Rejecting Presumptive Fee Matrix Reliance: Fourth Circuit’s Rule on FLSA Attorney’s Fees

Introduction

In Arriaza De Paredes v. Zen Nails Studio LLC, the Fourth Circuit clarified the proper approach a district court must take when awarding statutory attorney’s fees under the Fair Labor Standards Act (FLSA). Decided on April 15, 2025, this decision arose from a bench trial in which two former employees prevailed on wage‐and‐hour claims. Although the plaintiffs secured substantial damages, the district court awarded them less than half of the requested $343,189.85 in attorney’s fees by anchoring its fee calculation to the District of Maryland’s local rule “Guidelines Regarding Hourly Rates.” The Fourth Circuit vacated and remanded, holding that a local fee matrix may inform—but not presumptively control—the determination of market rates.

Summary of the Judgment

After a five-day trial, the plaintiffs won roughly 60% of their damages and sought a fee award under 29 U.S.C. § 216(b). The district court:

Identified prevailing hourly rates by consulting its local rule fee matrix.
Computed the reasonable hours worked.
Reduced the resulting “lodestar” by 35% for partial success.

Because the plaintiffs requested rates above the matrix ranges, the court imposed the local rule caps without requiring further justification. The Fourth Circuit held that this approach misapplied binding precedent. A district court may consider a published fee matrix but cannot treat it as presumptively correct or demand “special justification” to exceed its ranges. The Fourth Circuit therefore vacated the fee award and remanded for recalculation with full consideration of all market evidence.

Analysis

Precedents Cited

Blum v. Stenson (1984): Fee-shifting statutes require awards based on prevailing market rates in the relevant community.
Newport News Shipbuilding & Dry Dock Co. v. Holiday (2009): Fee matrices “can be a useful starting point.”
Fox v. Vice (2011): Emphasized “rough justice” in fee shifting and the district court’s vantage point.
Rum Creek Coal Sales, Inc. v. Caperton (1994): Appellate review of fee awards is for abuse of discretion.
Gall v. United States (2007): Analogized criminal sentencing guidelines, rejecting presumptive reliance on matrix ranges.

Legal Reasoning

The Fourth Circuit’s core holding rests on two principles:

Market‐Rate Focus: A reasonable fee award must reflect actual prevailing market rates, determined through all available evidence—attorney declarations, fee awards in similar cases, surveys, and even the court’s own knowledge.
Non‐Presumptive Role of Fee Matrices: While local rule matrices offer practical guidance and can narrow disputes, they are not binding floors or ceilings. A district court may consider them but must weigh them alongside other evidence and cannot require “special justification” to exceed their ranges.

In this case, the district court repeatedly described the local matrix as “presumptively reasonable” and used it to cap all requested rates—an approach the Fourth Circuit deemed legally erroneous. By anchoring its decision to the matrix, the court failed to give due consideration to the plaintiffs’ evidence on experience, inflation adjustments, and market expectations.

Impact

This decision reinforces the district court’s primary role in fee determinations and sets clear boundaries on the use of local fee matrices:

District courts will continue to enjoy broad discretion in awarding fees, provided they apply the correct legal framework.
Fee petitions can still reference local matrices to streamline the range of reasonable rates.
Counsel should present comprehensive evidence—beyond a matrix—about attorney experience, market rates, and case complexity.
Future cases will likely explore how and to what extent local or circuit fee matrices should be updated periodically to reflect changing market conditions.

Complex Concepts Simplified

Fee‐Shifting Statute: A law that requires the losing party (here, the defendant) to pay the prevailing party’s attorney’s fees.
Lodestar: The baseline fee calculation: (reasonable hourly rate) × (reasonable hours worked).
Presumptive Reasonableness: A rule or guideline presumed to set correct values unless shown otherwise. The Fourth Circuit prohibited this presumption for fee matrices.
Abuse of Discretion: An appellate standard of review that asks whether the lower court followed the correct legal rules. Here, treating a matrix as presumptive was an abuse.

Conclusion

Arriaza De Paredes v. Zen Nails Studio LLC stands as a pivotal reminder that district courts must anchor FLSA fee awards in the actual market rates, drawing on diverse evidence rather than deferring to local rule matrices as presumptive benchmarks. By vacating the fee award, the Fourth Circuit reaffirmed the trial court’s broad discretion—so long as it “calls the game by the right rules.” This decision will guide litigants and judges alike to approach fee petitions with rigorous, market‐focused analysis while still benefiting from the procedural efficiencies of published rate guidelines.