their reply

brief, the attorneys also requested $4442.50 in fees for the number of hours they

spent litigating the contested fee motion, bringing their total requested fees and costs

to $170,479.50.2 Id. at 146, 152.

      Defendants did not oppose the hourly rates Mr. Yohalem and Mr. Milstein

requested. But defendants argued that Mr. Yohalem and Mr. Milstein should be

awarded only twenty-five percent of their total fee request, for a total award of less
2
      We have corrected a transposition error in the total in the reply brief as well.


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than $45,000.00, because they prevailed on only one of the four claims they had

asserted. See id. at 107-08. Defendants marked up the invoices, circling on the left

side the line items they thought would be reasonable to award and lining out other

items they thought should not be awarded. See generally id. at 110-145.

      The district court adopted the hourly rates Mr. Yohalem and Mr. Milstein

proposed, but substantially reduced the number of hours requested on the invoices.

The court reviewed defendants’ marked-up copy, writing to the right of most of the

line items the amount the court would award, and showing whether the award was for

the amount Mr. Yohalem or Mr. Milstein had originally requested, a reduced amount,

or nothing. See generally id. at 159-94. The court also showed a subtotal of the

amounts awarded at the bottom of each page of the invoices. See generally id. The

line item for Mr. Yohalem’s request for the New Mexico Gross Receipts Tax was not

marked up by either defendants or the district court, and the court’s subtotal on the

relevant page shows that no amount was awarded for this tax. See id. at 194. The

invoices did not show Mr. Yohalem’s and Mr. Milstein’s request for fees to litigate

the contested fee motion, which was made in their reply brief, and the court did not

write on the invoices any comment or amount related to this request. The court

awarded Mr. Yohalem and Mr. Milstein a total of $79,248.28 to compensate them for

the hours reasonably expended on the case, which was less than half the amount they

had requested, but which was considerably more than defendants had argued they

should be awarded.


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                               II. Issues and Discussion

      “We review the district court’s award of attorney’s fees for a clear abuse of

discretion.” Malloy v. Monahan, 73 F.3d 1012, 1017 (10th Cir. 1996). “The district

court should, however, ‘provide a concise but clear explanation of its reasons for the

fee award.’” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)). “An

abuse of discretion is an arbitrary, capricious, whimsical, or manifestly unreasonable

judgment.” Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1286 (10th Cir. 2002)

(internal quotation marks omitted). “We review the statutory interpretation or legal

analysis that formed the basis of the award de novo.” Malloy, 73 F.3d at 1017.

      Mr. Yohalem and Mr. Milstein argue that the district court abused its

discretion by: (1) failing to explain why it reduced their request for fees by

approximately half, after they had already substantially reduced their fees to include

only their work on issues on which they prevailed at trial; (2) failing to discuss or

explain why it omitted all of the attorney’s fees they requested for the time and effort

spent litigating the contested motion for fees; and (3) failing to discuss or explain

why it omitted all amounts requested for the New Mexico Gross Receipts Tax that

will be paid on the fees awarded to Mr. Yohalem.

      The Supreme Court has held that “the district court has discretion in

determining the amount of a fee award,” which “is appropriate in view of the district

court’s superior understanding of the litigation and the desirability of avoiding

frequent appellate review of what essentially are factual matters.” Hensley, 461 U.S.


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at 437. “When an adjustment is requested on the basis of . . . the . . . limited nature

of the relief obtained by the plaintiff[s],” id., the district court’s explanation must

“answer the question of what is ‘reasonable’ in light of that level of success,” id.

at 439. It is not sufficient for the court to make “a mere conclusory statement that

[the awarded] fee was reasonable in light of the success obtained.” Id. n.15. The

Court has recently further explained that

       [i]t is essential that the judge provide a reasonably specific explanation
       for all aspects of a fee determination. . . . Unless such an explanation is
       given, adequate appellate review is not feasible, and without such
       review, widely disparate awards may be made, and awards may be
       influenced (or at least, may appear to be influenced) by a judge’s
       subjective opinion regarding particular attorneys or the importance of
       the case.

Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662, 1676 (2010). But “the fee

applicant bears the burden of establishing entitlement to an award and documenting

the appropriate hours expended and hourly rates.” Hensley, 461 U.S. at 437. “The

applicant should exercise ‘billing judgment’ with respect to hours worked, . . ., and

should maintain billing time records in a manner that will enable a reviewing court to

identify distinct claims.” Id.

       Based on these guiding principles, we affirm the district court’s award for the

hours it allowed for Mr. Yohalem’s and Mr. Milstein’s work through the trial of the

case. The court set out the framework for its decision in its order, summarized the

parties’ arguments, and held that “Plaintiffs are entitled to all the fees and costs they

spent litigat[ing] their FLSA claim but few of the fees incurred on overlapping


                                            -6-
claims.” Aplt. App. at 155. The court stated that it had “engaged in a line by line

review of the bills of Plaintiffs’ counsel and parsed out those that sustained their

FLSA claims.” Id. at 157. The court expressly allowed billing “directly related to or

intertwined with Plaintiffs’ successful claim.” Id. at 158.

      We have carefully reviewed the record. It is apparent that the court began with

defendants’ marked-up version of Mr. Yohalem’s and Mr. Milstein’s invoices, and

then reduced numerous individual line items further. See Aplt. App. at 159-85,

187-94. The court also awarded fees for some hours that defendants had lined out.

See id. at 163-64, 166-68, 170, 180, 184. While the explanation in the court’s order

is brief, the court did not adopt defendants’ view of Mr. Yohalem’s and

Mr. Milstein’s requested fees. Rather, it is clear that the court exercised its

independent judgment based on its “‘superior understanding of the litigation.’”

See Carter v. Sedgwick Cnty., 929 F.2d 1501, 1507 (10th Cir. 1991) (quoting

Hensley, 461 U.S. at 437). The explanation in the court’s order was not “a mere

conclusory statement that [the awarded] fee was reasonable in light of the success

obtained.” Hensley, 461 U.S. at 439 n.15.

      In their brief on appeal, Mr. Yohalem and Mr. Milstein point to some

examples of line items they contend should have been awarded. But the descriptions

on those examples are vague, and we are not persuaded that the district court acted

arbitrarily by not viewing those hours as connected to plaintiffs’ FLSA claim. In

short, we hold that the district court’s explanation was adequate for judicial review,


                                          -7-
and the court did not abuse its discretion in reducing Mr. Yohalem’s and

Mr. Milstein’s fee request for their work through the trial of the case. We note,

however, that the trial court’s explanation in this case is close to the most minimal

explanation we could affirm. District courts should heed the Supreme Court’s

guidance in Hensley and Perdue in articulating their attorney’s fee awards.

          We conclude, however, that the district court abused its discretion by failing to

discuss in its order Mr. Yohalem’s and Mr. Milstein’s request for fees for litigating

the fee motion in the district court and Mr. Yohalem’s request for fees for the New

Mexico Gross Receipts Tax. Our review of the district court’s calculations shows us

that no amount was awarded for either of these items, but we are unable to discern

why. The New Mexico Gross Receipts Tax is required by state law and may be

included as part of plaintiffs’ attorney’s fee award. See Herrera v. First N. Sav. &

Loan Ass’n, 805 F.2d 896, 901-02 (10th Cir. 1986); Rio Grande Sun v. Jemez

Mountains Pub. Sch. Dist., 287 P.3d 318, 324 (N.M. Ct. App. 2012). On these two

issues, we reverse for the district court to make an award or explain why it chooses

not to.




                                             -8-
      The judgment of the district court is affirmed in part and reversed in part, and

the case is remanded for additional proceedings consistent with this order and

judgment.


                                               Entered for the Court


                                               Bobby R. Baldock
                                               Circuit Judge




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