DONNA M. RYU, Magistrate Judge.
Plaintiff Joan Gurasich ("Plaintiff") brought this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., against Defendant IBM Retirement Plan ("IBM Plan"), as well as Defendant International Business Machines Corporation ("IBM") as the Plan Administrator (collectively "Defendants"). Plaintiff prevailed on her claim for retirement benefits under the IBM Plan and now moves for attorneys' fees and prejudgment interest. Motion for Attorneys' Fees and Prejudgment Interest ("Mot.") [Docket No. 69].
For the following reasons, Plaintiff's motion is granted in part. Plaintiff is awarded attorneys' fees in the amount of $249,871.50 and prejudgment interest in the amount of $2,398.31.
The factual history of this case is set out fully elsewhere.
Plaintiff began working for ROLM Corporation ("ROLM") on January 24, 1980. In 1984, IBM acquired ROLM. As a result of that acquisition, Plaintiff became an IBM employee and a participant in the IBM Plan.
After leaving IBM on February 15, 1990, Plaintiff worked at Siemens PN from February 19, 1990 until July 24, 1997, and became a vested participant in the Siemens Retirement Plan. On February 1, 2012, Plaintiff began receiving a monthly benefit under the Siemens Retirement Plan, which was calculated based on an employment history from January 24, 1980 to July 24, 1997, even though Plaintiff did not begin working for Siemens until February 19, 1990.
In the years following her separation from IBM, the IBM Plan sent Plaintiff numerous communications stating that she had a vested benefit under that plan. On April 2, 2013, Plaintiff sent a Pension Election Confirmation package to the IBM Employee Services Center. On July 10, 2013, Plaintiff called the IBM Employee Services Center and was told that she was not eligible under the IBM Plan. Plaintiff requested a written explanation of the basis for the denial of her claim. On October 1, 2013, the Plan Administrator sent Plaintiff a denial letter, explaining that Plaintiff had terminated her employment with IBM in 1990 pursuant to an agreement between IBM and ROLM, which included a pension asset transfer of Plaintiff's IBM employment service to ROLM for inclusion in any subsequent ROLM pension benefit calculation. The letter stated that, because the IBM Plan had already paid a benefit on Plaintiff's behalf for her service from January 24, 1980 to February 15, 1990, Plaintiff was ineligible for any future IBM pension benefit or service calculations. Finally, the letter explained that ROLM had since been acquired by Siemens, and that IBM had made an inquiry to Siemens and determined that Plaintiff was receiving Siemens pension benefits that included her previous IBM service dates.
On October 8, 2013, Plaintiff's attorney, Kathryn Curry ("Curry"), sent a letter to the Plan Administrator requesting documents related to her claim for benefits. On November 11, 2013, the Plan Administrator responded to Plaintiff's request by forwarding a July 9, 2013 email exchange between Siemens and the IBM Plan that confirmed that Plaintiff's Siemens pension was based on service from 1980 to 1997, plus copies of the 1989 and 1994 IBM Retirement Plans. Curry requested a copy of the 1990 purchase agreement between IBM and ROLM that was referenced in the denial of her claim, but the Plan Administrator did not provide one.
Plaintiff, through Curry, appealed the denial of her claim for IBM Plan benefits on December 3, 2013. On March 6, 2014, the Plan Administrator upheld the denial of Plaintiff's claim.
On June 24, 2014, Plaintiff, through her attorneys Curry and Tracy Tierney ("Tierney"), filed a complaint against Defendants asserting four claims under ERISA: 1) recovery of Plan Benefits pursuant to 29 U.S.C. § 1132(a)(1)(B); 2) breach of fiduciary duties pursuant to 29 U.S.C. § 1104; 3) equitable relief pursuant to 29 U.S.C. § 1132(a); and 4) failure to provide requested plan information pursuant to 29 U.S.C. § 1132(c).
Defendants filed a motion for partial dismissal, which the court denied. [Docket Nos. 18, 24.] Defendants subsequently moved for summary judgment on all four of Plaintiff's claims, and Plaintiff made a cross motion for summary judgment on her first and fourth claims. [Docket Nos. 35, 42.] The court issued an order granting summary judgment to Plaintiff on her first claim for recovery of plan benefits, denying as moot her second and third claims for equitable relief, and granting summary judgment to Defendants on the fourth claim for failure to provide requested plan information. Order on Motions for Summary Judgment ("MSJ Order") [Docket No. 60]. On February 11, 2016, the court entered judgment awarding Plaintiff past due benefits under the IBM Plan in the amount of $47,966.10, as well as future benefits pursuant to the terms of the Plan (providing for monthly payment of $978.90). [Docket No. 65.] Plaintiff filed a Bill of Costs, and the Clerk granted $400.00 in taxable costs against Defendants. [Docket Nos. 68, 76.] Plaintiff subsequently filed the present motion, requesting an award of attorneys' fees pursuant to 29 U.S.C. § 1132(g) in the amount of $285,160.50, consisting of $276,958.00
Plaintiff argues that she is entitled to reasonable attorneys' fees and costs as the prevailing party because there are no special circumstances that would render such an award unjust. Plaintiff further requests that the court, in its discretion, award prejudgment interest at a higher rate than the formula prescribed for post-judgment interest under 28 U.S.C. § 1961.
Defendants oppose the motion. Defs.' Opposition ("Opp'n.") [Docket No. 72]. They argue that Plaintiff should not be awarded fees and prejudgment interest at all, but if she is, the requested amounts should be drastically reduced. They argue that the amount of fees should be reduced to reflect the fact that Defendants prevailed on Plaintiff's fourth claim for failure to provide plan information. They also argue that some of the requested fees are excessive and duplicative, especially in light of the work that Plaintiff's attorneys did on her Administrative Appeal for benefits, as well as Plaintiff's counsel's professed experience and expertise in ERISA law.
Plaintiff requests an award of attorneys' fees pursuant to 29 U.S.C. § 1132(g) because she achieved success on her claim for benefits under the IBM Plan. She argues that the factors set forth by the Ninth Circuit in Hummell v. S. E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980), support a fee award.
Section 502(g)(1) of ERISA gives the court discretion to award attorneys' fees. 29 U.S.C. § 1132(g)(1). The Supreme Court has held that a fee claimant may be entitled to attorneys' fees if the claimant shows "some degree of success on the merits." Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010). In addition, the Ninth Circuit has held that a prevailing plan participant such as Plaintiff "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." Smith v. CMTA-IAM Pension Tr., 746 F.2d 587, 589 (9th Cir. 1984) (internal quotations and citation omitted). As the Ninth Circuit has explained, ERISA "is remedial legislation which should be liberally construed in favor of protecting participants in employee benefit plans" and, specifically, "to afford them effective access to federal courts." Id.
Defendants concede that Plaintiff meets the threshold in Hardt, but argue that an analysis of the Hummell factors warrants denial of Plaintiff's fee request. Opp'n. at 3, 5.
Once a court determines that an ERISA fee claimant has achieved some degree of success on the merits, the court "must consider" the factors set forth in Hummell, 634 F.2d 446, to guide its discretion under § 1132(g). See Simonia v. Glendale Nissan/Infiniti Disability Plan, 608 F.3d 1118, 1119, 1121 (9th Cir. 2010). In exercising this discretion, district courts should consider the following factors:
Hummell, 634 F.2d at 453. "No one of the Hummell factors . . . is necessarily decisive, and some may not be pertinent in a given case." Carpenters S. Cal. Admin. Corp. v. Russell, 726 F.2d 1410, 1416 (9th Cir. 1984) (citation omitted). Courts generally construe the Hummell factors in favor of participants in employee benefit plans. McElwaine v. US W., Inc., 176 F.3d 1167, 1172 (9th Cir. 1999) ("When we apply the Hummell factors, we must keep at the forefront ERISA's purposes that `should be liberally construed in favor of protecting participants in employee benefit plans'") (citation omitted). Plaintiff argues that each of these factors supports an award of fees. Defendants contend that all of the Hummell factors, save the second, weigh in favor of denying a fee award. The court addresses each factor below.
Under Hummell, a party's "culpability" does not require a finding of bad faith. IBM's failure to fulfill its legal duty is sufficient to support an award of fees. See Smith, 746 F.2d at 590. ("Although bad faith is a factor that would always justify an award, it is not required."); Caplan v. CNA Fin. Corp., 573 F.Supp.2d 1244, 1248 (N.D. Cal. 2008); King v. Cigna Corp., No. C 06-7025 CW, 2007 WL 4365504, at *2 (N.D. Cal. Dec. 13, 2007) ("[F]rom a legal perspective, Defendants are `culpable' in that they were found to owe Plaintiff a legal duty that they were not fulfilling").
The court granted summary judgment for Plaintiff because IBM abused its discretion in denying her claim for benefits based on an inference, rather than an investigation of the underlying facts, where IBM had the ability to confirm the disputed facts through reviewing its own records and where Plaintiff provided concrete evidence in support of her position. MSJ Order at 12-13. The court concluded that IBM's denial of benefits without relevant information, especially personnel and benefits records in the control of a plan administrator, amounted to an abuse of discretion and a failure to fulfill its legal duties to Plaintiff. See Booton v. Lockheed Med. Ben. Plan, 110 F.3d 1461, 1463-64 (9th Cir. 1997) (finding that denial of a claim without obtaining relevant information is an abuse of discretion); Kunin v. Benefit Tr. Life Ins. Co., 910 F.2d 534, 538 (9th Cir. 1990) (burden is on plan to obtain adequate information to make decision).
Thus, the first factor weighs in favor of a fee award.
Defendants concede that they are able to satisfy a fee award. Opp'n. at 6. As the Ninth Circuit explained: "Based on this factor alone, absent special circumstances, a prevailing ERISA employee plaintiff should ordinarily receive attorney's fees from the defendant." Smith, 746 F.2d at 590. The court reasoned that, absent fee shifting, it is generally difficult for an individual plan participant to carry the heavy burden of litigating a denial of benefits. Id. The same reasoning applies here. The second factor thus weighs in favor of a fee award.
The court finds that the third factor also favors awarding fees to Plaintiff. ERISA does not authorize an award of compensatory or punitive damages for bad faith behavior. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147 (1985) (holding compensatory and punitive damages not available remedies for ERISA benefit claims). As a result, courts acknowledge that an award of attorneys' fees and costs is a way of deterring violations of ERISA. Caplan, 573 F. Supp. 2d at 1248 ("[A]n award of attorneys' fees could serve to deter other plan administrators from denying meritorious disability claims. This could indirectly benefit other individuals."); Carpenters S. Cal. Admin. Corp., 726 F.2d at 1416 ("If defendant employers face the prospect of paying attorney's fees for successful plaintiffs, they will have added incentive to comply with ERISA.").
A fee award will deter IBM and other plan administrators from denying plan benefits based on inference and conjecture, without verifying facts within the plan administrator's control. This factor also weighs in favor of a fee award.
Plaintiff's suit did not seek relief for other plan participants besides herself; she sought to recover her own pension benefits. Plaintiff argues that the court's determination in this case will benefit other plan participants. This is a stretch. This case focused heavily on the specific factual circumstances of Plaintiff's employment with a number of related corporate entities. To the extent that the court's decision may help other plan participants, any such benefit is already captured in the previous factor as deterrence against a future failure to properly investigate information within the Plan Administrator's control.
This factor is neutral at best.
Finally, the fifth factor—the relative merits of the parties' positions—favors a fee award. In ruling on the cross-motions for summary judgment, the court found that IBM's denial of benefits without consulting relevant and accessible information amounted to a failure to fulfill its legal duties to Plaintiff. Further, Defendants failed to investigate the facts underlying Plaintiff's claim even after Plaintiff submitted concrete evidence in support of her position. Plaintiff therefore had a more meritorious position on her claim for benefits. This factor weighs in favor of a fee award.
In sum, Plaintiff is entitled to an award of attorneys' fees. The court now turns to the appropriate amount to be awarded in this case.
District courts in the Ninth Circuit typically employ the "lodestar analysis" in calculating fee awards. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (citations omitted). "The lodestar figure is calculated by multiplying the number of hours the prevailing party reasonably expended on the litigation (as supported by adequate documentation) by a reasonable hourly rate for the region and for the experience of the lawyer." Yamada v. Nobel Biocare Holding AG, No. 14-55263, 2016 WL 1579705, at *6 (9th Cir. Apr. 20, 2016) (internal citation omitted).
The party seeking fees bears the initial burden of establishing the hours expended litigating the case, and must provide detailed time records documenting the tasks completed and the amount of time spent. Hensley, 461 U.S. at 434; Welch v. Metro. Life Ins. Co., 480 F.3d 942, 945-46 (9th Cir. 2007). The requesting party also has the burden to demonstrate that the rates requested are "in line with the prevailing market rate of the relevant community." Carson v. Billings Police Dep't, 470 F.3d 889, 891 (9th Cir. 2006) (internal quotation marks and citation omitted). Generally, "the relevant community is the forum in which the district court sits." Camacho, 523 F.3d at 979 (citations omitted). Typically, "affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community and rate determinations in other cases . . . are satisfactory evidence of the prevailing market rate." United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990).
Fee awards calculated under the loadstar method generally are presumed to be reasonable. Gonzalez v. City of Maywood, 729 F.3d 1196, 1208-09 (9th Cir. 2013). At the same time, the court may adjust this figure "if circumstances warrant" in order "to account for other factors which are not subsumed within it." Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001). "Where the documentation of hours is inadequate, the district court may reduce the award accordingly." Hensley, 461 U.S. at 433. The district court may also exclude any hours that are excessive, redundant, or otherwise unnecessary. McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting Hensley, 461 U.S. at 434). In addition, the Ninth Circuit has stated that a district court may "impose a small reduction, no greater than 10 percent—a `haircut'—based on its exercise of discretion and without a more specific explanation." Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008).
After the party presents its evidence supporting its fee request, the party opposing the fees has a "burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in its submitted affidavits." Gates v. Deukmejian, 987 F.2d 1392, 1397-98 (9th Cir. 1992) (citation omitted). The party opposing fees must specifically identify defects or deficiencies in the hours requested; conclusory and unsubstantiated objections are insufficient to warrant a reduction in fees. De Amaral v. Goldsmith & Hull, No. 12-CV-03580-WHO, 2014 WL 1309954, at *3 (N.D. Cal. Apr. 1, 2014) (citing Cancio v. Fin. Credit Network, Inc., 04-cv-03755 TEH, 2005 WL 1629809, at *3 (N.D. Cal. July 6, 2005)). Courts have reduced fee awards where prevailing counsel engaged in inefficient or unreasonably duplicative billing, or where counsel's billing records contain insufficiently descriptive entries, show evidence of block billing, or billing in large time increments. See e.g., Welch, 480 F.3d at 948-50.
Even if the opposing party has not objected to the time billed, the district court may not uncritically accept a fee request, but is obligated to review the time billed and assess whether it is reasonable. Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1385 (9th Cir. 1984).
The court finds that the requested rates are within the prevailing market rates in the community for ERISA attorneys with similar experience and qualifications. The court also finds that most of the hours expended by Plaintiff's attorneys in this litigation were reasonable, but that some reductions are warranted.
The "reasonable hourly rate" is calculated "according to the prevailing market rates in the relevant community . . . ." Blum v. Stenson, 465 U.S. 886, 895 (1984). "To inform and assist the court in the exercise of its discretion, the burden is on the fee applicant to produce satisfactory evidence—in addition to the attorney's own affidavits—that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Id. at 896, n.11. Affidavits of the plaintiff's attorney and other attorneys regarding prevailing fees in the community as well as rate determinations in other cases can provide evidence of the prevailing market rate. Welch, 480 F.3d at 947 (citing Phelps Dodge Corp., 896 F.2d at 407). In the absence of opposing evidence, the proposed rates are presumed reasonable. Phelps Dodge Corp., 896 F.2d at 407.
Plaintiff seeks the following hourly rates: $650 for lead counsel Kathryn Curry, $625 for partner Tracy Tierney, and $180 for paralegals Tina Ernst and Jennifer Johnson. Plaintiff submits the following information in support of these requested rates: 1) the Curry declaration [Docket No. 69-1]; 2) the Tierney declaration [Docket No. 69-8], 3) the declaration of Glenn R. Kantor [Docket No. 69-11] supporting Curry's claimed rate; 3) citations to rates awarded to ERISA attorneys; and 4) a Request for Judicial Notice [Docket No. 70] of declarations filed by Rebecca Grey and Terence Coleman in support of the fee motion in Echague v. Metro. Life Ins. Co., Case No. 3:12-cv-00640-WHO (N.D. Cal. Aug. 20, 2014), as well as Judge Orrick's Order on that motion, Echague v. Metro. Life Ins. Co., 69 F.Supp.3d 990, 997 (N.D. Cal. 2014).
Kathryn Curry has been practicing law for more than 24 years and has more than 16 years of experience handling ERISA cases. Curry Decl. at ¶ 2. She has a degree in Business Administration from the University of California, Berkeley and graduated summa cum laude from Santa Clara Law School. Id. at ¶ 3. She has handled more than one hundred ERISA cases throughout her career, including appeals to the Ninth Circuit. Id. at ¶ 9. Curry is currently a partner at GCA Law Partners, LLP. Prior to joining GCA Law Partners, Curry handled ERISA cases on the defense side. Id. at ¶ 16.
Tracy Tierney has been practicing law for 18 years, with an exclusive focus in benefits, compensation, and ERISA matters. Tierney Decl. at ¶ 5. She holds a B.A. and M.A. from the University of Michigan and graduated cum laude from the University of Miami School of Law. Id. at ¶ 2. She "regularly counsel[s] clients with pension plan assets in excess of $200 million and $300 million." Id. at ¶ 8. She has served as a member of the Western Pension and Benefits Conference Significant Issues Committee and authored articles on ERISA legislation and legal developments. Id. at ¶ 9. She is currently a partner, and a former Managing Partner, at GCA Law Partners. Id. at ¶ 12.
Tina Ernst is a senior litigation paralegal with GCA Law Partners LLP. She graduated from San Jose State University with a degree in accounting. She began working as a litigation paralegal in 1990. Curry Decl. at ¶ 20.
Jennifer Johnson is also a senior litigation paralegal with GCA Law Partners LLP. She received her Paralegal Certificate from West Valley College in 1997. She graduated from the paralegal program at West Valley College on the Dean's Honor List and was a member of the National Paralegal Honor Society. Johnson has 19 years of experience as a litigation paralegal. Curry Decl. at ¶ 21.
Plaintiff submitted declarations from Glenn Kantor, an ERISA specialist in the San Francisco Bay Area, who currently charges an hourly rate of $650 and was awarded that rate in a recent ERISA litigation matter. Kantor Decl. at ¶¶ 14-15. Kantor's declaration in support of Curry's requested hourly rate of $650 cites cases where he or other plaintiff's attorneys were awarded rates ranging from $550 to $650 for work on ERISA cases. Kantor Decl. at ¶¶ 6-8, 10-13. Kantor opines that Curry's requested rate of $650 is "consistent with what other law firms of similar skill and expertise charge for this work, including [his] own." Id. at ¶ 19. Kantor and Curry were opposing counsel on numerous cases, including Ninth Circuit ERISA appeals, and he vouches for Curry's skill and reputation, stating that she "is an excellent ERISA litigation attorney and her reputation at my firm was very high." Id. at ¶ 20.
Kantor's declaration and the cited cases confirm that Curry's $650 hourly rate is consistent with the prevailing rates for ERISA litigation specialists in the San Francisco Bay Area. Kantor's declaration confirms that the requested rate for Curry is also consistent with the prevailing rates for ERISA litigation. The court therefore concludes that Curry's hourly rate is reasonable. Tierney's requested rate of $625 per hour is similarly reasonable, given the hourly rates awarded to attorneys with similar experience.
The court also concludes that the requested rate of $180 per hour for senior paralegals Ernst and Johnson is reasonable. See Zoom Elec., Inc. v. Int'l Bhd. of Elec. Workers, Local 595, No. C 11-1699 CW, 2013 WL 2297037, at *4 (N.D. Cal. May 24, 2013) (approving hourly rates between $180 and $225 per hour for law clerks and paralegals).
Defendants do not attempt to rebut the evidence of the reasonableness of the rates sought by Plaintiff in this case. Indeed, Defendants concede that "cases in the Northern District of California may support such rates." Opp'n. at 9.
Based upon the declarations submitted by Plaintiff, as well as the absence of any contrary evidence submitted by Defendants, the court finds that the hourly rates requested by GCA Law Partners in this case were reasonable and consistent with the prevailing market rates.
In granting a fee award, the court must explain how it arrived at the amount. Moreno, 534 F.3d at 1111. The explanation does not need to be elaborate; rather, it "must be concise but clear." Id. (citing Hensley, 461 U.S. at 437). "Where the difference between the lawyer's request and the court's award is relatively small, a somewhat cursory explanation will suffice. But where the disparity is larger, a more specific articulation of the court's reasoning is expected." Id. The party seeking the award of fees bears the burden of submitting time records detailing the hours spent; courts may reduce the award where the records do not justify the hours spent. Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986). Courts also have discretion to reduce the amount of hours billed in the event that entries are block-billed, as a court will be unable to determine whether all time in the entry was reasonably expended, and for duplicative or unnecessary work. Mendez v. Cty. of San Bernadino, 540 F.3d 1109, 1128-29 (9th Cir. 2008); see also Day v. AT & T Disability Income Plan, 608 F. App'x 454, 457 (9th Cir. 2015) (affirming reduction in fees where counsel spent an excessive amount of time on tasks compared to time spent on similar tasks by prior counsel and attorneys in other ERISA cases, used block-billing to record his time, and charged his other clients a lower hourly rate than the lodestar rate he requested).
In this case, the parties engaged in significant litigation activities, including the motion to dismiss briefing and hearing, a mediation and settlement conference, and cross-motions and a hearing on summary judgment. The court finds that most of the time spent by Plaintiff's counsel to litigate this case to its successful completion was reasonable. District courts within California have acknowledged that "[p]laintiffs in ERISA matters generally must spend a great amount of time preparing for conferences and other proceedings because ERISA cases tend to be factually intensive." Oster, 768 F. Supp. 2d at 1036 (quoting Mogck v. Unum Life Ins. Co. of Am., 289 F.Supp.2d 1181, 1192 (S.D. Cal. 2003)). This case was no different in that regard.
Plaintiff has submitted Exhibits A and B with the Curry Declaration, which detail the fees incurred during the case through contemporaneous billing records. Curry Decl. at ¶¶ 33-34. Each entry shows the dates on which services were performed, the name of the attorney or paralegal performing the service, the task or series of tasks completed, and the time spent. Entries that reflect communications protected by the attorney-client privilege have been redacted. These exhibits show the actual work performed in this case. Plaintiff subsequently filed the Supplemental Declaration of Kathryn Curry ("Supp. Curry Decl.") [Docket No. 79], which requests additional fees for time spent on the reply briefing.
Plaintiff seeks a total of 342.1 hours for Curry's work and 93.1 hours for Tierney's work on the case. Mot. at 12; Supp. Curry Decl. at ¶¶ 6-7. The court notes that Plaintiff did not summarize the amount of time spent by each timekeeper on each key task (complaint, settlement, motions for summary judgment, etc.). In light of the court's responsibility to determine fees for the hours reasonably expended, the court has analyzed the individualized billing entries as best as it can.
Defendants argue that the requested fees should be reduced because: 1) the time includes excessive drafting hours for the complaint and summary judgment motions; 2) the time preparing for and attending the mediation was excessive; 3) the requested travel time was unsupported; and 4) certain entries are vague, block billed and/or insufficiently detailed and should therefore be denied. Opp'n. at 9-13.
The fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. The applicant should exercise "billing judgment" with respect to hours worked, and counsel for the prevailing party should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from her fee submission. Hensley, 461 U.S. at 434, 437. "In the private sector, `billing judgment' is an important component in fee setting. It is no less important here. Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority." Id. at 434 (citing Copeland v. Marshall, 641 F.2d 880, 891 (1980) (en banc) (emphasis in original)).
Plaintiff's motion and supporting papers lack a clear statement about counsel's exercise of billing judgment for the requested hours. See Mot. at 11; Reply [Docket No. 78] at 5-8. Rather, it appears that Plaintiff seeks to recover all the time logged by her attorneys and paralegals on this case, save for some conferences between Plaintiff and counsel that were not recorded. Thus, Curry's declaration states "I have reviewed my entries (which are being submitted to the Court) and the hours set forth therein are accurate and reasonable. There are many conferences with Ms. Tierney and Ms. Gurasich for which I did not record any time. The 333.5 hours I billed on this case was reasonable and necessary to successfully litigate this matter."
Both Curry's and Tierney's declarations are silent as to the exercise of billing judgment to exclude hours that were excessive, redundant, reflected overstaffing, or otherwise unnecessary. In the absence of a showing that Plaintiff's counsel exercised billing judgment for the requested time, the court will do its best to exclude from the fee award hours that were not reasonably expended. See Hensley, 461 U.S. at 434.
Defendants argue that Plaintiff's request for 27.5 hours (17.9 for Curry and 9.6 for Tierney) spent drafting the complaint is excessive in light of counsels' skill and experience with ERISA litigation, which is reflected in their high rates, and the fact that counsel was already familiar with the underlying facts of the case due to representation of Plaintiff in her administrative proceedings. Plaintiff contends that it was not "simply a cookie cutter complaint," and that "many facts were complicated and potentially confusing and [it] took time to accurately and succinctly describe them." Mot. at 12. Plaintiff points out that the case "involved the acquisition and divestiture of various companies with similar yet very different names and the names made a difference to the claims made. For instance, there was a ROLM Corporation, a ROLM Company, and a ROLM division, a Siemens Corporation, and Siemens P.N. Corporation, and various IBM divisions and subsidiaries." Id. Plaintiff asserts that the 27.5 hours was the time that it actually took to prepare the complaint. Reply at 5.
The fourteen-page complaint in this case was factually intensive and specific to Plaintiff. [Docket No. 1.] However, the court notes that while the facts in this case were somewhat complicated, the legal theories set forth in Plaintiff's complaint were fairly straightforward. While sympathetic to the factual complexities, including the importance of timing of certain events and the relationship between specific corporate entities, the court notes that Plaintiff's lead counsel also represented Plaintiff in her administrative appeal. As such, counsel already had a familiarity with the underlying facts, and, indeed many of the contentions in the complaint mirror the arguments made in the administrative process. See Dec. 3, 2013 Administrative Appeal Letter, AR [Docket No. 40-1] at 25-30.
Plaintiff contends that the time spent drafting the complaint was reasonable, in light of the fact that in IBM's denial of Gurasich's administrative appeal was based on a different reason than her original denial, and Plaintiff had to tailor her complaint accordingly. See Mot. at 12; Reply at 5. The court notes that there are some differences between IBM's initial denial letter dated October 1, 2013 [Docket No. 40-1 at 13-14], and the denial of her appeal, dated March 6, 2014 [Docket No. 40-2 at 6-8]. However, in light of the large degree of overlap both in the factual understanding and legal theories between the December 3, 2013 Administrative Appeal Letter and the complaint, the court concludes that 27.5 hours to draft the complaint should be slightly reduced. Due to the significant degree of similarity between the complaint and the administrative appeal, both in articulation and presentation of the facts and legal theories, the court reduces the requested hours by 15%. The court awards 23.37 hours for work on the complaint (Curry: 15.21 hrs. (2.69 hr. reduction); Tierney: 8.16 hours (1.44 hr. reduction)).
Plaintiff requests a total of 174.8 hours for work on the cross motions for summary judgment
Defendants contend that the requested time is excessive, especially in light of counsel's professed expertise and experience (and correspondingly high billing rates) which should lead to efficiency. They argue that Plaintiff's counsel's contention that they spent over 174 hours on the cross-motions is "astonishing," and assert that these numbers are "swollen." Opp'n. at 10-11.
Plaintiff explains that "all of the briefs were different and specifically tailored to the type of brief." Curry Decl. at ¶ 32. Plaintiff also points out that Defendants submitted deposition excerpts, declarations, statements, and memoranda that were outside the administrative record that Plaintiff had to respond to and counter, so that her Opposition to Defendants' motion was different from her own motion for summary judgment and her reply. Curry Decl. at ¶ 35.
The court is cognizant of the fact that each summary judgment motion must stand on its own and, in reviewing the cross-motions, the court has a duty to review each cross-motion separately. Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). However, the court also recognizes that the factual and legal issues on the two cross-motions for summary judgment were nearly identical, and the factual and legal arguments in Plaintiff's Opposition to Defendants' motions for summary judgment had significant overlap with her own motion. While Defendants' motion did include evidence outside the administrative record, these evidentiary issues were a side note; the vast majority of the parties' briefing and legal analysis did not focus on disputes regarding evidence outside of the administrative record.
Having carefully reviewed and analyzed the parties' cross-motions for summary judgment, the court determines that, in light of the significant overlap in legal and factual issues for the briefs drafted by each side on the cross-motions on summary judgment, a 10% reduction of hours for the summary judgment briefing is warranted to alleviate issues of duplication and to address efficiency issues. Accordingly, Curry's hours are reduced by 14.92 hours and Tierney's are reduced by 2.56 hours.
Defendants also contend that Plaintiff billed an excessive amount of travel time to attend the mediation and settlement conference. Curry and Tierney each billed a total of seven hours of travel time to attend the March 5, 2015 mediation (3.7 hrs. each) and the November 10, 2015 settlement conference (3.3 hrs. each). See Pl.'s Resp. to Defs.' Objs., Ex. 1 [Docket No. 79-1] at 13, 20-21, 27, 31.
Counsel stated that they travelled with Plaintiff to the mediation and settlement conference, and the "time spent during the car ride was used to prepare Ms. Gurasich for the conference and to explain/update her of case and potential next steps." Curry Decl. at ¶ 31. In addition to counsel's declaration, Plaintiff has provided her own reply declaration vouching for the accuracy of the travel time requested. Gurasich Reply Decl. [Docket No. 78-2] at ¶ 16.
The court finds that counsels' and Plaintiff's declarations are sufficient to support the claimed travel time.
Defendants next argue that Plaintiff's requested attorney time should be further reduced because both attorneys attended the mediation and settlement conference in this case. The court disagrees. The court does not find that it was unreasonable for Plaintiff's two attorneys to participate in the mediation and settlement conference, which were important points in the litigation, especially in light of Curry's and Tierney's declarations addressing the division of labor on this case.
However, the court notes a discrepancy between the time claimed for Curry (9.8 hrs.) and Tierney (10.2 hrs.) for the same settlement conference, and reduces Tierney's time by 0.4 hours.
Defendants argue that a number of Plaintiff's counsels' time entries are vague and insufficiently supported. Defendants also contend that a number of entries are blocked billed and contain multiple tasks within the same time entry, and that such entries do not allow the court to determine the amount of time counsel spent on the various tasks. See Opp'n at 3; Defs.' Objs. to Billing Statements [Docket No. 74]. The court has reviewed the specific entries identified by Defendants. The descriptions in those time entries are sufficiently detailed to support the finding that this time is reasonable and compensable.
Defendants also argue that Plaintiff's requested fees should be reduced based on her limited success. The court granted summary judgment to Plaintiff on her first claim for benefits under the IBM Plan, denied her second and third claims as moot, and granted summary judgment to Defendants on the fourth claim for statutory penalties for failure to provide plan documents.
As the Ninth Circuit explained in Sorenson v. Mink, 239 F.3d 1140, 1147 (9th Cir. 2001), there is a two-step process for determining the appropriate reduction for "limited success":
The second step of the Hensley analysis is to consider whether "the plaintiff achieve[d] a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award." 461 U.S. at 434. In answering that question, a district court "should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." Id. at 435. "Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee." Id. A plaintiff may obtain excellent results without receiving all the relief requested. Id. at 435 n.11; Webb v. Sloan, 330 F.3d 1158, 1168 (9th Cir. 2003).
The Ninth Circuit has held that unsuccessful claims that are related to successful ones involve a common core of facts or are based on related legal theories, but does not require both. Dang v. Cross, 422 F.3d 800, 813 (9th Cir. 2005) (citing Webb, 330 F.3d at 1168). If the unsuccessful and successful claims are related, then the court must apply the second part of the analysis, in which the court evaluates the "significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." Id. (citations omitted).
Neither party explicitly addressed whether Plaintiff's second claim for breach of fiduciary duty and third claim for equitable relief were related to her successful first claim for ERISA benefits, but both parties appear to assume that they are. The court finds that Plaintiff's work on these equitable theories are related to her first claim for ERISA benefits under the IBM Plan. All three claims arose from a "common core of facts" regarding her employment with IBM, her entitlement benefits under the IBM Plan, and whether her IBM Plan benefits had been transferred to Siemens. Plaintiff's second and third claims advanced "alternative legal grounds for a desired outcome," and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. Hensley, 461 U.S. at 435.
The court next analyzes whether Plaintiff's fourth claim for statutory penalties pursuant to 29 U.S.C. § 1132(c)(1)(B) was related to her successful claim for ERISA benefits. In her fourth claim, Plaintiff challenged Defendants' failure to produce the Master Business Agreement ("MBA") during the administration of Plaintiff's claim.
Both Plaintiff and Defendants moved for summary judgment on this claim. The court granted summary judgment to Defendants. Plaintiff unsuccessfully asserted that Defendants violated two separate ERISA disclosure requirements which should result in an award of civil penalties under section 1132(c)(1)(B). First, she argued that Defendants were required to produce the MBA during the administration of her claim pursuant to 29 U.S.C. § 1024(b)(4). Second, she contended that Defendants' failure to produce the MBA resulted in a violation of 29 C.F.R. § 2560.503-1, which is an implementing regulation for 29 U.S.C. § 1133.
Plaintiff's fourth claim was based on wholly distinct legal theories. It rested on statutory interpretation (i.e., was the MBA a document that was required to be produced under 29 U.S.C. § 1024(b)(4)), and the remedies available under specific statues and regulations (i.e., is a violation of 29 C.F.R. § 2560.503-1 enforceable through the civil enforcement penalty provision in section 1132(c)(1)). See MSJ Order at 16-22. These issues are distinct and independent from the legal question presented in Plaintiff's first claim.
The fourth claim also involved different facts. Plaintiff's statutory penalties claim was based on the undisputed fact that Defendants did not produce the MBA during the pendency of her administrative claim. Her claim for benefits focused on numerous and completely non-overlapping factual issues. The court therefore finds that Plaintiff's unsuccessful statutory penalties claim is unrelated to her claim for benefits, and determines that it is not appropriate to award fees for time spent on this claim.
Once a district court concludes that a plaintiff has pursued unsuccessful claims that are unrelated to the successful claim, its task is to exclude from the calculation of a reasonable fee all hours spent litigating the unsuccessful claims. Hensley, 461 U.S. at 440; Thorne v. City of El Segundo, 802 F.2d 1131, 1141 (9th Cir. 1986). In so doing, the court "may attempt to identify specific hours that should be eliminated, or it may simply reduce the award . . . [t]he court necessarily has discretion in making this equitable judgment." Hensley, 461 U.S. at 436-37. It is the applicant's duty to maintain billing time records in a manner that will enable a reviewing court to identify distinct claims. Id. at 455. Plaintiff's counsel, of course, is not required to record in great detail how each minute of her time was expended. The Hensley court noted, "we would not view with sympathy any claim that a district court abused its discretion in awarding unreasonably low attorney's fees in a suit in which plaintiffs were only partially successful if counsel's records do not provide a proper basis for determining how much time was spent on particular claims." Id. at 455, n.12 (citation omitted).
Curry declares that the fourth claim "was not complicated factually or legally and, at most, I spent 5% of my time on this claim," but provides no basis for this estimate and points to no evidence in the billing records to support this apportionment. Curry Decl. at ¶ 37. At the hearing, Plaintiff's counsel conceded that that the billing records provided to the court are insufficient to determine how much of counsel's time is attributable to Plaintiff's fourth claim.
Neither party provides meaningful evidence to assist the court in making this determination. Defendants concede that the main point of Plaintiff's case was her claim for recovery of benefits. In light of the court's familiarity with the litigation of this case and in particular, the parties' briefing on cross motions for summary judgment on this claim, the court is not persuaded by Plaintiff's post hoc approximation that, "at most" 5% of Curry's time was spent litigating this claim.
Plaintiff argues, and the court agrees, that Plaintiff's primary goal was prevailing on her claim for benefits. The court finds that 10% of Curry's time is properly attributable to work on Plaintiff's claim for statutory penalties. This percentage is less than an even 25% split for each of Plaintiff's four claims, in recognition that the main thrust of the suit was Plaintiff's claim for benefits. However, the statutory penalties claim was distinct, and required separate factual and legal research and analysis. As detailed above, the court has reduced Curry's hours by 17.61 hours for work on the complaint and cross motions for summary judgment. Accordingly, the court reduces Curry's remaining 324.49 hours by 32.45 hours (10%) to account for time spent on Plaintiff's unrelated and unsuccessful claim for statutory penalties.
Tierney declares that she did not bill any time for work on this claim. Tierney Decl. at ¶ 18; Tierney Reply Decl. at ¶ 6. Therefore, the court does not reduce her time on this basis.
After a careful review and analysis of the parties' arguments and Plaintiff's submitted documentation the court finds that the following reductions are warranted:
In ERISA cases like this one, district courts have the discretion to award prejudgment interest. Blankenship v. Liberty Life Assur. Co. of Boston, 486 F.3d 620, 627 (9th Cir. 2007). The award of prejudgment interest is intended to compensate the plaintiff for losses incurred as a result of an insurer's nonpayment of benefits. See Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974, 988 (9th Cir. 2001). "Whether interest will be awarded [in an ERISA case] is a question of fairness, lying within the court's sound discretion, to be answered by balancing the equities." Day, 608 F. App'x at 458 (quoting Shaw v. Int'l Ass'n of Machinists & Aerospace Workers Pension Plan, 750 F.2d 1458, 1465 (9th Cir.1985)).
"Generally, the interest rate prescribed for post-judgment interest under 28 U.S.C. § 1961 is appropriate for fixing the rate of pre-judgment interest unless the trial judge finds, on substantial evidence, that the equities of that particular case require a different rate." Blankenship, 486 F.3d at 628 (quotations and citations omitted).
"Substantial evidence" is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Blanton v. Anzalone, 813 F.2d 1574, 1576 (9th Cir. 1987) (holding that district court abused its discretion by awarding, on an ERISA award, a prejudgment interest rate below the Treasury bill rate without making a finding as to the equities which justified the departure) (citations omitted). The court may compensate a plaintiff for "the losses he incurred as a result of [the defendant's] nonpayment of benefits." Dishman, 269 F.3d at 988 (holding that the district court abused its discretion in awarding a 16 percent prejudgment interest rate on an ERISA award—double the rate of return on the defendant's investment portfolio—because "[p]rejudgment interest is an element of compensation, not a penalty").
In Blankenship, the Ninth Circuit affirmed the district court's determination that prejudgment interest was necessary to compensate the plaintiff, as well as the decision to deviate from the standard Treasury bill rate and award a 10.01% interest rate. 486 F.3d at 628. In so doing, the Ninth Circuit noted that the district court made factual findings necessary to support the deviation. Id. The court cited plaintiff's declaration that as a result of Liberty Life's nonpayment of benefits, plaintiff was forced to replace the $6,093.82 per month he would have received with his own personal funds. Id. Those funds would otherwise have been invested in a Vanguard mutual fund in which he had already invested over one half million dollars, and which had a 10.01% return since its inception in June 2000. Id. Based on this factual record, the court concluded that "in order for Blankenship to be adequately compensated for Liberty's wrongful nonpayment of benefits," it was awarding prejudgment interest at a rate of 10.01%, compounded monthly. Id.
In this case, Gurasich has provided a declaration that for every month that she did not receive a pension payment from IBM, she withdrew at least $978.90 per month in order to pay for living expenses that would otherwise have been paid with the $978.90 per month she was supposed to receive from the IBM Pension Plan. Gurasich Supp. Decl. [Docket No. 81] at ¶ 2. She states that had she received the monthly payments from the IBM Plan to pay for her living expenses, she would not have taken money from her Chilton account and would have received earnings on her Chilton Capital Management LLC ("Chilton") investment. Gurasich Decl. [Docket No. 69-7] at ¶ 3.
Plaintiff's request for $7,672.38 in prejudgment interest on the $47,966.10 judgment is not sufficiently supported. It is based on Plaintiff's anticipated returns on her investment portfolio from February 1, 2012 to January 29, 2016. Plaintiff has submitted the declaration of Patricia Journeay, the Portfolio Manager/Analyst for Plaintiff's Chilton account. The Journeay declaration attaches a spreadsheet showing the rate of return on Plaintiff's Chilton account from February 1, 2012 through February 1, 2016, which shows that the $47,966.10 in deposits would have generated $7,672.38 in returns. See Journeay Decl. [Docket No. 69-9] at ¶¶ 2-4, Ex. A [Docket No. 69-10]. However, the Journeay declaration is sparse, and does not adequately explain the assumptions or methodology used to calculate the rates of return and the basis for claiming interest in an amount that totals nearly 16% of the $47,966.10 judgment.
The court finds that Plaintiff has presented substantial evidence that Plaintiff should be awarded a prejudgment interest that deviates from the standard Treasury Bill rate in order to be adequately compensated for IBM's nonpayment of benefits. See Blankenship, 486 F.3d at 628. However, her specific request is not fully supported. The court awards 5% in prejudgment interest on the $47,966.10 judgment, for a total of $2,398.31 in interest.
The court grants in part Plaintiff's motion for attorneys' fees and prejudgment interest. The court awards Plaintiff $249,871.50 in attorneys' fees and $2,398.31 in prejudgment interest.
Curry: 51.9 hrs. on motion; 82.4 on opposition and reply; 14.9 preparing for and attending hearing, for a total of 149.2 hrs. on the cross-motions for summary judgment. Tierney: 9.2 hrs. on motion; 6.9 hrs. on opposition and reply; 9.5 hrs. preparing for and attending hearing, for a total of 25.6 hrs. on the cross-motions for summary judgment.
