EDWARD M. CHEN, District Judge.
Plaintiff Quiller Barnes initiated this action on behalf of himself and a class, asserting that Defendant AT & T Pension Benefit Plan — Nonbargained Program owed them additional benefits. Mr. Barnes asserted five claims for relief. On May 10, 2012, the Court addressed the parties' cross-motions for summary judgment on three of the claims. The Court granted Mr. Barnes summary judgment on Count I of the complaint but granted the Defendant Plan summary judgment on Counts II and V. Subsequently, the parties stipulated to dismissal of Counts III and IV. See Docket No. 309 (Order at 31). Mr. Barnes has appealed, inter alia, this Court's summary judgment order to the Ninth Circuit. See Docket No. 371 (notice of appeal). In the meantime, currently
Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel and all other evidence of record, the Court hereby
Because the parties stipulated to dismissal of Counts III and IV, and because the viability of Count V is dependent on the viability of Count II, the critical claims in the instant case are Counts I and II. As noted above, the Court granted summary judgment to Mr. Barnes on Count I but granted the Defendant Plan summary judgment on Count II.
In Count I (an individual claim only), Mr. Barnes argued that the Defendant Plan had violated ERISA by failing to give him adequate notice of the specific reasons for the denial of his claim. The Court held that there was a violation of ERISA's notice requirements because, even though the Defendant Plan had given reasons for the denial, it did not cite the specific plan provision on which it had relied (§ 3.4(a)), nor had it quoted the language of the provision or given a close paraphrase; this affected the ability of Mr. Barnes to adequately appeal. See Docket No. 309 (Order at 8-9).
Ultimately, however, the Court declined to order any remedy because the normal remedy would be to remand to the plan administrator and, here, a remand would be "essentially pointless because it is now clear — if only through this litigation — that § 3.4(a) is the provision upon which the Defendant Plan relied." Docket No. 309 (Order at 9). Based on the record, it appears that Mr. Barnes had notice that the Defendant Plan was relying on § 3.4(a) at least as of February 5, 2010, when the Defendant Plan filed a motion for summary judgment and highlighted that provision in support of its position. See Docket No. 47 (Def.'s Mot. for Summ. Judg. at 4, 14) (highlighting § 3.4(a) and arguing that "[t]he plain language of the plan provisions in Section 3.4(a) ... expressly prohibit a pension calculation for a rehired employee that ignores a prior cashout by the employee"). It is plausible, however, that Mr. Barnes knew of § 3.4(a) slightly earlier, as, on January 26, 2010, he filed a motion for leave to amend his complaint, and the proposed amended complaint clearly relied on § 3.4(d)(3) of the plan. See Docket No. 39-1 (Prop. Am. Compl. ¶ 50). If Mr. Barnes was relying on § 3.4(d)(3), he likely knew of the other provisions in § 3.4, including § 3.4(a).
In Count II (a certified class claim), Mr. Barnes argued that the Defendant Plan had failed to pay full pension benefits. Initially, Mr. Barnes filed suit against the Defendant Plan as a lump-sum payee in his individual capacity only. However, on January 26, 2010, he moved to amend his complaint, and one of the amendments he proposed was to include class allegations. See Docket No. 39 (motion). The proposed class consisted of persons who had not been paid a benefit known as a "redetermined ATB," implicitly pursuant to § 3.4(d)(3) of the plan.
Under § 3.4(d)(3) of the Plan,
Docket No. 39-1 (Prop. Am. Compl. ¶ 50). The (x) value above represented the redetermined ATB. The (y) value above represented a separate benefit, known as the cash balance benefit. As a lump-sum payee, Mr. Barnes had been paid a cash balance benefit, but he had not been paid a redetermined ATB. Mr. Barnes asserted that he was also entitled to a redetermined ATB, and not just a cash-balance benefit, under § 3.4(d)(3). As indicated above, however, the Defendant Plan's position was that § 3.4(a), and not § 3.4(d)(3), governed the rights of lump-sum payees such as Mr. Barnes.
In Mr. Barnes's proposed amended complaint, the class was defined as follows:
Docket No. 39-1 (Prop. Am. Compl. ¶ 15).
While the proposed class definition did not explicitly include annuitants as members of the class (in addition to lump-sum payees such as Mr. Barnes), implicitly, annuitants were included because an annuitant, like a lump-sum payee, could be an employee "receiving, or ... eligible to receive, a monthly pension under the accelerated transition benefit [ATB] formula at his or her prior Termination of Employment" as stated in § 3.4(d)(3).
Subsequently, Mr. Barnes moved for class certification. Judge Patel granted that motion as well, although she limited the class definition to lump-sum payees only — i.e., excluding annuitants. See Docket No. 176 (Order at 12-13). A few months later, on December 20, 2010, Mr. Barnes moved to modify the class definition so that annuitants (in particular, deferred annuitants) would be included in the class. See Docket No. 199 (motion). More specifically, Mr. Barnes asked Judge Patel to adopt the original class definition that he had proposed based on 30(b)(6) deposition testimony that had been given on behalf of the Defendant Plan. See Docket No. 199 (Mot. at 6). As noted above, Mr. Barnes's original class definition was targeted to individuals who had not been given a redetermined ATB.
The Defendant Plan opposed the motion to modify. With respect to deferred annuitants, the Defendant Plan argued that Mr. Barnes had misconstrued the testimony of the 30(b)(6) deponent, Hannah Francis:
Docket No. 218 (Opp'n at 2). This was "directly contrary to the claim of Plaintiff herein, i.e. that he did not receive credit for his bridged service with respect to his ATB, while deferred annuitants do. As such, even if there could be some sort of claim with respect to deferred annuitants, Plaintiff Barnes is not similarly situated to them...."
On January 21, 2011, Mr. Barnes filed his reply brief in support of his motion to modify. In the reply, Mr. Barnes argued for the first time that just because a deferred annuitant could get a full ATB at second retirement missed the point. "The crux of Plaintiff's claim is that he was denied the full benefit under subsection 3.4(d)(3)...." Docket No. 224 (Reply at 2) (emphasis added). "Mr. Barnes claims that he is entitled to benefits equaling (x) (a redetermined ATB)
Judge Patel ultimately modified class certification to reflect this change in focus — now including a requirement that a class member "either (i) at their next termination, did not have their benefit calculated to include both an ATB adjusted to reflect their age and term of employment and a cash balance benefit (or a Career Average Minimum benefit) based on allocations to their account since rehire as set forth in section 3.4(d)(3) of the PTG Pension Plan or (ii) are still employed at Participating Company." Docket No. 240 (Order at 11) (emphasis added). Notably, if Judge Patel had simply adopted the original class definition as proposed by Mr. Barnes, that would have limited the class to those who did not get a redetermined ATB only; it would not have included those denied the cash balance benefit.
After the instant case was reassigned from Judge Patel to this Court, this Court adjudicated cross-motions for summary judgment. The Court rejected Mr. Barnes's argument that de novo review should apply to Count II and instead applied abuse-of-discretion review, tempered with slight skepticism because of the Defendant Plan's multiple interpretations of § 3.4(d)(3). See Docket No. 309 (assuming that it was appropriate to charge the Defendant Plan with three interpretations, only one of which was formally issued by the Benefit Plan Committee ("BPC"), the entity charged with interpreting the plan; the other two interpretations were offered during this litigation). Under this standard of review, the Court held that the language of the plan was ambiguous and that the Defendant Plan's interpretation of the plan was reasonable and in good faith. See Docket No. 309 (Order at 30). More specifically, the Court held that it was reasonable for the Defendant Plan to interpret § 3.4(a) as being applicable to lump-sum payees (a position that the Defendant Plan had always taken). As for § 3.4(d)(3), in its final interpretation of this provision,
Although the Defendant Plan's final interpretation of § 3.4(d)(3) was that it would apply to both immediate and deferred annuitants, there actually were multiple interpretations of this provision. (In contrast, there were always only one interpretation of § 3.4(a) — i.e., that it applied to lump-sum payees.) Moreover, those interpretations of § 3.4(d)(3) were not even made until after this lawsuit had been initiated.
As noted by the Court in its summary judgment order, § 3.4(d)(3) was never interpreted by the Defendant Plan — including the BPC, the entity formally charged with interpreting the plan — at any time during the administrative proceedings.
The first time that § 3.4(d)(3) became an issue was during this litigation. Mr. Barnes did not raise § 3.4(d)(3) at the outset of the lawsuit in January 2008; rather, he first brought up § 3.4(d)(3) on January 26, 2010 (i.e., two years later), when he moved to file an amended complaint. See Docket No. 39 (motion); see also Docket No. 309 (Order at 13).
The first time that the Defendant Plan interpreted § 3.4(d)(3) was in March 2010, as part of a reply in support of a motion for summary judgment. Although the interpretation was not provided by the BPC specifically, it was nonetheless offered on behalf of the Defendant Plan and was supported by a declaration from Ms. Francis, the Director of Benefits for AT & T. The interpretation in March 2010 was that § 3.4(d)(3) applied to both immediate and deferred annuitants alike (but not lump-sum payees). See Docket No. 86 (Hannah Decl.); see also Docket No. 309 (Order at 13).
In November 2010, however, when Ms. Francis was deposed as the Defendant Plan's 30(b)(6) witness, she offered a different interpretation of § 3.4(d)(3). She testified that § 3.4(d)(3) applied only to immediate annuitants, but not deferred annuitants. Soon after the deposition, Mr. Barnes moved to amend the class certification order (on Count II) because of the above testimony by Ms. Francis. See Docket No. 199 (motion). As noted above, Judge Patel granted the motion on March 1, 2011. See Docket No. 240 (order).
On June 24, 2011 (i.e., approximately four months after Judge Patel's ruling), defense counsel informed counsel for Mr. Barnes that the BPC intended to issue a formal interpretation of the plan with respect to the treatment of lump-sum payees and deferred annuitants. See Docket No. 292-6 (letter). In the letter, defense counsel asserted that "[t]here can be no serious dispute that the BPC did not have before it all the interpretive arguments Mr. Barnes now makes with respect to his interpretation of various sections of the Plan at issue in this litigation" and "we disagree with your client's assertion that the BPC had the opportunity to consider the issues of Plan interpretation in the prior administrative process." Docket No. 292-6 (letter). Defense counsel also stated: "In order to avoid the result that the Court may need to remand the plan interpretation questions to the BPC and the delay associated with doing so at a later date, we believe it is appropriate to ask the BPC to consider these issues with a full understanding of Plaintiff's claims, so that it can exercise the power it has under the plan to render Plan interpretations." Docket No. 292-6 (letter). "Accordingly, the BPC will consider the issues of Plan interpretation raised in this litigation at its July 18, 2011 meeting, including with respect to the treatment of both lump sum payees and deferred annuitants." Docket No. 292-6 (letter).
On August 31, 2011, the BPC issued its formal interpretation in which it concluded, inter alia, that § 3.4(d)(3) did indeed apply to both immediate and deferred annuitants alike (i.e., consistent with the first interpretation).
In the pending motion for fees and costs, Mr. Barnes argues that he should be awarded his fees up until August 31, 2011 (i.e., the date that the BPC issued its formal interpretation of § 3.4(d)(3)) because
The relevant ERISA provision regarding fees and costs is 29 U.S.C. § 1132(g)(1). It states as follows: "In any action under this title (other than an action described in paragraph 2) by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1).
In Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010), the Supreme Court rejected the interpretation that, under § 1132(g)(1), fees and costs may be awarded only to a prevailing party. See id. at 2156 (noting that the statute makes no reference to a prevailing party). Rather, under the statute, a court has discretion to award fees and costs to either party so "long as the fee claimant has achieved `some degree of success on the merits.'" Id. at 2152 (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983)).
The Court reached this conclusion based in large part on Ruckelshaus. In Ruckelshaus, the Court had interpreted § 307(f) of the Clean Air Act, which authorized a court to award fees "`whenever it determines that such an award is appropriate.'" Id. at 2157 (quoting 42 U.S.C. § 7607(f)).
Id. at 2157-58.
The Hardt Court concluded that
Id. at 2158.
In the wake of Hardt, the Ninth Circuit has emphasized that "[o]nly after passing through the `some degree of success on the merits' door is a claimant
Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir.1980).
If a fee claimant passes both the Hardt and Hummell requirements, then courts will typically apply a Hensley analysis, see Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), to determine the amount of fees that should be awarded. See D'Emanuele v. Montgomery Ward & Co., 904 F.2d 1379, 1382 (9th Cir.1990) (recognizing that § 1132(g)(1) "does not limit attorney's fees to a `prevailing party'" but stating that that "distinction does not affect the applicability of Hensley to the calculation of an attorney's fee award under ERISA"); see also McElwaine v. US West, Inc., 176 F.3d 1167, 1173 (9th Cir.1999) (stating that "attorney fees under § 1132(g)(1) are calculated using a hybrid lodestar/multiplier approach").
As noted above, for Count I, the Court held that the Defendant Plan had violated ERISA's notice requirements but that the normal remedy — i.e., a remand to the plan administrator so that it could identify the relevant plan provision — would be a useless formality because, if only through the litigation, it was clear that Mr. Barnes's claim for benefits had been denied based on § 3.4(a) of the plan.
The Defendant Plan argues that, with respect to Count I, Mr. Barnes did not achieve some degree of success on the merits but rather obtained only a trivial success on the merits or a purely procedural victory which, under Hardt, is not enough to give rise to a fee award.
Because the Court would have ordered a remand but did not only because of the circumstances, it is fair to frame the issue as whether a remand order without more (e.g., without an order instructing benefits to be awarded) is enough to constitute some success on the merits. This is an issue that the Supreme Court in Hardt expressly declined to consider. See Hardt, 130 S.Ct. at 2159 (stating that "we need not decide today whether a remand order, without more, constitutes `some success on the merits'").
Contrary to what the Defendant Plan argues, Mr. Barnes's victory on Count I cannot be deemed purely procedural. Those district courts that have defined the term "purely procedural victory" have indicated that such a "victory would involve success on a procedural as opposed to a substantive issue. For example, winning a motion for class certification or a motion to intervene would constitute a purely procedural victory because such a success does not bring the victorious party any closer to its desired relief." Taaffe v. Life Ins. Co.,
Admittedly, in Duncan v. Hartford Life & Accident Insurance Co., No. 2:11-cv-01536-GEB-CKD, 2013 WL 1785904, 2013 U.S. Dist. LEXIS 59624 (E.D.Cal. Apr. 25, 2013), a California district court did seem to characterize a remand (so that the plan could conduct a second, independent review) as a purely procedural victory. See id. at *1-2, 2, 2013 U.S. Dist. LEXIS 59624, at *4, 6. But, as the Alabama district court in Olds explained, procedural remedies should not be confused with procedural victories. "Procedural victories are those a party obtains in the course of the litigation but that do not result in any success on the litigated claim itself. Procedural remedies, in contrast, follow a substantive victory, which victory necessarily reflects some degree of success on the merits of the litigated claim." Olds, 2011 WL 2160264, at *3, 2011 U.S. Dist. LEXIS 59329, at *8. The determination of whether to remand after a finding of error based on the merits is a procedural remedy rather than a procedural victory.
The court in Olds also gave a good explanation as to why a remand for further administrative proceedings should not be considered a purely procedural victory or even a trivial success:
Id. at *2-3, 2011 U.S. Dist. LEXIS 59329, at *6-7 (emphasis in original). Compare Jones v. Metropolitan Life Ins. Co., 845 F.Supp.2d at 1033 (Ware, J.) (deeming the Ninth Circuit's order for a remand to the plan administrator to determine the amount of benefits a trivial success but only because, prior to the appeal, the plaintiff had already submitted the issue of the amount of benefits to the plan administrator (in the wake of the district court's summary judgment order)).
The bottom line is that, in the wake of Hardt, "[l]ower court cases ... have usually concluded that a remand to the defendant to conduct further administrative proceedings is not a merely procedural victory [or trivial success] but reflects a sufficient degree of success on the merits to qualify for an award of fees and expenses." Olds, 2011 WL 2160264, at *2, 2011 U.S. Dist.
Accordingly, the Court concludes that, for Count I, Mr. Barnes has adequately established some success on the merits.
As noted above, for Count II, the Court held that (1) the Defendant Plan's interpretation that § 3.4(a) applied to lump-sum payees was reasonable and that (2) any request for relief on behalf of deferred annuitants based on § 3.4(d)(3) was moot in light of the Defendant Plan's stipulation that all annuitants, immediate and deferred alike, were entitled to benefits under § 3.4(d)(3).
Mr. Barnes does not make any attempt argue success based on the claims of lump-sum payees. However, he does assert that he achieved some success with respect to the claims of deferred annuitants. According to Mr. Barnes, his actions led to Judge Patel's giving a preview on how she might construe § 3.4(d)(3), see Docket No. 240 (Order at 7-8), and her inclusion of deferred annuitants as part of the class (based on that construction); this then served as a catalyst to the Defendant Plan's decision to have the BPC issue a formal interpretation on the plan regarding the treatment of deferred annuitants. That interpretation was favorable to deferred annuitants (i.e., they were entitled to both a redetermined ATB and a cash balance under § 3.4(d)(3)) and reversed the Defendant Plan's prior interpretation that § 3.4(d)(3) covered immediate annuitants, but not deferred annuitants.
As a preliminary matter, the Court takes note that Mr. Barnes essentially asserts a catalyst theory. See Kenseth v. Dean Health Plan, Inc., 784 F.Supp.2d 1081, 1094 (W.D.Wis.2011) (stating that "[t]he catalyst theory `posits that, for purposes of determining an award of attorneys' fees, a plaintiff prevails if he achieves the desired outcome of litigation even if it results from a voluntary change in the defendant's conduct'"), vacated on other grounds, 722 F.3d 869, No. 11, 2013 WL 2991466, 2013 U.S.App. LEXIS 12083 (7th Cir. June 13, 2013). In Buckhannon Board & Care Home v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), the Supreme Court rejected the catalyst theory where a request for fees had been made under 42 U.S.C. § 1988 (and not § 1132(g)(1) as here). More specifically, the Supreme Court held that a plaintiff is not a prevailing party under the statute even if the lawsuit has brought about a voluntary change in the defendant's conduct because, to be a prevailing party for purposes of § 1988, a plaintiff must secure some material alteration in the legal relationship between the parties (e.g., a judgment on the merits, a settlement agreement enforced through a court-ordered consent decree). In other words, the catalyst theory was rejected because "[i]t allows [a fee] award
However, the ERISA fee provision under consideration in the instant case (§ 1132(g)(1)) does not include a prevailing party requirement. Courts have disagreed as to whether a catalyst theory is permissible under of § 1132(g)(1) after Buckhannon. See Feldman's Med. Ctr. Pharm., Inc. v. CareFirst, Inc., 898 F.Supp.2d 883, 897-98 (D.Md.2012) (citing cases). Most courts, however, have assumed that it is still viable. See, e.g., Boyle v. International Bhd. of Teamsters Local 863 Welfare Fund, No. 11-3202(SRC), 2012 WL 6005657, at *10, 2012 U.S. Dist. LEXIS 170330, at *28 (D.N.J. Nov. 30, 2012) (noting that no circuit court had yet decided "whether Buckhannon's rejection of the catalyst theory extends to the more permissive fee shifting provision in ERISA" and that "courts that have squarely addressed the question have expressed doubt about the catalyst theory's place ... but have generally assumed the theory's continuing viability"). In Feldman's, the district court so assumed, pointing to supporting authority:
Id. at 898-99. But see Boyle, 2012 WL 6005657, at *10, 2012 U.S. Dist. LEXIS 170330, at *28 (concluding that "ERISA does not permit fee shifting under the catalyst theory" because "[t]he Supreme Court's requirement that plaintiffs show some success `on the merits' seems to presume, at a minimum, that this success be before the court"; adding that "the `some degree of success' standard `is more lenient with respect to how much a party must prevail' but ... `it is difficult to see why it would change the type of result that qualifies as success, that is, whether the plaintiff achieves relief through a court order or voluntary cessation of conduct'") (emphasis in original).
The Court finds the analysis in Feldman's more persuasive than that in Boyle and, accordingly, concludes that the catalyst theory remains viable for purposes of § 1132(g)(1). The availability of the theory accords with the broader sweep of the fee-shifting language of § 1132(g)(1).
Having made this conclusion, the Court must then evaluate whether, in the instant case, Mr. Barnes's actions in the lawsuit were in fact a catalyst for the Defendant Plan's decision to have the BPC render a formal interpretation on the plan with respect to lump-sum payees and deferred annuitants.
In Buckhannon, Justice Ginsburg, in her dissent, noted that
Buckhannon, 532 U.S. at 627-28, 121 S.Ct. 1835; see also Feldman's, 898 F.Supp.2d at 899 (identifying three thresholds under the catalyst theory).
Here, the critical question is whether Mr. Barnes's suit was a substantial or significant cause of the Defendant Plan's decision to have the BPC issue a formal interpretation of the plan with respect to lump-sum payees and deferred annuitants which concluded with a favorable outcome for deferred annuitants. According to the Defendant Plan, "the catalyst for the BPC 2011 Determination was not Judge Patel's reading of Section 3.4(d)(3), but rather the fact that Plaintiff was pursuing these claims without having exhausted and without the benefit of the BPC interpretation of the Plan." Opp'n at 13 n.8. But this argument misses the point. Even if the catalyst was Mr. Barnes's purported failure to exhaust, that still means that it was Mr. Barnes's suit that precipitated the BPC to interpret the plan.
To the extent the Defendant Plan argues that this Court implicitly rejected Mr. Barnes's suit being a catalyst in its summary judgment order, see Opp'n at 13 n.8, it is not correct. In the summary judgment order, the Court simply stated that "it is far from clear that the third interpretation [of § 3.4(d)(3)] was rendered as a response to Judge Patel's order." Docket No. 309 (Order at 23). This was a statement made in the context of discussing whether the third interpretation was made in bad faith. That does not detract from the fact that Mr. Barnes's lawsuit precipitated all of the interpretations of § 3.4(d)(3) — i.e., the Defendant Plan had no occasion to interpret § 3.4(d)(3) but for Mr. Barnes's lawsuit.
The more important problem identified by the Defendant Plan is that, even if Mr. Barnes's lawsuit did serve as a catalyst for its actions, Mr. Barnes should not be rewarded now because he never put § 3.4(d)(3) at issue during the administrative proceedings and so the Defendant Plan did not have an opportunity during administrative proceedings to render an interpretation of § 3.4(d)(3). See Docket No. 309 (Order at 13) (noting that "Mr. Barnes did not bring up § 3.4(d)(3) at the outset of the lawsuit [in January 2008][;] [r]ather, the first time that he raised § 3.4(d)(3) as an issue was on January 26, 2010, when he moved to file an amended complaint"). The Defendant Plan argues that, if Mr. Barnes had raised § 3.4(d)(3) during the administrative proceedings, then the BPC would have rendered its interpretation favorable to deferred annuitants
As noted above, even where a plaintiff shows some success on the merits under Hardt, a court still has discretion in deciding whether to award fees, taking into account the Hummell factors, namely:
Id.
For Count I, Mr. Barnes argues that there is culpability because, had he been informed of the specific plan provision on which the Defendant Plan relied to deny him benefits (i.e., § 3.4(a)), then that would have likely have led him to § 3.4(d)(3), see Docket No. 309 (Order at 9 (noting that "it is possible that, had the Defendant Plan cited to § 3.4(a), that would have led Mr. Barnes to § 3.4(d)(3)"), which then would have allowed him to effectively appeal the denial. This argument is not on point as it does not address Defendant's culpability or bad faith. Although the Defendant Plan did fail to cite the specific plan provision on which it relied, it did not fail to give any reason for its denial, nor was the reason provided for the denial conclusory or vague. Indeed, the Defendant Plan was fairly specific about the reason for denial — i.e., "because Mr. Barnes had taken a cashout of his ATB at the time of his first retirement, future benefits upon rehire would not `re-do' his ATB." Docket No. 309 (Order at 8) (noting that the Defendant Plan quoted the Benefits Binder). Because the Defendant Plan was fairly specific about the reason for denial, it is hard to say that the Defendant Plan intentionally or even recklessly violated ERISA's notice requirements. See McPherson v. Employees' Pension Plan of Am. Re-Ins. Co., 33 F.3d 253, 256-57 (3d Cir.1994) (noting that "bad faith normally connotes an ulterior motive or sinister purpose" but that "[a] losing party may be culpable ... without having acted with an ulterior motive"; adding that culpable conduct in the civil context "is commonly understood to mean conduct that is `blameable; censurable; ... at fault'" and "normally involves something more than simple negligence"); see also Eddy v. Colonial Life Ins. Co. of Am., 59 F.3d 201, 210 (D.C.Cir.1995) (suggesting that culpability would require some intentional or reckless conduct).
As for Count II, Mr. Barnes asserts that there is culpability because the Court
Mr. Barnes argues that this factor weighs in its favor because AT & T clearly has sound financial standing as reflected in its 2012 annual report to investors. In response, the Defendant Plan states that the money to pay for fees will come not from AT & T but rather from the Defendant Plan. However, the Defendant Plan goes on to admit that it would be able to pay fees, and thus this factor weighs in Mr. Barnes's favor. Although the Defendant Plan suggests that a fee award would adversely effect future benefits for plan participants, see Opp'n at 17 n.13 (stating that, although Mr. Barnes "may argue that a $1.5 million depletion would not result in any decrease to current accrued or vested benefits, which must be funded by AT & T as the employer, that argument overlooks the fact that the Plan uses its assets to pay for future benefits not yet accrued" and thus his "fee demand seeks to reduce the amounts available for future benefits by almost $1.5 million"), the fact remains that the Defendant Plan is able to satisfy the fee award requested.
This factor evaluates whether an award of fees against the Defendant Plan would deter others from acting under similar circumstances. Because the Court concludes that the Defendant Plan has acted at best with a low degree of culpability, an award of fees would likely have a small deterrent effect.
There is no real dispute that the instant case did not involve the resolution of a significant legal question regarding ERISA. Instead, the parties focus on whether Mr. Barnes sought to benefit all participants and beneficiaries of an ERISA plan. At least one circuit court has characterized the benefit-to-others factor as an objective factor rather than a subjective one. See Eddy, 59 F.3d at 209 (D.C. Circuit stating that "benefit-to-others is an objective factor, and the subjective intent of the plaintiff in filing suit is irrelevant"). Furthermore, at least one circuit court has stated that the benefit-to-others consideration appears to be "a codification of the common fund doctrine of the common law," which "permits the courts to award fees to a party recovering a fund or property for the benefit of others in addition to himself out of the fund or property so recovered." Armistead v. Vernitron Corp., 944 F.2d 1287, 1304 (6th Cir.1991).
The Defendant Plan contends that this factor weighs in its favor because Mr. Barnes sought to benefit a very small group of participants — i.e., annuitants — and the actual number of annuitants who
This issue has basically been addressed above in conjunction with the analysis of "some degree of success on the merits."
In the instant case, the critical factors seem to the first and fifth — i.e., the degree of culpability on the part of the Defendant Plan and the relative merits of the parties' positions. On balance, the Court concludes that the factors sufficiently weigh in favor of an award of fees, although the appropriate amount is certainly subject to dispute.
With respect to the amount of fees, Hensley provides the guiding analysis. Under Hensley, a
McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir.2009). A district court then makes a two-part inquiry: "`First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?'" Id. at 1103 (quoting Hensley, 461 U.S. at 434, 103 S.Ct. 1933). "A plaintiff is not eligible to receive attorney's fees for time spent on unsuccessful claims that are unrelated to a plaintiff's successful ... claim."
Id.; see also Dang v. Cross, 422 F.3d 800, 813 (9th Cir.2005) (stating that, under a Hensley analysis, where unsuccessful and successful claims are related, then the court must evaluate the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation).
In the instant case, the Defendant Plan not does attack the lodestar as claimed by Mr. Barnes. Rather, its focus is on Mr. Barnes's limited success. With respect to limited success, the Defendant Plan does not contend that the unsuccessful claims were unrelated to the successful claims. Instead, its only argument is that the fees requested are not justified in light of the partial success achieved.
Because the Defendant Plan does not make any argument that any of the unsuccessful claims are unrelated to the successful claims, the Court considers only the second prong of Hensley. With respect to this prong, the Court agrees that there should be a reduction of fees because of the limited success. There is no dispute that Mr. Barnes achieved only limited success because, although he prevailed on Count I and part of Count II (deferred annuitants), he did not prevail on Counts III through V and part of Count II (i.e., lump-sum payees). And the hours spent on the litigation (more than 3,000) were not "reasonably necessary to obtain the relief that was ultimately obtained" by Mr. Barnes, Velez v. Wynne, 220 Fed.Appx. 512, 513 (9th Cir.2007) — i.e., a remand that was not ordered because it was unnecessary under the circumstances (Count I) and an interpretation of the plan favorable to deferred annuitants as they would now get cash balance benefits (and not just an ATB) (Count II).
The Court first takes into account the time frame for which fees may be recovered. For Count I, Mr. Barnes cannot credibly claim fees incurred after February 5, 2010, because, on that date, the Defendant Plan gave notice to him (through a motion for summary judgment) that it was relying on § 3.4(a) of the plan as the basis for the denial of benefits. See Docket No. 47 (Def.'s Mot. for Summ. Judg. at 4, 14) (highlighting § 3.4(a) and arguing that "[t]he plain language of the plan provisions in Section 3.4(a) ... expressly prohibit a pension calculation for a rehired employee that ignores a prior cashout by the employee"). Thus, the ERISA notice violation asserted in Count I was essentially remedied as of February 5, 2010.
As for Count II, the Court does not agree with the Defendant Plan's argument that none of the fees should count because there was never exhaustion of the deferred annuitants' claim for benefits. See pages 964-66, supra. Notably, when Mr. Barnes moved to modify Judge Patel's class certification order to add annuitants to the class, the Defendant Plan opposed, in part because of a lack of exhaustion. See Docket No. 218 (Opp'n at 3). In reply, Mr. Barnes argued that there was no exhaustion problem because, as a general
While Judge Patel did not make any express ruling on the exhaustion issue in her order granting Mr. Barnes's motion to modify the class definition, the fact that she granted the motion in the face of the Defendant Plan's exhaustion argument implies that she did not consider exhaustion a bar. Moreover, the Defendant Plan apparently viewed the exhaustion issue as having been resolved since it did not move for a dismissal on that basis. Nor did it seek clarification. To the extent the Defendant Plan argues that Judge Patel indicated at the hearing that she considered exhaustion an affirmative defense which could be brought up later in the proceedings, that is not clear from the record. The hearing transcript reflects that defense counsel raised before Judge Patel the argument that a claim for a special ATB had never been exhausted — an argument applicable to a different motion made by Mr. Barnes which was heard on the same date (i.e., a motion to amend to add, inter alia, allegations related to a failure to pay a special ATB). See Docket No. 192 (motion); see also Docket No. 245 (Tr. at 13-14) (stating that Mr. Barnes should plead a separate cause of action for the special ATB and that the Defendant Plan was "going to take issue with it [b]ut you'll reserve that in your answer[;] [w]e're not going to have any more motions to dismiss"). Judge Patel never stated, either at the hearing or in her order on the motion to modify, that she thought the exhaustion defense with respect to the claim by annuitants — in particular, for a cash balance benefit — should be deferred until a later juncture in the proceedings.
That being said, even if failure to exhaust (as a predicate for fees) does not entirely bar the claim of deferred annuitants, that does not change the fact that annuitants did not become a part of this case until January 26, 2010, when Mr. Barnes moved to amend to add class allegations (which implicitly included not only lump-sum payees but also annuitants). Thus, fees incurred prior to January 26, 2010, for deferred annuitants are not recoverable herein.
Moreover, even though deferred annuitants became a part of the case on or about January 26, 2010, that was only with respect to a claim for an ATB only. The cash balance benefit for deferred annuitants did not become an issue in this case until January 21, 2011 (almost a year later), when Mr. Barnes filed his reply brief in support of the motion to modify the class certification order.
Accordingly, at this juncture, fees that were reasonably necessary to obtain the relief that was ultimately obtained by Mr. Barnes include at most (1) fees incurred in prosecuting Count I prior to February 5, 2010, and (2) fees incurred in prosecuting Count II between January 21, 2011, and August 31, 2011. Because the fees in time period (1) above include time spent on claims other than Count I and the fees in time period (2) above include time spent on claims other than Count II (deferred annuitants), an allocation between time spent on successful and unsuccessful claims or some evaluation of the hours spent in light of results obtained must be made. Unfortunately for the Court, the billing records for Mr. Barnes's attorneys do not shed any light as to how to parse out fees related to Count I or Count II (deferred annuitants) from the other claims.
Given this situation, the Court orders the parties to provide supplemental briefing as to (1) whether all fees incurred prior to February 5, 2010, were reasonably necessary to obtain the relief that was ultimately obtained by Mr. Barnes for Count I; (2) whether all fees incurred between January 21, 2011, and August 31, 2011, were reasonably necessary to obtain the relief that was ultimately obtained by Mr. Barnes for Count II (deferred annuitants); and (3) in either event, what reduction, if any, should be made with respect to each time period, particularly in light of the nature of the claims on which Plaintiff obtained some success and the results obtained. The Court advises the parties that it expects both to address each of these three issues. The supplemental briefing shall be filed within two weeks after the date of this order. The parties may stipulate to additional time if necessary to ensure a complete review of the billing records.
As to the third issue, the Court makes the following observations regarding proportionality. The main case cited by Mr. Barnes regarding proportionality is Anderson v. AB Painting & Sandblasting, Inc., 578 F.3d 542, 546 (7th Cir.2009), an ERISA case. The district court there was concerned about the relationship between the actual damages ($6,500, including interest) and the requested attorney's fees ($50,885.90). The district court stated that the fee request was disproportionate to the damages claimed and thus reduced fees to $10,000. See id. at 544.
On appeal, the Seventh Circuit reversed and remanded for a new calculation of attorney's fees. It began by noting that,
Id. at 545.
The court acknowledged that "[s]ome of our cases have expressed concern where
The Seventh Circuit went on to state as follows:
Id. (emphasis added). Notably, the Seventh Circuit stated that obdurate conduct on the part of the defendant could be a reason why a fee request is high. See id.
Proportionality between a damages award and a fee request, however, is a different issue from proportionality between the damages sought and damages obtained; the Ninth Circuit addressed the latter in McCown, 565 F.3d at 1097. There, the Ninth Circuit noted that the trial court should have taken into account in its calculation of attorney's fees the fact that eight of the plaintiff's nine related claims were dismissed at summary judgment. McCown, 565 F.3d at 1104 (stating that, "[a]lthough the Supreme Court has disavowed a test of strict proportionality, it also suggested that a comparison of damages awarded to damages sought is required").
As for costs, for the reasons stated above, the Court rejects the Defendant Plan's argument that they should not be awarded under a Hardt or Hummell analysis. Because the Defendant Plan did not make any challenge to costs under a Hensley analysis, the Court shall award all costs requested unless it agrees with the Defendant Plan that the cost request is "unsupported because [Mr. Barnes] has failed to produce evidence of the `prevailing practice in a given community' for lawyers to bill," e.g., meals, travel, outside printing or copying, and so forth. Opp'n at 21.
The Court does not find this final argument raised by the Defendant Plan persuasive.
Nevertheless, Mr. Barnes has cited one case in which a Northern District of California court concluded that it is the prevailing practice in the community that the costs of computer-based legal research, PACER fees, and postage are billed to the client. See Mot. at 24 (citing Langston v. North Am. Asset Dev. Corp. Group Disability Plan, No. C-08-02560 SI, 2010 WL 330085, at *8-9, 2010 U.S. Dist. LEXIS 12507, at *27-28 (N.D.Cal. Jan. 20, 2010)). Furthermore, a decision from this District allowed for the costs of copying, mailing, faxing, and legal research under 42 U.S.C. § 1988. See Mahach-Watkins v. Depee, No. C 05-1143 SI, 2009 WL 3401281, at *2, 2009 U.S. Dist. LEXIS 101675, at *5-6 (N.D.Cal. Oct. 20, 2009). Mahach-Watkins is especially notable because, there, even though the plaintiff had not made any showing what the prevailing practice in the legal community was, Judge Illston stated that she had "adjudicated many fee and cost petitions, and [found] that attorneys routinely bill their clients for these types of expenses." Id. at *2, 2009 U.S. Dist. LEXIS 101675, at *6.
Based on Langston, Mahach-Watkins, and this Court's experience with adjudication of fee and cost petitions, Mr. Barnes's request for costs is justified. Accordingly, Mr. Barnes is awarded his costs in the amount of $75,867.85.
For the foregoing reasons, the Court grants Mr. Barnes's motion for attorney's fees and costs. Costs in the amount of $75,867.85 are awarded. As for fees, the Court defers a ruling on the specific amount until after the parties have filed supplemental briefs. The Court shall advise the parties if an additional hearing is needed after it has had an opportunity to review the supplemental briefs.
This order disposes of Docket No. 355.
IT IS SO ORDERED.
Plaintiff Quiller Barnes filed suit against Defendant AT & T Pension Benefit Plan, Nonbargained Program (the "Defendant Plan"), alleging that the Defendant Plan violated his rights and the rights of others similarly situated by, inter alia, failing to pay full pension benefits in violation of ERISA. A final judgment in the case was entered on April 17, 2013. See Docket No.
Having considered the parties' papers and accompanying submissions, as well as all other evidence of record, the Court hereby awards $193,461.63 in fees and $15,189.95 in "fees on fees." As for costs, the Court
In its prior order, the Court concluded that, for Count I, Mr. Barnes was entitled at most to fees incurred prior to February 5, 2010. At best, only fees up to February 5, 2010, were appropriate because, as of that date, it was clear that the Defendant Plan was relying on § 3.4(a) of the Plan as a basis for denying Mr. Barnes's claim. In his supplemental brief, Mr. Barnes represents that he incurred $250,983.75 in fees (representing 473 hours) up to February 5, 2010. He asks to be awarded the entirety of that sum.
In response, the Defendant Plan essentially asks the Court to reconsider its prior ruling because Mr. Barnes was actually informed of the Defendant Plan's reliance on § 3.4(a) far earlier than February 5, 2010. According to the Defendant Plan, on April 20, 2009, it served an ENE statement on Mr. Barnes (more specifically, his prior counsel), and, in that statement, Mr. Barnes was given fair notice that the Defendant Plan was relying on § 3.4(a) as the basis for denying his claim for benefits. If the Court were to agree with the Defendant Plan, then this would eviscerate all fees sought by Mr. Barnes with respect to Count I ($250,983.75) because current counsel did not even start to incur fees until October 2009.
As a preliminary matter, the Court notes that, although the Defendant Plan is essentially asking for reconsideration, the Court shall not apply the restrictions of Civil Local Rule 7-9 here. This is because the Court did not expressly articulate its time limitation framework during the initial hearing on the fee motion, and, therefore, the Defendant Plan never had an opportunity to argue that Mr. Barnes had notice of § 3.4(a) very early on in the litigation. The Court's decision not to apply Civil Local Rule 7-9 is not unfairly prejudicial to Mr. Barnes because he is also seeking reconsideration on various matters, for which the Court shall also decline to apply the Rule 7-9 standard.
Because the Court is not applying the Rule 7-9 standard, the Court gives little weight to Mr. Barnes's contention that the Defendant Plan's argument is untimely. This leaves Mr. Barnes with the arguments that (a) consideration of the ENE statement is not necessary to prevent manifest injustice; (b) judicial estoppel bars consideration of the ENE statement; and (c) the Defendant Plan failed to disclose that it would be relying on the ENE statement.
First, Mr. Barnes contends that it would not be manifest injustice for the Court to disregard the ENE statement because the ADR Local Rules actually provide for ENE statements to be confidential — including from the presiding judge.
But the commentary to ADR Local Rule 5-12 shows that the rule is not quite so unforgiving as it might appear on its face. The commentary states: "Ordinarily, anything that happens or is said in connection with an ENE session is confidential in the same manner and for the same reasons as with mediation. Please see the legal authorities cited in the commentary to ADR L.R. 6-12(c)." ADR L.R. 5-12, commentary (emphasis added). The commentary for ADR Local Rule 6-12 provides that, "[o]rdinarily, anything that happened or was said in connection with a mediation is confidential" — citing in support, inter alia, Federal Rule of Evidence 408. ADR L.R. 6-12, commentary. The commentary then goes on to note that
ADR L.R. 6-12, commentary (emphasis added).
Here, the Court can use Rule 408 as a benchmark to see whether the ENE statement should be considered. Under Rule 408, evidence of "conduct or a statement made during compromise negotiations about the claim" is "not admissible... either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction." Fed.R.Evid. 408(a)(2). But here the Defendant Plan is not asking the Court to consider the ENE statement to disprove the validity or amount of Mr. Barnes's ERISA claims. Rather, the Defendant Plan is only asking for consideration of the ENE statement for purposes of a collateral issue — i.e., attorney's fees. See, e.g., Mullen v. United States Army Crim. Investigation Command, No. 1:10cv262 (JCC/TCB), 2012 WL 2681300, at *7, 2012 U.S. Dist. LEXIS 93977, at *18 (E.D.Va. July 6, 2012) ("Turning next to Plaintiff's Motion for Attorneys' Fees, as a preliminary matter, this Court finds that `[Federal Rules of Evidence 408] does not bar a court's consideration of settlement negotiations in its analysis of what constitutes a reasonable fee award in a particular case.'"). In particular, the ENE statement merely goes to notice as it affects attorney's fees.
Accordingly, the Court rejects Mr. Barnes's contention that the ADR Local Rules or the principles underlying the rules should bar the Court from considering the ENE statement.
Second, Mr. Barnes asserts that judicial estoppel should prevent the Court from considering the ENE statement. See Docket No. 400 (Opp'n at 3). Although not entirely clear, Mr. Barnes's contention seems to be that, because the Defendant Plan has previously taken the stance that only the BPC can issue formal interpretations of the Plan, the Defendant Plan should not now be allowed to argue that he was informed of the basis for the denial of his claim through the ENE statement authored
This argument is not convincing for the reasons articulated by the Defendant Plan in its reply brief.
United Nat'l Ins. Co. v. Spectrum Worldwide, Inc., 555 F.3d 772, 778 (9th Cir. 2009). Judicial estoppel applies where (1) the party to be estopped takes a current position that is "`clearly inconsistent'" with its earlier position; (2) the party to be estopped has succeeded in persuading the court to accept the earlier position; and (3) the party to be estopped would derive an unfair advantage if not estopped. Id. at 779. At the very least, judicial estoppel should not apply in the instant case because the Defendant Plan was not successful in persuading the Court to accepts its earlier position that only Plan interpretation by the BPC should count. See Docket No. 405 (Reply at 4).
Third, Mr. Barnes argues that the Defendant Plan should not be able to rely on the ENE statement because it never previously disclosed that it would be relying on the statement as evidence in this litigation.
Because none of Mr. Barnes's technical arguments is persuasive, the Court is left with what is, in essence, the undisputed fact that the ENE statement of April 20, 2009, disclosed the Defendant Plan's reliance on § 3.4(a) of the Plan. To the extent Mr. Barnes tries to argue that at best only his prior counsel got notice of § 3.4(a) and not his current counsel, see Docket No. 400 (Opp'n at 2), the Court is not convinced that this is a reason to award him his fees up to February 5, 2010. The Defendant Plan cannot be blamed if Mr. Barnes's prior counsel failed to give documents to his current counsel.
Accordingly, the Court concludes that, for Count I, Mr. Barnes is not entitled to any of his current counsel's fees. Current counsel did not begin to incur fees until on or about October 2009. Mr. Barnes, however, was given notice as of April 20, 2009, that the Defendant Plan was relying on § 3.4(a) in denying his claim.
In conjunction with this ruling, the Court
In its prior order, the Court concluded that, for Count II, Mr. Barnes was entitled at most to all fees incurred between January 20, 2011, and August 31, 2011. In his supplemental brief, Mr. Barnes asks for all fees incurred in that time period — i.e., $203,846.25, which represents 455.8 hours of time. See Docket No. 393 (Pl.'s Supp. Br. at 6).
The Defendant Plan argues first that this sum should not be awarded because only time reasonably necessary to obtain the relief ultimately obtained should be awarded and, here, Mr. Barnes could have obtained the same exact relief through a much faster means — i.e., by filing a motion to remand so that the BPC could decide in the first instance whether deferred annuitants would be covered by § 3.4(d)(3). See Docket No. 397 (Def.'s Supp. Br. at 5-6) (arguing that it would take no more than 20 hours to move to remand, which, at an hourly rate of $485, would result in a fee award of no more than $9,700).
The Court rejects this argument. The Defendant Plan was a party to this suit. Once it knew that deferred annuitants were a part of this case, it could have on its own initiated a procedure asking the BPC to issue a formal interpretation. It did not.
The Defendant Plan argues next, with respect to Count II, that the lodestar of $203,846.25 (representing 455.8 hours of time) is overstated and should be trimmed to exclude hours that are "excessive, redundant, or otherwise unnecessary." Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). According to the Defendant Plan, time that falls within these categories includes
(1) Time spent by Mr. Barnes's counsel after June 24, 2011, i.e., the day that the Defendant Plan told Mr. Barnes that it would be asking the BPC to issue a formal interpretation (49.65 hours totaling $22,943.75), see Docket No. 397 (Def.'s Supp. Br. at 8);
(2) Time spent by Mr. Barnes's counsel on "wasted" work or work related to entirely different cases (34 hours totaling $16,011.25), see Docket No. 397 (Def.'s Supp. Br. at 9-10);
(3) Time spent by Mr. Barnes's counsel on clerical and secretarial tasks (69.35 hours totaling $23,012.50), see Docket No. 397 (Def.'s Supp. Br. at 12); and
(4) Time spent by Mr. Barnes's counsel for which there are either vague or block-billed time entries (112.4 hours totaling $51,282.50). See Docket No. 397 (Def.'s Supp. Br. at 13).
Altogether, this would be a reduction of approximately $113,250.00.
The Court rejects the Defendant Plan's attempt to cut into the lodestar because, in its original opposition to the fee motion, it never made a challenge to the lodestar and argued instead only limited success. Defendant's belatedly raised argument is not cognizable in the context of the instant motion.
The Defendant Plan argues next that the Court should reduce the lodestar because Mr. Barnes is asking for compensation for time spent on unrelated claims (i.e., issues not related to the deferred annuitants). In particular, the Defendant
The problem here is that, as the Court noted its in prior order, the Defendant Plan never argued — at least not in its papers — that "the unsuccessful claims were unrelated to the successful claims." Docket No. 386 (Order at 22). The Defendant Plan argues that it raised the issue at the hearing, see Docket No. 397 (Def.'s Supp. Br. at 8) (citing Docket No. 355 (Tr. at 12-13)), but, even here, it did not propose any specific hours that should be reduced — including but not limited to the Fidelity or other subpoenas.
Finally, the Defendant Plan argues that there should be a reduction of any fee award based on the limited success that Mr. Barnes obtained on Count II (i.e., only deferred annuitants, not lump-sum payees, and only $46,000 for one deferred annuitant). The Defendant Plan proposes a percentage reduction of 50 to 70% across-the-board.
Mr. Barnes, of course, argues that there should be no across-the-board percentage reduction because all the fees incurred were reasonably necessary to obtain the relief ultimately achieved. Mr. Barnes identifies "several main categories of work" that make up the $203,846.25 in fees requested:
Docket No. 393 (Pl.'s Supp. Br. at 10-11); see also Docket No. 393 (Pl.'s Supp. Br. at 7) (chart). According to Mr. Barnes:
Docket No. 393 (Pl.'s Supp. Br. at 11-12).
The Court finds merit to much of Mr. Barnes's argument. That is, even if lump-sum payees were not part of the case, in large part, Mr. Barnes would not have litigated the case any differently because his position for both lump-sum payees and deferred annuitants was that § 3.4(d)(3) was applicable to them. Cf., e.g., Velez v. Wynne, 220 Fed.Appx. 512, 513 (9th Cir. 2007) (noting that, even though plaintiff did not prevail on her claim for disparate treatment, she did prevail on her claim for hostile work environment; remanding to determine reasonable fees taking into account success on the hostile work environment claim).
However, the Court must also take into account that the Defendant Plan did have a defense with respect to lump-sum payees that was not applicable to deferred annuitants (i.e., that § 3.4(a) was applicable). Therefore, contrary to what Mr. Barnes suggests, he did have to spend time on lump-sum payees that was (for lack of a better word) "unique" to them.
This leaves open the question of what kind of a percentage reduction there should be based on the unique defense for lump-sum payees. Unfortunately, it is not clear from the record exactly how much of Mr. Barnes's focus was on defeating § 3.4(a). Defendant fails to make any factual showing in this regard. In the absence of any concrete information, the Court concludes that, at most, it should take no more than a 10% "haircut." See Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir.2008) (stating that "the district court can impose a small reduction, no greater than 10 percent — a `haircut' — based on its exercise of discretion and without a more specific explanation"). Based on this haircut, Mr. Barnes is entitled to fees of
Like the Defendant Plan, Mr. Barnes has also effectively moved for reconsideration of the Court's fee order.
(a) For Count I, fees incurred after February 5, 2010 — in particular, fees spent on opposing the Defendant Plan's motion for summary judgment (in which it stated its reliance on § 3.4(a)) ($110,077.50) because "the manner by which Defendant chose to inform Plaintiff of the plan provision ... — via a motion for summary judgment — necessitated significant and unnecessary additional work by Plaintiff's counsel." Docket No. 393 (Pl.'s Supp. Br. at 5, 15).
(b) For Count II, fees incurred for taking the 30(b)(6) deposition of the Defendant Plan in November 2010 ($56,210) as this was when the interpretation that § 3.4(d)(3) was not applicable to deferred annuitants was exposed. See Docket No. 393 (Pl.'s Supp. Br. at 5, 12).
(c) For Count II, fees incurred before January 21, 2011, for moving to modify the class certification order ($21,162.50). See Docket No. 393 (Pl.'s Supp. Br. at 6, 13-14).
The Court is not sympathetic to Mr. Barnes's request for additional fees as stated in (a) and (c) above. With respect to (a) above, the Defendant Plan as not moving for summary judgment on Count I; rather, it was moving for summary judgment on Count II (i.e., that Mr. Barnes was paid all that he was owed). Therefore, Mr. Barnes's opposition to the summary judgment motion was all about Count II, and not Count I.
As for (c) above, the Court already addressed in its prior order why it was not starting fees for Count II until January 21, 2011 — i.e., because it was not until the reply brief for the motion to modify the class certification order that Mr. Barnes brought up that he was asking for deferred annuitants to be paid a cash balance benefit (rather than a redetermined ATB). Mr. Barnes's attempt to characterize his earlier filed papers as fairly including a request for a cash balance benefit is not convincing. See, e.g., Docket No. 199 (Mot. at 1) (asking the Court to define the class "as originally proposed by Plaintiff"); Docket No. 201 (proposed order for motion to modify) (focusing on redetermined ATB); see also Docket No. 240 (Order at 7) (order issued by Judge Patel) (noting that there had been a "slight[] shift[] [in] the focus of the litigation to the proper interpretation and application of section 3.4(d)(3) in its entirety, rather than its previous focus on the proper interpretation and application of the `x' value within section 3.4(d)(3), namely, the redetermination of the ATB benefit upon successful bridging").
The only argument that has some merit is Mr. Barnes's contention that he should be awarded fees for the time spent on the 30(b)(6) deposition. As to this issue, the Court rejects Mr. Barnes's main contention that the Defendant Plan has conceded that he should be awarded fees incurred for the deposition. It is true that, at the July 18, 2013, hearing on the fee motion, the Defendant Plan did state as follows:
Docket No. 391 (Tr. at 33-34). But, as the Defendant Plan argues in its supplemental brief, this should not be construed as a concession that Mr. Barnes should be awarded deposition fees "under any other analysis, such as the one reflected in the Court's order." Docket No. 397 (Def.'s Supp. Br. at 6 n.3).
That being said, Mr. Barnes has a legitimate point in noting that, without the 30(b)(6) deposition, he never would have learned that the Defendant Plan was not construing § 3.4(d)(3) to cover deferred annuitants. Thus, some compensation for fees incurred for the deposition seems fair. The question is whether all of the fees for the deposition ($56,210) should be awarded.
On the one hand, there is the argument that only a minimal amount of the fees should be awarded because, out of a six-hour deposition (resulting in approximately 160 transcribed pages), only a brief part of the deposition focuses on deferred annuitants specifically. See Docket No. 200 (Roberts Decl., Ex. 2) (Depo. at 63-70). On the other hand, it may be argued that the bulk of the fees should be awarded because, even if lump-sum payees were not a part of the case, the deposition would largely been the same because Mr. Barnes's main contention was that § 3.4(d)(3) applied to lump-sum payees and deferred annuitants alike.
The Court finds that Mr. Barnes has failed to demonstrate it was reasonable to accrue $56,000 in fees in order to learn in the deposition that the Defendant Plan was not construing § 3.4(d)(3) to cover deferred annuitants. Based on the record, the Court finds $10,000 a reasonable amount in this regard.
Accordingly, for the reasons discussed above, the Court finds that no fees should be awarded for Count I and fees totaling
In its prior fee order, the Court did not address Mr. Barnes's motion for "fees on fees" — i.e., for fees related to his motion for fees. The Defendant Plan claims that it understood that the Court's silence on the issue meant that there was a denial. But that is not a fair point. Fees on fees could not really be addressed until the Court determined what "underlying" fees should be awarded in the first instance. And even if the Court had implicitly denied the request for fees on fees, this would be a fair basis for Mr. Barnes to move for reconsideration (i.e., manifest failure to consider arguments raised).
As to the fees on fees requested by Mr. Barnes, they total $106,917.50 for 224 hours of time. See Docket No. 393 (Pl.'s Supp. Br. at 14). This includes the work done on the supplemental brief.
Mr. Barnes should be awarded at least part of his fees on fees but not all of his fees on fees. How much he should be awarded depends in large part on how much Mr. Barnes is awarded for the "underlying" fees. See, e.g., Schwarz v. Secretary of Health & Hum. Servs., 73 F.3d 895, 909 (9th Cir. 1995) (concluding that "the district court was well within its discretion in awarding 50% of the fees-on-fees requested because this ratio actually exceeded the percentage by which Schwarz prevailed on her request for merits fees"); Thompson v. Gomez, 45 F.3d 1365, 1368 (9th Cir.1995) (stating that the Supreme
Here, Mr. Barnes originally sought $1,364,241.25 million in fees (excluding costs and fees on fees). See Docket No. 355 (Mot. at 2); Docket No. 381 (Reply at 15). The Court has concluded that fees in the amount of $193,461.63 are appropriate. Thus, the Court has awarded Mr. Barnes 14.2% of the fees requested. The Court concludes that this percentage is fairly applied to the request for fees on fees. Accordingly, the Court awards Mr. Barnes 14.2% of the fees on fees, for a total of
Finally, the Court
For the foregoing reasons, the Court awards Mr. Barnes $193,461.63 in fees and $15,189.95 in fees on fees. Costs shall be determined at a later date after the parties' briefs are submitted.
This order disposes of Docket Nos. 392, 398, and 405.
IT IS SO ORDERED.
