Ferman v. Sturgis Cleaners, Inc.

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SJC-12602

BELKY FERMAN & another1 vs. STURGIS CLEANERS, INC., & another.2

Suffolk. December 4, 2018. - February 19, 2019.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, &

Kafker, JJ.

Massachusetts Wage Act. Practice, Civil, Attorney's fees.

Civil action commenced in the Superior Court Department on

November 19, 2014.

Following a stipulation of dismissal, an application for

attorney's fees and costs was heard by Karen F. Green, J.

The Supreme Judicial Court granted an application for

direct appellate review.

John J. McGlone, III (David T. Norton also present) for the

defendants.

Elizabeth Soltan (Patricio S. Rossi also present) for the

plaintiffs.

Joseph Michalakes & Liliana Ibara, for Immigrant Worker

Center Collaborative & others, amici curiae, submitted a brief.

Margaret E. Monsell & Ruth A. Bourquin, for Massachusetts

Law Reform Institute & another, amici curiae, submitted a brief.

1 Veronica Guillen.

2 Peter Triantos.

2

KAFKER, J. This case requires us to consider whether

employees, whose claim against their employer under the Wage

Act, 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, 532

U.S. 598 (2001) (Buckhannon). Because Buckhannon requires a

prevailing litigant to obtain judicial approval or "imprimatur"

of a private settlement, the defendants argue that the

plaintiffs did not prevail. Id. at 605. The plaintiffs

disagree, arguing that, because we have previously decided that

the Buckhannon test has no applicability to Massachusetts fee-

shifting statutes, the correct standard to determine prevailing

party status under the Wage Act is the "catalyst test." Under

the catalyst test, if the plaintiff's lawsuit is a necessary and

important factor in causing the defendant to grant a material

3 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.

3

portion of the requested relief, a settlement agreement, even

without any judicial involvement, may qualify the plaintiff as a

prevailing party for fee-shifting purposes. None of the parties

disputes that the plaintiffs met the catalyst test; rather, the

central issue is the threshold question of the proper test to

apply to determine prevailing party status under the Wage Act.

We hold that the catalyst test applies to Wage Act claims and

that the trial judge correctly found that the plaintiffs

satisfied that test in the instant case, and we therefore affirm

the award of attorney's fees to the plaintiffs under the fee-

shifting provisions of the Wage Act.4

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 in regular and overtime

wages as required by G. L. c. 149, §§ 148 and 150, and G. L.

c. 151, §§ 1A and 1B. Both of these chapters confer a private

4 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.

4

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

5 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.

6 The plaintiffs also asserted breach of contract claims and

violations of the Federal Fair Labor Standards Act, 29 U.S.C.

§§ 207 and 216(b), but did not claim additional damages with

respect to these claims. The plaintiffs conceded that they had

not achieved prevailing party status on these claims.

5

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 rights of appeal

. . . waived."7

7 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, 435 Mass. 364, 372 (2001) (despite waiver of issue,

"[b]ecause there is some uncertainty over the question, because

it involves a matter of public interest that is likely to arise

in the future, and where the issue has been fully briefed, we

will address the issue").

6

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 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, 475 Mass. 757, 764 (2016), quoting

Newell v. Department of Mental Retardation, 446 Mass. 286, 298,

cert. denied, 549 U.S. 823 (2006). To determine whether the

plaintiffs here were prevailing parties, the defendants argue

that the trial judge should not have defaulted to the catalyst

8 The judge deducted claimed attorney's fees as to certain

precomplaint work and motions, as well as to work relating to

the claim under 29 U.S.C. § 207, as to which she found that the

plaintiffs did not prevail.

7

test, but rather should have considered whether, as required by

Buckhannon, there was a "material alteration of the legal

relationship of the parties" (citation omitted) and a "judicial

imprimatur on the change." Buckhannon, 532 U.S. at 604-605.

The plaintiffs are correct, however, that we have expressly

"rejected the application of Buckhannon . . . and its progeny to

fee requests under Massachusetts fee-shifting statutes or other

Massachusetts authority." Brown v. F.L. Roberts & Co., 452

Mass. 674, 689 (2008), citing T & D Video, Inc. v. Revere, 450

Mass. 107, 115 n.21 (2007).9 Consequently, the question is not

whether the Buckhannon test or the catalyst test applies, but

whether the catalyst test or another, previously undefined test

applies. If the catalyst test applies, we have nothing further

to decide, because the defendants concede that the plaintiffs

9 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, 532 U.S. 598, 610 (2001).

See LaChance v. Commissioner of Correction, 475 Mass. 757, 765

(2016); Newell v. Department of Mental Retardation, 446 Mass.

286, 297-299, cert. denied, 549 U.S. 823 (2006); Mendoza v.

Licensing Bd. of Fall River, 444 Mass. 188, 211-212 (2005). See

also Nogeiro v. Commissioner of the Dep't of Transitional

Assistance, 72 Mass. App. Ct. 496, 499 (2008). Yet "we are not

. . . bound by interpretations of the Federal statute in

construing our own State statute." College-Town, Div. of

Interco, Inc. v. Massachusetts Comm'n Against Discrimination,

400 Mass. 156, 163 (1987).

8

prevail under the catalyst test, and do not contest the amount

awarded pursuant to that test.10

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 sanction on the agreed-upon

material change in the legal relationship." Nogeiro v.

Commissioner of the Dep't of Transitional Assistance, 72 Mass.

App. Ct. 496, 499 (2008). Although we have never expressly

applied the catalyst test to determine prevailing party status

under a State fee-shifting statute, we have, as previously

stated, expressly rejected the alternative. In this case, we

take the logical next step and conclude that the catalyst test

applies in the context of determining prevailing parties under

the Wage Act. We do so for the following reasons.

We begin with the "two major purposes" of statutory fee-

shifting provisions: "First, they act as a powerful

10As discussed infra, even if the matter were not conceded,

we would conclude that the catalyst test is satisfied here and

the amounts properly calculated.

9

disincentive against unlawful conduct. Second, they often

provide an incentive for attorneys to provide representation in

cases that otherwise 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, 470 Mass. 837, 842

(2015). See Buckhannon, 532 U.S. at 623 (Ginsburg, J.,

dissenting) (rejection of catalyst test will "impede access to

court for the less well heeled, and shrink the incentive . . .

created" by fee-shifting statutes enforced by private attorneys

general). It is for these reasons that the Legislature included

such provisions in select statutes such as the Massachusetts

Civil Rights Act, G. L. c. 12 § 11I, and the Massachusetts

consumer protection act, G. L. c. 93A, §§ 9 and 11, as well as

the wage laws at issue here. See Augustine, supra (citing these

and other statutes containing fee-shifting provisions).

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

10

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, 412 Mass. 759, 765

(1992).11

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." Id. Cf. DeSalvo v. Bryant, 42 P.3d

525, 530 (Alaska 2002) (catalyst test, rather than Buckhannon,

applies to determine prevailing party status under State fee-

shifting statute because "[e]ven without formal judicial relief,

many plaintiffs achieve the goals of their litigation").

Importantly, the catalyst test prevents an employer from

11At 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, 581 F.2d 275,

281 (1st Cir. 1978), quoting Christiansburg Garment Co. v. Equal

Employment Opportunity Comm'n, 434 U.S. 412, 422 (1978). The

First Circuit later suggested that the inquiry is whether the

relief obtained by the plaintiff was "material[]" and not "de

minimis." Pearson v. Fair, 980 F.2d 37, 44-45 (1st Cir. 1992).

We conclude that a materiality analysis better identifies and

rewards meritorious legal work, distinguishing it from frivolous

suits that may nonetheless result in nuisance settlements.

11

escaping liability for attorney's fees by an "eleventh hour"

settlement of a meritorious case. See Buckhannon, 532 U.S. at

636 n.10 (Ginsburg, J., dissenting), quoting Vermont Low Income

Advocacy Council v. Usery, 546 F.2d 509, 513 (2d Cir. 1976)

(Congress did not intend fee-shifting statute to be evaded by

"eleventh hour" compliance). See also Albiston & Nielsen, supra

at 1091, 1130 (presenting empirical evidence that Buckhannon

increased occurrences of "strategic capitulation" in which

"defendants faced with likely adverse judgments attempt to moot

the case and to defeat the plaintiff's fee petition by providing

the requested relief before judgment"). If such settlements did

not result in the obligation to pay attorney's fees, there would

be a disincentive to bring such cases in the first place,

thereby leaving other unlawful conduct unaddressed and

uncorrected. See id. at 1130. Consequently, the catalyst test

best promotes the purposes of fee-shifting statutes by

encouraging attorneys to take cases under such statutes to

correct unlawful conduct and rewarding them accordingly when

they do so. See Augustine, 470 Mass. at 842. See also

Buckhannon, 532 U.S.at 623 (Ginsburg, J., dissenting)

(explaining that catalyst test encourages enforcement by

"private attorneys general").

The catalyst test also promotes the prompt settlement of

meritorious cases, avoiding the need for protracted litigation,

12

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.,

34 Cal. 4th 553, 573 (2004), as modified (Jan. 12, 2005)

(catalyst test, rather than Buckhannon, applies to determine

prevailing party status under State fee-shifting statute in part

because catalyst test encourages judicial economy). It also

provides a disincentive for defendants to stretch out cases and

delay settlement for strategic advantage, as they would only be

increasing the legal fees they would ultimately be required to

pay. See Buckhannon, 532 U.S. at 639 (Ginsburg, J., dissenting)

("the longer the litigation, the larger the fees"). See also

Albiston & Nielsen, supra at 1130 ("qualitative data" suggests

that shift from catalyst to Buckhannon test has made settlement

more difficult and prolonged litigation).

The statutory language, structure, purpose, and history all

confirm that the catalyst test is the correct standard to apply

to the Wage Act. The Legislature specifically included fee-

shifting provisions in the Wage Act to ensure its "rigorous

enforcement" by private parties. Lipsitt v. Plaud, 466 Mass.

240, 247 (2013). As small amounts were often at stake, and

employees otherwise lacked the resources to hire counsel, the

fee-shifting provisions were deemed necessary to serve the act's

purpose, which was "to prevent the unreasonable detention of

13

wages" by "unscrupulous employers" (citation omitted). Id. at

245. The fee-shifting provisions thus provide both a necessary

incentive for attorneys to take such cases and a powerful

disincentive for employers to withhold the wages in the first

place. Prompt resolution of such cases is also highly valued as

the timely payment of wages is a critical component of the Wage

Act. See id. at 251 ("Legislature's intent behind the Wage Act

that employees receive timely payment of wages" [citation

omitted]). For this reason, it is especially important to

encourage settlement of such cases, and to provide attorney's

fees for such settlements. Thus, all the rationales discussed

above supporting the application of the catalyst test to fee-

shifting statutes in general directly apply to the Wage Act.12

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

This conclusion accords with that of other States, which

12

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, 42 P.3d 525,

530 (Alaska 2002) (wage detention statute); Tipton-Whittingham

v. Los Angeles, 34 Cal. 4th 604, 608 (2004) (Fair Employment and

Housing Act); Bonanno v. Verizon Business Network Sys., 196 Vt.

62, 72 (2014) (workers' compensation statute).

14

fee-shifting statutes.13 More specifically, at that time, we

recognized that the catalyst test allowed a negotiated

settlement to confer prevailing party status.14 We therefore

13There 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,

532 U.S. at 602. See also Newell, 446 Mass. at 303 (before

Buckhannon decision, catalyst test recognized basis for award of

attorney's fees). Accordingly, we recognized the catalyst test

as a proper basis for awards of attorney's fees under Federal

statutes. See Guardianship of Hurley, 394 Mass. 554, 559 & n.6

(1985), quoting Nadeau, 581 F.2d at 278-279, and Coalition for

Basic Human Needs v. King, 691 F.2d 597, 599 (1st Cir. 1982)

("Individuals prevail 'for attorney's fees purposes if they

succeed on any significant issue in litigation which achieves

some of the benefit the parties sought in bringing suit' or

'when plaintiff's lawsuit acts as a "catalyst" in prompting

defendants to take action to meet plaintiff's claims'"; "[These]

two tests are separate and distinct; satisfying either of them

is sufficient to qualify a party as prevailing"). See also

cases cited in note 14, infra.

14See Handy v. Penal Insts. Comm'r of Boston, 412 Mass.

759, 764-765 (1992) (plaintiff prisoners who entered into

settlement requiring defendants to improve prison conditions

were "prevailing parties" for purposes of award of attorney's

fees under 42 U.S.C. § 1988 [1988], because their "lawsuit was a

necessary and important factor" in causing defendants to settle

and thus "catalyst that prompted change"). See also Draper v.

Town Clerk of Greenfield, 384 Mass. 444, 452-453 (1981), cert.

denied sub nom. Draper v. Prescott, 456 U.S. 947 (1982)

(plaintiffs' negotiated settlement qualified them as prevailing

parties under 42 U.S.C. § 1988 because they satisfied criteria

of catalyst test as established by First Circuit in Nadeau, 581

F.2d at 278-279).

15

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, 466 Mass. 627, 646 (2013) ("We

presume that the Legislature enacts legislation with an

aware[ness] of the prior state of the law as explicated by the

decisions of this court" [citation omitted]).

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

15 See Batchelder v. Allied Stores Corp., 393 Mass. 819,

821-822 (1985) ("Legislature intended 'prevail' to have the same

meaning" under G. L. c. 12, § 11I, as under analogous Federal

fee-shifting statute at time, 42 U.S.C. § 1988, because

"Legislature is presumed to have been aware of the use and

meaning of this term in the Federal statute"). See also Cronin

v. Tewksbury, 405 Mass. 74, 75-76 (1989) (relying on case law

interpreting prevailing party status under 42 U.S.C. § 1988 to

determine whether plaintiffs prevailed under G. L. c. 12,

§ 11I).

16

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 claims on which he prevailed." Fernandes v.

Attleboro Hous. Auth., 470 Mass. 117, 132 (2014). The party

must have made the request for appellate attorney's fees in its

brief. Fabre v. Walton, 441 Mass. 9, 10 (2004). Because the

plaintiffs made such a request in their briefing, they may file

a request for appellate attorney's fees and costs with this

court in accordance with the procedure described in Fabre,

supra.

4. Conclusion. For the foregoing reasons, we affirm the

trial judge's award of attorney's fees to the plaintiffs.

So ordered.